San Francisco approves Transportation Sustainability Fee

By Dan Handel
San Francisco hopes to generate nearly $20 million annually with a recently updated transit impact fee on new development. The city is experiencing immense growth and is projected to add over 190,000 jobs and over 100,000 new homes by 2040. The new Transportation Sustainability Fee will help San Francisco keep up with growth by allocating all generated revenue to the area’s Muni transit system or to bicycle and pedestrian facilities.
The TSF updates the city’s previous Transit Impact Development Fee to include residential, commercial, and industrial land uses on a citywide scale. New residential developments of 20 to 100 units will be charged $7.74 per square foot of building area, those with 100 or more will be charged $8.74. Commercial developments ranging from 800 to 100,000 square feet of building area will be charged $18.04 per square foot and those at 100,000 square feet or more will pay $19.04. Industrial developments of all sizes will be charged $7.61 per square foot of building area. Clearly the TSF has the potential to be a significant charge to developers; on the other hand, the nexus study reports that these per-square-foot charges are only 20 to 25 percent of the total charges that could have been implemented.
While transportation impact fees are not unusual in cities, San Francisco’s TSF is quite unique. Typical transportation impact fees are collected in order to maintain roadway Level of Service through projects like roadway expansions, signal and signage upgrades, added turn lanes, and installation of intelligent transportation systems. The TSF is different because it is set aside entirely to fund transit operations and maintenance or bicycle and pedestrian facilities, and none of it goes to roadway improvements. This fee is part of an overarching Transportation Sustainability Program for San Francisco that focuses on reducing the vehicle miles traveled generated from new development, as well as addressing higher demands on transit, bicycle, and pedestrian infrastructure.
Dan Handel is a Graduate Assistant at SSTI.