University of California Transportation Center

Employer-paid parking subsidizes about a third of all automobile travel in the United States, and about two-thirds of all automobile travel during the morning peak hours. To reduce traffic congestion and air pollution, California has recently enacted legislation requiring employers who subsidize employee parking to offer employees the option to take the cash value of the parking subsidy, in lieu of the parking itself. The legislation also requires cities to reduce the parking requirements for developments that implement a parking cash-out program. This study estimates how the option to cash out employer-paid parking will reduce commuter parking demand, and recommends a corresponding reduction in minimum parking requirements. To deal with spillover parking problems that may occur if cities reduce parking requirements, the article concludes with a proposal to create "Parking Benefit Districts" where the revenues from market-priced curb parking are dedicated to paying for neighborhood public services. At market parking prices, curb parking revenue could easily exceed the current residential property tax revenue in neighborhoods subject to spillover parking.