TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: John Ristow
Jim Shannon
SUBJECT: Parking Meter and Garage
Rates and Hours
DATE: September 8, 2026
Approved
Date:
9/16/26
COUNCIL DISTRICTS: 3, 6
RECOMMENDATION
Adopt a resolution to amend the City’s Master Parking Rate Schedule for municipal on and off-street parking facilities to:
(a) Authorize a parking garage special event flat rate range, at the Market/San Pedro Square, Third Street, Second/San Carlos, Fourth Street and Third/Santa Clara (The Globe) Garages, of $13-$35, effective October 2026;
(b) Authorize a parking garage daily incremental rate, at the Market/San Pedro Square, Third Street, Second/San Carlos, Fourth Street, Third/Santa Clara (The Globe), and Convention Center Garages, of $1.25 per 15 minutes, effective October 2026;
(c) Authorize the Downtown Employee Discounted Permit Parking Program to provide a 50% discount off the Global Monthly Permit rate for employees working at businesses located within the City’s meter districts and earning a wage no greater than 50% over the city’s current minimum wage, not including gratuities, effective October 2026;
(d) Authorize the extension of 90-minutes free parking to the Convention Center Garage on non-event days, effective September 2026 – June 2027;
(e) Authorize a parking meter hourly rate of $3 per hour Monday-Saturday, except Sundays and holidays at meters located within Parking Meter District 1a- Downtown, effective July 2027;
COUNCIL AGENDA: 9/29/26
FILE: 26-1004
ITEM: 5.2
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
(f) Authorize a parking meter hourly rate of $3 per hour, on days/times of operation specified on the meter, at meters located within Parking Meter Districts 1b-South First Street/University, and 5–Arena/Diridon Area, effective July 2027;
(g) Authorize parking meter operating hours of 9 a.m. – 9 p.m. Monday-Saturday, except Sundays and holidays at meters located within Parking Meter District 1a- Downtown, effective July 2028;
(h) Authorize parking meter operating hours of 9 a.m. – 9 p.m., on days/times of operation specified on the meter, at meters located within Parking Meter Districts, 1b-South First Street/University, and District 5–Arena/Diridon, Area effective July 2028;
(i) Authorize a parking garage special event flat rate range, at the Market/San Pedro Square, Third Street, Second/San Carlos, Fourth Street Garages, and Third/Santa Clara (The Globe) Garages of $15-$35, effective July 2029;
(j) Authorize a parking meter hourly rate of $4 per hour Monday-Saturday, except Sundays and holidays at meters located within Parking Meter District 1a- Downtown, effective July 2030;
(k) Authorize a parking meter hourly rate of $4 per hour, on days/times of operation specified on the meter, at meters located within Parking Meter Districts 1b-South First Street/University, and 5–Arena/Diridon Area, effective July 2030; and
(l) Authorize a parking meter hourly rate of $3 per hour Monday-Saturday, except Sundays and holidays at meters located within Parking Meter Districts 2–East Santa Clara Neighborhood, 3–Japantown Neighborhood, and 4–First and Younger Neighborhood, effective July 2030.
SUMMARY AND OUTCOME
In alignment with direction provided by the City Council during the 2026-2027 budget development process to preserve the City’s most important priorities and core services to the maximum extent possible while also resolving the ongoing $50 million General Fund shortfall, the Administration initially recommended increases to Downtown meter rates and hours of operation to generate additional annual revenues to support an ongoing transfer of $1.2 million from the General Purpose Parking Fund (Parking Fund) to the General Fund. While the ongoing transfer was included in the 2026-2027 Adopted Operating Budget, the City Council deferred action on the parking system changes and directed staff to conduct additional community engagement and analysis of alternatives.
Based on additional analysis and informed by stakeholder feedback, the new actions recommended in this memorandum establish a five-year strategy to gradually adjust
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
City garage and on-street parking rates and hours, significantly expand eligibility for the Downtown Employee Discounted Permit Parking Program, and maintain the first 90 minutes of free parking in City garages. 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.
BACKGROUND
The City operates and maintains seven public parking garages and multiple surface parking lots that provide daily and event parking. Collectively, these facilities offer more than 6,000 off-street parking spaces, including approximately 3,600 spaces that provide up to 90 minutes of free parking. The City also operates approximately 2,500 on-street metered parking spaces that provide convenient short-term parking throughout Downtown and surrounding areas.
Downtown parking meter rates were last updated in 2014 as part of the transition from manual parking meters to smart meter technology. Similarly, the operating hours for most parking meters have remained unchanged for more than two decades.
