The Parking Minute

A minute of parking news and commentary

Tony Jordan

Should transit benefits be taxed more than parking benefits? Let the IRS know what you think.

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There’s another opportunity to tell the IRS how you feel about parking taxes and transit benefit taxes, comments are due on Friday, June 7.

Buried in the Trump Tax Cuts was an esoteric change to how fringe benefits for commuters are taxed. Prior to the cuts, employers could provide free parking or free transit passes, up to a little more than $250 a month as a non-reported non-taxable fringe benefit. But after the tax cut went into effect, transit and parking benefits would be taxable to the employer at the corporate tax rate, even if the employer was a non-profit hospital, university, or charity. This could lead to many employers ending transit benefits. It might not be so bad if parking was really taxed the same way, but it isn’t.

Some employers, mostly in urban centers, pay third parties for employee parking, those employers would have to pay corporate taxes on the cost of parking, but employers with their own parking, or bundled parking in their suburban office park leases, would pay much less, or nothing, based on IRS guidance issued last year.

Having received many comments, the IRS is now asking the public to weigh in on what tax issues that we think should be their priority to work on this year. 

This could really be a very damaging thing for transportation demand management programs and other efforts to reduce single-occupancy commutes.  The Coalition for Smarter Transportation has a page with more information, read up a little and comment, your bus pass could depend on it.

Don’t waive parking requirements near transit, just waive them everywhere.

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When cities reform their parking requirements, they often implement new rules reducing or waiving on-site parking based on a new project’s proximity to transit. But, just like ratios that came before them, these rules seem arbitrary and based on gut feeling rather than any real evidence.

In some cities, the ratio is based on proximity to bus stops, in others it’s how close it is to the street where the bus runs.  In some cities 351 feet is too far away to waive parking requirements, in others 501, and in others 1321 feet. Some cities treat light rail different than buses, others allow a waiver for planned transit. In most cities the bus or transit needs to run frequently enough for the site to qualify for a waiver, but “frequent service” means something different everywhere you go.

In this map of Portland, the areas in blue are “close enough” to qualifying transit and parking is not required. Many areas excluded are transit-rich walkable communities. Source: City of Portland

Proximity based rules like this are a lazy way to make reforms. A map of areas that qualify for a waiver in Portland, Oregon shows voids in the waiver area that are walkable, bike able, transit rich neighborhoods full of amenities, but just a couple steps outside an arbitrary boundary. Meanwhile, areas with wide streets, few sidewalks, and strip-mall development patterns are in the waiver zone because a light rail stop happens to be 1/4 mile away.

In this example, a new development may be saddled with a 1:1 parking ratio because it is 70 feet “too far” from a bus line. The site is in the middle of a bike network, which would be degraded by the addition of 244 more cars to the neighborhood.

Such mobility based rules rarely account for bike networks, walk-scores, or bike-share amenities. Frequency rates are often based on commute times to city centers, only, discounting the idea that people might want to work near where they live so they don’t have to drive or take the bus. 

While these reforms are better than nothing, the one-off problems they cause aren’t worth the trouble. Developers will build parking if their projected tenants will demand it. If cities are managing their on-street parking, there’s no free lunch for anyone and there’s no need for an arbitrary rule telling people how far they can walk to a bus before they’re forced to pay for parking whether they use it or not.

New public parking is bad for our budgets as well as our environment

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Earlier this week an article in the Willamette Week shed some light on a $200K study the Portland Bureau of Transportation (PBOT) commissioned to explore adding up to 392 parking stalls at a cost of nearly $18M to a public parking garage on the waterfront in Old Town.

Parking Garage

I was quoted in the article, making the case that the city has no business investing in parking amid the growing climate crisis. But that’s not the only problem with the project.

Fiscally, it should be a non-starter. Spending up to $60,000 of public money per stall to replace private parking stalls lost to redevelopment is not only risky because of the possibility of disruptive transportation changes, but it would be money spent directly undermining the city’s own climate action and transportation goals. 

PBOT is simultaneously working to implement a $60M plan called Central City In Motion which includes protected bike lanes and priority transit lanes to serve the same area of town as the parking garage. Most of those projects aren’t funded, yet. A quarter of the project could be built for this same cost, and those priority bus lanes would benefit more than 392 commuters.

The article caught the attention of John Van Horn (JVH), publisher of Parking Today magazine and kicked up a little dust. There have been several op-Eds published as a result. I’ve met John and Parking Today is willing to platform all sides of the transportation discussion and I’ve posted a reply you can read here.

