The City of Chicago hopes to relieve traffic congestion by jacking up downtown parking rates during peak hours in hopes that motorists will use new rapid-transit bus routes.

Mayor Richard M. Daley announced yesterday that the city had secured a $153 million federal grant to launch the program.

"The parking pricing encourages drivers to come downtown outside the peak hours or take public transit," Daley said in a press release. "The bus rapid transit service will give commuters a more modern and faster alternative to driving as well as better connections to rail lines. The result is less congestion and less pollution."

Under the plan, drivers will pay more to park at meters and in lots during peak hours in and around the Loop. The city will also start charging fees for use of on-street loading zones.

To administer the program, the city will lease a long-term concession to a private sector parking manager, said Daley.

Meanwhile, the city plans to implement 10.2 miles of rapid bus service in key corridors.

The bus routes will have fewer stops, dedicated lanes, next-bus arrival information, and rear door and prepaid boarding. In addition, traffic signals on these routes will sense approaching buses, allowing for extended green lights or shorter red ones to improve bus times. The service will use hybrid buses to reduce air pollution.

The goal eventually is to create a network of over 100 miles of rapid bus routes connecting riders to popular destinations and key CTA transfer points.

The mayor, who appeared at a press conference with U.S. Transportation Secretary Mary E. Peters, described the two components of the program as complementary.

"We've always tried to lead by example," said Daley. "Our willingness to implement a new concept such as peak period pricing is what convinced Secretary Peters to make this grant."

Donald Shoup, a professor of urban planning in the School of Public Affairs at the University of California, Los Angeles and the author of The High Cost of Free Parking, argues that the implementation of "performance pricing" will have beneficial effects.

"By keeping metered parking cheaper than the garage spaces, the city is giving people the incentive to cruise around for parking spaces, resulting in a lot of traffic congestion," said Shoup.

Shoup said numerous studies conducted over the past 70 years show drivers cruising for cheap metered parking parking can comprise up to 30% of traffic in a downtown area at any time.

Eliminating those cruisers will limit traffic congestion and ease travel for buses, he said.

Shoup said Washington, D.C. has had success in creating optimal parking space availability through instituting peak-hour pricing around its new ball park. San Francisco is set to begin a similar program soon.

The key, Shoup said, is to get the price right.

If the price is too low, there will be a parking shortage. High prices could  produce a parking glut.

"They want spaces to be about 85% full, so it's well-used, with 15% of parking space readily available,"  said Shoup.

City Council and the CTA must approve the program before it goes into effect.