Maryland Del. Maggie L. McIntosh was stunned. The veteran lawmaker, who chairs the powerful House Appropriations Committee, had just heard nearly 90 minutes of testimony in which people who typically disagree were all on the same side.

Corporate executives and union leaders. Chamber of commerce presidents and environmentalists. Civic leaders from both the Washington suburbs and Baltimore. All favored giving Metro more state money.

“I can’t believe there’s nobody opposing this bill,” McIntosh (D-Baltimore City) said at the end of a hearing in Annapolis last week.

The unanimity was a sign of the political momentum in Maryland, Virginia and the District propelling what would be a landmark deal to provide permanent, dedicated funding for the regional transit system.

Metro revenue and governance bills enjoyed favorable receptions in three key committee hearings in Annapolis. Maryland Gov. Larry Hogan (R) is resisting some key provisions, but his team is in active negotiations with Democratic lawmakers in hope of achieving progress.

Crucial details remain to be decided. There is no consensus on how much money Metro would get, what management and labor reforms would be required, whether Northern Virginians’ taxes would increase, and whether an increased federal contribution must be part of the package.

And the Trump administration cast a shadow over the otherwise sunny outlook by saying it wants to reduce federal funding for Metro.

Still, the events in Maryland and Virginia made clear that Metro is closer than ever to gaining a significant, guaranteed stream of revenue. Since its founding in 1967, the agency has been the only major transit system in the nation to lack such financial support.

“The jurisdictions are aligning for the first time in 50 years,” said Maryland state Sen. Brian J. Feldman (D-Montgomery), chief sponsor of one of the funding bills.

Several factors account for the encouraging prospects. One is the nearly universal respect accorded Metro General Manager Paul J. Wiedefeld for the changes he has instituted regarding management, safety and reliability since taking over the system in late 2015.

Another element is the growing acceptance among politicians outside the Washington region that Metro is vital to the area’s economy and thus to the prosperity of Virginia and Maryland as a whole.

“Metro is extremely important to the vibrancy of our commonwealth, just like the port is,” said Virginia Del. S. Chris Jones (R-Suffolk), referring to the harbors at Hampton Roads, which have received substantial state support.

That point has been driven home by Amazon.com’s desire to build its second North American headquarters on a site with good public transit. (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.) Northern Virginia, Montgomery County and the District are on the Seattle-based retail company’s shortlist of 20 locations for HQ2 and its 50,000 jobs.

Finally, the region’s business leaders have forged an unusually large and strong alliance to lobby for increased Metro funding. In the latest sign of business support, six major companies joined the MetroNow coalition backing the campaign: Capital One, Marriott, Hilton, MedStar Health, Exelon and Washington Gas.

The companies and business groups also have joined with other civic organizations, including environmental groups such as the Coalition for Smarter Growth and the Southern Environmental Law Center.

“Our growing membership is showing its strength at the right time,” said MetroNow campaign manager Clare Flannery.

Despite the optimism, significant hurdles remain. Perhaps the biggest is Hogan’s insistence on limiting the increased funding to four years. Both bills in Virginia, as well as the Democratic-backed ones in Maryland, call for permanent dedicated funding.

Hogan, however, opposes an open-ended pledge of funds.

“The governor’s plan is not a blank check,” spokesman Doug Mayer said. “He is not going to turn over unlimited funds to an agency that has been known more for its failures than its successes.”

In another potential obstacle, the total contributions agreed upon by the three jurisdictions may fall short of the additional $500 million a year in dedicated funding that Wiedefeld says is necessary to ensure reliability and safety.

Metro and its backers want each jurisdiction to contribute its share based on an existing Metro funding formula, which is based on population, number of stations and similar factors. Under it, Maryland would contribute $167 million, Virginia $154 million and the District $179 million.

However, the bills being considered in Maryland would provide $125 million. Business groups and others are pushing hard to raise that to $167 million, but it’s not clear whether they will be successful.

In Virginia, a key issue is tax increases. The House approved a bill offering $105 million a year — with no tax increases. The Senate’s version provides the full Virginia share of $154 million, but includes new taxes on hotel stays and real estate transactions in Northern Virginia.

