BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: sb 518
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: lowenthal
VERSION: 4/13/09
Analysis by: Mark Stivers FISCAL: yes
Hearing date: April 21, 2009
SUBJECT:
Parking policies
DESCRIPTION:
This bill generally prohibits the use of state funds to
subsidize parking after January 1, 2011, requires cities and
counties to adopt and implement 20 points worth of parking
reforms from a points-based menu of alternatives by January 1,
2012, and provides cities and counties with specified rewards
for exceeding 20 points worth of reforms.
ANALYSIS:
In 2006, the Legislature enacted AB 32 (Nu?ez), Chapter 488, the
Global Warming Act of 2006, which requires the Air Resources
Board (ARB) to establish a statewide greenhouse gas emissions
limit such that by 2020 California reduces its greenhouse gas
emissions to the level they were in 1990.
According to the ARB, the transportation sector is the single
largest contributor of greenhouse gases in California. The
entire transportation sector contributes 38 percent of the
state's greenhouse gas emissions, and automobiles and light
trucks alone contribute almost 30 percent. Absent action to
alter current trends, greenhouse gas emissions in the
transportation sector are expected to grow by approximately 25
percent by 2020.
The ARB's Climate Change Scoping Plan relies on three key
strategies to reduce greenhouse gas emissions from automobiles
and light trucks: 1) increasing fuel-efficiency of new vehicles;
SB 518 (LOWENTHAL) Page 2
2) implementing a low-carbon fuel standard; and 3)
reducing vehicle miles traveled. With respect to the latter,
the Scoping Plan relies on each urbanized region of the state,
through its metropolitan planning organization (MPO), to
contribute towards achieving 5 million metric tons of greenhouse
gas emission reductions from the transportation sector. The ARB
will assign each MPO a greenhouse gas emission reduction target
pursuant to the process established in SB 375 (Steinberg),
Chapter 728, Statutes of 2008. SB 375 requires each MPO to
adopt a sustainable communities strategy as part of its regional
transportation plan to reach the regional target. MPOs will
rely primarily on strategies to reduce vehicle miles traveled,
such as changing land use patterns to reduce distances between
homes, jobs, and other destinations. The Scoping Plan states,
"Supporting measures that should be considered include ?
programs to reduce vehicle trips while preserving personal
mobility, such as employee transit incentives, telework
programs, car sharing, parking policies, [and] public education
programs."
In addition to the three broad strategies to reduce emissions
from automobiles and light trucks, the ARB Scoping Plan states
that local governments are essential partners in achieving AB 32
goals and encourages local governments to adopt additional
measures to reduce greenhouse gas emissions by approximately 15
percent from current levels by 2020.
Under current law and practice, the state often provides parking
at its properties and facilities. In many, if not most, cases,
this parking is free. [ask DGS and SPB] The University of
California and California State University systems have adopted
policies to provide parking as a fee-based, self-supporting
(i.e., non-subsidized) service and to prohibit the use of
university funds to pay for parking except "on the basis of
highly meritorious academic recognition such as the Nobel
Prize." With respect to community colleges, however, current
state law prohibits a district from charging general students
and staff more than $40 per semester, carpoolers more than $30,
and students on financial aid more than $20 for parking.
Most parking policies, however, fall within the jurisdiction of
local governments. Through their zoning ordinances, cities and
counties mandate how many parking spaces each new development
must provide. In most cases, these minimum parking requirements
are set to ensure free parking to all users of the development
at the maximum level of demand. Cities and counties also decide
SB 518 (LOWENTHAL) Page 3
where parking meters will be installed, set the rates for street
meters and public garages, and designate parking permit areas.
This bill :
Prohibits the use of state funds directly or indirectly to
subsidize the construction or operations of parking after
January 1, 2011, except for the following:
? Locations where the cost of collecting payment for
parking exceeds 75 percent of total revenue collected.
? Existing parking facilities at state parks where parking
demand does not exceed capacity on more than 10 percent of
days.
? Existing parking facilities at state-owned or leased
employment facilities that employ 25 or fewer state
employees or contractors where parking demand does not
exceed capacity on more than 10 percent of days during peak
hours.
? Locations where existing employee collective bargaining
agreements forbid payment of parking, until the time that
those agreements expire.
? Locations where federal rules, prior contracts, or prior
funding agreements restrict payment for parking.
? Park and ride facilities serving public transit riders
and carpoolers.
? Parking spaces reserved for persons with disabilities.
