San Diego City Council officials reached a settlement with local homeowners on Wednesday, which requires the city to eliminate paid parking at Balboa Park by Jan. 1, 2027. This decision is also in part tied to the city’s controversial trash collection fees instituted in 2025. 

The agreement, approved by the City Council in a closed session on Wednesday, will also reduce trash fees for many single-family homeowners in San Diego. In exchange for the settlement, a collection of homeowners in San Diego agreed to drop a lawsuit challenging the city’s trash fee structure and halt a ballot initiative campaign seeking to repeal both measures. 

The settlement marks a political and fiscal reversal for city leaders, who introduced parking fees in Balboa Park earlier this year as part of efforts to address San Diego’s budget deficit.

The city argued that the parking program would generate $15.5 million in revenue for park maintenance and operations. However, critics said the program discouraged visitors from accessing one of the city’s most historic public spaces. The economic fallout that museums and cultural institutions inside the park have felt since the implementation of paid parking is also a central issue in the debate. According to the Balboa Park Cultural Partnership, museum attendance dropped an average of 34% after paid parking began, with some institutions seeing a 60% decline in visitors. 

The reversal also reflects growing political pressure on the San Diego government. Paid parking recently became one of the city’s most unpopular policies, leading to protests, petitions, and widespread criticism.

In 2025, the City Council approved San Diego’s first residential trash collection fee in more than a century after voters passed Measure B — a municipal code amendment allowing the city of San Diego to charge fees for residential waste and recycling collection services — in November 2022. Supporters of the measure argued that the previous system unfairly subsidized trash pickup for single-family homeowners through the city’s general fund. Opponents accused city leaders of misleading voters about the eventual costs. 

Former San Diego City Attorney Michael Aguirre, a member of the legal team representing homeowners, argued in court that the trash fees violated Proposition 218. The proposition stems  from a 1996 California constitutional amendment that limits local governments ability to raise taxes and property-related fees. Under the settlement, trash fees are expected to drop to about $38.75 beginning in 2027, rather than above $50 as originally planned. 

Raul Campillo was the only councilmember to consistently vote against both the parking fee and the trash fee. 

“Today, we are reducing the cost of living in San Diego and beginning the process of rebuilding San Diegans’ trust in their city government,” Campillo said in a statement to NBC 7. 

Eliminating paid parking alone is projected to cost the city roughly $2.2 million in the next fiscal year, according to the Times of San Diego. City officials must now find alternative revenue sources or cut services to compensate for the millions of dollars that parking revenue and reduced trash collection income would have generated to help the city fill a $115 million budget deficit.