Virginia House leadership has ruled out any tax increases, although there may be support for setting a floor for regional wholesale gasoline taxes. That could yield $17 million or more for Metro, on top of the $105 million, for a total of $122 million.

The District is considering dedicating three-quarters of a penny per dollar of its sales tax to help meet its obligation to Metro. It has given up seeking a regionwide sales tax to support the transit agency because of opposition from Virginia and Maryland. But D.C. Council Chairman Phil Mendelson (D) has objected that the proposed regional funding formula is unfair to the city.

Wiedefeld said it is crucial to get the full $500 million from the three jurisdictions, because the White House has signaled it wants to reduce the federal government’s contributions.

“The key message is we’ve got to stick to the $500 million across the board,” Wiedefeld said. “We may need to backfill” to make up for a lower federal subsidy, he said.

The Trump administration last week proposed to reduce the federal subsidy to Metro from $150 million to $120 million in the next fiscal year. The White House budget office also said federal support to the transit agency needs to be “lessened” over the “long term”; the federal subsidy program for Metro is set to expire after 2019.

Given the federal government’s position, another possible stumbling block is Hogan’s insistence that Maryland would contribute more money for Metro only if the federal government increases its contribution. Democrats, business groups and other Metro supporters see that as unrealistic.

Hogan’s spokesman defended the governor’s position while noting that negotiations are continuing.

“It is bare bones common-sense that we put pressure on the federal government to pay their fair share,” Mayer said. “What’s really important is the governor has been leading on the issue . . . and he’s going to continue to do that.”

A key player in procuring federal funding is Rep. Barbara Comstock (Va.), the only Republican to represent a congressional jurisdiction that includes a Metro station. She said Friday she is “confident” that Congress will restore the full $150 million for Metro for the next fiscal year.

Asked about extending and increasing the federal subsidy in later years, as she has proposed in her own Metro bill, Comstock said only that changes would be necessary to have a chance of succeeding.

“I think if we have the reforms, it’s going to be a lot easier for me to make that case,” Comstock said.

Such changes should include restructuring the board to make it more “businesslike,” and saving money on pension and overtime costs, she said.

A requirement for governance and labor reforms as a condition for getting extra money is also an issue in the state legislatures, especially Virginia.

The House bill in Richmond would shrink the 16-member Metro board to a “reform board” of four or five members at first, and later create an eight-member board. It also calls for limiting the agency’s annual growth in operating costs to 2 percent and adopting a “right-to-work” provision for any Metro projects solely within Virginia.

The less-restrictive Senate bill calls for effectively shrinking the Metro board to eight by restricting the participation of the eight alternate members. It backs Wiedefeld’s commitment to 3 percent annual growth in the operating budget and does not include the labor provision.

In Maryland, proposed governance changes include requiring the secretary of transportation or their representative to serve as a Metro board member, and to strengthen the role of the Metro inspector general.

It will be a daunting task to work out all these differences in Annapolis and Richmond in the relatively short time allotted. Virginia lawmakers must resolve the differences between their two competing bills by the scheduled close of the General Assembly session March 10.

Maryland has more time — its session lasts until April 9 — but its legislation should not contradict what Virginia approves. The D.C. Council meets year round, so its calendar is not an issue.

Nonetheless, the progress has lifted the hopes of Metro and its backers that dedicated funding is on the way.

“Clearly there’s a sense that something has got to happen,” Wiedefeld said.

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For every tax provision, there’s a loophole — or so it’s said, anyway. And public transit advocates are worried that a seemingly minor change included in the new federal tax law could push employers to seek workarounds that would have a long-term effect on commuter benefits for people who use public transportation.

Of concern is a provision in the Tax Cuts and Jobs Act that eliminates tax write-offs for employers who subsidize the cost of their employees’ parking or transit passes — as many as a third of employers in urban hubs such as Washington.

