"The City With a Heart"
Rico E. Medina, Mayor
Marty Medina, Vice Mayor
Sandy Alvarez, Councilmember, District 1
Tom Hamilton, Councilmember, District 2
Michael Salazar, Councilmember, District 3
AGENDA
SAN BRUNO CITY COUNCIL SPECIAL MEETING
July 22, 2025
5:30 PM
IN PERSON* MEETING LOCATION
San Bruno Recreation and Aquatic Center, Community Room 251 City Park Way
San Bruno, CA 94066
*Please turn off all electronic devices before the start of the meeting to prevent disruptions*
**Zoom Link
https://sanbrunocagov.zoom.us/j/85991271942?
pwd=w7yeHtnTbP4yqkLDnw8JaAJBcGjQPz.1
Phone Line: 16465588656
Webinar ID: 859 9127 1942
Webinar Password: 920169
*Broadcast of the meeting is offered via Zoom as a
courtesy to the public.
**No public comment accepted via Zoom.
PUBLIC COMMENT: In person attendees who want to provide public comment, will be asked to fill out a speaker card and turn it into the City Clerk. Public comment may also be emailed to [email protected] . Comments received via email will not be read
aloud during the meeting.
ACCESSIBILITY: In compliance with the Americans with Disabilities Act, individuals requiring special accommodations or modifications to participate in this meeting should contact the City Clerk’s Office 48 hours prior to the meeting at (650) 6167061 or [email protected] .
*Any disclosable public writings related to an open session item on a regular meeting agenda and distributed by the City to at least a majority of the City Council less than 72 hours prior to that meeting are available for public inspection at the City Clerk's Office at City Hall located at 567 El Camino Real, San Bruno, California during normal business hours. In addition, the City may also post such documents on the City’s Website at sanbruno.ca.gov/AgendaCenter .
1. CALL TO ORDER
2. ROLL CALL
3. STUDY SESSION
Public comment will be requested after each topic in this section a. Conduct a Study Session to Discuss a Land Use, Housing and Economic Development Initiative and Receive the Transit Corridors Plan Financial Feasibility Assessment Finding
4. ADJOURNMENT – The next Regular City Council Meeting will be held on July 22, 2025 at 7:00 pm.
POSTING: I declare a copy of this agenda was posted at City Hall, 567 El Camino Real, San Bruno, among other locations in the city limits of San Bruno, on July 17, 2025, by 9:00 pm. 1 of 79
City Council Agenda Item
Staff Report
CITY OF SAN BRUNO
DATE: July 22, 2025
TO: Honorable Mayor and Members of the City Council
FROM: Alex D. McIntyre, City Manager
PREPARED BY: Peter Gilli, Community Development Director SUBJECT: Conduct a Study Session to Discuss a Land Use, Housing and Economic Development Initiative and Receive the Transit Corridors Plan Financial Feasibility Assessment Findings
BACKGROUND
The primary purpose of this study session is to discuss an initiative to strengthen the fiscal base of the City by revising land use, housing, and economic development policy. There are three parts to this study session:
1. Overview of the events that led to the Economic Development/Land Use Initiative proposal, which includes the City Council’s FY24-25 priority to assess the Transit Corridors Plan (TCP);
2. Receive the TCP Assessment Findings entitled “Economic Analysis to Promote Investment Along San Bruno Transit Corridors” (see Attachment 1); and
3. Discuss Launching the Initiative that would build on the TCP analysis, as conceptually accepted by the City Council at the July 23, 2024 and November 19, 2024 joint study sessions with the Planning Commission.
Overview
Strengthening the fiscal base of the City has been a City Council priority in past fiscal years.
Leading into FY24-25, the City Council established a top priority to complete a financial assessment of the TCP. Building on that priority, staff presented a broader initiative for a land use, housing and economic development initiative to City Council on July 23, 2024 at a joint City Council and Planning Commission study session. The relationship of the initiative and the TCP assessment is illustrated in Figure 1:
2 of 79
Item 3a.
Honorable Mayor and Members of the City Council
July 22, 2025
Figure 1: Relationship of the Initiative and the TCP Financial Assessment Factors Leading to the Initiative
Ordinance No. 1284
Ordinance No. 1284 (1977) requires voter approval of increases in allowed height beyond 3 stories and 50 feet, increases in density and occupancy of sites in residential zoning districts, allowance of parking structures, and changes to certain scenic roadway corridors. This is a key factor in policy work that could increase heights or densities.
Voter approval was obtained for Tanforan (1984) and the U.S. Navy Site and its Environs Specific Plan (2001) to exceed 3 stories and 50 feet and allow parking structures, and the TCP (2014) to exceed 3 stories and 50 feet.