The City Council-approved Mayor’s March Budget Message for Fiscal Year 2026-2027, in order to preserve resources for the City’s most import priorities and core services to the maximum extent possible, directed to the City Manager employ a range of strategies to resolve the ongoing General Fund shortfall forecasted for 2026-2027, including increasing costs recovery levels for fee-supported services, while still being mindful of affordability impacts, and identifying implementable new revenue streams.
In alignment with this direction, the 2026-2027 Proposed Operating Budget included recommendations to increase parking-related revenue by $1.2 million and increase the ongoing transfer from the Parking Fund to the General Fund by $1.2 million. Not only will these actions help resolve the $50 million ongoing General Fund shortfall, but the City will also continue to provide a range of parking options for businesses, employees, customers, and visitors, as well as promote regular turnover of parking spaces to improve availability for customers and visitors.
The original proposal included the following elements:
1. The extension of parking meter enforcement hours from 6 p.m. to 9 p.m. at approximately 1,600 metered spaces located throughout the Downtown core, which include the Downtown and South First Street / University meter districts.
2. A subset of the 1,600 meters, approximately 900, located within two blocks of a City parking garage, will experience a rate increase to $4.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
Implementation of these changes through amendments to the Master Parking Rate Resolution was placed on the Consent Calendar for the June 23, 2026, City Council meeting. During public comment, Downtown businesses and employees raised concerns about awareness of the proposed changes, the extension of paid parking into the evening, impacts on employees who currently park during free meter hours, increased costs for customers, and the concentration of the proposed changes within certain meter districts.
While the $1.2 million transfer to the General Fund was approved as part of the 2026- 2027 Adopted Operating Budget, City Council deferred consideration of parking rates and hours of operations. Staff was instead directed to conduct additional outreach on the proposal and perform a high-level analysis of an alternative that can address stakeholder concerns while still providing sufficient revenues to support the $1.2 million ongoing transfer to the General Fund.
ANALYSIS
Downtown parking demand has continued to evolve as residential growth, business activity, dining destinations, entertainment venues, and special events extend into evening hours. As a result, current parking meter hours of 9 a.m. to 6 p.m. no longer fully align with actual parking demand patterns, particularly within the Downtown core, where parking occupancy frequently remains elevated after 6 p.m.
Similarly, several of the city’s highest-demand curbside parking areas continue to experience sustained occupancy levels while priced at $2 per hour and after 6 p.m., when meter spaces are free. High occupancy reduces parking availability for customers and visitors. In addition, when curb spaces are full, other illegal and unsafe parking activities like double parking or blocking fire hydrants and access ramps are more likely to occur. Parking pricing and operating hours are commonly used as parking management tools that help balance demand, improve turnover, and maximize the effectiveness of public parking assets.
Staff previously reviewed parking meter rates and practices from peer jurisdictions that operate active downtown parking programs and balance recurring daily parking demand with significant event-driven activity. San Francisco, Oakland, and Sacramento provide useful comparisons because their parking programs use pricing, operating hours, and other parking management strategies to address a combination of business, visitor, entertainment, and event-related demand. Nearby communities such as Los Gatos, Santa Clara, and Campbell provide free public parking, although certain areas have time limits. Santana Row charges $3 per hour for on-street parking and provides two hours of free parking before hourly charges apply in its garages. These locations represent important alternatives for customers, but parking price is only one factor influencing destination choice, along with travel distance, fuel prices, time, convenience, and the availability of businesses, restaurants, entertainment, and events.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
As shown in Figure 1, San José’s current meter rate of $2 per hour and Monday- through-Saturday operating schedule is generally lower than those of the larger peer cities reviewed. Even after the proposed phased changes, Downtown San José’s meter rates and operating hours will generally remain within or below the range of comparable municipal parking programs.
Figure 1 – Parking Rates and Hours Benchmarking
City / Agency Days of Operation Hours of Operation Rate San Francisco (SFMTA) Every day 9 a.m. - 10 p.m. Up to $13 per hour Oakland Every day 8 a.m. - 6 p.m. Up to $4 per hour
Sacramento Every day 8 a.m. - 10 p.m. Up to $6 per hour
San José – Current Monday-Saturday 9 a.m. - 6 p.m. $2 per hour San José – Proposed Monday-Saturday Greater Downtown Area Meters: 9 a.m. - 9 p.m.
beginning FY 28-29
Exterior Meters: 9 a.m. -
6 p.m.
