New homes would become more expensive in San Francisco under a proposal to slap a new fee on construction that would raise $170 million over 20 years for transportation projects.
Developers in The City already pay a fee that goes toward offsetting traffic congestion. A proposal would expand that fee to residential construction, under which developers would pay $5.53 per square foot for new work.
Expansion of the fee was recommended last year by the San Francisco Municipal Transportation Agency, but it was abandoned after strong opposition from residential builders. The new proposal is receiving the same reaction.
Sean Keighran, president of the Residential Builders Association, said the fee would be a “huge” cost burden.
“It’s outrageous to think that while small builders are facing foreclosure, bureaucrats would come up with a wild and crazy idea to pass further excessive fees,” Keighran said.
The ordinance would generate about $630 million toward transit, transportation and infrastructure improvements over the next 20 years — a 37 percent increase from the $460 million that would be generated under the existing fee structure. Of the funding, 65 percent would go toward enhancing service on the busiest Muni lines.
Ed Reiskin, executive director of the SFMTA, said the plan would replace outdated development impact planning.
Along with the residential fee, the proposal would change development impacts measured under the California Environmental Quality Act. Instead of measuring how development slows down traffic congestion, the ordinance would measure impacts based on how they slow down transit speeds and increase overcrowding.
John Lee, a former president of the San Francisco Association of Realtors, said an average two-bedroom condo in The City is about 1,200 square feet, meaning developers would face $6,000 in extra project fees that would likely be passed on to consumers.
The ordinance, backed by the Office of Economic and Workforce Development and the SFMTA, would need approval by the Board of Supervisors.
It’s expected to be formally introduced next month, but it will likely be more than a year before the board takes official action due to planning studies, said Michael Yarne of the Economic and Workforce Development Office.
Residential builders could face a new fee that would go toward transit, transportation and infrastructure improvements.
$5.53 Price per square foot of proposed fee for new residential developments
1,000-1,200 Average size, in square feet, of two-bedroom condo in San Francisco
$630M 20-year transportation funding under proposed development ordinance
$170M Increase in funding from current development ordinance
Sources: S.F. Capital Planning Committee, S.F. Association of Realtors