Housing Opportunities – Housing Element Programs
The Sixth Cycle Housing Element include two Housing Element programs required by the State that call for the City to (1) to expand the allowance of higher density multi-family housing along El Camino Real and update the TCP environmental impact report (EIR) to allow more housing, and (2) expand housing opportunities in higher resource neighborhoods. Implementing these programs is expected to require a General Plan Amendment, new or amended Specific Plans, Municipal Code Amendments, a revised environmental impact report (EIR) for the TCP, and a 2028 ballot measure.
3 of 79
Honorable Mayor and Members of the City Council
July 22, 2025
Economic Development Opportunities – Adopted Plans with Limited Results The last comprehensive General Plan update was adopted in 2009, the TCP was adopted in 2013, and the Bayhill Specific Plan was adopted in 2021. From 2009 to present-day, the volume of real estate investment appears less for San Bruno than our neighboring communities have experienced.
Of particular note, the TCP’s intent was to promote private and public realm improvements in a manner that would transform the corridors. Seeing as the intent has not been realized as much as neighboring communities, City Council established a priority for FY24-25 to complete a financial assessment of the TCP to identify what policy issues should be explored to promote investment.
City Council FY24-25 Priority – TCP Financial Assessment On November 19, 2024, staff updated the City Council and Planning Commission that Economic & Planning Systems (EPS) was selected to prepare the TCP assessment. EPS has broad experience in this field, including local experience providing economic analysis services for the City during the preparation of the Bayhill Specific Plan and currently for the Tanforan redevelopment project. Below is an excerpt from the November 2024 staff report that outlines how the TCP assessment would be used:
“The results of the TCP assessment are intended to inform future City Council and Planning Commission discussion to consider proposed changes to intensities, densities or heights for development areas in the community. Those changes will lead to amendments to the Land Use Element of the General Plan, and likely the Circulation Element as well, as land use and transportation are intertwined. This will be a multi-year effort and will require an Environmental Impact Report (EIR). If there are proposed increases in heights beyond what has been approved by the voters in the past, then a new ballot measure will be necessary based on Ordinance No. 1284. The ballot measure is projected to occur with the November 2028 election.”
Combined Initiative
At the July 23, 2024 and November 19, 2024 joint sessions, the City Council endorsed combining the housing and economic development initiatives, with the economic development component being a citywide update to the Land Use Element. The citywide approach is recommended because the expectation was that the TCP analysis and recommendations would be relevant to other potential development sites, including but not limited to the Bayhill Specific Plan area and the Towne Center shopping center. A combined effort to adjust land use, housing and economic development policies to support desired real estate investment with a single EIR and ballot measure is more efficient and cost effective for the City.
In addition, on May 20, 2025, the Planning Commission discussed potential land use changes that should be explored as part of this combined initiative. 4 of 79
Honorable Mayor and Members of the City Council
July 22, 2025
DISCUSSION
Receive TCP Assessment Findings
The TCP was adopted by the City Council in 2013 and outlined how private and public realm improvements could transform the corridors. Investment has been limited, particularly compared to development and improvements seen in neighboring communities in the same timeframe.
EPS will present their findings at the study session, which are listed in Attachment 1. Staff considers the fundamental recommendations of the EPS analysis to be the need for the City to:
Promote private realm improvements in the TCP area by revisiting development policies and standards, including increased heights which will require a ballot measure, and establishing incentives for development; and
Promote public realm improvements in the TCP area by establishing funding mechanisms for streetscape and infrastructure improvements.
Discuss Launching the Initiative
The findings and recommendations of the TCP analysis supports the citywide initiative; therefore staff developed the following goals and objectives for the initiative, informed by past study session discussions with City Council, dialogue within the Executive Team, and the TCP analysis findings:
Goals and Objectives
Strengthen the City’s fiscal health:
o Make San Bruno more attractive for real estate investment:
Amend land use, housing and economic development policies, standards and processes to support desired development;
Successfully revise Ordinance No. 1284 by generating business and community support for these policy changes; and
Establish funding mechanisms for major public streetscape and infrastructure improvements.
o Establish funding mechanisms for future ongoing service costs from new development.
While the results of this initiative will have secondary benefits of potentially transformative improvements in portions of the community, the primary purpose of the initiative would remain strengthening the City’s fiscal health.
