Downtown parking fee hike riles local businesses

San Jose has delayed a decision on whether to increase downtown parking prices after widespread pushback from local businesses and workers.

The measure would have increased rates for hundreds of parking meters in the downtown core from $2 an hour to a maximum of $4 an hour, and also extended the machine’s operating hours further into the evening. But dozens of furious residents stormed Tuesday’s City Council meeting to protest the rate hike. They warned making it more expensive to park downtown would throttle the area’s fragile hospitality sector, while also harming workers who rely on street parking to make it to their jobs.

Facing a torrent of complaints from residents who said they felt blindsided by the proposal — originally slated to be approved without discussion — councilmembers agreed to push the matter to their next meeting, which won’t be until Aug. 11 due to the summer recess. In the meantime, they have directed staff to step up efforts to consult with the businesses that may be impacted and also consider ways to recalibrate the change so as to lighten the economic blow for downtown.

Joseph Lassman, an employee at Cash Only on Santa Clara Street, said he is encouraged by proposals raised during the meeting to boost city programs that subsidize parking for downtown workers like himself. Nevertheless, he remains wary.

“We work hard to keep money flowing into downtown San Jose, so I feel like we should at least have a place where we can park our cars safely for free or a very discounted rate,” he told San José Spotlight.

The city’s existing employee parking program allows workers to park in downtown garages at a 50% discount, though some workers said they prefer parking at meters visible from their place of work because they fear break ins.

The proposed meter changes cover roughly 1,600 spaces in a portion of downtown bounded by Highway 87 and Fourth Street to its west and east — and East Julian Street and Highway 280 to its north and south. The changes would extend the operating hours for these meters by three hours, delaying the shut off time from the current 6 p.m. to 9 p.m. The proposed fee increases would impact 900 spaces.

The parking meter rate changes, the first major adjustment in San Jose for more than a decade, is an attempt by the city to capitalize on downtown’s growing nightlife scene, which has led to a spike in evening business activity. Officials estimate the changes would generate roughly $1.2 million in additional annual revenue.

The staff report notes that San Jose’s parking rates are well below other major Bay Area cities, with San Francisco parking fees topping out at $13 an hour and Oakland fees reaching a maximum of $4 an hour.

The increase is one of several proposals from the city Department of Transportation to increase parking related revenue that came out of the recent budgeting process, which wrapped up earlier this month.

Finding a resolution that satisfies downtown businesses while also meeting the city’s revenue needs may be tricky.

Revenue from the proposed parking fee hike has already been factored into the recently approved $5.5 billion budget for the upcoming fiscal year, which begins July 1. Even delaying the vote seven weeks is expected to cost the city more than $150,000, cutting into reserve funds.

On the other side, several downtown workers said the increased rates would wipe out enough of their paycheck that they would need to look for work elsewhere. Business owners said charging visitors more for parking would undermine the city’s longstanding effort to create a vibrant downtown.

“This is essentially a tax on the small businesses, the residents and the employees and the visitors that are coming in, which I think would be too much of a cost to bear,” Alan “Gumby” Marques, a downtown business owner, said at the meeting. “This is something that will literally kill the momentum we worked so hard for in the last 10 years.”

Responding to the criticism, several city leaders said they agreed that community outreach about the meter rate increase had not been sufficient.

“It’s clear the community at large did not know about this increase,” Vice Mayor Pam Foley said at the meeting. “Many (downtown businesses) are thriving because of 2026 (major sporting events) right now, but when that goes away, will they continue to thrive with the increase?”

Contact Keith Menconi at [email protected] or @KeithMenconi on X.