San Jose attempts phased increase for downtown parking rates

San Jose officials are preparing to roll out a revised proposal to increase downtown parking rates, after the original plan met opposition from the city’s business community.

The new plan — set to go before the City Council on Tuesday — seeks to soften the financial blow to businesses and workers. It does this in part with a phased approach that would see rates increased gradually over five years, rather than imposed immediately as originally planned. To lighten the load on downtown, it would also spread the rate increases out geographically to include parking meters elsewhere in the city as well. And unlike the first plan rolled out in June, the fee increases would also impact city-run parking garages.

Meanwhile, officials have also added a provision to expand eligibility for a city program that subsidizes parking for downtown workers in response to concerns raised by people who commute to downtown jobs by car and must pay for parking. Workers have previously said the increased rates would wipe out enough of their paycheck that they would need to look for work elsewhere.

After councilmembers rejected the first rate increase plan in June amid widespread outcry, the city held public meetings to draw feedback as staff worked to hammer out updated proposals.

“The phased approach lessens immediate impacts on employees and customers, improves management of the parking system, and generates sufficient revenue over the longer term to support the General Fund transfer and future parking system improvements,” Department of Transportation Director John Ristow and Budget Director Jim Shannon wrote in a memo outlining the plan.

The original proposal, the first major attempt to adjust parking rates in the city for over a decade, called for raising rates from $2 an hour to $4 an hour at 900 downtown meters. In addition, the changes would have also extended operating hours for about 1,600 downtown meters, delaying the shut off time from the current 6 p.m. to 9 p.m.

Backers said San Jose needs the extra revenue from the rate increase — originally projected to total $1.2 million — to balance the city’s ongoing budget deficit, which is expected to top $26 million this year. But downtown businesses fear that increasing rates will dissuade customers from visiting, undermining the city’s efforts to create a vibrant commercial core.

Responding to the new proposal, San Jose Chamber of Commerce CEO Leah Toeniskoetter said the phased approach is “more manageable” than the original, and applauded city officials for incorporating feedback from the business community into the revised proposal.

Still, she said, their underlying concern remains.

“Increasing parking rates and eventually extending meter hours to 9 p.m. adds to the cost of choosing downtown at exactly the time we’re working to bring more people here to eat, shop and spend time,” Toeniskoetter told San José Spotlight.

If councilmembers approve the revised plan, the first change would take place this year, increasing rates at city parking garages by an additional $1 an hour, with a sharper increase for special event days. The city will continue to offer the first 90 minutes of garage parking for free.

Under the plan, next year would see parking meter rates in the greater downtown area increase by $1 per hour to a total of $3. Then in 2028, the three-hour extension of meter operating time to 9 p.m. would take effect for downtown parking spaces.

The final increase would take place in 2030, when all parking meters across the city would increase by another $1 an hour. For those in the downtown core, that would mean an hourly rate of $4. For parking meters elsewhere in the city — such as those around the County Government Center and in Japantown — the new rate would be $3 per hour.

The proposal also loosens income limits for the city’s employee parking program, which allows workers to park in downtown garages at a 50% discount. Workers have said the current limit — which bars anyone making more than 30% above the city’s minimum wage of $18.45 an hour — excludes many in the downtown workforce who need the financial assistance.

The more gradual approach to fee increases means that revenue generation will also take time to ramp up, with about $811,000 in extra funds expected this year. That figure is projected to rise each year, reaching $4 million in 2030.

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

Meanwhile, downtown workers said even with more gradual increases, they still expect to feel a financial pinch.

“Either way that they spend this is still gonna affect us negatively. It’s going to affect everybody negatively that works in the industry,” Joseph Lassman, an employee at Cash Only on Santa Clara Street, told San José Spotlight. “There’s got to be other ways that they could find money for this budget.”

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