The change won’t affect people who use pretax dollars to pay monthly parking or transit costs, the most popular form of commuter benefits offered by U.S. employers. In fact, those commuter benefits are increasing slightly. The maximum amount of pretax income that can be used each month for commuting expenses increased to $260 this year from $255 in 2017.

But at companies where the employer covers part or all of their employees’ commuting costs, those subsidies are no longer considered a tax-deductible business expense.

Lawmakers say they advocated for the change because standard corporate tax rates are dropping dramatically — to 21 percent from 35 percent — under the new tax law. With so much cash freed up, they argue, employers have more freedom to provide benefits and perks that would be most valuable to their employees.

But transit advocates worry that the change could lead employers to recoup some of the money they were previously able to deduct by finding an alternative — and tax-deductible — method to pay for the benefit under the umbrella of their property lease — a workaround that some say has been recommended by tax attorneys.

Here’s how it would work: Employers who rent office space and also separately pay to provide parking for employees could try to “bundle” those expenses. They could, in theory, negotiate a two-in-one agreement, in which the cost of providing parking would be embedded as part of their lease — a tax-deductible expense.

“It would be a way for an employer to provide a benefit and still be able to wrap it into their office lease, since it’s an office expense that is deductible,” said Cheryl Cort, policy director at the Coalition for Smarter Growth.

The workaround would be good only for parking, not public transit subsidies. Although it’s still a win for workers in that it allows employers to offer a perk, transit advocates say it will encourage more people to drive.

It’s even more of a concern in dense cities, where the cost of parking can be exorbitant — a valuable perk for employees but expensive to subsidize.

Transit advocates fear that over the long term, the provision will worsen the disparity between transit and parking benefits, with employers opting more toward parking subsidies than those for transit.

For years, transit advocates have complained that federal tax law rewards those who choose to drive to work and fails to incentivize using public transit. Through the 1990s and much of the 2000s, the tax-free limit for monthly parking fees was much higher than its transit pass equivalent.

That’s why some cities and states have enacted their own legislation to tip the scales away from parking credits and toward transit. In 2014, the D.C. Council, for example, enacted a law that requires all D.C. businesses with more than 20 employees to offer a way for workers to pay for public transit costs with pretax wages. The council is considering legislation that would require businesses that offer free or subsidized parking for employees to offer the cash equivalent of that parking to employees who choose to use transit, walk or bike.

“There have always been ways that the federal tax code had encouraged subsidized parking as a commuter benefit. Over time, we’ve struggled to get some parity, but we’ve never reached parity,” Cort said.

Others, however, say advocates are being alarmist. It’s also unclear whether the workaround is even allowable.

“It’s a question that the IRS will definitely have to look into,” said Jason Pavluchuk, policy director at the Association for Commuter Transportation. “If employers start to look for workarounds, I think the IRS will start to come down pretty harshly against that.”

Another possible outcome of the new tax law, experts said, is that more employers will consider ditching their transportation subsidies altogether, opting instead to enroll their employees in pretax commuter pass programs.

“I don’t think they’re going to stop providing transit or parking benefits tomorrow, but they’re certainly going to rethink them in the future,” Cort said.

But Pavluchuk said he has spoken to several national employers known for their robust transportation benefit packages, and they don’t expect to change them, despite the fact that they will no longer be able to use the tax deduction.

“They don’t do it for the write-off. They do it for the employee recruitment and retention. And they do it because it helps not to have to figure out parking,” he said.

If that happens, it could have an opposite effect on commuting habits: In midsize, car-dependent cities, employers that ditch their commuter subsidies are more likely to eliminate parking subsidies — and instead get workers to sign up for transit passes.

Still, they question whether the elimination of the corporate tax write-off will be enough to get a large number of companies to change their policies.

“If employers are looking to improve their bottom line, transit benefits are not going to be the first place they look,” said Jody Dietel, chief compliance officer at WageWorks, a company that administers pretax benefits like parking and transit passes.

“In a lot of places, commuter benefits have become like health benefits — it’s a given,” she added. “Employers will say, ‘No way am I going to get rid of those benefits that are so valued by my employees.’ ”

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From the very inception of Washington, alleys have crisscrossed the city’s blocks, invisible passageways etched deep into the urban core. Over the course of generations, they have played host to horse stables, carriage houses, garages, artisans’ workshops and slums of such squalor that a 1912 inventory deemed them “evil.”

