Funding Principles

San Francisco strives for racial and social equity across our programs and investments. For capital, this means allocating resources towards expanding equitable access to quality housing, open space, transportation, health, and other public services for Black, Indigenous, and People of Color while improving outcomes for all groups experiencing marginalization, including based on gender, sexual orientation, ability, age, and more. In addition, capital planning supports departments in their respective racial equity plans that inform each department’s capital priorities. The 10-Year Capital Plan strives to fund projects that address racial and social disparities and promote equity in the services delivered by the City’s facilitiesThe funding principles for the Capital Plan are the categories used to make trade-offs between competing needs. They help San Francisco to keep our long-term perspective when it comes time to make choices about major projects and offer a consistent and logical framework for some of the City’s most difficult conversations and infrastructure.

FUNDING PRINCIPLE 1: Addresses Legal or Regulatory Mandate

Improvement is necessary to comply with a federal, state, or local legal or regulatory mandate.

The City faces a wide range of directives and requirements for our facilities, some with significant consequences for failure to perform. Action in these cases is required by law, legal judgment, or court order, or it can proactively reduce the City’s exposure to legal liability. The legal, financial, operating, and accreditation consequences for failure to perform are all weighed when considering these types of projects.

FUNDING PRINCIPLE 2: Protects Life Safety and Enhances Resilience, including Racial Equity

Improvement provides for the imminent life, health, safety, and/or security of occupants and/or the public or prevents the loss of use of an asset.

Life safety projects minimize physical danger to those who use and work in City facilities, including protection during seismic events and from hazardous materials. Considerations for these projects include the seismic rating of a facility, the potential for increased resilience in the face of disaster, and the mitigation of material and environmental hazards for those who visit, use, and work in City facilities. Resilience includes eliminating racial and social disparities so that all San Franciscans may recover and thrive no matter the shocks and stresses they face.

FUNDING PRINCIPLE 3: Ensures Asset Preservation and Sustainability

Asset preservation projects ensure timely maintenance and renewal of existing infrastructure.

It is imperative to maintain the City’s infrastructure in a state of good repair so that the City’s operations are not compromised and resources are not squandered by failing to care for what we own. It is also important to support projects that lessen the City’s impact on the environment. Some assets are more critical than others; for example, some facilities provide services that cannot be easily reproduced at another location or serve as emergency operations centers. Considerations for these projects include the effect on the asset’s long-term life, importance for government operations, and environmental impact.

FUNDING PRINCIPLE 4: Serves Programmatic or Planned Needs

This set of projects supports formal programs or objectives of an adopted plan or action by the City’s elected officials.

Integrated with departmental and Citywide goals and objectives, this funding principle aims to align capital projects with operational priorities. Considerations for this type of project include confirmation that they will contribute to a formally adopted plan or action from the Board of Supervisors or the Mayor.

FUNDING PRINCIPLE 5: Promotes Economic Development

Economic development projects enhance the City’s economic vitality by stimulating the local economy,
increasing revenue, improving government effectiveness, or reducing operating costs.

These projects may have a direct or indirect effect on the City’s revenues or may help to realize cost savings. Considerations for this type of project include the potential for savings, the level of revenue generation (either direct through leases, fees, service charges, or other sources; or indirect, such as increased tax base, business attraction or retention, etc.), and any improvements to government service delivery, such as faster response times, improved customer service, or increased departmental coordination.

Resilience and Sustainability

As the stewards of San Francisco’s public infrastructure, capital planning stakeholders in San Francisco look for ways to increase the City’s resilience and sustainability via our capital program. Resilience describes the capacity of San Francisco's individuals, communities, institutions, businesses, and systems to survive, adapt, and grow, no matter what kind of chronic stresses and acute shocks they may experience. For San Francisco this means (1) the ability to quickly respond and recovery from a disaster or large shock; (2) the ability to address systemic crises such as lack of economic mobility, inequity, poverty, and housing shortages; and (3) the ability to prepare for and address slow-moving disasters like climate change and sea level rise.

As a coastal city in a dense metropolitan region, San Francisco faces a wide range of challenges when it comes to promoting sustainability in our infrastructure programs and projects. Sustainability in San Francisco means promoting green building, clean energy, mass transit, urban forestry, and careful planning, as well as preserving our existing assets to reduce the need for additional building.  For more information about capital-related efforts supporting these goals, please see Chapter Four: Building Our Future.

Visitacion Valley is located in southeast San Francisco, near the Brisbane border. In 1999, the Schlage Lock company decided to close its factory located in the area. The now-vacant site presents opportunities for new uses. New developments in the area are expected to produce a net increase of 4,800 housing units, 140,000 square feet of commercial/retail space, and 75,000 square feet of community space over at least 10 years.

Enhancement projects to be implemented in Visitacion Valley include Geneva Harney Bus Rapid Transit, 8-Bayshore Transit Priority Project, and Schlage Lock streetscape improvement and parks projects. The Visitacion Valley spending plan is shown below.