Requires cities and counties within a region covered by a
metropolitan planning organization to adopt and implement, or
have adopted and implemented, by January 1, 2012 parking
reform measures from the following menu that achieve a total
score of at least 20 points:
------------------------------------------------------------------
|Measure |Points |
|--------------------------------------------------------+---------|
|Parking requirements and zoning | |
SB 518 (LOWENTHAL) Page 4
|--------------------------------------------------------+---------|
|Eliminate minimum parking requirements citywide or |20 |
|within the unincorporated county. | |
| | |
|--------------------------------------------------------+---------|
|Reduce average minimum parking requirements for all | |
|general office, general retail, general commercial, and | |
|similar development citywide or within the | |
|unincorporated county to: |2 |
| Less than 3 spaces per 1,000 square feet |5 |
| Less than 2 spaces per 1,000 square feet |10 |
| Less than 1 space per 1,000 square feet. | |
|--------------------------------------------------------+---------|
|Reduce minimum parking requirements for residential |5 |
|uses to: | |
| 1 uncovered space per zero- or one-bedroom | |
|unit | |
| 1.5 uncovered spaces per two-bedroom unit | |
| 2 uncovered spaces per three-bedroom or | |
|larger unit. | |
| | |
|--------------------------------------------------------+---------|
|Reduce minimum parking requirements for all sizes of |10 |
|residential units below 1 uncovered space per unit. | |
| | |
|--------------------------------------------------------+---------|
|Eliminate minimum parking requirements for projects in |10 |
|transit intensive areas | |
| | |
|--------------------------------------------------------+---------|
|Establish maximum parking restrictions for all general | |
|office, general retail, general commercial, and similar | |
|development at or below the following: |10 |
| 3 spaces per 1,000 square feet |15 |
| 2 spaces per 1,000 square feet |20 |
| 1 space per 1,000 square feet. | |
|--------------------------------------------------------+---------|
|Establish commercial parking maximums of 2 or fewer |10 |
|spaces per 1,000 sq feet citywide or within the | |
|unincorporated county. | |
| | |
|--------------------------------------------------------+---------|
|Establish commercial parking maximums of 2 or fewer |5 |
|spaces per 1,000 sq feet in transit intensive areas. | |
| | |
|--------------------------------------------------------+---------|
SB 518 (LOWENTHAL) Page 5
|Establish residential parking maximums of 1 or fewer |5 |
|spaces per unit in transit intensive areas. | |
| | |
|--------------------------------------------------------+---------|
|Remove restrictions against residential tandem parking, |2 |
|including eliminating requirements that parking must be | |
|independently accessible to count toward minimum | |
|residential parking requirement, if any. | |
| | |
|--------------------------------------------------------+---------|
|Remove restrictions against mechanized and mechanical |2 |
|"lift" parking, including counting mechanized spaces | |
|toward minimum requirement, if any. | |
| | |
|--------------------------------------------------------+---------|
|Establish a shared parking ordinance and requirements |2 |
|for interconnection of parking in all commercial areas. | |
| | |
------------------------------------------------------------------
SB 518 (LOWENTHAL) Page 6
------------------------------------------------------------------
|Remove or increase by 50% allowable density limits and |10 |
|floor area ratios (FAR), allowing infill development on | |
|existing parking lots. | |
| | |
|--------------------------------------------------------+---------|
|Parking and Transportation Demand Management | |
| | |
|--------------------------------------------------------+---------|
|Adopt an ordinance to require that any lease for a |5 |
|residential dwelling unit within a housing development | |
|of five or more units, if a parking space or spaces is | |
|provided in connection with the lease, include a | |
|separate unbundled charge for the parking space or | |
|spaces that reflects the full cost of the parking space | |
|or spaces but is not less than the number of parking | |
|spaces associated with each unit multiplied by the | |
|current cost of a monthly transit pass within the city, | |
|county, or city and county and grant the lessee the | |
|ability to opt out of the parking charge by foregoing | |
|use of the parking space or spaces. | |
| | |
|--------------------------------------------------------+---------|
|Adopt an ordinance to require, with respect to the |5 |
|initial sale of a separate interest within a common | |
|interest development of five or more units, that access | |
|to parking be sold separately at a price that reflects | |
|the full cost of the parking space or spaces. | |
| | |
|--------------------------------------------------------+---------|
|Adopt an ordinance to require that any lease for |5 |
|commercial space in a complex of five more commercial | |
|tenants include a separate unbundled charge for the | |
|parking space or spaces that reflects the full cost of | |
|the parking space or spaces but is not less than the | |
|number of leased parking spaces multiplied by the | |
|current cost of a monthly transit pass within the city, | |
|county, or city and county and grant the lessee the | |
