Residential streets in downtown Palo Alto may be filled to capacity with parked cars, but the picture inside several garages couldn't be any more different.

Despite waiting lists for parking permits and the city's policy in "overselling" these permits, parking structures on Bryant and Cowper often remain largely unused outside lunch hours. And with community tempers flaring over parking shortages elsewhere, the city is considering a menu of options for changing that.

In a memo released this week, Planning Director Hillary Gitelman proposed three possible options for filling the parking garages: selling more permits, issuing a "Top Floor Only" permit to wait-listed workers at the Cowper Street garages and implementing a residential parking permit program, which would set time limits on residential streets and presumably steer more commuters into garages.

The lattermost of these options took a big step forward on Monday night when the City Council approved a basic framework for what such a permit program would look like and directed staff to draft an ordinance creating it.

According to the memo, the city currently oversells garage permits by more than 160 percent. Even so, many of the top floors in the garages are "often empty." The memo notes that the permits are available only to workers in the two business districts. Because these rules were created to be consistent with the assessment district that financed the garages, the city has "only limited flexibility to make adjustments."

Gitelman noted in the memo that the there are "always more permits in circulation than there are parking spaces because people who hold permits do not always use them and/or renew them." Some changes, she notes, can only be made once the city implements "access controls" that allow officials to monitor garage uses in real time. This could, for example, make is possible for the city to allow employees to share a permit.

The proposals described in the memo -- to sell more permits and introduce permits restricted to the top floor -- will be discussed by the City Council in February as part of a broader discussion about building new garages and creating a "transportation demand management" program aimed at reducing the number of cars.

Even with these measures on the table, the city is also considering adding to the parking supply by building more garages. The council's Infrastructure Committee discussed on Wednesday a list of infrastructure priorities that includes three garages -- two downtown and one near California Avenue. Combined, the three structures would cost about $35 million, according to staff estimates.

Though parking remains the city's burning issue, Councilman Pat Burt, member of the Infrastructure Committee, said Wednesday that he would be "very hesitant" to pay for the garages before the transportation-demand-program is in place.