Greater Downtown
Area Meters: $3
beginning FY 27-28,
increasing to $4 in
FY 30-31
Exterior Meters: $2
per hour, increasing
to $3 per hour in FY
30-31
Los Gatos Every Day 2-3 hour parking limit in
certain areas
Free
Santana Row (Private) Every Day 24/7 Garage: First 2 hours free
$2-$3 per hour ($10-
$15 Daily Max)
On-street Meters: $3
per hour
Santa Clara Every Day 1-2 hour parking limit in
certain areas
Free
Campbell Every Day 2-hour parking limit in
Downtown
Free
Between July 17, 2026, and September 2, 2026, staff participated in eight stakeholder engagements (see Public Outreach section for details) to discuss parking demand management, the City’s budget shortfall, historical parking meter rates, garage and event rates, Parking Fund uses, the original parking meter hours and rates budget proposal, and a proposed alternate solution. During these outreach efforts, staff noted that the feedback received during public comment remained consistent:
• Impacts on employees who are currently parking during free meter hours; • Impacts on customers who will be asked to pay more to park; • Meter hour and rate changes are not equitable as they do not impact all meters; and
• Perception that parking garages are not clean or safe.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
Based on this feedback and staff's review of parking utilization, historical meter and garage rates, and Parking Fund financial and resource requirements, staff developed an alternate approach. The revised proposal maintains the City's revenue objective while phasing changes over five years, reducing the immediate impact on parking customers and employees, preserving lower-cost parking options, more broadly distributing rate adjustments across the parking system, and ensuring sufficient revenues to operate and invest in the City’s parking system over the long-term.
A commitment to maintaining 90-minutes of free parking in the garages during the five- year period is also a key element in the proposal shown in Figure 2 below:
Figure 2. Five-Year Parking Rates and Hours Implementation Schedule 2026-2027 City Garages*: $3 Event Rate Increase and $1 Per Hour Rate Increase 2027-2028 Greater Downtown Area Meters: $1 Per Hour Rate Increase 2028-2029 Greater Downtown Area Meters: Extend Meter Hours 6 p.m.-9 p.m. 2029-2030 City Garages*: $2 Event Rate Increase
2030-2031 All Meters: $1 Per Hour Rate Increase
*First 90-minutes free in City garages remain unchanged during five-year plan
Impacts on employees
The alternate proposal also includes enhancements to the City’s existing Downtown Employee Discount Permit Parking Program. During outreach efforts, staff learned that this program is not well known among Downtown businesses and employees. The San José Downtown Association is responsible for promoting parking programs and is working to increase awareness about this helpful parking permit option. It was also identified that many restaurant and bar employees did not qualify for the existing program, because they receive gratuities that push them over the income limit. To address this, the alternate proposal will increase the maximum income limits to qualify for the Downtown Employee Discounted Permit Parking Program from 30% over the City’s minimum wage to 50%, not including gratuities. This is expected to allow more employees the ability to take advantage of the discounted parking program and park in City garages. Employees parking in City garages will also free up prime on-street parking spaces for customers.
Impacts on customers
The alternate proposal maintains the offering of 90-minutes of free parking in City garages, including the Convention Center on non-event days, for a minimum of five years. When considering a two-hour stay and current rates, parking at a meter costs $4 and parking in a garage costs $2. When considering rates proposed in 2026-2027 and 2027-2028 of the alternate proposal, parking for two hours at a meter will cost $6, and parking in the garage will cost $2.50. This rate structure should help move longer-term parking stays into the garage and help with turnover at prime on-street parking spaces.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
Citywide rate equity
The alternate proposal includes smaller rate increases at all meters and City garages, spreading the rate changes across paid parking spaces contained within existing meter districts and garages.
Garage safety and cleanliness
Actual and perceived safety and cleanliness are important to the parking customer experience and can influence whether residents, employees, and visitors choose to use City parking facilities. The City currently provides security, cleaning, and maintenance services at its parking facilities, and additional resources are also available to assist customers traveling to and from downtown parking locations.
The San José Downtown Association contracts with Groundwerx to provide a safety escort service. Between the hours of 6 a.m. and 8 p.m. Sunday through Thursday, and 6 a.m. and 10 p.m. Friday and Saturday, individuals may contact Groundwerx at (408) 287-1520 to request an escort from their location to their vehicle, transit stop, or rideshare pick-up location. During stakeholder outreach, staff learned that awareness of this service is limited among some Downtown businesses and employees. The San José Downtown Association is working to increase awareness of the program.