|ability to opt out of the parking charge by foregoing | |
|use of the parking space or spaces. | |
| | |
|--------------------------------------------------------+---------|
|Adopt an ordinance to require that any new employment |5 |
|contract under which the employer provides a parking | |
|space within the city, county, or city and county | |
SB 518 (LOWENTHAL) Page 7
|include a non-reimbursable charge to the employee that | |
|reflects the full cost of the parking space but is not | |
|less than the cost of a monthly transit pass within the | |
|city, county, or city and county and that the employee | |
|may opt out of by foregoing use of the parking space. | |
| | |
|--------------------------------------------------------+---------|
|Adopt an ordinance to require employers to offer |2 |
|transit passes to all employees (full time, part time, | |
|and seasonal) on a pre-tax basis and certify compliance | |
|upon application for a new or renewal business license. | |
| | |
|--------------------------------------------------------+---------|
|Parking management | |
| | |
|--------------------------------------------------------+---------|
|Adopt an ordinance to set on-street parking meter and |10 |
|public parking lot and garage rates to achieve an 85% | |
|target occupancy rate during hours when adjacent | |
|businesses are open or employ demand-responsive rates | |
|that vary throughout the day to achieve an 85% target | |
|occupancy rate. | |
| | |
|--------------------------------------------------------+---------|
|Establish a Parking Benefit District, whereby all or a |5 |
|portion of new public parking revenues are directed | |
|toward improvements within the district where the | |
|revenue was raised. | |
| | |
|--------------------------------------------------------+---------|
|Establish a Residential Parking Benefits district, |5 |
|whereby a limited number of parkers may pay to park in | |
|an otherwise restricted Residential Parking Permit | |
|area, with the net revenue directed toward improvements | |
|within the district where the revenue was raised. | |
| | |
|--------------------------------------------------------+---------|
|Install parking meters in areas with parking occupancy |2 |
|rates of greater than 85% and establish meter rates | |
|such that parking availability improves to 85% or | |
|better. | |
| | |
|--------------------------------------------------------+---------|
|Parking Revenue | |
| | |
|--------------------------------------------------------+---------|
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|Adopt an ordinance to direct some portion of net public |6 |
|parking revenues to programs that reduce parking |multiplied by |
|demand, including but not limited to public transit, |the |
|Transportation Demand Management, and/or bicycle and |percentag|
|pedestrian infrastructure improvements and promotion. |e of net |
| |revenue |
| |directed |
| | |
|--------------------------------------------------------+---------|
|Adopt a parking sales tax, a parking impact fee, a |6 |
|property assessment on parking owners, or a use fee |multiplied by |
|upon parkers, with some portion of resulting net |the |
|revenue directed at programs that reduce parking |percentag|
|demand, including but not limited to public transit, |e of net |
|Transportation Demand Management, and/or bicycle and |revenue |
|pedestrian infrastructure improvements and promotion. |directed |
| | |
| | |
------------------------------------------------------------------
Allows a city or county to request, and the Air Resources
Board to award, proportionate points for alternate measures to
reduce or eliminate subsidies that fail to charge users for
the full cost of a parking space.
Makes cities and counties eligible to receive carbon reduction
credits through the cap-and-trade program to be administered
by the Air Resources Board for adopting and implementing
measures that exceed the 20 point threshold.
Provides cities and counties that adopt and measures worth at
least 50 points from the menu with bonus points equal to 5
percent of the total available points in any competitive state
loan or grant program related to housing, transportation, or
economic development or funded by a general obligation bond
approved after January 1, 2010.
Exempts from the bill any city or county located within a
metropolitan planning organization (MPO) in which the MPO and
its members have adopted a binding compact committing members
to implementing parking reforms by January 1, 2013 that
achieve a total score of at least 20 points if the city or
county fulfills the obligations of the compact.
Encourages cities and counties to address any parking
spillover from new development through the use of residential
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parking permits or other parking management strategies and to
provide residents who resided in the parking permit zone prior
to adoption of the parking permit zone a parking permit for
free.
Removes the $40 per semester cap on parking charges at
community colleges and instead prohibits a community college
district from using state funds directly or indirectly to
subsidize the construction or operations of parking services
for students, district employees, or other persons on
district-owned or district-leased property on and after
January 1, 2011, except that a district may continue to cap
parking charges at $20 per semester for students on financial
aid and at $30 per semester for carpoolers.