Now, the District’s alleys may be the next frontier in the city’s red-hot housing market. And across the country, cities including Austin and Denver are also turning to alleys in the hope of tackling unabating crises in housing affordability.

“This is creating new housing opportunities in places that are woven into our neighborhoods and were previously pretty much unavailable to us,” said Cheryl Cort, policy director at the Coalition for Smarter Growth. Adding alley-lot dwellings to a neighborhood block, she added, “can substantially increase the housing opportunity on that block . . . and that is a meaningful contribution to the diversity of housing choices and housing type.”

Tucked behind block upon block of neat rowhouses in the Capitol Hill neighborhood is an intricate network of alleys. The alleys, which historically served as back entrances or equestrian passageways, and in the city’s more recent troubled past as the domain of prostitutes, gangs and drug dealers, are today largely underutilized and underdeveloped. But the city’s new zoning code, which went into effect last September after almost a decade in the making, now makes it easier to develop alleys, easing previous restrictions like the minimum width of an alley, height limitations, and its distance to a main street.

One person doing a lot of that developing is Sean Ruppert.

Ruppert, the principal of the development firm OPaL, last month listed his latest completed alley project on the market, on Adolf Cluss Court SE in the Capitol Hill neighborhood: two 2,700-square-foot apartments, built out of a 1920s-era brick garage, for $1.895 million apiece.

Ruppert has done a handful of alley projects in recent years, including the award-winning three-home Naylor Court Stables development in the Shaw neighborhood of Northwest Washington, and has noticed the growing popularity of alley homes among home buyers.

“I think there’s more of a willingness to live in alleys,” he said. “Now it’s seen as a quirky, unique space to live in, especially in a city that is so full of traditional row homes. This is really quite a unique space.”

Ruppert is betting on growing demand for alley homes. Just a block and a half away from his Adolf Cluss Court project, he is collaborating with local developer Martin Ditto of Ditto Residential on an alley project that will feature 45 residential units when completed. The project is being billed as “D.C.’s Next Great Alley.”

Individual homeowners, too, are increasingly interested in developing alley lots, said Nick Burger, a commissioner with the Advisory Neighborhood Commission on Capitol Hill who has been helping his constituents and other neighborhood residents through the long, complex process of obtaining permission to develop alley lots. In his neighborhood alone, four alleys have been named since last September, all in relation to plans for development, Burger said.

“What we found was that the vast majority of alleys on Capitol Hill . . . didn’t have names,” he said. “What many of these alley lot owners found was that they couldn’t build until they got an address, and they couldn’t get an address until the alley had a name.”

And then there are neighbors to placate.

Gillette Wing, who grew up in the District and now lives in Kingston, N.Y., owns an alley building just five blocks from the Capitol. The former stable used to be her grandmother’s, and when she passed away, ownership was transferred to Wing’s parents. But the property was left in limbo after Wing’s parents divorced, and for years the building was used only for storage, slowly falling into disrepair.

After the new zoning code went into force last year, Wing started thinking about turning the building into a residential space. Because the building didn’t fit the exact conditions laid out in the zoning code — for one, the 10-foot-wide alley was less than the required minimum width — Wing had to apply for a special exception, a process that includes input from neighborhood commissions and other D.C. agencies. Initially, some neighbors weren’t too pleased.

“Nobody wants construction in their backyard. I understand that,” Wing said. “I think there were points when it seemed like, oh, is this going to be so hard and painful?”

Wing ultimately won the support of the neighborhood commission, and a final hearing this week before the Board of Zoning Adjustments also yielded a unanimous vote of approval.

While the rehabilitation of vacant alley buildings into residential homes is not new to the city, the recent flurry of activity involving alleys — both from developers like Ruppert and individuals like Wing — points to a growing public consciousness of all that an alley can hold.

Alley homes, Ruppert said, “are trending, but not trendy.” Yet.

