There's a quote that's been floating around the net for a few weeks: Manhattan banned overnight curb parking until the 1940s. Ed Glaeser quoted an ITDP report (PDF) by Rachel Weinberger, John Kaehny and Matthew Rufo, who attributed it to Peter Norton's book Fighting Traffic.
I've heard good things about Norton's book, but I haven't yet read it. However, I was able to get some of the story from the New York Times archive, and it's a fascinating one. To begin with, yes, it was originally illegal to leave a car parked on the street overnight, the same way it was illegal to leave any of your personal property in the street.
When people drove carriages and carts around, of course, they tied them up in the street. So during the day, street parking was allowed. If you had a horse and carriage, however, you didn't leave it on the street overnight. The horse could easily be stolen, and was vulnerable to bad weather. City dwellers kept their horses and carriages in carriage houses, like these in Greenwich Village:
If your family history has stories of Great-Uncle Shlomo working long hours as a tailor to start his family on the Lower East Side, you can bet that Shlomo didn't have a carriage house to go with his fifth-floor cold-water walk-up on Rivington Street. Carriage houses were for two classes of people: those who needed them for work, and those who were wealthy.
That started to change with cars. Someone figured out how to lock a car's ignition so that it was hard to start without a key. Someone else figured out how to lock the whole thing up. They were heavy enough so that you couldn't drag them away without a tow truck. So why not leave them in the street?
To be honest, the only reason I can come up with is simply that the streets are public common spaces, not intended for the free storage of private property. And that of course leads to the question why it changed. If you think about it, it is kind of bizarre that the city devotes a sizable chunk of its public land, and a significant portion of its transportation and policing budgets and personnel, to helping people (roughly speaking, the second-wealthiest quartile of the population) to store their private property free of charge.
Reading the Times archive, it's clear that nobody in city government ever intended to do this. It was a fascinating combination of popular revolt and political chicanery - and it's even possible that the revolt was manufactured and it was all chicanery. Stay tuned for details.