DC could pay you to ride transit, walk, or bike to work

DC has the highest percentage of commuters in the country walking and biking to work, at 18.3% according to the 2016 American Community Survey. Another 37% take transit. However, employer benefits are set up to give the biggest reward to people who drive, by subsidizing parking. This means more traffic and longer commutes.

A bill in the DC Council could give employees the chance to trade in their parking space for extra cash and encourage drivers to explore other commuting options. After winning unanimous approval in committee, the bill will have the first of two votes in the full DC Council on March 3. We published a version of this article in 2017, when the bill was first introduced, and have updated it now to reflect the latest changes.

Parking cash-out could give more people access to transit benefits

Right now, employers can choose to give workers a commuting benefit of up to $270 a month for parking and $270 a month for public transit, or let employees deduct that amount from their salary, pre-tax. A 2016 DC law requires employers with over 20 employees to at least offer the pre-tax deduction for transit, but many employers offer free parking and don’t offer free transit as an option. (The federal government does offer free transit to its employees.)

According to the Coalition for Smarter Growth, a supporter of the bill, 20-50% of DC employers provide either free or subsidized parking. People who take transit and work for most private sector companies don’t have free transit. And people who walk or bike to work are completely on their own.

In parking-scarce areas like downtown DC, the parking subsidy makes driving more attractive for workers — and contributes to more congestion and longer commutes. According to this analysis provided by CSG, the driving alone rate for people with subsidized parking shoots up from 52% to 85%, but adding a transit subsidy on top of the parking drops the drive-along rate to 62% while the transit rate rises more than three-fold.

DC councilmembers Charles Allen and Mary Cheh have proposed a plan to give people an equally strong incentive to ride transit, bike, or walk to work: the Transportation Benefits Equity Act. The bill would affect employers with 20 or more workers that give their employees subsidized parking. Those employers would have to alternatively let employees trade in that benefit for cash.

That means employees who walk or bike would now have the chance to pocket the value of their parking space as taxable income, or use the parking benefit for transit, while pocketing the balance. Employees who drive to work could still use their parking benefits to commute in and park at work if they chose.

DC residents already prefer to get to work in ways that don’t rely on driving. This flexible commuter benefit (also known as “parking cash-out”) would give these employees an incentive to keep up their habit and encourage more people to take transit, walk, or bike to work instead. Cheryl Cort, Policy Director at the Coalition for Smarter Growth, estimates that a benefit like the one proposed in the Transportation Benefits Equity Act would lead to a 10 to 12% reduction in the number of people driving alone to and from work.

Cort points out that the bill could even wind up benefiting employers in the long run. According to the World Resources Institute, converting a non-active employee into a bike commuter saves $3,000 in employer health care costs and reduced absenteeism.

After changes, the bill won committee approval

The first version of the bill was introduced in 2017 and had a hearing that year. Facing some business opposition, however, the Committee on Transportation and the Environment didn’t move it forward until January 2020.

In the meantime, there were a few changes. The most significant one exempted employers who already own their own parking. Especially outside downtown, some employers own their own buildings which include have surface parking lots or their own garages. The original bill would have required those employers to offer a cash-out benefit after one year, with the goal of encouraging better uses of the land in the long term. However, employers including universities and hospitals argued that this would create a direct cost to them.

Other times, the employer has a long-term lease on a set of parking spaces. To avoid costing the employer extra right now, both the original and revised bills exempt them until that lease comes up for renewal. After that, they’d have to offer the benefit (and perhaps end up leasing fewer spaces the next time).

Employers also have a few alternatives to the cash-out if they choose. They could stop giving employees subsidized parking. Or, they could pay a “Clean Air Compliance Fee” of $100 per month per employee. Responding to requests from the universities and hospitals, the bill also allows setting up a plan, approved by the District Department of Transportation, to help employees reduce car usage by 10% a year until reaching a rate of 25% of employees driving to work, the goal set by the moveDC and Sustainable DC plans.

Business owners also asked for an alternative to providing cash, so the bill now permits them to increase their contribution to their employee’s health care coverage in exchange for a parking spot.

The council is slated to vote on the bill’s first reading on March 3. If it passes, it would then receive a second reading, most likely later in March.