San Francisco Approaches New Transportation Fee, Reduced Transportation Analysis

​It is no secret to anyone who travels around and through San Francisco that its transportation infrastructure is in need of a serious facelift. From BART and MUNI capacity to bike lanes, damaged roads, and public transit vehicles themselves, San Francisco – and the greater Bay Area – are struggling to upgrade critical aspects of our multi-modal transportation infrastructure. This week, the Planning Department presented refined plans for the City’s Transportation Sustainability Program (TSP).

The TSP has three principal components: a Transportation Sustainability Fee (TSF) for new development; a change to how transportation analyses under CEQA are conducted; and a standardized menu of options for implementing transportation demand management (TDM) tools in new developments. These new changes could begin rolling out by the end of the year.

First, the new impact fee. The Transportation Sustainability Fee would replace the current Transit Impact Development Fee (TIDF). Where the TIDF only applies to non-residential projects, the TSF will apply to both residential and non-residential project. For new projects, the TSF is currently proposed as follows: $7.74/sf for residential, $18.04/sf for non-residential, and $7.61 for PDR. Projects entitled when the new fee is enacted will still pay the existing TIDF only. Projects with pending entitlement applications will not pay the TIDF and instead pay a reduced TSF rate that is roughly 75% of the fees listed above. Projects with plan area fees (i.e. Eastern Neighborhoods, Market/Octavia) will pay a reduced TSF fee, based on the portion of the plan-area specific impact fee allotted to transportation. For example, Eastern Neighborhoods projects will pay a reduced TSF fee equal to the amount of the EN Infrastructure Impact Fee that is directed to transportation infrastructure. The reduction will vary depending on plan area.  

Next, the CEQA change. San Francisco is set to implement a statewide change to how transportation impacts are analyzed. Currently, CEQA focuses on how the Level of Service at nearby intersections is impacted by a new project. This translates to an inherent disadvantage for urban infill projects, which are much more likely to be located near a busy intersection than a suburban subdivision. The new approach would focus on Vehicle Miles Traveled, which is an inherent benefit to urban infill projects which generate much less vehicle miles traveled due to better public transit and the dense, walkability of cities. As a result of this change, the Planning Department expects that traffic from most new projects in the City will likely have a less than significant impact on the environment. The City estimates that all but the largest of new projects will be able to avoid preparing a project-specific transportation study. This will have a truly transformative impact on the entitlement process, since a transportation study typically takes 6-9 months to complete and transportation is the most likely environmental issue to trigger environmental review.

The final piece in the puzzle is the City’s Transportation Demand Management program. Under the program, there will be a standardized menu of options for project sponsors to choose from when implementing a TDM program for their development. These measures will be implemented citywide and will be put into legislation so that it is codified as a requirement, like the Maher and greenhouse gas ordinances.

Between the City and the State, there are numerous next steps. Planning is completing the technical analysis of TSP and confirming a policy approach. It has already begun public outreach to present the program and receive feedback. We can expect the introduction of the new impact fee and the standardized Transportation Demand Management Program to the Board of Supervisors in the summer or early fall, which are projected to be adopted in late fall. Finally, State action on the CEQA reform is expected in the winter, and the City will begin working to implement the new changes shortly after state CEQA rules are amended.

This update was prepared with significant contribution from one of Reuben, Junius & Rose’s newest attorneys, Louis Sarmiento.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.