5 of 79
Honorable Mayor and Members of the City Council
July 22, 2025
Strategy and Timeline
The actual changes to policy, standards and processes will be developed through a multi-prong approach, over a multi-year process involving significant engagement, policy and regulation development, environmental review, develop funding mechanisms and incentives, internal process improvements, and polling and ballot measure preparation. The following timeline was prepared to illustrate the work involved:
The recommended timeline includes a potential 2026 ballot measure, which will be described further at the study session.
Aspects of the initiative that do not rely on the EIR or ballot measures may be able to be implemented sooner.
Steps Taken
The City Council has already taken many steps to support this initiative:
1. Approval of Municipal Code Amendments, effective July 1, 2024, to streamline planning review processes for minor applications to expand staff capacity for long range planning initiatives;
2. Approval of an increased General Plan Maintenance Fee in FY24-25 and FY25-26 that will fund staff and consultant costs for this initiative;
3. Identification of the TCP assessment as an FY24-25 City Council priority, which was funded with the General Plan Maintenance Fund;
4. Endorsement of the initiative at the July 23, 2024 and November 19, 2024 joint study sessions; and
6 of 79
Honorable Mayor and Members of the City Council
July 22, 2025
5. Approval of an additional staff position in FY24-25 for the Planning Division for additional capacity for long-range planning initiatives, utilizing the General Plan Maintenance Fund.
Next Step
Prior to the EPS TCP analysis, the need for the economic development aspect of this combined initiative has been based on anecdotal evidence. Now the City has an independent, third-party, expert financial analysis concluding the City should pursue revisiting regulations, including height limits, in order to achieve its identified goals. Having this confirmation of need is important since the eventual outcome will be a request of the voters to support this initiative.
Since the initiative’s goal is to strengthen the City’s fiscal base, which there is historically wide- spread City Council support for, an agenda item will be placed on the consent calendar for the July 22, 2025 regular meeting that provides the City Council with a resolution to adopt the initiative goals, strategy and timeline, and also formally initiate the General Plan Amendment. If adopted, staff will prepare a request for proposals/qualifications to secure a consultant team with expertise in land use planning, economic development, financial analysis, environmental analysis, community and business engagement, polling and ballot measure development, and improving internal development review processes.
FISCAL IMPACT
There is no direct fiscal impact with this item. Completing this initiative will provide the City with greater opportunities for a strengthened tax base in future years. The primary funding source for this initiative will be the General Plan Maintenance Fund.
ENVIRONMENTAL IMPACT
This study session topic is not considered a project under the California Environmental Quality Act (CEQA) and no environmental review is necessary. An environmental impact report (EIR) is anticipated for this initiative.
RECOMMENDATION
Conduct a Study Session to Discuss the Economic Development/Land Use Initiative and Receive the Transit Corridors Plan Financial Feasibility Assessment Findings.
ATTACHMENTS
1. Economic Analysis to Promote Investment Along San Bruno Transit Corridors 7 of 79
ECONOMIC ANALYSIS TO
PROMOTE INVESTMENT
ALONG SAN BRUNO
TRANSIT CORRIDORS
ADMINISTRATIVE DRAFT REPORT
Prepared for: Prepared by:
City of San Bruno Economic & Planning Systems, Inc.
July 15, 2025
EPS #241070
8 of 79
ATTACHMENT 1
Table of Contents
1. Introduction and Key Findings 1
Introduction .................................................................................................................................................................. 1 Key Findings ................................................................................................................................................................. 3
2. Market Context 6
Socio-Economic Overview ........................................................................................................................................ 6 Housing Market Overview ..................................................................................................................................... 10 Commercial Market Overview .............................................................................................................................. 14
3. Opportunity Site Analysis 17
TCP Parcel Ownership and Development Patterns ........................................................................................ 17 Housing Product Types and “Test Fit” Analysis ............................................................................................... 19 Key Policy Implications ........................................................................................................................................... 26
4. Development Feasibility 28
Methodology and Assumptions ............................................................................................................................ 28 Financial Feasibility Results ................................................................................................................................... 30 Sensitivity Analysis .................................................................................................................................................. 32 Key Policy Implications ........................................................................................................................................... 35
5. Funding And Development Incentives 36
Potential Funding Tools and Resources ............................................................................................................. 36 Developer Incentives and Engagement .............................................................................................................. 47 Key Policy Implications ........................................................................................................................................... 54 Appendix A: Development Scenarios 56
Appendix B: Funding Sources 67
9 of 79
List of Tables
