Washington DC Parking Cash-Out Law (Transportation Benefits Equity Amendment Act)
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Brief summary of this reform
This law requires (some) employers in Washington, D.C. who provide free or subsidized parking to also offer benefits to employees who choose other ways to commute to work, such as taking transit, walking or biking.
Why should you care?
Free workplace parking is a large incentive to drive to work.
This DC law is a first-of-its-kind municipal-level parking cash-out law. It is a potential model for other cities and will be carefully watched for its impacts.
Parking cash-out has been estimated, based on experience in California, to have strong potential for mode shift (of 10 to 12% reduction in drive-alone commuter trips).
United States of America
Key actor type
mode shift or TDM
District Department of Transportation (DDOT), Washington, D.C.
Is it a model or a warning?
Main parking category
Main parking paradigm shift
cash-out and similar
Towards more responsiveness to context/market
Adaptive Parking thrust
P: Price parking in the right ways and with the right rates for each place and time
Goals of the reform
According to the Coalition for Smarter Growth, "Parking cash-out can incentivize more people to bike, walk, or ride transit to work. Cash-out simply lets an employee trade a parking space for a transit pass of the same value, or keep the cash and walk or bicycle to work. By expanding people’s commuting choices, alternatives to driving alone become more attractive, and the number of drive-alone commute trips decreases."
Impetus (what problem, campaign, opportunity or event prompted action?)
A vigorous 2017-2018 campaign led by the non-profit Coalition for Smarter Growth was the immediate impetus.
An important reason for the Coalition's decision to pursue this campaign was that DC had in 2013 passed the Sustainable DC Omnibus Act, which requires employers with 20 or more employees to offer pre-tax commuter benefits to those employees. This meant that most DC employers have administrative systems that are suited to implementing a parking cash-out policy.
Detailed description of the reform
The new law requires (some) employers who provide free or subsidized parking to also offer benefits to employees who choose other ways to commute to work, such as taking transit, walking or biking.
In welcoming the law, Cheryl Cort, Policy Director for the Coalition for Smarter Growth, which is the non-profit organization that campaigned for the law, said "This new law will allow an employee who is offered a parking benefit by their employer to use the equivalent value of the parking subsidy for a transit, walk, or bike commute”.
The Transportation Benefits Equity Amendment Act of 2020 is an amendment to the Sustainable DC Omnibus Amendment Act of 2014.
Employers that fall under this law can "comply" in four different ways:
Stop offering free-of-charge or subsidized parking to employees, so the cash-out law does NOT apply
Offer a "Clean Air Transportation Fringe Benefit" to employees who give up their parking benefits
Implement a transportation demand management plan
Pay a Clean Air Compliance fee to the District Department of Transportation (DDOT)
The Actionfigure blog post about this law described the first option as The Bonus Option.
"While not spelled out literally, the intent of the law also supports just getting rid of employee parking altogether. If you can do it, this is the most cost-effective option as well as the best choice for the environment. It may also be aligned with your company’s values and goals, may help with LEED certification points, and advances other sustainability metrics. Making this new law simply not apply to you is a fantastic path forward!"
It will be instructive to monitor the relative popularity of each option. Early information on this may be available soon.
A "Clean Air Transportation Fringe Benefit" is defined by the US taxation authorities as either a public transport or vanpool subsidy. To comply, this must be equal to the market rate of the parking space.
The transportation demand management plan option involves getting approval from the city for a plan for "reducing the number of employees’ commuter trips made by car by at least 10% from the previous year, until 25% or less of employees’ commuter trips are made by car".
The Clean Air Compliance fee option is for employers that choose to keep offering free or subsidized parking to employees. Such employers can pay a Clean Air Compliance fee of US$100/month per employee who is offered a parking benefit.
The law applies to employers that meet all of these criteria:
- Have 20 or more employees working in DC
- Lease their parking spaces
- Offer free or subsidized parking to some or all of their employees
Campaigners for the law were disappointed that exemptions to the law were broader than they had hoped. In particular, the law exempts:
- Employers that currently own the parking used for employees.
- Existing leased parking: if an employer has an existing lease for parking provided to employees, the employer is only required to comply with the new rules at the end of the current lease.
- Employers that do not provide subsidized parking are exempt.
- Employers with 20 or fewer employees are exempt.
Some hospitals and universities are also exempt, particularly those with existing Campus Plans (until they expire). However, if such entities build outside their existing campus plan, then the new construction must comply.
Results or impacts
It is too soon to evaluate the results of the law.
Sources and acknowledgements
Samantha Huff (March 17, 2022) Everything You Need to Know About the DC Parking Cashout Law, goDCgo (a DC government resource for transportation information and options), https://godcgo.com/everything-you-need-to-know-about-the-dc-parking-cashout-law/
Articles on this from the proponent non-profit, Coalition for Smarter Growth: https://smartergrowth.net/?s=flexible+commuter and https://smartergrowth.net/resources/flexible-commuter-benefits-in-dc-a-csg-campaign-report-and-addendum/
Reinventing Parking podcast episode based on a Parking Reform Network event to discuss this law and the campaign that led to it: https://www.reinventingparking.org/2021/07/DC-cash-out.html
Information on this from 'Actionfigure Insights'. [Actionfigure Insights is Actionfigure’s transportation education, planning, and commute management solution with the most advanced, personalized, door-to-door commute planning available.] https://actionfigure.ai/blog/dc-parking-cash-out-law-employees/
Image is from https://smartergrowth.net/resources/flexible-commuter-benefits-in-dc-a-csg-campaign-report-and-addendum/
17 May 2022