INVEST: Frequently Asked Questions
Who Pays the Fee?
The Transportation Sustainability Fee applies to most new development and changes of use citywide. The fee replaces the Transit Impact Development Fee (TIDF), which only applied to non-residential development, and expands applicability to include large, market-rate residential projects. Affordable housing, small businesses and residential developments with 20 or fewer units are exempt.
The fee amounts are assessed in proportion to the size and use of the proposed development. The City studied the impact of growth on transportation and conducted an economic feasibility analysis to examine the effect of the fee on potential new development. The findings of these two studies helped determine the final fee rates, which strike a careful balance to achieve maximum public benefit while still enabling development to occur.
When Does the Transportation Sustainability Fee Apply?
The fee applies to net new development or a change of use. That means that either a completely new building or building that is being expanded or converted to a more intensive use. The fee applies only to the net new part of the building. For example: If a project demolishes 5,000 square feet of space and builds 20,000 square feet of the same use, the fee is paid on the 15,000 net new square feet.
The fee also applies to changes of use that increase the number of 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 also does not apply to any addition or new building of 800 square feet or less.
What Will it Pay For?
The proceeds will fund projects that help relieve traffic congestion, reduce crowding on buses and trains, and create safer streets. Specific improvements could include:
- More Muni buses and trains. Expanding the Muni fleet to improve reliability and reduce travel times. The proceeds could also upgrade Muni maintenance facilities. Some facilities are over 100 years old and in dire need of renovation to accommodate a modern fleet.
- Improved reliability on Muni’s busiest routes. Invest in Muni Forward projects improve transit stops and reengineer city streets in a way that better organizes traffic, saving customers up to an hour a week in travel time.
- Roomier and faster regional transit. Retrofit BART train cars to provide more space for passengers and bikes. Invest in Caltrain to increase service in and out of San Francisco.
- Improved bike infrastructure; safer walking and bicycling. Expand bike lanes to reduce crowding on transit; improve other bicycle infrastructure; and enhance intersections and sidewalks to make it safer for people walking.
While the fee will help close the funding gap for essential transportation infrastructure, additional money is needed to address operating costs.
How will the money be spent?
The collected fees will be spent as follows:
- Transit Capital Maintenance (replaces money from existing Transit Impact Development Fee or TIDF impact fee): 63 percent
- Transit Service Expansion and Reliability improvements (new revenue): 30 percent
- Bicycle and Pedestrian Improvements (new revenue): 3 percent
- Regional Transit Service and Expansion (new revenue): 2 percent
The expenditure plan in the TSF Nexus Study provides a list of typical projects for each category. The SFMTA, with other City and County agencies, will develop a more-specific five-year spending plan for each category. Every two years The Controller’s Office will produce a report every two years identifying the fees collected and actual expenditures by project in each category.
What does the new fee mean for nonprofits?
There is no change in the status quo for the vast majority of nonprofits that own and develop properties for their own use. The only change is that major hospitals and medical uses would now be subject to the fee on new development. See the Development Impact Fee Register for more information.