Table 1. Household and Capita Incomes ................................................................................................................... 8 Table 2. Local and Regional Employment Trends ................................................................................................... 9 Table 3. Job-Housing Comparison .............................................................................................................................. 9 Table 4. Composition of Housing in San Bruno / Peer Cities (2013 – 24) .................................................... 11 Table 5. Affordable Versus Market Rents in San Bruno ..................................................................................... 14 Table 6. Retail Market Data ....................................................................................................................................... 15 Table 7. Summary of Hypothetical Development Scenarios ............................................................................. 23 Table 8. Hypothetical Land Value for Active Retail Site ..................................................................................... 29 Table 9. Summary of Development Feasibility Results by Scenario................................................................ 31 Table 10. Summary of Funding Sources Evaluated ................................................................................................ 37 Table 11. Citywide Taxes Advantages and Disadvantages .................................................................................. 38 Table 12. Development Impact Fees Advantages and Disadvantages ............................................................. 39 Table 13. EIFD Advantages and Disadvantages ..................................................................................................... 42 Table 14. Improvement Districts Advantages and Disadvantages ..................................................................... 44 List of Figures
Figure 1. San Bruno Transit Corridor Plan Area ........................................................................................................ 2 Figure 2. San Bruno Housing Opportunity Sites ....................................................................................................... 3 Figure 3. San Bruno Population and Household Size (2010-2024) ...................................................................... 7 Figure 4. San Mateo County Population (2010-2024) ............................................................................................ 7 Figure 5. Peninsula Multi-family Rental Housing Development (Units Built After 2019) ........................... 10 Figure 6. Rent Per Square Foot Comparison .......................................................................................................... 13 Figure 7. Rent Per Unit Comparison ......................................................................................................................... 13 Figure 8. San Bruno Retail Rent and Vacancy Rate (2015-2024) ...................................................................... 15 Figure 9. San Bruno Gross Sales (Inflation Adjusted 2024$) .............................................................................. 16 Figure 10. Improvement to Land Value Ratio Distribution .................................................................................... 18 Figure 11. Distribution of Parcels by Size ................................................................................................................. 18 Figure 12. Share of Total Properties by Owner Type ............................................................................................. 19 Figure 13. 1/8-Acre Stacked Flats Massing ............................................................................................................... 24 Figure 14. 1/8-Acre Site Townhome Missing ........................................................................................................... 24
10 of 79
Figure 15. ¼-Acre Site Podium Massing ..................................................................................................................... 24 Figure 16. ¼-Acre Site Townhome Massing .............................................................................................................. 24 Figure 18. ½-Acre Site Townhome Massing .............................................................................................................. 25 Figure 17. ½-Acre Site Podium Massing ..................................................................................................................... 25 Figure 19. 1-Acre Site Podium Massing ..................................................................................................................... 25 Figure 20. 1-Acre Site Townhome Massing .............................................................................................................. 25 Figure 22. 2 Acre Site Townhome Massing ............................................................................................................... 26 Figure 21. 2 Acre Site Podium Massing ...................................................................................................................... 26 Figure 23. Impact of Rent Per Square Foot on Residual Land Value .................................................................. 33 Figure 24. Impact of Sale Price Per Square Foot on Unlevered Return ............................................................. 34
11 of 79
Economic & Planning Systems, Inc. 1 Introduction and Key Findings
1. Introduction and Key Findings
Introduction
This report evaluates opportunities to catalyze redevelopment and reinvestment in the City of San Bruno’s Transit Corridors Plan (TCP) area. The analysis focuses on economic factors impacting development feasibility and identifies potential land use and policy changes that may incentivize investment in this key mixed-use district. It also considers potential public and private financing tools and resources that could be leveraged to support this effort. While macro-economic trends have negatively affected the current real estate market, EPS has focused on the longer-term prospects presented by the corridors competitive position in the region.
The City adopted the TCP in 2013 to guide growth and revitalization along key corridors surrounding the San Bruno Caltrain and BART Stations and along El Camino Real. Figure 1 identifies these key corridors and characterizes the types of development and improvements envisioned by the Plan. In addition to active commercial and residential uses, the area currently includes a mix of underutilized parcels, aging structures, and opportunities for new housing, commercial, and public realm investments. This effort explores whether existing regulations support the City’s vision for a more vibrant, walkable, and economically sustainable corridor and identifies opportunities to help unlock the full development potential of the Plan area.
A central objective of this analysis is to understand the market conditions, development parameters, and regulatory considerations that shape the feasibility of new housing and mixed-use investment in the TCP area. Among other purposes, the findings from the study will inform City consideration of potential measures to modify existing regulations or initiate other efforts to better attract investment in the TCP. It will also help the City navigate various state and regional laws and policies related to housing and transit accessibility that affect development economics along the corridor.1
1 In recent years the State has approved numerous “pro-housing” regulations designed to make it easier to build housing, particularly in transit-accessible locations and along commercial corridors. Additionally, the Metropolitan Transportation Commission’s 2024 Transit-Oriented Communities (TOC) policy provides additional guidance and incentives for higher density development.
