Mayor Vincent C. Gray’s administration has concluded the city’s annual $35 residential parking permit fee is too low, setting the stage for a broader political debate about the value of an on-street parking space.

During a D.C. Council hearing on parking Friday, the head of the Department of Transportation said his agency is in the process of developing a comprehensive plan that knits together various parking rules and new strategies to manage on-street parking.

Terry Bellamy, the director, said during his testimony that at least part of the plan could involve an increase in residential parking permit (RPP) fees.

“The RPP fee is too low,” Bellamy said. “Introducing ways to change the price could change the attitudes and practices of RPP.”

District officials for years have pondered whether residential parking permit fees should be increased. The debate has taken on more urgency in recent months as city officials seek ways to reduce the number of vehicles – some of which are rarely moved – in city neighborhoods.

Pedro Ribeiro, a Gray spokesman, declined to comment on Bellamy’s testimony.

But council member Mary M. Cheh (D-Ward 3), chairwoman of the Committee on the Environment, Public Works and Transportation, and several neighborhood activists also appeared to endorse broad changes to how much residents, at least in some neighborhoods, pay for parking.

“Only three ways to manage a scare commodity,” Cheh said. “You can do it by price, you can do it by lottery, and you can do it by queue.”

Citing DDOT statistics, Cheh noted a residential parking permit holder currently pays just 9.66 cents a day to park.

“That’s too low to even cover the maintenance of asphalt,” said Cheh, asking if it was fair to make non vehicle-owing taxpayers to pick up the remainder of the share.

Even if the council opts not to boost the fee for all vehicle owners in the city, Cheh said the council may want to boost the price on second and third vehicles registered to the same address.

Herb Caudill, a Cleveland Park resident representing Ward 3 Vision, testified at the hearing that neighborhood battles over parking occur because the city treats parking “as if its abundant and has no value.”

“I think the simple solution is you start with two simple principles,” Caudill said. “Parking is a private benefit…and second, the value of parking varies by locations.”

Caudill said the city also needs to implement smaller residential parking zones and more refined policies on how the District handles visitor parking in neighborhoods.

Though Bellamy said a comprehensive parking strategy from the Gray administration is still about a year away, the director told Cheh he’s willing to work with the council if it wants to pursue some new parking strategies next year.

That could set up a major council debate over parking rates, which could spill over into the mayor’s and council races in 2014.

Council member Jim Graham (D-Ward 1) appeared skeptical of increasing residential parking permit fees.

“The fact is one of our every four people [in Ward 1], live below the federal poverty line,” Graham said. “So when you are talking about fees, taxes, it is those folks who have very little money and thus can’t afford anymore.”

But council member Tommy Wells (D-Ward 6) said higher fees may be needed to convince more residents to take public transportation.

“We all know neighborhoods, where neighbors just store their car on the street, never used, just stored there,” Wells said. “And it’s $35 a year to store your car…It’s very resistant to smart policy.”