The City currently funds security coverage within the parking system, including stationary and vehicle/mobile patrol security guards. Stationary guards provide high- visibility presence, check stairwells, address loitering, and report maintenance issues and property damage, while mobile patrols provide vandalism deterrence, parking compliance support, relief for stationary guards, and checks of parking equipment and electric vehicle charging stations.
Parking revenues support daily garage operations, cleaning and maintenance, stationary and mobile security patrols, meter maintenance and revenue collection, and facility improvements such as painting, signage, power washing, ADA compliance, structural repairs, and roof, floor, and fencing repairs. Parking revenues also support capital improvements, including garage access improvements, elevators, and parking meter technology and equipment replacement. Accordingly, maintaining current service levels and implementing further enhancements to security, cleaning, and facility maintenance requires sufficient ongoing resources within the Parking Fund. As the City considers parking rates and other changes to the parking program, maintaining a financially sustainable parking system is important not only to parking operations, but also to the City's ability to respond to stakeholder concerns and continue investing in cleaner, safer, and better-maintained parking facilities.
Long-Term Comprehensive Parking Plan
In addition, during the five-year implementation period, staff anticipates engaging with the Downtown Parking Board on the development of a comprehensive parking plan that builds upon the City’s current parking program and provides additional analysis and consideration of alternative strategies for the future operation of the City’s on- and off-
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
street parking system. The plan will evaluate approaches related to existing and expansion of parking operations and maintenance, rate structures, hours of operation, free-parking periods, parking technology, and other parking strategies beyond the five- year proposed plan identified in this memo. A key component of this effort will be establishing a long-term rate strategy that allows revenues to increase gradually in alignment with rising operating and maintenance costs, supports reinvestment in parking fund reserves, provides capacity to address long-term capital improvement needs, and creates greater financial stability within the General-Purpose Parking Fund.
As part of that longer-term planning effort, staff may also evaluate potential approaches for a future meter revenue-sharing or reinvestment framework within established meter districts. Any such approach will be considered only after evaluating the financial performance, stability, and long-term solvency of the General-Purpose Parking Fund, including its ability to meet ongoing operating, maintenance, capital, General Fund commitments, and other financial obligations
EVALUATION AND FOLLOW-UP
No additional follow-up action with the City Council is expected. If approved, staff will implement the five-year strategy and engage the Downtown Parking Board in development of a comprehensive parking plan as described above. If the recommended actions are not approved, the 2027-2028 Proposed Operating Budget will need to include spending reductions within the Parking Fund or reduce the General Fund transfer and resolve the corresponding impacts to the ongoing General Fund shortfall.
FISCAL IMPACTS
Table 1 below illustrates the impact on expenses and revenues in the Parking Fund based on the recommended changes to parking meter rates and hours and City garage rates from 2026-2027 through 2030-2031. While the recommended actions result in negative impacts to the Parking Fund in the near-term, the cumulative impact of these recommended changes is estimated to be $5.0 million, and will help support necessary future investments. City parking garages in the Downtown core will continue to have free parking for the first 90 minutes, and rate schedules related to garage and meter parking will be adjusted accordingly.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
Table 1 – Impacts to General Purpose Parking Fund
2026-2027 2027-2028 2028-2029 2029-2030 2030-2031 Actions included in the 2026-2027 A dopted Operating Budget that reduced available resources to support parking sy stems operations and capital inv estment.
I ncrease to General Fund T ransfer
(1,200,000)
(1,200,000)
(1,200,000
(1,200,000) (1,200,000)
Non-e ve nt da y, 90-minute free
parking at Convention Center
garage*
(146,000)
(350,000)
(350,000)
(350,000)
(350,000)
San José Downtown A ssociation
(Downtown Ice) (150,000) - - - -
To t a l Impact to A vailable
Re s ou rc es in General-Purpose
Parking Fund
(1,496,000) (1,550,000) (1,550,000) (1,550,000) (1,550,000) Changes to the City’s va rious parking meters and garage rates and hours as recommended in this memorandum.
I ncrease G arage E v ent R ates by $3
225,000**
300,000
300,000
300,000 300,000
I ncrease G arage R ate by $1 per
hour
586,000**
878,000
878,000
878,000 878,000
I ncrease Parking M eter R ate for
G reater Downtown Ar e a Me t e r s b y
$1 per hour
814,000
814,000
814,000 814,000
Extend M eter Hours for G reater
Downtown Ar e a M eters from 6
p.m. to 9 p.m.
