Mitigating Vehicle Miles Traveled

January 17, 2024

In 2020, the methodology under the California Environmental Quality Act (CEQA) for evaluating most development projects’ transportation-related impacts changed from level of service (LOS) to vehicle miles traveled (VMT). While the primary impact measured under LOS was traffic congestion, which could be mitigated by widening roads or using roundabouts instead of stoplights, VMT remains the same regardless of traffic conditions.

Consequently, lead agencies have been forced to consider new VMT-based mitigation measures to reduce a project’s significant transportation impacts. This article explores project- and program-level measures that lead agencies may consider implementing as part of their VMT mitigation strategy.

Project-level Mitigation Strategies

Traditionally, project-level reductions in VMT have focused on Transportation Demand Management (TDM) strategies designed to reduce personal vehicle travel to and from the project site through on-site programs or improvements. Examples of such strategies include car-sharing, bike sharing, or ride-sharing programs; subsidized transit passes; the provision of on-site amenities at places of work, such as priority parking for carpools and vanpools, guaranteed ride home services for non-auto users, and many others.

The efficacy of project-level VMT reduction strategies may be difficult to quantify in some cases. For example, the actual reduction in VMT achieved by a particular measure will depend heavily on how the project site is used, which may not be known during the planning stages or may change throughout the project’s lifespan. Additionally, because many TDM strategies focus on reducing VMT to and from the workplace, reductions may prove harder to achieve in practice for residential projects, compared to industrial or office-space projects. For these reasons, agencies may wish to establish program-level mitigation that individual projects could participate in as discussed below.

Program-level Mitigation Strategies

Program-level mitigation, established at a city-wide or regional level, can prove particularly useful when project-level mitigation is infeasible or insufficient to reduce project impacts to less than significant levels. Programmatic approaches to VMT mitigation can also pool resources across multiple projects to pay for larger and more effective VMT reduction efforts than would be feasible at the individual project level.

The entity responsible for administering these programs could be a city or county government, a metropolitan planning organization or regional transportation authority, or a regional joint powers authority. Because the creation of such programs would likely constitute a discretionary action, the mitigation program itself would likely require independent CEQA analysis.

Program-level mitigation can include the creation of a VMT mitigation bank or exchange, or the establishment of a development impact fee program. Examples of VMT-reducing projects that can be funded by these programs include, among others, pedestrian, bicycle, or public transit infrastructure projects; the acquisition of transit vehicles and other related equipment; infrastructure needed to support parking pricing strategies; or regional car and bike sharing services. Tips for establishing these VMT mitigation programs are discussed below.

VMT Mitigation Banks and Exchange Programs

VMT mitigation banks and exchange programs involve the creation of a separate exchange, or marketplace, administered by agencies with expertise and responsibilities in transportation, land use planning, and CEQA.

In a VMT mitigation bank, an administrator assigns a monetary value to VMT reduction credits that project proponents can purchase to reduce project-level VMT. The money used to purchase the credits helps fund VMT-reducing programs or services. The efficacy of any such bank will depend on the performance of the strategies funded by the bank. To qualify as valid CEQA mitigation, substantial evidence must establish that the programs funded by the bank will actually achieve the expected VMT reductions. In addition, some form of monitoring would be required to validate the established exchange rate for the VMT reduction credits.

Lead agencies can also consider establishing a VMT mitigation exchange, where project proponents fund VMT mitigation from a pre-approved list of programs or services. Alternatively, project proponents can propose and fund a new program or service not on the pre-approved list. VMT exchanges require the administering entity to match the VMT generator (i.e., project) with a VMT-reducing program or service. The administering entity will also need to ensure that substantial evidence supports the claimed VMT reductions.

Development Impact Fee Programs

In a development impact fee program, individual development projects pay a fee to fully or partially fund regional transportation projects. Development impact fees must comply with Mitigation Fee Act requirements (Gov. Code § 66000 et seq.), including the need to document an appropriate nexus and proportionality between the fee and VMT impacts. The impact fees fund “public facilities,” which consist of public improvements, public services, or other community amenities, for the purpose of defraying all or a portion of the cost of public facilities created by the development project. The relationship between the fee and a development project’s share of public facility costs is typically established by a nexus study.

Development impact fees typically apply to all projects within a jurisdiction. However, local agencies can structure a development impact fee program to apply only to those projects that the agency determines are likely to have significant transportation impacts—for example, all office buildings of more than 25,000 square feet or housing developments located outside of transportation corridors. In lieu of implementing on-site TDM strategies, project proponents could pay an impact fee to fund off-site projects that reduce VMT. In general, courts have upheld impact fee programs as valid CEQA mitigation where there is both a commitment to pay fees and evidence that mitigation funded by those fees will actually occur (see Save Our Peninsula Committee v. Monterey County Bd. of Supervisors.)

For more information on how your agency can mitigate VMT, contact Matthew McKerley or Ellen Garber. Matthew and Ellen thank law clerk Erica Griggs for her research assistance.