Seattle is getting strategic with its parking rates.

The Department of Transportation received approval from the City Council on Monday to begin on a 2-year project that will upgrade each of Seattle’s 2,200 parking meters with dynamic pricing technology.

That means, by 2016, you may see two different prices during the day on the same parking meter depending on demand for that specific street.

“We decided it’s time to make an investment and upgrade the technology,” said Mike Estey, Manager of Parking Operations and Traffic Permits for Seattle’s Department of Transportation (SDOT).

The new technology will let the City employ a dynamic pricing model that’s used in the travel and entertainment businesses. Estey said the rates, which will be set yearly based on SDOT’s annual parking study, may adjust at different times of the day to reflect demand. For example, there may be a cheaper rate when demand is low in the morning, and a more expensive rate when demand is higher in the afternoons.

The idea is to find the magic price that will enable the City to keep open one or two parking spaces for every block in every neighborhood, Estey said. It’s a strategy that won’t necessarily rake in more revenue for City government — in fact, prices may actually drop for drivers.

“Our revenue won’t necessarily go up,” Estey said. “In fact, it could come down if we drop rates in the morning in a lot of areas.”

Down in San Francisco, transportation officials have spent the past two years testing a dynamic pricing for parking and found that average meter rates actually dropped by 4 percent. And that’s not all — citations and average time spent searching for parking decreased, while blocks were full less often.

The new kiosks, to be installed by 2016, will feature faster processors, larger display screens, and credit card readers that will require a simple swipe — yes, that means your cards won’t get stuck in the meters anymore. SDOT will also be able to make changes to each meter — like parking rates — remotely and wirelessly, instead of having to manually and physically fix them.

The machines will cost the City $10 million, not including installation and annual operating costs. SDOT made $37 million in paid street parking revenue last year alone.

As Crosscut points out, the new solar-powered meters could also potentially allow payment via license plate number. This upgrade would remove the need for paper receipts and could possibly adjust price based on vehicle type or emissions.

Check out SDOT’s 2014 annual parking study here:

2014 SDOT Annual Parking Study

Update, Oct. 1: In terms of how the dynamic pricing will be set, Estey said that SDOT will use the annual parking study, which is a “manual hourly count of actual on-street occupancy in paid parking areas that we conduct each spring.”

Here’s more from Estey: