Proposed “Parking Cash-Out” Bill Aims to Level the Commute Playing Field for Non-Drivers

Mostly empty parking garage with trees in the front

Image by Sergio Ruiz

A bill to give California commuters more options for sustainable transportation is getting strong support as it advances through the legislature. Assembly Bill 2206, authored by Assemblymember Alex Lee, would make it easier for employers to implement a long-standing California law known as parking cash-out. The current law requires employers who provide free or subsidized parking to offer the cash equivalent of the parking subsidy to those who chose to give up their parking space.

Research has shown that parking cash-out is an effective way to reduce car commuting and encourage more sustainable commuting. Unfortunately, this program has been largely unenforced and unimplemented, in part because the law is ambiguous about how to determine the amount of parking subsidy an employee receives.

AB 2206 was approved in its final policy committee this week and will be considered by the full Senate in August. The bill will make it far easier to implement parking cash-out because it clarifies how to calculate the amount of cash employees can receive in lieu of a parking space and improves the likelihood that employers will inform employees of their parking cash-out option. (See amendments attached to this bill analysis.)

SPUR explored the benefits of parking cash-out, potential challenges in expanding the policy and real-world lessons from implementation at a digital discourse earlier this year. Below we summarize the conversation.


Parking Cash-Out as a Tool for Equity

Parking cash-out is a tool to level the playing field for commuters. It provides an opportunity to reduce emissions without putting any restrictions on those who want to drive to work. If cities are serious about sustainability and equity goals, parking cash-out is an incredible way to provide flexibility and support sustainable choices in the quest toward a more equitable Bay Area. During our panel discussion, Professor Donald Shoup distinguished research professor in the Department of Urban Planning at UCLA, and originator of the parking cash-out concept, highlighted the following:

  • When employers offer free parking to car commuters and no equivalent subsidy to those who do not commute by car, this situation creates an unfair advantage and offers car drivers a huge benefit while offering nothing in return to other commuters, who are disproportionately people of color.
  • When businesses offer free parking, employees with cars take advantage of it and drive alone. The resulting additional solo drivers contribute to traffic congestion and air pollution, which impacts lower income and communities of color more than predominantly white neighborhoods.
  • Providing free parking at work limits who can take advantage of it. Since parking is often limited, only a portion of employees (usually those who are more senior) are able to benefit.

Professor Shoup reminded us that parking cash-out does not take anything away. It simply adds another option for commuters who already receive free or subsidized parking. They can continue to use their parking space, but if they don’t want to, they can opt for the cash.


Successes and Challenges Enforcing the Existing Law

Despite the benefits of parking cash-out and the California law stating that certain employers must offer it, only the City of Santa Monica currently enforces this policy. Colleen Stoll, transportation demand manager for the City of Santa Monica, talked about how the city was able to enforce the parking cash-out law, which provides a model for other cities who want to start complying with the law.

Santa Monica took a unique approach to enforcing the cash-out law. The city modeled its regulation after the local air district’s law that businesses must provide annual emissions reduction plans for approval. Before Santa Monica will approve an employer’s emission reduction plan, it requires employers to comply with the parking cash-out law. The city also addressed technical barriers to compliance with parking cash-out, such as requiring parking to be unbundled from building leases, so that employers were no longer required to lease a certain number of spaces.

Why aren’t air districts enforcing this law if it provides such a clear path to reducing emissions? Henry Hilken at the Bay Area Air Quality Management talked about the prospect of broader enforcement in the Bay Area. While he said the air district believes the policy has merit and, like Shoup, highlighted the equity opportunities inherent in parking cash-out, he noted that there is an inherent challenge in developing a strategy that works across all jurisdictions and geographies in the Bay Area. The air district has far more experience regulating stationary sources of pollution. Mobile sources such as vehicles are typically regulated by the state or federal government, unless there are narrow exceptions made by the legislature. The result is that the air district has had trouble playing a role in parking cash-out enforcement, though it may pursue new options for action in the coming years.


Lessons From D.C.

Outside of California, we can look to Washington, D.C., for a recent example of how to deliver a more effective parking cash-out law.

Allen Greenberg of the Federal Highway Administration highlighted comparisons between California cash-out law and Washington, D.C.’s recently passed law:

  • The D.C. law uses the market-rate value of parking for a given area to determine the value of a parking subsidy that is given to an employee. This avoids the ambiguity that has long plagued California’s law (which will be at last eliminated if AB 2206 passes).
  • The D.C. law was able to be bolder by grandfathering certain existing parking arrangements. For example, the law applies not only to parking that is leased by an employer, but also to parking that is owned by an employer, but it doesn’t impose this requirement on existing parking owners. Parking that is owned by an employer is only covered where the parking was purchased after the law took effect.
  • The D.C. law applies to employers with as few as 20 employees, while the California law applies only to employers with 50 or more employees.

Allen has developed a more extensive assessment of D.C.’s new parking cash-out law here.

Cheryl Cort from the D.C. region’s Coalition for Smarter Growth led the effort to make the case for parking cash-out in Washington, D.C., and gave an overview of the city’s effort to create a successful campaign and deliver a policy with real enforcement.

Leading up to D.C.’s bold parking cash-out law, the coalition worked for three years to garner support from councilmembers, D.C. transportation leaders and businesses who cared about sustainability. By explaining policy scenarios, sharing fact sheets, responding to all types of questions and concerns, and keeping local media informed, the group was able to support the bill’s two authors to successfully pass their parking cash-out proposal.

In the course of this advocacy, the Coalition for Smarter Growth focus groups results yielded valuable lessons:

  • They talked about flexible commuter benefits and learned to use inclusive language that emphasized flexibility and choice, as well as cash.
  • Making an argument around fairness was complicated because of key differences in how employers interpreted the term ‘fairness’. Some employers thought parking cash-out might eliminate parking subsidies, though this was not actually true. Others felt that walk and bike commuters were not deserving of a commute benefit because they were lucky enough to live close to work. Advocates adjusted their message to focus on people with low incomes and people of color who were getting stuck in congestion behind people being paid to drive to work.

Allen also noted federal research currently underway in nine U.S. cities seeking to update sustainability and congestion relief benefits that result from parking cash-out programs. Preliminary findings show that parking cash-out remains a strong tool to encourage more sustainable travel choices.


Read our previous article on parking cash-out

Read Professor Shoup’s extensive research and analysis