842,000
842,000 842,000
I ncrease G arage E v ent R ates by $2
200,000 200,000
I ncrease Parking M eter R ate for A ll
M eters by $1 per hour 993,000
T otal Change in estimated
R evenue for G eneral-Purpose
Parking Fund
811,000 1,992,000 2,834,000 3,034,000 4,027,000
Cumulative Parking Fund
Impact /Ne w R esources A vailable
for Parking System Investment
(685,000)
(243,000)
1,041,000
2,525,000
5,002,000
*While only approved on a pilot basis, the 2026-2027 Adopted Operating Budget, this action is assumed to continue for purposes of this presentation.
**Effective October 2026
To the extent the proposed changes generate net revenues above the committed $1.2 million transfer to the General Fund, the ongoing forgone revenues from various parking programs and the ongoing parking portfolio operating, maintenance, and other
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
programmed obligations, those revenues will be used to offset costs associated with needed capital improvements to the City’s parking system. The Parking Fund supports a range of both short and long-term capital needs. Examples of identified capital improvement needs include:
• Elevator addition at the 2nd/San Carlos Garage ($11.0 million - $15.0 million) • Meter technology upgrades and equipment replacement ($2.5 million) • Parking facilities security camera system ($1.5 million) with system expansion on an annual basis to all facilities
• Market Street Garage façade project and entrance/exit improvements ($1.0 million)
Since the recommended actions will yield less revenue than included in the 2026-2027 Adopted Operating Budget, corresponding budget actions may be brought forward as part of a future budget process, as necessary, to revise revenue estimates based on activity levels. Further, while the Downtown Parking Rates and Hours 1 budget action, as
described in the Transportation Department section of the 2026-2027 Proposed Operating Budget, adds 0.50 Parking and Traffic Control Officer position and various non-personal equipment to support the enforcement efforts associated with the meter hour extension.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office and the Planning, Building, and Code Enforcement Department.
PUBLIC OUTREACH
Between July 17, 2026 and September 2, 2026, City staff attended and/or hosted eight stakeholder meetings, providing a presentation on the specific elements of the meter rate and hour budget proposal and the City’s budget shortfall and facilitating discussions and feedback on the proposal. Specific outreach touchpoints included:
• San José Downtown Association Advocacy Group (July 17) • SoFA Committee (July 23)
• San Pedro/Little Italy Committee (July 31)
• Paseo Committee (August 3)
• Historic District Committee (August 4)
• Downtown Parking Board Special Meeting (August 5)
• San José Downtown Association Board Meeting (August 13)
1 See page 779 in the 2026-2027 Proposed Operating Budget for addition details on the Downtown Parking Rates and Hours budget action.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
• Downtown Parking Board Regular Meeting (September 2)
In addition, the Department of Transportation published blog posts on July 31, 2026, and September 8, 2026, and engaged with various news outlets on the subject.
This memorandum will be posted on the City Council Agenda website for the September 29, 2026 City Council meeting.
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
A special meeting of the Downtown Parking Board was convened on August 5, 2026, to provide an opportunity for staff to receive and discuss both Board Member and public feedback on the proposed parking rate changes. During the meeting, Board Members expressed concern regarding the equity of the original budget proposal, noting that the proposed meter rate changes were concentrated downtown rather than applied more broadly across City parking facilities and meters. The alternate proposal shared during the meeting addressed some of these concerns by outlining a phased approach with more moderate rate increases and distributing certain increases across City parking meters and garages.
Board Members also requested that staff consider the sequencing of the proposed rate changes, with garage and event parking rate adjustments occurring earlier in the five- year implementation period and meter rate changes occurring later. Staff incorporated this feedback into the final alternate proposal, including revisions to both the distribution and timing of the proposed rate changes.
During the September 2, 2026, Downtown Parking Board Regular Meeting, a quorum was not present; therefore, the Board was unable to take formal action or establish an official position on the proposal. However, staff presented information regarding the final draft meter rates and hours proposal and received additional comments from Board Members in attendance. Staff highlighted the revisions made in response to prior Board Member feedback and Board Members acknowledged staff’s efforts. Board Members reiterated concerns regarding the proposed $1.2 million transfer from the General- Purpose Parking Fund to the General Fund, as well as the potential impacts of the proposed parking changes on Downtown businesses and employees, especially the extended meter hours.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Parking Meter and Garage Rates and Hours
CEQA
Not a Project, File No. PP17-008, General Procedure and Policy Making resulting in no changes to the physical environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
John Ristow Jim Shannon
Director, Transportation Budget Director
For questions, please contact Heather Hoshii, Deputy Director, Transportation Safety, Operations, and Parking, Transportation Department, at [email protected].