12 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 2 Introduction and Key Findings Figure 1. San Bruno Transit Corridor Plan Area
The Report will also help the City implement its Housing Element as well as support broader fiscal and economic development goals. The TCP includes many of the sites identified as suitable for housing development and presents an opportunity to direct future investment to areas already planned for growth, as illustrated in Figure 2. The corridors are currently home to the bulk of the retail and other commercial services/ amenities that serve the City’s residents, workers, and visitors. As such, successful revitalization will be critical to the City’s long-term economic and fiscal success.
13 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 3 Introduction and Key Findings Figure 2. San Bruno Housing Opportunity Sites
Key Findings
(1) While San Bruno is less affluent and appears to be experiencing a slower recovery from the pandemic relative to many peer cities in the County, local and regional socio-economic trends suggest continued demand for higher density housing. San Bruno’s strategic and accessible location in an economically prosperous and growing region, combined with growth in younger and smaller households, align with expanded market acceptance of higher density housing formats. That said, median and per capita incomes in San Bruno, while increasing, remains well below the County and the City has experienced a decline in population in the aftermath of the pandemic. New housing on under-utilized parcels along the TCP presents an opportunity to reverse this trend while also spurring revitalization of the commercial sector. (2) San Bruno experienced modest expansion in higher density housing over the last decade with new projects commanding rents consistent with peer cities that have larger and faster growing housing markets, suggesting opportunities for further development. Over the last decade, San Bruno gained just over 600 multi-family and attached housing units (an increase of about 9 percent), but the overall composition of the City’s housing stock has
14 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 4 Introduction and Key Findings remained relatively stable and predominantly single family (about 56 percent).
Meanwhile, San Bruno’s peer cities and the County experienced notably faster multi-family and attached housing development, with increases ranging from 22 percent in Redwood City to about 12 percent countywide, suggesting growing region demand for higher density. Yet market rents for new buildings in San Bruno are on par with those in these other cities. In further contrast to regional trends, the proportion of San Bruno residents that are renters declined by about 9 percent over the last decade, likely reflecting the City’s increasing attractiveness to homebuyers priced out of nearby markets and difficulty for renters to find housing that meets their needs. (3) Retail is the predominant land use within the TCP and, while the area includes pockets of success, the sector does not appear to be as vibrant as many peer cities, partially due to a lack of land use diversity and walkability.
While San Bruno has the third largest retail inventory among its peer cities, the sector has recovered more slowly in the post pandemic era, as exhibited by lower rents and occupancy rates. The planned redevelopment of the struggling Tanforan Mall, a site that alone accounts for about one-third of the City’s retail stock, has acerbated these conditions. Targeting additional underutilized / underperforming retail sites for redevelopment could help bring vitality and create a sense of place at key stretches along the corridors. (4) Existing parcel ownership and development patterns within the TCP present both challenges and opportunities for intensification, reuse, and development, conditions that could potentially benefit from effective and proactive City actions. On the one hand, many TCP sites appear under-utilized from an economic perspective and there are several larger properties held in single ownership or by the City that could be targeted for redevelopment. On the other hand, the TCP overall exhibits numerous and fragmented ownership patterns with properties that are relatively small, shallow, and not well configured for larger scale development. The City may be able to catalyze redevelopment by identifying well positioned opportunity sites and facilitating or spearheading targeted and concerted planning, entitlement, and public- private financing efforts. Additionally, the City might consider incentives to encourage lot consolidations that create sites with sufficient scale to attract private investment.