Return to Impact Fee Areas

Rincon Hill is located in the northeast section of San Francisco, close to the Bay Bridge. Historically the neighborhood has contained many vacant lots and underutilized parcels, which have been rezoned for housing. Additionally, new parcels were opened up for development after the Embarcadero Freeway was demolished in 1991. Rincon Hill is a close walk to many transit lines including the Muni Metro system and BART at Embarcadero station, which make Rincon Hill a strategic area to construct new housing in San Francisco.

Key enhancements to be implemented in Rincon Hill include streetscape projects on First, Harrison, and Fremont Streets, and a new park at Guy Place. The Rincon Hill spending plan is shown below.

Return to Impact Fee Areas

The Transit Center District Plan was adopted in 2012 to provide infrastructure improvements in conjunction with the opening of the Salesforce Transit Center. The Salesforce Transit Center is a $2.2 billion transportation hub that replaces the old Transbay Terminal and connects 11 regional transportation providers to downtown San Francisco. In addition to passengers arriving at the Transit Center, the Plan also includes several commercial developments.

The complete streets, transportation, and open space projects are designed to accommodate all of the new people that will arrive in the area each day. The Plan includes those projects to be implemented by City agencies, with additional projects to be completed by external agencies such as the Caltrain Downtown Extension (known as DTX), BART underground pedestrian connector, open space projects to be performed by the Office of Community Investment and Infrastructure, and sustainable resource district projects.

In addition to Impact Fees as a primary source of funding infrastructure projects, the Transit Center District Plan has also implemented a Community Facilities District (CFD) special use tax that will provide funding for projects in the neighborhood. The total revenues estimated for the proposed projects in the Transit Center District is $910 million, including prior years. The tables on the following page show the Transit Center District spending plan, sources of funds, and funding gap.

Return to Impact Fee Areas 

Market Octavia is located just west of the Civic Center where governmental and cultural institutions attract a wide range of people both day and night. Its pattern of streets and alleys make it very walkable and bikeable. More than a dozen transit lines cross the neighborhood, including all of the city’s core streetcar lines. It is accessible from the entire Bay Area by BART and the regional freeway system.

Market Octavia’s history as a crossroads also poses enormous challenges. Large redevelopment projects occurred in the 1960s and 1970s, and the Central Freeway bisected the neighborhood before it was demolished in 2003. Large volumes of automobiles are channeled through the area creating hazardous conditions for pedestrians. However, its central location and transit accessibility make Market Octavia a key area to add new housing to the city.

The Market Octavia Area Plan identified many needs related to complete streets, transit, open space, and childcare that will provide the necessary services for new people living and working in the area. The total estimated revenues for proposed projects in Market Octavia is currently estimated at $190 million, including prior years. The following tables show the Market Octavia spending plan, sources of funds, and funding gap.

Return to Impact Fee Areas 

The Eastern Neighborhoods Area Plan consists of several smaller neighborhoods, including the Mission, Showplace Square, Central Waterfront, and Potrero Hill. Much of the land use in the Eastern Neighborhoods was historically dedicated to industrial uses, and production, distribution, and repair. Over time, residential and commercial uses have grown. In 2010, population in the Eastern Neighborhoods Plan Area was 83,930. The Planning Department projects the population to reach 149,570 by 2040, an increase of 78%.

With the increase in population has also come an increase in demand for infrastructure related to complete streets, transportation, and open space. Since the Eastern Neighborhoods Area Plan was initiated in 2008, the City has worked with the community to identify priority projects for implementation. These priorities include a number of projects from the 2008 Area Plan as well as new projects identified through planning efforts that occurred since the Plan was adopted.

The revenues estimated for projects in Eastern Neighborhoods is approximately $466 million, including prior years. The tables on the following page show the Eastern Neighborhoods spending plan, sources of funds, and funding gap.

Return to Impact Fee Areas

Balboa Park is located in southern San Francisco and provides several amenities that can be leveraged to promote a more livable neighborhood. The area includes the Ocean Avenue campus of the City College of San Francisco, the Ocean Avenue Neighborhood Commercial District, Balboa Park, and the Balboa Park BART station. The area is home to the Balboa Park Reservoir, where 1,100 units of housing are slated for development.

Key projects to be implemented in Balboa Park during the period of this Plan include streetscape projects along Geneva and Ocean Avenues, and several Muni Forward transit improvements. The Balboa Park spending plan is shown in the tables below.

Return to Impact Fee Areas

The Central SoMa Plan Area runs from 2nd Street to 6th Street, Market Street to Townsend Street, exclusive of those areas that are part of the Downtown Plan. It is an “Eastern Neighborhoods Plan” comprised entirely of areas formerly part of the East SoMa Plan Area and Western SoMa Plan Area. It is a neighborhood with an incredible history and a rich, ongoing, cultural heritage. As it grows and evolves over the next 25 years, Central SoMa has the opportunity to become a complete, sustainable, and vital neighborhood without losing what makes it special and unique today.

