John Smith’s commute from Rockville, Maryland to downtown D.C. is only 20 miles, but during the morning rush hour, it takes him an hour and 20 minutes. Smith, a finance professional, would rather take Metrorail’s Red Line, but he puts up with the traffic because his employer pays for his parking space.
“It’s just a bunch of traffic. If I leave really early, it’s not too bad, but to get here on time it’s stressful,” said Smith on a recent morning near his office.
Even with Metro’s problems, he would prefer to use mass transit instead of sitting in bumper-to-bumper traffic to and from work.“It’s less stressful, especially when the Metro is working well,” he said.
Smith may soon be able to cash in on his preferred mode of transport by cashing out his parking benefit.
Legislation proposed by D.C. Council member Charles Allen (D-Ward 6) would require any business that pays for a worker’s parking space to offer that same benefit — in cash — if the employee chooses to walk, bike or take transit to the office instead of driving.
This is not the pre-tax transit or parking benefit many employers already offer; Allen’s proposal deals with taxable cash paid out in addition to an employee’s salary or wages.
“It’s only fair that if you choose transit, you choose bike, you choose walk, some other way to get to work, that value should carry with you. It’s about fairness for our employees,” said Allen in an interview with WAMU.
If an employer provides a specific parking subsidy, for example, up to $350 per month for parking, the worker would be able to cash out the amount and use it to pay for their preferred mode of transportation, even walking. Where an employer does not specify a value, the bill calls for a maximum of $255, the same amount in tax-free parking benefits an employer can provide in 2017 under IRS rules.
Why would someone need money to walk to work?
“Well, you might buy a new pair of sneakers every six months,” said Cheryl Cort, the policy director at the Coalition for Smarter Growth, an advocacy organization that favors sustainable transportation over highway expansions. “But it is taxable cash,” she added. “So you can use it how you want. And the point is, rather than only incentivizing driving and parking, why not incentive healthier, sustainable commutes?”
Good for the environment, good for business?
Allen’s proposal appears to square with the District’s goal of getting commuters out of cars at a time when the city has ambitious goals to reduce downtown gridlock. The Council member said his legislation would not add costs to any employer’s operation.
“The employer was going to spend the money anyway,” Allen said. “But if the employee chooses not to drive their car or if they don’t have a car, then now that value can be transferred to help support their transit, their way of getting back and forth to work.”
Six percent of D.C. residents bicycle to work and 12 percent walk, according to Census data. Less than 50 percent of city residents drive alone to the office. An informal survey by the District Department of Transportation found that 34 percent of D.C. employers pay for employees’ parking.
Matt Klein, the president of Akridge, a major real estate developer with offices in downtown Washington, said it remains to be seen if the business community will embrace Allen’s legislation, even if it brings no additional costs.
“It’s important to look at the total weight of regulation on businesses in the District,” Klein said. “This is really smart policy. This is something we should explore fully relative to how we improve road capacity within Washington. But my business sense is that we really have to also understand what it means to have the District start to become more involved in the interaction between employer and employee.”
Some employers may welcome Allen’s proposal as a way to become more competitive. The downtown architecture firm ZGF already offers the pre-tax transit benefit. Otto Condon is an executive at the firm.
“We need to actually look at a benefits package which does address getting to work, whether that’s bike assistance, transit assistance, even shoe subsidies for people who walk,” Condon said.
There is evidence such incentives are effective. Donald Shoup, an expert on sustainable transportation at UCLA, contends that employer-paid parking is an invitation to drive to work alone, and it is single-occupant vehicles that cause congestion. A parking cash-out law approved in California in 1992 has produced benefits, Shoup said.
“What it has done in some cases is encourage people to live closer to where they work and use the cash payment as a rent subsidy,” said Shoup, who has researched the effect of the parking cash-out law in Los Angeles, a city known for horrific congestion. “Out of every 100 employees, it shifted 13 out of solo driving into carpooling or mass transit,” he said.
In a March 28 editorial in the Los Angeles Times, Shoup wrote: “Of those 13 former solo drivers, nine joined carpools, three began to ride public transit and one began to walk or bike to work. Overall, the share of commuters who drove to work alone fell from 76% before the cash option to 63% afterward,” Shoup wrote in a March 28 editorial in the Los Angeles Times.
Some Washington workers said the Council proposal sounds good — almost too good to be true.
“I think encouraging people not to drive is a great idea. I wonder if this legislation would have that effect,” said Erica Handloff as she walked to her office at a think tank one morning. Handloff lives in the District, takes a bus downtown and then walks the rest of the way. “If somebody was offering $250 or whatever the benefit is, that would be fantastic. I also think there’s no such thing as a free lunch. It sounds too good to be true.”
She and other skeptics could get answers to their questions soon. Council member Allen’s bill could get a hearing before the Council takes its summer recess in July.