How much is the Transportation Sustainability Fee?

The new fee would be assessed in proportion to the size and use of the proposed development.

TSF Rates

How were the rates determined?

The city conducted two data-intensive studies and then struck a careful balance to achieve maximum public benefit without hamstringing development.  The first analysis, a nexus study, set a maximum justifiable fee based on demands on the transportation system. The second study, an economic feasibility analysis, looked at how different fees affected the bottom line for different projects.  The result is a fair contribution for the transportation network without making projects too costly to build.  

When will the new fee start being charged?

If the fee is approved by the Board of Supervisors and the mayor, it would be charged from the effective date of the ordinance.

What is the cutoff point for who is responsible for the new fee?

Development projects that have a Planning Department or Planning Commission approval by the ordinance’s effective date would not have to pay the new fee. Residential development projects that have submitted a development application by the effective date would only pay 50 percent of the proposed fee. (A preliminary project assessment is not a development application.) Non-residential projects that have submitted an application to the Planning Department would pay the existing Transit Impact Development Fee, or TIDF. For all types of development, projects would still be subject to all applicable fees in effect at the time.

When does the Transportation Sustainability Fee apply?

As is the case with the current Transit Impact Development Fee, the new proposed fee will only apply to net new development or a change of use.  That means that either a building is completely new or is being expanded or converted to a more intense use.  The fee applies only to the net new part of the building.  So if a project demolishes 5,000 square feet of space and builds 20,000 square feet, the fee is paid on the 15,000 net new square feet.  Similarly, if someone is adding 5,000 square feet of space to a 20,000 square foot building, the fee would only apply to the 5,000 new square feet.

The fee would also apply for changes of use that generate more trips on the transportation system, like converting a building from industrial space to offices.

The fee does not apply to interior renovations that don’t expand a building’s footprint or change its use.  The fee does not apply to any addition or new building of 800 square feet or less.

If a new development project converts a site from a low-trip-generation use, like industrial, into a high-trip-generation use, like retail, then the new project pays the difference between the fee for the less-intense use and the new, higher use.  If a project goes in the opposite direction – converting from retail to industrial, for example – the fee doesn’t apply.

Why is there a credit for existing uses?

This is about new development paying its fair share. Projects would be required to pay for new impacts they generate, meaning additional developed space or changes to a more intensive use. For changes of use, the project would be required to pay the difference between the new use and any pre-existing uses. For example, if a development project would demolish an existing 5,000 square foot office building and build a 50,000 square foot office building, the fee would be applied on 45,000 square feet of new development.

Can developers get an in-kind fee to fund transportation improvements in the area their project is located in?

No. This is a citywide fee, and it goes to citywide programs, but priority is given to specific projects identified in different Area Plans.

Timing of Fee/Grandfathering

• My condo building had its application approved.
  • Development projects that already have their Planning Department entitlements would not have to pay the new fee (any other applicable fees would still apply).
• I filed my application for a new 100-unit residential building with the Planning Department 3 months ago and am in the middle of the review process.
  • Partially applies. Residential development projects that have submitted an application to the Planning Department would pay 50 percent of the proposed fee.
• I filed my application for a new 100,000-square-foot office building with the Planning Department three months ago, and I’m in the middle of the review process.
  • Does not apply. Non-residential projects that have submitted an application to the Planning Department prior to the effective date of the ordinance would pay the existing Transit Impact Development Fee, or TIDF, and any other applicable fees.

How does the fee apply to common types of building applications?

Housing

• I’m building a single-family home
  • Does not apply. Residential developments with 20 units or less would not be subject to the fee.
• I’m remodeling or adding on to my home.
  • Does not apply. Would only apply to new developments that would create more than 20 new units.
• I'm proposing a new building with 10 housing units. 
  • Does not apply. Residential developments with 20 units or less would not be subject to the fee.
• I'm proposing a new building with 100 housing units
  • Applies. Residential developments with more than 20 units would be subject to the fee.
• I’m proposing a new group housing development where people share kitchens and other facilities.
  • Applies. Group housing projects of any size would be subject to the fee.
• I propose to include 12 on-site affordable housing units in my 100-unit development.
  • Applies to all units. Required inclusionary (affordable) units would be subject to the fee. However, they would still be required to be kept affordable at the same levels; the fee could not be passed on to the individual owners or tenants.
• I’m renovating a building with 100 housing units, with no expansion to the building.
  • Does not apply. Would only apply to residential developments creating more than 20 units.
• I am a large master development with an approved Developer Agreement with the City
  • May apply. The terms of the Developer Agreement would dictate whether the fee applies or not.

Office

• I’m building a new 100,000 square foot office building
  • Applies. Would apply to new office development, similar to the existing Transit Impact Development Fee.
• I'm proposing to expand my office by 10,000 square feet into another part of an existing office building.
  • Does not apply. Only applies to new construction, building additions, and changes of use.  Since this would be changing from one office tenant to another office tenant, it would not change the use.
• I'm proposing a new floor in an existing building that will expand the building by 10,000 square feet.
  • Applies. Would apply to building additions of 800 square feet or more.
• I'm proposing to convert an auto-body shop into office space.
  • Applies. This would be considered a change of use, from industrial use to office use, which has a higher fee rate. You would pay the difference between the two rates.

Retail

• I’m a small business that will move into an existing retail space.
  • Does not apply. The fee would only apply to new construction, building additions, or changes of use.
• I’m a small business that will build a new 4,000 square foot space for my store.
  • Does not apply. The fee does not apply to small businesses under 5,000 square feet.
• I’m building a new building for a Starbucks
  • Applies. Formula retail would be subject to the fee.
• I’m building a new development with housing units above ground-floor storefronts.
  • Probably applies. The fee only applies to the residential component of the development on the upper floors if 20 or more new units are being created. The fee will likely apply to the ground floor commercial space depending on the uses that existed on the property prior to development.

Nonprofits -- This legislation does not change anything in current practice other than apply the development fee to large private universities.

• I’m a nonprofit that is moving into an existing office space
  • Does not apply. The fee would only apply to new construction, building additions, or changes of use. Going from one office tenant to another office or institutional tenant would not be a change of use.
• I’m a nonprofit that will build a new facility for my headquarters
  • Does not apply, except for major private universities, if the nonprofit also owns the land.
• I’m a nonprofit that will rent space that was previously an auto-body shop and convert it into office space for my headquarters.
  • Applies.  Like the existing fee, the new fee would apply to a change of use for all users, including nonprofits that don’t also own the land. This would be a change of use from industrial to office space.
• I’m a nonprofit, private high school that will build a new campus building.
  • Does not apply. Nonprofits, including private high schools, that own and develop land would be exempt from the fee. The fee only applies to nonprofit schools (K-12) if they don’t own the land, as with the current fee.

Medical / Health Care

• I'm a hospital system proposing a new 200,000 square foot hospital.
  • Does not apply. Hospitals are exempt through at least 2030. The Board would have to pass legislation to apply the fee to hospitals at that time.

Universities

• I'm a private university proposing a new 200,000 square foot campus building
  • Applies. The fee would apply to all new developments for large university systems.
• I’m a private university with over 50,000 square feet of space in total, proposing a new 20,000 foot campus building
  • Applies. The fee would apply to all new developments for large university systems.
• I’m a public university proposing a new 200,000 square foot campus building
  • Does not apply. Public universities are exempt from the fee.