The affordable housing crisis afflicting cities nationwide is partly a physics problem: There is only so much space to build on, but an ever-growing population to accommodate. Alley dwellings, experts say, help by creating housing options in existing, underused space.

“You’re kind of filling in the cracks and crevices,” said Yolanda Cole, the senior principal, and owner of Hickok Cole Architects, which is providing architectural services for the 123-unit residential project on Blagden Alley, in the Blagden Alley/Naylor Court Historic District downtown. Construction is expected to begin early next year.

Capitol Hill, the site of many alley buildings, has seen property prices increase by about 30 percent in the past five years, according to the online real estate company Zillow. Alley homes could take some pressure off the housing market, said Cort, of the Coalition for Smarter Growth.

“We think it’s great to bring these places back online in order to create more housing opportunities,” she said. “A smaller space also costs less to build, so it’s naturally less expensive.”

Of course, alley homes alone won’t solve the housing crunch. High-end homes like Ruppert’s Cluss Alley will be out of reach for many, and even non-designer homes may be too expensive for low-income home buyers. But middle-income households are also struggling to find affordable places to live, and alley homes can fill in the “missing middle” of housing, said Lisa Rother, executive director of Urban Land Institute Washington.

“It is not a big deal in and of itself,” she said of alley homes. “But I think what’s important is we need to use every single way of creating affordability in our toolbox. It’s not one-size-fits-all.”

Other cities are looking to alleys as a way to increase housing stock.

In Austin, the Alley Flat Initiative has identified a network of vacant and underused alleys in the city’s east, and is working to build alley flats in the residential lots facing these alleys. The initiative has built seven such flats and has another 10 in development, according to Nicole Joslin, who heads the program as executive director of the Austin Community Design and Development Center.

And in Denver, the Single Family Plus housing initiative, spearheaded by the city-supported West Denver Renaissance Collaborative, will kick off next spring with the goal of building 250 backyard or alley homes over five years.

Those homes, called accessory dwelling units, are technically different from the alley lot buildings seen in Washington. Instead of a structure on an alley lot unconnected to a street, an ADU is an additional dwelling on a single-family lot, either attached to the main building, say in the basement, or detached as a separate structure at the rear of the property. But while ADUs and alley lot dwellings differ in definition, they serve largely the same purpose: putting free space to use.

“Our goal is to create a pathway to make ADUs accessible to low- and middle-income homeowners,” said Renee Martinez-Stone, the collaborative’s director. To streamline the process and to reduce building costs, the initiative plans to offer a menu of preapproved ADUs for homeowners to choose from.

And beyond expanding the housing stock, the repurposing of alleys offers a new way to build and engage with the urban environment.

For Rebecca Summer, a Ph.D. candidate in geography at the University of Wisconsin at Madison who has studied alleys in the District, how alleys are regarded in the public’s mind offers a clear snapshot of the city. Where alleys used to be treated as breeding grounds for vice, they are now celebrated as edgy and quintessentially urban, she said.

“Now, they’re still hidden,” Summer said. “But instead of people denigrating them, they’re seen as cool spaces.”

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It took a few days and a lot of shouting, but the hullabaloo over the HOT lanes on Interstate 66 has settled down — not unlike the peak toll rates, and just as Virginia transportation officials predicted.

By Friday, the peak toll was $14.50, which seemed almost like a bargain compared with the $40 peak in the first few days after the system went live Monday.

Hate them if you will, but the new tolls also appear to be doing what they were supposed to do: If you really insist on commuting solo in a major metropolitan area on an artery that’s already clogged, then you also deserve a heart attack when you see the toll sign flashing the cost. That’s market price, and you should pay up, stay off or form a carpool. NBC4 reported that the fuss led at least one Virginia man to use social media to form new casual carpools, also known as “slug lines.”

What outraged some drivers most, however, was the feeling that they had been conned by Gov. Terry McAuliffe (D) and his transportation team when the cost of the plan to commuters was under discussion. In the walk-up, before the new tolls went into effect, many Virginians got the idea that the toll would be no more than $9 to $10 a day. So when the tolls hit extremes, many motorists — not to mention some Democratic and Republican lawmakers — hit the roof.