(5) EPS identified townhomes, stacked flats, and podium apartments as the most viable development prototypes given the existing parcel configurations and land use patterns within the TCP. For the most part, these viable product types comply with the City’s existing height limitations, achieving densities ranging from 24 (townhomes) to 195 (podium) units per acre. The numerous smaller / shallow sites within the TCP cannot accommodate higher-density projects while larger sites, better suited for podium-style developments, face limitations such as height restrictions and floor-area-ratio (FAR) constraints. EPS also found that the City’s open space requirements (40 feet of open space per unit) create
15 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 5 Introduction and Key Findings design constraints for certain product types, especially on smaller sites. Given the depth of the sites along the corridor, it was determined that a so-called “wrap” multi-family project (stacked flats wrapped around an internal parking structure) is unlikely to be feasible for any of the sites. EPS also ruled out the likelihood of a market-rate residential tower (i.e., more than eight floors) in the foreseeable future, given both economic and regulatory considerations. (6) While physical and regulatory factors continue to affect the viability of housing development in the TCP, economic considerations have and continue to represent the single biggest impediment. Given current market conditions that are compromised by high interest rates, escalating construction costs, and general economic uncertainty, the for-sale townhome format (typically a two to three story and 20 to 30 unit per acre project), represents the most financially viable product type. As market conditions improve, stacked flats and podium products on select sites may become more financially feasible, though the timing of this outcome is uncertain. In the meantime, EPS recommend that the City encourage townhome development, particularly on smaller/narrower sites rather than hold out for higher density development. New market-rate housing within the TCP, even on a small scale, can send a positive market signal that will set the stage for larger scale and more dense development as market conditions improve. Smaller, infill townhome projects will provide economic and land use diversity and contribute to a sense of place within the TCP, providing additional market advantages over the long term. That said, given that the City has finite available land, particularly along transit corridors, and an ongoing long term housing obligation, it should also seek opportunities to maximize higher- density multi-family housing on the parcels that can accommodate this type of development.
(7) This City will need to take a proactive approach to identifying and securing funding tools and resources to deliver the catalytic public infrastructure improvements needed to realize the TCP vision. Potential funding sources include Community Facilities Districts (CFDs), expanded use of development impact fees, improvement districts, Enhanced Infrastructure Financing Districts (EIFDs), and state and regional grants. While property-based funding sources are beneficial to ensuring new development pays for its share of City facilities and amenities, those funds are reliant on an active real estate investment market. The City may consider development incentives such as relaxing inclusionary requirements or providing tax rebates, with a sunsetting mechanism for when the market improves.
16 of 79
Economic & Planning Systems, Inc. 6 Market Context
2. Market Context
This chapter summarizes the real estate market conditions in San Bruno and broader market affecting the likely success of residential projects in the TCP area.
EPS utilized both publicly available as well as private or vendor data to obtain and assess socio-economic trends and market performance indicators (e.g., rents, sales prices, occupancy rates). The EPS Team also toured the TCP and adjacent neighborhoods and reviewed recently completed development projects in the broader market to identify trends and potential successful development prototypes.
To provide context for the competitive landscape within the TCP, this analysis also compares San Bruno’s socio-economic and real estate market trends with nearby “peer” cities. Specifically, based on the type of redevelopment being considered in the TCP, EPS selected Millbrae, Redwood City, San Mateo, and South San Francisco, as relevant sub-markets. The following sections provide data for these cities and San Mateo County overall to illustrate broader market trends and patterns relevant to understanding development within the TCP.
Socio-Economic Overview
This section summarizes the population, employment and income trends within the Trade Area defined immediately above. While San Bruno benefits from its strategic and accessible location in an economically prosperous and growing region, the City in generally less affluent than its peer cities and appears to be experiencing a slower post pandemic recovery.
As shown in Figure 3, San Bruno’s population increased steadily between 2010 and 2016, reaching a peak around 2017 before stabilizing through 2020.
However, the City experienced population decline beginning in 2021, likely in part due to the pandemic and its associated impacts on out-migration and mortality.
Decreasing household sizes have also been a significant contributing factor to this decline. The downward trend continued through 2024, and a full recovery will likely take several years and /or depend on increased housing supply.
17 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 7 Market Context
Figure 3. San Bruno Population and Household Size (2010-2024)
Source: California Department of Finance; Economic & Planning Systems As shown in Figure 4, San Mateo County’s population growth follows a similar pattern in the same period but does not decrease as dramatically from 2020 to 2024. Again, reduced household size is a common theme both locally and county- wide. The trend towards smaller household size has helped offset a reduction in housing demand that may have otherwise resulted from a decline in population, as discussed later in this analysis. This could also be explained by an influx of younger and wealthier residents with different housing needs and preferences.
Figure 4. San Mateo County Population (2010-2024)
18 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 8 Market Context
As shown in Table 1, the City has a median annual household income of about $136,000 and per capita income of $61,000,putting it well below the County and most of its peer jurisdictions in this regard (except South San Francisco). San Bruno’s median household income has also increased less than all its neighboring jurisdictions, but the growth in income per capita has been on par. This change is likely attributable to the inter-related trends of San Bruno’s slower population growth and decreasing household size between 2010 and 2023 relative to neighboring jurisdictions.
Table 1. Household and Capita Incomes
In terms of employment, San Bruno and its peer cities currently account for about 49 percent of the County’s total jobs, a share that has continued since 2010, as shown in Table 2. San Bruno accounts for a relatively small share of regional jobs (about seven (7) percent of the peer cities total) and though employment increased by 20 percent between 2010 and 2024, the City did not grow as fast most of the peer cities (with exception of Millbrae).
