That pricing will not discourage too many people directly---because you price it exactly at a point where not too many people are discouraged. (That point might have to be adjusted over time.)
Like a congestion charge, you shift from people bidding with their willingness to sit in traffic and endure queues, to people bidding with their chequebook. (Interestingly, your mix of parkers would shift towards more people who value their time more than their money. Affluent customers are good customers!)
Congestion charges worked out well for Singapore and London.
Politically, it's a good idea to hand out the fees from parking at the same level as the people who can decide about it. So if local opposition could derail the scheme, you have to hand out the proceeds very locally. Otherwise you get the political dynamics you describe.
Charging for parking is relatively easy and does not require high-tech. For example Singapore uses a scheme (amongst others) where you buy a bunch of perforated cards. When you want to park, you take a card and push out the appropriate chads to indicate the date and time of day and display the card in your car's window. Each card is valid for an half-hour slot. You can punch out multiple cards with consecutive slots. Each card can only be used once (obviously).
(If you want a crud variable pricing, you can require people to display multiple simultaneous cards for peak hours.)
I have also seen a system where you send a premium SMS with your licence plate number to pay.
Except that you're admitting to discouraging 15% of the customers. If there isn't enough parking for everyone then the shops much prefer people to be cruising around so that as soon as a space opens up there is someone to take it, rather than not showing up in the first place because they can't afford parking.
> (Interestingly, your mix of parkers would shift towards more people who value their time more than their money. Affluent customers are good customers!)
You can't actually make more money strictly by losing profitable customers, even if the customers you lose are below average customers.
> Like a congestion charge
It is like a congestion charge, which have exactly the same problems.
> Congestion charges worked out well for Singapore and London.
They keep poor people off the roads so rich people can use them, anyway.
> Charging for parking is relatively easy and does not require high-tech.
People don't use the high-tech stuff because it's harder. Either way you need something vs. the alternative where you don't need anything.
> Politically, it's a good idea to hand out the fees from parking at the same level as the people who can decide about it. So if local opposition could derail the scheme, you have to hand out the proceeds very locally. Otherwise you get the political dynamics you describe.
The problem is there are no "proceeds" -- the money is going to come from the local residents whether it's parking fees or taxes. The only way you can save anything is to have fewer parking spaces, which nobody is going to allow until after there is already a better alternative in place.
I'm not sure you're going to like the market price of parking. If a parking space is 25% of the size of a $3000/month apartment then the market price of a parking space should be something like $1/hour, which isn't that high. And which puts it right in the hard spot where people subsidizing the price down to zero may actually make sense.
If all you care about is maximizing the revenue from parking spaces then you can set a price like that, but having a price at all discourages people from using parking spaces that you've already paid to construct whether you use them or not. And if you don't use them then the local shops lose customer traffic. So the local shop owner does the math and says hey, if there was free parking here I would get an extra $20,000 profit from more customer traffic, so I should go lobby the city to have free parking even if it means my taxes will be $10,000 higher.
Then their customers realize that if parking was paid for through taxes rather than at the meter the local businesses would be paying part of it instead of the customers paying all of it, so they would be paying less, and paying at the meter is more stressful than paying via taxes anyway.
Then the government realizes that to get the money from taxes they only have to put a slightly higher tax rate on the tax forms but to get it from parking they need meters and credit card processing computers and customer service and parking wardens and dispute resolution systems and the whole works.
So the vote comes up and 90% of everybody votes for free parking because the lack of free parking would collectively cost them more in money and grief than it costs to provide free parking.
The way out of this is to make the alternative to cars (or parking) more attractive, without making cars less attractive. Because people are going to fight you and win if you try to make cars less attractive without immediately replacing them with something which is at least as good.