“The bottom line is this is very different from what we briefed people it would be,” Del. John J. Bell (D-Loudoun), an opponent of tolling on I-66, told my colleague Luz Lazo.

Others have been blunter in saying the McAuliffe administration misled people. The Republican Party of Virginia accused McAuliffe’s administration of ensuring that the tolls would be switched on only after the gubernatorial election to choose his successor. Loudoun County Supervisor Ron Meyer (R-Broad Run), who is also a member of the Northern Virginia Transportation Commission (NVTC), urged the NVTC to pass a resolution demanding that the tolls be lowered or suspended.

But Brian Coy, a spokesman for the governor, said the administration never misled anyone. He said that when transportation officials talked about a $17 average daily toll during peak hours, they meant what they said, an average — all short trips and long trips along that section of highway, and with peaks and valleys of demand.

“All the discussion about this was in terms of averages,” Coy said. “So that would fundamentally require that at many other times tolls would be considerably higher and considerably lower.”

The idea of tolling I-66 inside the Beltway is part of a larger program to expand the highway’s number of lanes and raise funds for additional improvements to mass transit and bike lanes.

In September 2015, Nick Donohue, deputy transportation secretary, gave a presentation to the NVTC on the state’s proposal for dynamic tolling inside the Beltway. He told the commission the “typical toll” during rush hour would be $7 inbound in the morning and $9 outbound at night — a number picked up and repeated many times in media coverage. He did say the tolls would vary depending on congestion.

Coy, the governor’s spokesman, said that transportation officials modeled those estimates based on the experience of the HOT lanes that already are in place on the Beltway — where, incidentally, some tolls were up around $30 last week. He also wanted to emphasize that the new I-66 tolls are voluntary: they apply only to solo drivers during the height of the rush hour. He also made another prediction: In time, I-66 traffic would adjust to market forces.

“[W]e’re only four days in. I think in two weeks, this conversation will be fundamentally different,” Coy said Friday.

Stewart Schwartz, executive director of the Coalition for Smarter Growth, also thinks Virginians had fair notice. He suggested that some commuters and Northern Virginia lawmakers might not have been listening — or chose to hear what they wanted to hear — when state officials discussed the plan. And in any case, he said, the $40 tolls this week weren’t out of line, considering the circumstances on the first day.

“Remember, this is a peak-of-the-peak toll. It’s also a peak-of-the-peak in the first day for a road that hadn’t been available to single-occupant drivers,” Schwartz said in an interview. “It suddenly became available for single-occupant drivers, and so there’s probably a ton of interest and demand that is far beyond what we will see” later.

Schwartz praised the plan for I-66, though he would have preferred more emphasis on promoting transit-oriented development instead of highway expansion. He believes Virginia transportation officials did their duty to advise commuters about how the system would work.

“I can’t speak for all the comments that were made back in the day,” he said. “But I do know they were talking about averages.”

McAuliffe is and has always been a pitchman, known for sometimes making claims whose casual relationship with the facts could make a used-car salesman blush. (Cf. GreenTech.) It’s almost become part of his charm.

But it seems like an overstatement to say that McAuliffe or Transportation Secretary Aubrey Layne deceived people. There may be broader issues to consider about HOT lanes — whether they aggravate America’s growing inequities or whether we should be placing tolls on roads purchased with taxpayer funds — but when state officials talked about what they thought would be the daily cost, it seems reasonable to speak of averages and the bulging middle of the Bell curve for all trips.

But even if they didn’t sell Virginia a lemon this time, the administration should have been much more explicit in its briefings for the public and public officials; their public presentations should have explained more clearly what they were averaging. In the run-up, the administration also could have prepared commuters with more upfront warnings that the sky was the limit for tolls, depending on the circumstances. Sure, these caveats might have played into the hands of their political opponents, who had their own reasons for playing up the impact, but it also would have spared lots of people this week’s sticker shock.

Phot by Jahi Chikwendiu/The Washington Post. Click here to read the original story.