Makes a conforming change to the elimination of the cap on
parking charges at community colleges by repealing the
authority of a community to charge fees in excess of the cap
in specified circumstances.
Clarifies that cities and counties may use their own gas tax
funds for the adoption or implementation of transportation
demand management measures, including parking measures
required by this bill.
Clarifies that cities and counties may set parking meter rates
administratively according to performance standards specified
by ordinance and that cities and counties may dedicate any
portion of revenues collected from parking meters to benefit
parking benefit districts or to fund programs that reduce
parking demand. The bill states that these changes are
declaratory of existing law.
COMMENTS:
1.Purpose of the bill . According to the author, "free" parking
has significant social, economic, and environmental costs.
First, the high cost of land, construction, and maintenance to
provide free parking adds significantly to the cost of
economic development, making many housing and commercial
projects financially infeasible.
Second, the high cost of land, construction, and maintenance
to provide free parking is passed on to everyone through
higher prices. Free parking at stores is paid for by all
SB 518 (LOWENTHAL) Page 10
customers through higher prices for goods. Free employer
parking is paid for by lower wages for all workers. Free
parking at housing developments raises the cost of housing.
Free on-street parking is paid for by the entire community in
the form of higher taxes. In each case, these prices are also
paid by those who do not drive.
Third, free parking encourages vehicle trips, thereby
increasing traffic congestion, pollution, and greenhouse gas
emissions. For example, employer-paid parking at job sites
increases rates of driving by as much as 27%.
Fourth, excessive governmental parking requirements to ensure
free parking greatly expand the built footprint and increase
travel distances, thereby increasing per capita vehicle miles
traveled and reducing the viability of other transportation
modes, such as walking, bicycling, and transit.
This bill seeks to facilitate economic development and reduce
traffic congestion and greenhouse gas emissions by revealing
the actual cost of parking and reducing governmental or
government-required subsidies for parking. A recent RAND
Corporation report stated that pricing strategies, such as
parking pricing, are the only way to achieve lasting
reductions in traffic congestion. And in the short term,
changes to parking policy can reduce greenhouse gas emissions
more than all other strategies combined. Implementing parking
pricing strategies does not cost much money and can even save
state and local governments money. Eliminating parking
subsidies can also improve social equity by lowering prices
for those who choose not to drive, often lower-income
households.
2.Findings of the hearing . On February 24, 2009, the Senate
Transportation and Housing Committee held an informational
hearing on the subject of reducing congestion and greenhouse
gas emissions through parking policy. Based on the testimony
from the hearing, the committee staff proposed the following
findings:
As a general rule, minimum parking requirements require
more parking spaces than the private market would provide
on its own, significantly adding to the cost of housing and
commercial development.
Minimum parking requirements often make it infeasible to
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bring new uses to older buildings and to develop infill
parcels, hindering the ability to achieve denser
development.
Excessive parking requirements spread out development,
increase travel distances, and make the environment less
friendly to pedestrians and less viable for transit.
Parking is never free. In fact, the cost of land and
construction to provide parking spaces is extremely high,
and these costs are passed on to consumers in the form of
higher prices for housing and other goods for everyone,
including those who do not drive.
Free or cheap parking at the large majority of
destinations masks the true cost of driving and
artificially skews transportation choices towards
automobile trips, increasing parking demand, vehicle miles
traveled, and air emissions.
Free or cheap parking meter rates create a lack of
vacancies, which results in additional congestion as
drivers cruise for available parking spaces.
Parking reforms are one of the most cost-effective ways
to achieve congestion reduction and greenhouse gas emission
reduction benefits. Reforms can be implemented at little
to no cost to the public sector and can even generate
revenues to support transit services, neighborhood
improvement and beautification, and other services.
Employing pricing, including parking pricing, is key to
reducing traffic congestion on roads and highways because
it is the one strategy that permanently reduces demand by
changing behavior.
Reducing driving demand is also critical to achieving AB
32 goals for greenhouse gas emission reductions. The
transportation sector is the biggest single contributor to
greenhouse gas emissions, and absent a reduction in driver
demand, emissions from VMT growth could easily outweigh
reductions from cleaner fuels and more efficient vehicles.
A number of local governments in California have begun
implementing parking reforms, including eliminating minimum
parking requirements, charging market-rates for public
SB 518 (LOWENTHAL) Page 12
parking spaces, generating political support for
market-pricing by creating parking benefit districts,
expanding employer participation in parking cash-out
programs, and unbundling parking costs from other lease
costs.
