An Assessment of the Expected Impacts of City-Level Parking Cash-Out and Commuter Benefits Ordinances

Appendix B. Additional Scenarios Considered for Analysis

Prior to selecting scenarios for analysis, FHWA considered a number of potential alternatives. The purpose of this appendix is to share with readers a few approaches that FHWA elected not to analyze, but nevertheless, some cities might consider as policy approaches possibly worthy of their consideration.

Instead of policies being mandated, incentives such as tax credits could be used to encourage employers to change their commuter benefits offerings. Incentives could be provided to employers to offer cash-out to employees, or to offer it in a more desired form. As an example, employers could be provided an incentive, such as a 30 percent fully refundable tax credit for each of two years, for offering monthly cash-out, such as at the minimum level prescribed in either Scenario 1 or Scenario 2. A hybrid mandate/incentive policy is also possible. Employers that are required to offer monthly cash-out could be provided fully refundable tax credits to offer the cash-out in a daily instead of a monthly form. If this approach were to be pursued, the tax credit should be sufficiently small or tailored (i.e., applied only for employees currently offered parking benefits) so that employers are not encouraged to begin to offer parking benefits that they had not previously offered. One challenge with assessing tax credits is estimating how many employers would take advantage of them.

A hybrid approach entailing parking and cordon charges could be pursued. All parking facilities (including employer-provided parking facilities) would be required to charge a surtax on those arriving or departing during peak hours. This scenario has one unique advantage over the ones that were analyzed; namely, it raises revenues that could be used to improve city transportation. It also has a unique disadvantage: commuters with jobs that provide little scheduling flexibility and who feel that they need to continue to drive alone to work would not be able to avoid a higher commute cost.

Since some policies would be more challenging to implement than others, it is expected that full implementation would generally take some time. With the exception of the extension to exempt small employers (with fewer than 20 employees) from Scenario 1 and Scenario 3, the impacts of other exceptions, whether temporary or permanent, was not evaluated. It is likely that some grace period would be included in ordinances to accommodate employers whose parking is bundled with their office space lease, or who own employee parking, to enable employers to recoup their costs for parking that goes unused due to the cash-out program. These variances were not analyzed for simplicity and also in large part because it is presumed that a reasonable amount of transition time would be provided by ordinances.

Under any of the scenarios FHWA did analyze, employers could be required or encouraged to provide additional support for employees to use sustainable transportation options. Examples include preferential parking for carpoolers and vanpoolers, comprehensive telework programs that include office-sharing, compressed work weeks, shuttles to/from transit stations, or on-site bicyclist accommodations. These policies would increase the take-up rates of the scenarios, although it would be challenging to estimate the degree of impact.