September 22, 2021
City Council To Review Parking Cash Out Proposal

City Council To Review Parking Cash Out Proposal

Councilman Ryan Dorsey along with co-sponsors Brandon Scott, Yitzy Schleifer, Zeke Cohen, Kris Burnett, Shannon Sneed, Bill Henry, and Mary Pat Clarke have introduced a bill before the City Council that would mandate the City pay the cash equivalent to what it would cost to subsidize a city employee’s parking space should that worker choose to bike, walk, or use transit instead of driving. This is known as parking cash-out.

This concept was first developed by UCLA Professor of Urban Planning Donald Shoup, author of the highly influential book “The High Cost of Free Parking“.

In 2005 Shoup wrote a report for the American Planning Association on parking cash-out. In 1994, 95 percent of American automobile commuters who drove to work alone parked for free. Though Shoup notes that some workers will drive to work alone even if they have to pay, even workers who have the option to use alternatives means of transportation will drive to work for the simple fact that free parking is a benefit workers feel they might as well use. Shoup points to studies from Los Angeles, Ottawa, and Washington, DC as evidence that employer-paid parking encourages workers to drive to work alone.

Shoup describes nine principle benefits to parking cash out.

  1. It gives commuters choices
  2. Rewards those who use alternative means of transportation
  3. Reduces vehicle trips
  4. Treats all commuters equally since those who use public transportation are effectively subsidizing those who drive to work. This is especially important with regards to lower-income workers who are more likely to use public transit
  5. It costs employers very little money. Based on California’s current parking cash-out law which applies only when the company rents parking spaces, Shoup gives an example of a company with 100 workers that spends one-hundred dollars a month per parking space. In this example 90 of the companies 100 employees drive to work. If the company were to pay employees who do not drive to work $100 a month, it would only equal $10 more per month per employee. Furthermore, in the case of California, employers can meet the cash-out requirement in a variety of ways in order to ease or prevent any potential financial hardship.
  6. Parking cash-out also allows the Central Business District to be more competitive with suburban areas because many employers in downtown areas already provide free parking to their employees. Since downtowns tend to be walkable and have good public transit access, there is a very high likelihood that employees will take the cash-out option, meaning that the extra cash could be seen as an incentive that will help attract employees.
  7. Another benefit is that parking cash-out converts economic waste into public revenue as unlike parking benefits, parking cash-out is taxable. Therefore, the money an employer was spending for a benefit an employee did not need is being spent in a more productive way and contributing to government coffers.
  8. Employees are likely to resist an employer charging for parking when it was at one point free. But through giving employees an incentive to not drive to work through paying them cash, the negative effects of free parking are diminished without charging employees for parking.

Employer parking cash-out policies have been implemented across the country. Some of the most most notable examples can be found in California where there is a mandatory parking cash-out law. Washington, DC is also considering legislation that would require employers to offer a parking cash-out option.

However, parking cash-out can even be found outside major urban centers on the coasts. In Grand Rapids, Michigan, Spectrum Health decided that when it moved downtown it would not provide free parking to its employers. Instead, it will pay them a little bit more money that they can use to pay for parking, should they so choose. However, the extra pay will be a little less than what workers will have to pay for parking. Downtown Grand Rapids Inc., a public agency that promotes living and working downtown both provides a parking cash-out scheme for its employees and actively encourages it among employers locating in the downtown area.

Reducing auto traffic within Baltimore, especially in and around the Central Business District is a worthwhile goal. Parking cash-out is one of many ways to accomplish this. The City should set a strong example for other employers by implementing such a program for its own employees. We look forward to the passage and implementation of this bill and hope to one day see incentives for private employers to do the same as well.