Yesterday we hit election silly season and transport was the first cab off the rank with plenty of infrastructure promises included. But along with the big ticket items, there’s often a lot of small things that could be done to improve transport. So, here’s a great little law change that could help ease traffic problems, boost public transport ridership, give most people a bit of extra money and potentially save employers a lot of money. It’s called a “Parking Cash Out Law” and exists in California. Here’s an explanation:
State law requires certain employers who provide subsidized parking for their employees to offer a cash allowance in lieu of a parking space. This law is called the parking cash-out program. The intent of the law is to reduce vehicle commute trips and emissions by offering employees the option of “cashing out” their subsidized parking space and taking transit, biking, walking or carpooling to work.
Basically, many employers provide parking for employees, either paying for it directly or using the space it is often a result of minimum parking requirements. The law requires large employers to give you the choice of subsidised parking or extra cash in hand of an equivalent value. This obviously removes a subsidy for those who choose to drive and offers a financial incentive for people to try other forms of transport.
A study of the law’s impacts was undertaken by Donald Shoup, with the following key findings:
In 1992, California enacted legislation that requires many employers to offer employees the option to choose cash in lieu of any parking subsidy offered.
This report presents eight case studies of employers who have complied with California’s cash out requirement. One employer is a government agency, and the other seven are private firms, including three law firms, one accounting firm, one bank, one managed care medical provider, and one video post production company. They range in size from 120 to 300 employees, with a combined total of 1,694 employees. The price of parking at the worksites ranged from $36 to $165 a month.
After cashing out, solo driving to work fell by 17 percent. Carpooling increased by 64 percent. Transit ridership increased by 50 percent. Walking and bicycling increased by 33 percent. Commuter parking demand fell by 11 percent. These mode shifts reduced total vehicle miles traveled for commuting by 12 percent, with a range from 5 to 24 percent for the eight firms. To put this reduction into perspective, reducing VMT for commuting by 12 percent is equivalent to removing from the road one of every eight automobiles used for driving to work. In total, cashing out reduced 1.1 million VMT per year. Cashing out reduced total vehicle emissions for commuting by 12 percent, with a range from 5 to 24 percent for the eight firms. To put this reduction into perspective, reducing vehicle emissions by 12 percent is equivalent to eliminating vehicle emissions for automobile commuting from January 1 to February 13 every year.
The eight employers I average commuting subsidy per employee increased from $72 a month before complying with the cash-out requirement to $74 a month after complying with the cash-out requirement. The employer’s commuting subsidy declined by $70 per employee per month at one firm, and increased by an average of $13 per employee per month at the other seven firms, with a range from $8 to $33 more per employee per month. Employers praised the cash option for its simplicity and fairness, and said that it helped to recruit and retain employees. In summary, these eight case studies show that cashing out employer-paid parking can benefit commuters, employers, taxpayers and the environment.
The impact on travel and emissions is pretty staggering when you think about it.
In Auckland I think you’d see such a law playing out in two ways, depending on whether the jobs was in the city centre, Newmarket, Takapuna or other places where paid parking is common – or in other places.
- In the city centre (and to a lesser extent Takapuna and Newmarket) parking is really really expensive to provide and therefore the cash out could end up being pretty significant. This could result in a fairly substantial modal shift to public transport (which is relatively good in linking the city centre with many parts of the city), reducing traffic on city centre streets and all the major motorways accessing the city.
- Outside the city centre and other major centres, parking is cheaper to provide and until recently was forced to be provided through parking minimums. While this means the cash out is likely to be quite a lot smaller and may be less likely to be taken up, for those who can walk, cycling or take public transport to work they will be able to at least receive some form of incentive to make this choice. The businesses in turn will be able (now that parking minimums have largely disappeared) to reuse all that asphalt for more productive uses so also win.
Making this law change seems like such a no brainer, with major benefits and seemingly no losers (aside from some administrative costs). It’s also a pretty non-partisan type of law change so could be picked up by any party.