San Jose City Council is set to review a revised proposal to increase downtown parking meter rates and extend operational hours on September 29. The proposal, which seeks to generate $1.2 million in new revenue for the city, follows a previous deferral by the council due to concerns about its potential economic impact and the process by which it was introduced.
The original recommendation for meter changes was part of City Manager Jennifer Maguire's request for departments to identify savings to help close a $50 million budget deficit for the 2026-27 fiscal year. The Department of Transportation (DOT) did not identify savings but instead proposed the new revenue by raising rates at 900 meters and extending hours at 1,600 meters. This proposal was accepted by the City Manager's budget, and funds were subsequently transferred from the Downtown Parking Enterprise Fund to the general fund without public outreach.
The downtown business community, including the City Council’s own Downtown Parking Board, reportedly became aware of the proposed changes only days before the council was scheduled to approve them on June 23. Following public testimony that highlighted these concerns, the council unanimously decided to defer action on the item.
DOT staff subsequently held a series of outreach meetings. The revised proposal, which largely maintains the same meter rate increases but phases them in over a five-year period, was then presented to the Downtown Parking Board and the public at its September 2 meeting. However, feedback from board members and attending residents at that meeting identified "significant fundamental issues" with the original proposal that were not addressed in the revised version.
David Heindel, who chairs the San Jose Downtown Parking Board, a city charter commission, has urged the City Council to defer the item for at least six months. This pause, he proposed, would allow the Downtown Parking Board, city staff, and community stakeholders to conduct a thorough review of parking operations. Heindel, a downtown small business owner, also asked DOT staff to develop recommendations for how downtown parking operations could better compete with areas like Willow Glen, Campbell, Los Gatos, and San Jose Market Center, which all offer free parking.
Heindel highlighted that downtown business owners have testified their expectation that increased parking costs would lead to fewer customer visits and lost revenue. He argued that the city’s objective should be to maximize downtown economic activity, rather than simply focusing on maximizing parking revenue. Heindel noted that significant issues and opportunities have been identified, warranting a "deep dive on the economics of a parking rate hike" and its potential impact on parking citation revenue.
The Downtown Parking Board's role is to serve as a public forum for parking issues, review programs, and make recommendations to the council regarding the downtown parking program, its financial stability, and revenue use. Heindel noted that the board, which meets quarterly and relies on unpaid volunteers, has not been able to fully fulfill its role recently due to vacancies and a lack of a quorum. The City Clerk has reported several pending applications, and Heindel hopes Mayor Matt Mahan will propose candidates for council review soon.
While the budget transfer from the city parking fund has already occurred, Heindel emphasized that the council should consider the total fiscal and economic effect of the proposed changes on customer visits, restaurant and retail spending, employees, business viability, sales-tax generation, and downtown investment. He urged interested parties to learn about the issues and share their views with the mayor and councilmembers before or at the September 29 city council meeting.