There is general agreement that parking reforms can have
significant benefits, but there is not a consensus on
whether the state should encourage and enable local efforts
or require some level of reform.
Implementation of parking reforms has the potential to
increase demand for public transit at a time when transit
providers already are receiving insufficient operating
support. Additional consideration must be given to
increasing support for public transportation.
3. Rural counties exempted . The bill's mandate on cities and
counties only applies to jurisdictions within one of the
state's 18 regions covered by an MPO. As a result, local
governments within 21 counties in northern California, in the
Sierra foothills, and along the eastern side of the Sierras
are exempt from the bill.
4. Allowance for regional strategies . The bill also exempts
any city or county located within region in which the MPO and
its members have adopted a binding compact committing members
to implementing parking reforms by January 1, 2013 that
achieve a total score of at least 20 points as long as the
city or county fulfills the obligations of the compact. This
provision is intended to promote regional efforts to address
parking policies, either as part of or separate from the
region's sustainable communities strategy required by SB 375.
While members of a region that exercises this option have one
extra year to implement reforms, the regional compact must
commit members to action that is at least equal to the mandate
in the bill.
5. Mandates and incentives . In addition to prohibiting the use
of state funds to subsidize parking, this bill creates both a
mandate and incentives for local government to adopt parking
reforms. On the one hand, the bill mandates that local
government adopt and implement measures equaling 20 points
from the menu. On the other hand, the bill provides the
incentive of a 5% bonus in any competitive state loan or grant
program related to housing, transportation, or economic
SB 518 (LOWENTHAL) Page 13
development or funded by a new general obligation bond to
cities and counties that exceed 50 points on the menu.
The bill also makes cities and counties eligible for to
receive carbon reduction credits through the cap-and-trade
program to be administered by the ARB for implementing
measures that exceed the 20 point threshold. Under the
program, to be adopted by the end of 2010 and in operation in
2012, the ARB will establish an overall limit on greenhouse
gas emissions from capped sectors, and facilities subject to
the cap will be able to trade allowances to emit greenhouse
gases. In essence, entities that surpass their required
emission reductions will be able to sell their credits for
cash. In this way, cities and counties could benefit
financially from adopting additional parking measures.
By combining mandates and incentives, this bill seeks to have
every city and county become part of the solution and adopt a
minimum level of reforms while incentivizing cities and
counties to do more than the minimum. The committee may wish
to consider whether combining mandates and incentives is the
most advantageous approach to involve local governments in
overcoming the externalities created by current parking
policies.
6. Who's the judge ? This bill provides a 5% bonus in any
competitive state loan or grant program related to housing,
transportation, or economic development or funded by a new
general obligation bond to cities and counties that exceed 50
points on the menu. It is not clear, however, who will
determine whether this threshold has been met. Will each
state agency administering an affected program have to conduct
its own analysis? Will there be a single state agency that
tallies points and maintains a centralized list? Or will
local governments self-certify? The author does not have an
answer to these questions at this time but intends to resolve
this issue if and as the bills moves through the process.
7. Double referral . The Senate Rules Committee has referred
this bill to both this committee and Education Committee.
SB 518 (LOWENTHAL) Page 14
8. Technical amendments . The bill requires the following
technical amendments. The author may want to take these
amendments in the next committee, however, to facilitate the
double referral.
On page 7, strike lines 28-33 and insert:
(1) Annualized land cost. For surface parking or for
structured parking uncovered by occupiable space, the land
cost shall be equal to the full value of the land area of
the parking facility. For entirely underground parking,
the land cost shall be zero. For above-ground parking
wholly or partially covered by occupiable space, assume a
fractional land cost based upon the above-ground volume of
the parking facility compared to the volume of the parking
facility and other occupiable building space combined. To
annualize the cost, divide actual or fractional land cost
by 10. For leased land, use the annual lease rate.
On page 7, line 36 before "relevant" insert "current"
On page 7, line 37 after "index" insert "published by
the parking, transportation, or construction industries"
On page 7, line 40 after the period insert "If actual
costs are not available, use current applicable estimates
published by the parking, transportation, or construction
industries."
On page 12, line 30 after "development" insert "or"
On page 10, line 8 strike "50% of" and insert "by 50%"
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
April 15, 2009)
SUPPORT: Natural Resources Defense Council (sponsor)
American Lung Association
California League of Conservation Voters
Genentech
Housing California
Non-Profit Housing Association of Northern
California
Planning and Conservation League
Transform
OPPOSED: None received.