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Academic paper + legislative proposal

TITLE: $2 Daily Workplace Parking Charge + $4 Cashout: Cut U.S. Commute VMT/GHG 23%

This policy will be referred to below as "$2 + $4."

Why this policy is necessary:

Per the Moving Cooler report, we need to increase the cost/pain of driving and also increase incentives for alternatives in order to meet 2035 GHG reduction targets. Increasing the cost of driving makes transit/carpooling more competitive; accelerates the "vibrant, livable, energy-efficient transit village" movement; and makes long-commute sprawl less attractive.

If the cost of driving increases via other measures, then this policy is NOT necessary. Other equivalent measures include: $5 per gallon increase in the gas tax; a $400/ton carbon tax; and "peak oil" hitting with a vengeance, causing gas price to hit $10 per gallon. Currently, there is zero political viability for a big gas tax increase or a large carbon tax, hence this complicated policy is required. The advantage of "$2 + $4" is that it has much higher political viability, as the policy has been designed to carefully tip-toe through a minefield of objections.

This policy has been developed and improved over 10 years, based on diligent research with employers, employees, transit agencies, parking experts, trip reduction experts, behavioral economists, and academics. This policy combines previous policies (By UCLA's Donald Shoup, etc) with some twists/innovations.

Policy explanation: What the concept is & why it is necessary to do it this way

This policy is targeted first (but not exclusively) at suburban job sites with their great expanses of free parking asphalt. Worldwide, these work sites are per-capita GHG villains. MTC (San Francisco Bay Area's Metropolitan Planning Organization) has characterized increasing the cost/pain of driving to these areas "as the Holy Grail of trip reduction."

A "cashout" is an employer-provided incentive for employees to not park at their workplace. Incentives can be transit passes, cash, etc.

Begin with policy implementation at very large employers and gradually phase in smaller and smaller employers.

Begin with $0.25 daily workplace parking charge with $0.50 daily cashout. This minimal-cost first step is politically viable, whereas an immediate leap to $2/day charge + $4/day cashout would create riots. Gradually phase in charge and cashout increases every 4 months, bringing the charge from $0.25 to $2.00 over 32 months. This allows transportation alternative programs and transit to gradually expand to accommodate increased demand, rather than having one big, disruptive "shock" to the transportation system.

Employers are often big and profitable, but employee parking generally falls within under-funded Human Resources or Facilities Departments. Hence, employers demand zero new implementation costs in exchange for greening commutes. This demand eliminates the possibility of $2 + $4 implementation via "a person in a parking booth at the parking lot tracking which employees park at work." Instead, the policy defines how employees rapidly fill out a web form twice a month to report their commuting behavior. The web form data is then fed into the payroll system. The policy provides state funding for development of the web form software and payroll software changes. There are three main companies that provide payroll processing software: SAP, Oracle, and Paychex, and the amount of software development work that is required is small.

Employers object to a policy that entails a new annual cost, no matter how green. $2 + $4 is designed to be revenue-neutral to employers. Via the payroll processing system, employers collect parking revenue from parking and pay that revenue out to non-parking employees. The charge and cashout levels have been chosen to "break even" for employers, with the policy calling for mid-course adjustments if necessary to make the policy revenue neutral.

For downtown San Francisco commutes, the parking cost/pain is already well beyond $2 + $4, so the policy has no impact in these already-low-driving areas.

The short-term financial impact on employers is revenue neutral; the long-run impact of this policy spurs in-fill of underutilized parking lots. The policy specifies that such in-fill will receive CEQA (environmental analysis for real-estate development approvals) streamlining, similar to the streamlining in the SB375 Sustainable Communities Strategy (California transit villages policy to protect the climate). Such desirable in-fill will be extremely lucrative to the private sector (the parking lot land is already paid off), meaning that the policy's long-term financial impact is staggeringly profitable for in-filling employers. If 250 square feet of tradable development rights are granted for each commute permanently removed and if in-filled (already paid off) land generates $400 in profit per square foot, then $212B California in-fill profit is created. Hence, this policy is very business-friendly. Protecting the climate is not a "job killer" as some claim.

The policy is economically "progressive," a transfer of wealth from higher-income workers to lower-income workers. This is because higher income workers are far more likely to commute by solo driving than lower income workers.

The policy will not penalize low-income graveyard shift grocery/hospital workers and other low-income workers who have few alternatives to driving. The policy appoints an implementation commission to develop "case law" to handle such cases. Environmental Defense has studied social equity impacts of policies to increase driving costs/pain. Their report concluded that exceptions have to be carved out of such policies to ensure social equity. This policy envisions fair, compassionate exceptions developed via a transparent process.

While it is abundantly clear that the policy will reduce commuting by 23%, the policy is sufficiently novel to prevent legislators from directly moving to full implementation. Hence a 16-month, three-company pilot program (with program efficacy evaluation) is required before "full implementation" begins. This pilot period will prove that the policy works, driving behavior changes, and unintended negative consequences are avoided.

Companies have expressed a fear that if they move first on the policy and other companies do not follow, then they will be at a recruiting disadvantage for hiring new staff. In response, the policy ensures that all US employees will be eventually covered by the policy, and requires that other states follow California's lead on the policy. Re-stated, Silicon Valley economic development requires that non-California US job centers adopt $2 + $4. The policy's implementation directs the governor/staff to persuade other states to follow California's lead. The policy postpones the phased pricing increases unless a specified number of states also adopt the policy.

• From the Findings and Declarations of SB518 (California Senator Lowenthal's parking bill), "Eliminating subsidies for parking has enormous potential to reduce traffic congestion and greenhouse gas and other vehicle emissions by reducing vehicle miles traveled. If drivers must pay the true cost of parking, it will affect their choices on whether or not to drive. In the short term, changes to parking policy can reduce traffic congestion and greenhouse gas emissions more than all other strategies combined, and they are usually the most cost-effective."
• Increase chances of meeting 2035 climate protection objectives (60% of 1990 emissions)
• In-fill for more efficient land use
• Social equity
• The policy will increase transit ridership by 50% for many routes, filling up empty seats on underutilized routes. This policy improves transit agency finances, saving important jobs.
• The policy fosters a larger voting constituency in favor of transit expansion
• By adding in more of the true cost of suburban parking, the policy makes urban downtown real-estate more competitive with suburbia

• Many US jobs are "suburban." Suburban job sites may be characterized as "isolated within a zoned-only-for-employment area, with poor transit options." Shoup and others studied 1970s mandatory Southern California "pricing + trip reduction" policies for defense employers. These employers had similar isolated, poor-transit job sites. Shoup found a large commute shift away from SOV (single occupancy vehicle) to ridesharing. It should also be noted that 2010 "smartphone + social networking" ridesharing (Avego, nuride, Carticipate, ZimRide, GoLoco, etc) provides a vast improvement over the ridesharing landscape of the 70s.
• For US suburban, 80% SOV commute, auto-centered culture, there are some commuters with attractive commute alternatives and some with poor alternatives. Under the policy, those with poor alternatives continue to commute via SOV, while paying others to get out of their cars. In the long-run, the increase in price/pain of solo commuting motivates more folks to change work and/or home location to obtain better commute alternatives.
• Sierra Club's California Nevada Regional Conservation Committee's Energy-Climate Committee has endorsed the policy. Silicon Valley Leadership Group (SVLG) and Association for Commuter Transportation (ACT) - Northern California Chapter have provided "supporting letters."

Detailed California legislative proposal and academic paper (36 pages):
Seven-question "guided discussion" survey about the policy: