San José Postpones Plan to Double Downtown Parking Rates After Business Owner Uproar

The increase had already been built into the 2026-2027 budget adopted earlier this year, which is part of why it arrived for what was supposed to be routine approval on the consent calendar, rather than as a standalone item with dedicated public input.

“I had a number of small businesses, ground-floor retail businesses, reach out and express their concern over the lack of public engagement on this item,” said Councilmember George Casey, who made the motion to defer. “Somewhere along the line, the ball got dropped.”

The plan to capitalize on increased nightlife downtown, most recently due to a surge of traffic from the FIFA World Cup, ran afoul of downtown restaurant and bar owners, workers and residents, who said during the meeting the increase would hit the service industry hardest and at exactly the wrong hours.

George Lahlouh, an owner of M.O. Hospitality, which operates five bars and restaurants downtown and employs 200 people, told the council the timing of the extended hours was the main issue.

“Extending paid meter hours until 9 p.m. and raising key downtown meters to $4 an hour affects the exact hours when restaurants, bars, cafes, venues and events are working to bring people back to downtown,” Lahlouh said. He noted that 90 minutes of free garage parking “does not always cover dinner, drinks, shows, or a full downtown experience. For employees, it does not cover a normal shift by far.”

In response to questions from KQED, the city’s Department of Transportation defended the increase as long overdue. Spokesperson Colin Heyne said meter rates had not been raised since 2014, and that the operating hours for most meters had gone unchanged for more than two decades.

He said San José’s $2 rate sits below peer cities — Oakland charges up to $4 an hour, Sacramento up to $6, and San Francisco up to $13 — and that even after the increase, San José would remain tied for the lowest meter rates in the region while continuing to offer free parking on Sundays.

Low rates and free on-street parking after 6 p.m. appear to allow some cars to park for long stretches, limiting availability for other customers, Heyne said. San José operates seven public garages with more than 6,000 spaces, including roughly 3,600 downtown spaces that offer 90 minutes of free parking, with monthly passes starting at $100. The city also offers a discounted permit for downtown employees earning less than 30% above minimum wage, though there is no special meter rate for workers, students or commuters.

Jason Greer, a longtime restaurant manager who said he spoke on behalf of his back-of-house staff, said the rate hike would eat into already-thin wages.

“Most of the employees are not making over $20 an hour,” Greer said. “Taking $4 is taking a huge portion of their pay, and it’s inappropriate.”

David Faria, a small business owner and chair of the SoFA District Committee, a group advocating for downtown businesses, argued the plan assumed the city could pull $1.2 million out of the local economy without changing how people behave — that customers and workers would simply absorb the higher cost rather than spend less or stay away.

“That money has to come from somewhere, and it ultimately comes from the pockets of working people and customers who are already stretched,” Faria said. “If we want a stronger downtown, we should be reducing friction, not adding to it.”

Heather Hoshii, deputy director of the Department of Transportation, told the council most outreach had been done internally, through the budget study sessions, and that an email to the Downtown Association in early May offering a meeting had been missed. The department’s full communications push — reaching businesses, updating websites — wasn’t scheduled until July, the month before the change would take effect.

Vice Mayor Pam Foley called that sequence backward.

“It’s clear the community at large did not know about this increase,” Foley said. “Whether the downtown business association knew or not or attended the meetings, that’s really irrelevant. What is relevant is that the small business owners here didn’t know about it. And really, I think we need to take ownership of that outreach.”

Because the revenue was already counted in the budget, the deferral carries a cost. Budget Director Jim Shannon said the delay would reduce revenue by roughly $150,000 to $200,000. But he said he did not expect any impact on city services.

Councilmember Anthony Tordillos, who represents downtown, floated the idea of spreading a smaller increase across the whole city rather than doubling the cost for the downtown spaces. Foley raised concerns that a citywide change would require far broader outreach than could be done by August. The council also asked staff to study possible parking discounts or set-asides for downtown employees.

Nate LeBlanc, economic development director at the San José Downtown Association, had asked for the deferral on similar grounds and noted the proposal skipped a key step by never going before the city’s downtown parking board. He said it’s “probably inevitable that some new revenue needs to be raised,” but argued the city could find a way “without negatively impacting our service industry and our visitors.”