A first-of-its-kind municipal law now requires many employers in Washington, D.C. to provide cash to workers who turn down their company-sponsored parking benefits — and experts say it could serve as a model for other American cities that want to de-incentivize car commuting.
After more than a year stuck in regulatory limbo, local leaders in the nation’s capital are finally enforcing the Transportation Benefits Equity Act of 2020, which requires “that employers … offer a ‘Clean Air Transportation Fringe Benefit’ in an amount equal to or more than the market value of the parking benefit” for employees who turn down the company-provided space.
The new requirement is based on parking expert Donald Shoup‘s innovative “parking cash-out” model, which studies have shown is an effective tool to disincentivize car use. (Free parking, of course, has long been proven to encourage vehicle commuting.) Similar laws have passed at a statewide scale in California and Rhode Island, but neither applies to workplaces with fewer than 50 employees, and both offer generous exemptions for employers located in regions that already have good air quality, or that don’t have strong transit networks that workers could realistically use instead of driving.
And critically, the California law only pays workers the amount their employer saves by not having to provide them with a parking space, not what that space is actually worth — which can mean a lot less money if the boss is getting a good deal on a contract with a private parking company.
The D.C. law, by contrast, will apply to virtually every employer in the District with 20 or more employees — a category which includes the vast majority of workplaces — and will require them to pay out the full market value of each spot, or follow other compliance paths aimed at decreasing regional driving mode share in other ways.