2010 (CPI
adjusted) 2023 % Change
2010 (CPI
adjusted) 2023 % Change
San Bruno $110,642 $135,976 23% $47,881 $61,124 28%
San Mateo County $125,388 $156,000 24% $63,141 $80,438 27% Millbrae $118,236 $157,567 33% $58,444 $74,369 27%
Redwood City $110,137 $150,840 37% $56,114 $82,193 46%
San Mateo $122,755 $152,669 24% $64,622 $78,704 22%
South San Francisco $108,566 $135,909 25% $44,236 $59,430 34% (1) Table compares data from 2010 ACS 5-Year Estimates and 2023 ACS 5-Year Estimates.
Source: American Community Survey; Economic & Planning Systems.
Median Household Income 1 Per Capita Income 1
19 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 9 Market Context
Table 2. Local and Regional Employment Trends
San Bruno also has a has a lower jobs-to-housing ratio compared to neighboring jurisdictions and the County as a whole. As shown in Table 3, San Bruno’s has less than 1 job per housing unit, putting it near the bottom of the peer cities, second only to Millbrae. This suggests the city currently functions as more of a bedroom community than jobs center, a position reinforced by local commute patterns.
According to the Longitudinal Employer-Household Dynamics (LEHD), most of San Bruno’s residents commute to other cities for employment with only 4.9 percent of the population employed within the City. Increased economic vibrancy within the TCP could potentially help address this imbalance.
Table 3. Job-Housing Comparison
Jurisdiction 2010 2024
% Change
2010 - 2024
San Bruno 12,537 15, 061 20%
Millbrae 5,118 5,869 15%
Redwood City 50,673 64,498 27%
San Mateo 42,128 62,360 48%
South San Francisco 47,556 63,106 33%
Subtotal 158,011 210,893 33%
Percent of County 46% 48%
San Mateo County 341,711 439,277 29%
Jurisdiction Jobs
Housing
Units
Jobs-
Housing
Ra
tio
San Bruno 15,061 16, 933 0.89
Millbrae 5,869 9,065 0.65
Redwood City 64,498 33,516 1.92
San Mateo 62,360 43,817 1.42
South San Francisco 63,106 23,545 2.68
San Mateo County 439,277 292,078 1.50
Sources: JobsEQ; California Department of Finance; Economic & Planning Systems, Inc.
20 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 10 Market Context
Housing Market Overview
In recent years, San Bruno has experienced moderate residential development activity in and around the Transit Corridors Plan (TCP) area. While not as prolific as some neighboring cities, several high-density projects in the region—including within San Bruno—illustrate a gradual increase in demand for more urban development patterns.
One notable example is Aperture built in 2019, located in San Bruno, which delivers 83 units on 0.95 acres (87 dwelling units per acre) across 5 stories with a blended rent of $4.36 per square foot. Nearby in South San Francisco, Celeste built in 2024 provides a compelling regional comparison: a larger 8-story project with 195 units on 1.1 acres (177 dwelling units per acre) and blended rents of $4.82 per square foot. These examples suggest growing demand and willingness to pay for well-located, high-density housing near transit.
While high-density development is emerging, much of the Peninsula’s recent multi-family housing projects have consisted of smaller and lower-density formats (e.g., stacked flats or small-scale apartments). As summarized in Figure 5, data from the Costar Group, rental units built after 2019 have been dominated by projects on relatively small lots (less than one acre) and under 100 units. Projects over 350 units and / or on sites larger than 2.5 acres are outliers. The median project size is about 80 units and approximately one acre.
Figure 5. Peninsula Multi-family Rental Housing Development (Units Built After 2019)
Source: Costar
0.000
0.500
1.000
1.500
2.000
2.500
3.000
0 50 100 150 200 250 300 350 400
Acres
Number of Units
Acres vs. Number of Units
21 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 11 Market Context
Over the last decade the composition of San Bruno's housing stock has remained relatively stable, mirroring the profile of San Mateo County as a whole. As shown in Table 4, the City gained just over 600 multi-family and attached housing units since 2013, an increase of about 9 percent over this approximately 10-year span.
However, these higher density formats still only represent about 44 percent of the total housing stock, with the traditional single-family accounting for the remaining 56 percent, a profile that mirrors the County as a whole.
In terms of growth, the peer cities and the County experienced a notably faster level of multi-family and attached housing development, with increases ranging from 22 percent in Redwood City to about 12 percent countywide. These trends suggest that the regional market has become increasingly accepting of higher density housing, with San Bruno is lagging slightly behind its peer cities in this regard.