The vision of the Central SoMa Plan is to create a social, economic, and environmentally sustainable neighborhood by 2040, with space for approximately 32,000 new jobs and 8,600 new housing units. The Plan is expected to result in up to $2.2 billion in public benefits to serve critical needs of the neighborhood, including affordable housing, transportation, streets improvements, parks and recreation, schools, environmental sustainability, and community services. Funding for these projects will be derived from a combination of new and existing impact fees, Community Facilities District special tax revenues, direct provision by developers, and various other sources of funding. These funds will be received as development occurs in the Plan Area over the next 25 years.

The revenues estimated for projects in SoMa is approximately $261 million, including prior years. The tables on the following page show the SoMa spending plan, and sources of funds.

Return to Impact Fee Areas

Capital Planning in San Francisco

The Fiscal Year 2022-31 City and County of San Francisco Capital Plan (the Plan) is the City’s commitment to building a more resilient, equitable, and vibrant future for the residents, workers, and visitors of San Francisco. Updated every odd-numbered year, the Plan is a fiscally constrained expenditure road map that lays out anticipated infrastructure investments over the next decade. This document is the product of input from Citywide stakeholders, who have put forth their best ideas and most realistic estimates of San Francisco’s future capital needs.

Through the application of consistent funding principles and fiscal policies, the Plan prioritizes departmental capital needs within defined fiscal constraints. The result is a road map for investments in San Francisco’s streets, facilities, utilities, parks, waterfront, and transportation systems.

Developed on the centennial of the 1906 earthquake, San Francisco’s first Capital Plan described the City’s renewed dedication to investing in public facilities and infrastructure for FY2007- 2016. Since that first Plan, the City’s commitment to our capital portfolio has grown substantially. The first Plan called for $15.7 billion to address earthquake safety, modernization, and maintenance needs for City buildings and infrastructure. The level of recommended funding steadily grew as better capital planning practices were employed, infrastructure systems and facilities reached the end of their useful life, and the City dug out of extremely low levels of investment from the mid-1970s to 2008.

This FY2022-31 Capital Plan represents further evolution of the Plan and addresses urgent challenges confronting San Francisco. This Plan includes a new chapter devoted to affordable housing to fulfill direction from the Board of Supervisors in the approval of the FY2020-29 Capital Plan. Capital investment for acquiring and building affordable housing supports greater affordability in San Francisco. Furthermore, in light of the COVID-19 crisis and economic downturn, the current Plan is leveraging its debt programs to address economic recovery needs while also addressing budget shortfalls and working within fiscal constraints. The debt program is addressing mid-year budget cuts in FY2020 and filling gaps in the Pay-As-You-Go program funding that is 45% lower than the previous 10-year Capital Plan. The ability to leverage other sources of revenue and continue to make investments shows San Francisco’s commitment to address its infrastructure needs to the greatest extent possible. It also recognizes the broader benefit of making capital investments to stimulate the local economy and provide jobs during this recession.        

The current Plan recommends nearly $38 billion in critical infrastructure improvements over the next 10 years.

The $38 billion total level of investment recommended here is slightly lower than the previous Capital Plan, despite the addition of over $2.6 billion in planned affordable housing investments. This decline is driven primarily by shortfalls caused by the COVID-19 pandemic, forcing reductions in the General Fund Pay-As-You-Go Program, as well as enterprise department budgets. For example, the Airport’s 10-year planned investment dropped by 70% to $1.4 billion, compared to $4.8 billion in the previous Plan. In addition, voters have approved three large G.O. Bond programs totaling $1.7 billion since 2019. This increased level of investment to address some of the City’s most pressing infrastructure needs, affordable housing, mental health and homelessness, earthquake safety, and emergency response, reduces the overall debt capacity available for the FY2022-31 cycle.

Despite these challenges, the recommendations in this Plan reflect confidence in the City’s capacity to navigate near-term budget constraints and administer capital projects and programs in a responsible manner. San Francisco understands that ongoing investment in public assets is an essential function of government and will continue to act as a good steward of the City’s public spaces, facilities, and other infrastructure.

Table 2.1

Visitacion Valley is located in southeast San Francisco, near the Brisbane border. In 1999, the Schlage Lock company decided to close its factory located in the area. The now-vacant site presents opportunities for new uses. New developments in the area are expected to produce a net increase of 4,800 housing units, 140,000 square feet of commercial/retail space, and 75,000 square feet of community space over at least 10 years.

Enhancement projects to be implemented in Visitacion Valley include Geneva Harney Bus Rapid Transit, 8-Bayshore Transit Priority Project, and Schlage Lock streetscape improvement and parks projects. The Visitacion Valley spending plan is shown below.

Return to Impact Fee Areas