Heindel: San Jose should calculate economics of increasing parking meter rates

Before raising downtown parking rates, San Jose should know whether the additional parking revenue will exceed any resulting loss in downtown economic activity.

In crafting the 2026-27 fiscal year budget, City Manager Jennifer Maguire asked each department to provide recommendations on savings to close the $50 million budget deficit. The Department of Transportation (DOT) did not identify any savings, but rather proposed $1.2 million in new revenue by raising downtown rates at 900 meters and extending the hours at 1,600 meters. Maguire’s budget accepted this proposal and the funds were transferred from the Downtown Parking Enterprise Fund to the general fund with zero public outreach.

The affected businesses and downtown business community — including the City Council’s own Downtown Parking Board — were not aware of the proposed changes until just days before the council was set to approve them on June 23. Based on public testimony, the council unanimously deferred action. DOT staff subsequently held a series of outreach meetings and DOT’s revised proposal — essentially the same meter rate increases phased in over five years — is scheduled for council on Sept. 29.

As a city charter commission, the unpaid volunteer, seven-member downtown parking board’s role is to serve as a public forum for downtown parking issues, and review, evaluate and make recommendations to the city council regarding the downtown parking program, the health and financial stability of the parking fund and the use of parking revenues. The board meets quarterly, and similar to many city commissions, has not been able to fully fulfill its role due to vacancies and a lack of a quorum. The city clerk reports several pending applications and I am hopeful Mayor Matt Mahan can propose three candidates and have the council review them soon.

DOT’s original recommendation for meter changes was never communicated to or evaluated by the downtown parking board. The revised proposal acknowledges the negative impact to business by phasing the increases in over a five-year period. It was first presented to the downtown parking board and the public at its Sept. 2 meeting. Feedback from downtown parking board members and attending residents identified significant fundamental issues with the original proposal which were not addressed in the revised proposal.

As a downtown small business owner, I first joined the downtown parking board in October 2020 and currently serve as chair. At the Sept. 2 meeting, I proposed that staff recommend to council they defer this item for a minimum of six months to allow the downtown parking board working with city staff and community stakeholders to conduct a thorough review of operations to better understand how the proposed parking price changes will affect downtown employees, customers, businesses and city revenues. I also asked DOT staff to develop recommendations for how best to structure downtown parking operations to compete with Willow Glen, Campbell, Los Gatos and San Jose Market Center — all offer free parking.

Significant issues and opportunities have been identified and a pause to complete a deep dive on the economics of a parking rate hike and the ensuing increase in parking citation revenue seems warranted. Downtown business owners have testified that they fully expect these increased costs to result in fewer customer visits and lost revenue to their businesses. The objective should be to maximize downtown economic activity — not simply parking revenue.

The budget transfer from the city parking fund has already occurred and this reduction in fund balance does not materially impact the operations of the garages or the meters for fiscal year 2026-27. Council should consider the total fiscal and economic effect on customer visits, restaurant and retail spending, employees, business viability, sales-tax generation and downtown investment. Let’s pause and get the data that looks at potential economic consequences first so we can make an informed decision.

I urge all interested parties to educate themselves on the issues, and if appropriate share their views with our mayor and councilmembers before or at the Sept. 29 city council meeting.

David Heindel is chair of the San Jose Downtown Parking Board. These comments are his own and not the official position of the Downtown Parking Board or its members.