Or you can hand out guest passes to residents.
The enforcement are handled by the same people that do normal parking enforcement. They scan the plates, see if there's a valid permit/ticket and write a ticket otherwise.
I think after we have fixed the car parking, we really should start looking into those bikes and ban them from street parking.
This is indeed one of the biggest problems with such parking permit scheme.
What happens is the resident needs to move their car to the street (possibly driving around for a long while to find a spot) so the guest can park on their driveway. It's a pain for everyone involved. And you better never have a party where more than a couple people visit at once.