Mayor Martin J. Walsh has proposed a rate hike to at least $2 an hour for all of the city’s 8,000 parking meters, the first such increase in a decade as his administration seeks new ways to raise revenue while controlling a parking demand that has cluttered many of Boston’s streets.
The standard citywide fee would increase from $1.25 per hour, a rate that was set in 2009. But it would jump to $2.50 per hour in the Fenway/Kenmore and the Bulfinch Triangle area near TD Garden, where city officials say there has been a spike in demand. The increases would go into effect July 1.
In the Back Bay and parts of the Seaport District, two high-demand areas where the city began testing a pilot increase in 2017, the rates would be $3.75 an hour.
Walsh’s aides also said Thursday that the mayor will seek a half-percent hike in taxes on stays at hotels and short-term rentals, which could generate an estimated $5 million a year. If he gets approval from the City Council, Walsh would direct those funds to permanent support housing for homeless people and programs that help prevent youth homelessness.
The two revenue-generating plans are part of the city’s proposed 2020 budget, which Walsh plans to file next week, and they provide new fund-raising strategies for a city heavily reliant on property taxes. Nearly 70 percent of the city’s revenue comes from property taxes.
Emme Handy, the city’s chief financial officer, said the increase in parking rates would raise an estimated $5 million that would help fund related transportation improvements.
The city wants to spend $8 million to improve roads, bridges, sidewalks, and lane markings; another $4 million to reconstruct sidewalks in Boston; and $2 million to upgrade its bike infrastructure. The city will also look to fees it collects from the ride-hailing industry, an estimated $3.5 million in the next year, to pay transportation-related costs.
“We are heavily dependent on property taxes, something we talk about every single year at this time of year,” said Handy. “And so when we make this form of investment in areas of the city, we have to be looking for what new revenue sources we might have.”
The administration also wants to boost spending on housing and homeless services by 7.6 percent, or $7.4 million, with the bulk of the funds coming from the new hotel tax.
The proposal would raise the tax from 6 to 6.5 percent, an increase that was enabled by the short-term rental legislation Governor Charlie Baker signed at the end of last year.
Hotel industry groups, who were instrumental in pushing for new short-term rental rules through both City Hall and the State House, were chilled by the administration’s new proposal.
“We are happy to pay our fair share, we just think it’s a bit more than we’ve been anticipating,” said Paul Sacco, chief executive of the Massachusetts Lodging Association, who pointed to the 5.7 percent state lodging tax and 2.75 percent convention center tax that Boston hotels already pay. “It adds up to a lot that we’re passing on to the customer. Hopefully that won’t affect business.”
City officials said the revenue would directly fund housing and homeless services, including $4 million a year for permanent supportive housing for homeless people. The money would subsidize rental housing, and help fund construction of new projects such as, potentially, the Pine Street Inn proposal for 140 units of long-term housing for formerly homeless people in Jamaica Plain.
“There’s a nexus here, a direct correlation,” said Justin Sterrit, the city’s budget director. “These are taxes that we are going to raise. But they’re going to go into services that you will see next year.”
With a $2 standard parking rate, Boston would top its immediate neighbors. Rates in Cambridge range from $1 an hour to $1.50, depending on the location. Somerville’s rates are $1 citywide. And while Brookline’s meters cost up to $2 in some locations, its standard rate is $1.25 for a two- or three-hour parking spot.
Nationally, similarly sized cities have raised rates higher than Boston. Seattle charges up to $4 an hour, and San Francisco charges up to $6.50 an hour.
Chris Osgood, Boston’s chief of streets and transportation, said Thursday that the city’s two-year pilot program for increasing the meter rates — specifically in the Back Bay — showed that the rate increase can help clear up car congestion, by opening up parking spaces and reducing illegal parking, such as double-parking or parking in loading zones.
With the rate increase, he said, drivers were less likely to keep their cars at spaces for a long time, or were more willing to park in parking garages, or not drive at all. An independent study had found that 30 percent of car congestion in some areas of the city can be attributed to vehicles hunting for a parking space, he said.
Stacy Thompson, executive director of the nonprofit Livable Streets Alliance, welcomed the increase, celebrating the plan to have the money fund better pedestrian and cyclist infrastructure. She said the new rates better match the value of on-street parking.
“In cities that are really seriously tackling congestion, they’re making the difference between free and cheap parking being an incentive to drive into the city,” she said.
Downtown on Thursday, several people had mixed reactions to the increase.
“It’s not prohibitive, but it’s a noticeable difference,” said Dan Nowitz, 38, who was parking to go out after work.
Sophia Maclone Zayas, 22, of Nahant, the manager on duty at the Courtyard by Marriott Boston Downtown/North Station, said that parking fees will be another burden for guests.
“If you’re coming to Boston to spend a penny, you don’t want to spend it on parking,” she said.
Adam Vaccaro of the Globe staff and Globe correspondent Andrew Stanton contributed to this report.