But John is a anthropogenic climate change skeptic, he doesn’t believe that all the sprawl we’ve built and the driving it necessitates are sufficiently proven to be a threat we can address. I think he bases this skepticism on the Climatic Research Unit email controversy known as Climategate. Climate change denial makes it hard to establish a foundation for debate on parking policy. Fortunately, there are plenty of other reasons to be anti-car culture. Sprawl, air pollution, wasted time and money, and traffic violence to name a few.

Six Parking Policies That Could Be Better Than Congestion Pricing

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Painted sign reading “$ Pay BEFORE returning to your vehicle”

Congestion pricing is becoming the commonly prescribed cure for what ails the city. But what if there was another approach to traffic management that could yield similar results with less infrastructure, fewer privacy concerns, and help make housing more affordable, too?

First, eliminate minimum parking requirements already. 

Second, use curb zones for their best uses and price them appropriately. Bike lanes and transit priority lanes are the best use. If that’s not politically possible, then the space should be permitted and/or metered and market priced for performance. Allocate space for parking scooters, bikes, deliveries, and passenger loading, charge for these uses when in high demand. (Important: give some of the money directly to poor people and spend the rest to subsidize other modes)

Third, require a employers who voluntarily pay for employee parking to offer all employees a cash equivalent option. Parking cash-out is a simple and nearly free policy, but most employers won’t offer it unless they have to. So make them!

Fourth, implement a peak-hour commuter parking surcharge. If an office worker enters or exits a daily/monthly garage during peak traffic hours, charge a couple bucks.  Bonus if the charge is equivalent or more than a transit pass.  (Important: equivalent peak hour surcharges for ride hailing or autonomous vehicle trips are critical, too)

Fifth, impose a tax on surface parking lots. Ideally, the tax would be based on the site’s potential use, but a flat per-stall rate would be a fine start. This should encourage re-development of existing lots and discourage new ones.

Sixth, charge impact fees on new parking stalls to discourage new parking supply. Parking is not a beneficial community amenity, the external costs of new parking should be paid by the developer (who will pass the cost onto the user).

Individually, these are all good policies, but they combine like a classic recipe! A good comprehensive parking policy can do a lot of the work congestion pricing does, but it’s less invasive and easier to implement. By discouraging driving, repurposing space to transit and bikes, and reinvesting parking revenue in other modes these policies can help us combat climate change, save lives, and make housing more affordable.

Who will open the first autonomous-only parking garage?

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We’ve got cars that are able to park themselves and we’ve got research into retrofitting garages to help the cars park themselves, but when will we see a parking operator open an autonomous-only garage?

Some potential benefits of autonomous vehicles (close follow distances & seemingly choreographed intersections) are really realized in scenarios where they don’t have to mix in with human-driven vehicles. Similarly, the benefits of autonomously parked vehicles (no need for clearance & self-valet-style-stacking) can’t be realized in a mixed environment.

Special AV Sections

There aren’t enough self-parking cars today to support an AV only garage, but what about autonomous parking sections? A savvy parking operator in an affluent city could set space for cars to park themselves close together and allow valet-style drop-off at the entrance.  The first operators to do this will stake positions in the car parking market of the future.

A Marketing Opportunity For Electric Autonomous Vehicles

Are Tesla only parking garages in our near future?

Tesla operates a nationwide supercharging network for its customers. As a promotional incentive, the company has offered free lifetime access to this charging network for early-adopters of Tesla tech.  What if Tesla, or another luxury car manufacturer, purchased parking assets in cities with high ownership density and offered free parking in those garages for Teslas? 

A garage (or portion of a garage) limited to a single manufacturer would allow the cars to communicate with one another via wireless protocols. Cars parked in the Tesla-only parking level could not only park close together, but could double or triple stack themselves, moving out of the way when a car’s owner was ready to leave. 

These garages could also allow for EV charging technology to be tested. Systems which allow cars to charge in place (wirelessly?) or via (possibly mobile) robotic charging stations will be in great demand in the future.

Why would I propose this?

This might seem like a strange proposal from a parking reformer, but I am eager to see whether my theories about parking supply will play out in reality.  If AV technology can increase the efficiency of existing parking garages, that will have big impacts on the parking industry. A successful example of this technology would be another warning sign for cities and developers considering spending millions on new parking garages.