Table 4. Composition of Housing in San Bruno / Peer Cities (2013 – 24)
2013 2024 % Change 2013 2023 % Change
San Bruno
Amount 6,768 7,387 9% 6,526 5,907 -9%
% of Total 42.7% 44.1% 3.2% 44% 38% -13%
Millbrae
Amount 3,159 3,603 14% 2,949 2,943 0%
% of Total 36.8% 39.8% 8.1% 37% 37% 0%
Redwood City
Amount 15,048 18,377 22% 13,247 15,820 19%
% of Total 50.6% 54.9% 8.7% 48% 52% 10%
San Mateo
Amount 21,840 24,598 13% 17,684 19,549 11%
% of Total 54.2% 56.6% 4.4% 46% 49% 6%
South San Francisco
Amount 8,574 9,680 13% 8,482 8,567 1%
% of Total 39.0% 41.6% 6.7% 40% 39% -3%
San Mateo County
Amount 114,280 127,990 12% 104,623 108,180 3%
% of Total 41.8% 44.2% 5.6% 41% 41% 1%
Source: California Department of Finance
Jurisdiction
Renter Occupied UnitsMulti-Family + Attached Units
22 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 12 Market Context
In terms of trends in housing ownership, San Bruno stands in stark contrast to its peer cities and the County. Specifically, while the City has experienced a gradual increase in higher density housing over the last decade, the proportion of the population that are renters has declined, bucking regional trends. As shown in Table 4, the number of renter households declined by about 9 percent in San Bruno between 2013 and 2024, compared to a three percent increase in the County overall (with 11 percent and 19 percent increases in the cities of Redwood City and San Mateo, respectively). The increase in home ownership rates may reflect gradual gentrification of the City and its increasing attractiveness to homebuyers priced out of nearby markets.
Housing Price and Rent Trends
Housing rents in San Bruno are generally in line with San Mateo County averages, with newer developments commanding a premium for smaller units. Figure 6 details the average rent per square foot in each jurisdiction, comparing the overall average rent to that of buildings built since 2019. Figure 7 includes a similar comparison, on a rent-per-unit basis.
Taken together, these patterns suggest that while San Bruno’s development activity has been modest, the market fundamentals including demand for smaller, higher-quality units and premium rents for new construction support the viability of future mixed-use residential projects in the TCP area. Given relatively strong rent per square foot in San Bruno, renters in the City also appear to exhibit a higher market premium for smaller units, pointing to latent demand for compact, modern housing.
23 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 13 Market Context
Figure 6. Rent Per Square Foot Comparison
Source: Costar
Figure 7. Rent Per Unit Comparison
Source: Costar
24 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 14 Market Context
As can be seen in Table 5, the average market rate rent per square foot in San Bruno appears to fall within the Low Income (<80% Area Median Income) category for the County. As noted in the previous section, San Bruno has relatively low median household incomes (about 85 percent of the County average) and, in many cases, prevailing market rents match those deemed “low income” based on County affordability criteria. This poses a potential issue, where under existing inclusionary zoning policy, developers would be required to deed restrict units at rates equivalent to those offered in the open market, adding risk, as well as administrative and financing hurdles to developers but not necessarily an increase in affordable units.
Table 5. Affordable Versus Market Rents in San Bruno
Commercial Market Overview
Retail is the predominant land use within the TCP area, with concentrations along El Camino Real, San Mateo Avenue, and San Bruno Avenue. While San Bruno has the third largest retail inventory among its peer cities (18 percent of total inventory), the sector has recovered more slowly in the post pandemic era. As shown in Table 6, San Bruno has lower rents than most peer jurisdictions (except South San Francisco), as well as the County average. Moreover, this data likely overstates retail rents because it does not reflect recent vacancies in the Tanforan Mall, which accounts for about a third of the City’s retail space.
Item
Very Low
(50% AMI)
Low
(80% AMI)
Moderate
(100% AMI) Market Rate
Household Income Limit1
$88,150 $141,000 $167, 950
Income Available for Housing Costs Per Year2
$26,445 $42,300 $50, 385
Per Month $2,204 $3,525 $4,199
Less Utility Costs3
($79) ($79) ($79)
Rent Per Month $2,125 $3,446 $4,120 $3, 400
(1) Incomes are based on 2024 HCD Income Limits fo three-person households in San Mateo County. (2) Assumes that no more than 30% of a household's income should be spent on housing-related costs. (3) Utility costs sourced from the Housing Authority of San Mateo County.
Sources: California HCD; CoStar; San Mateo County Housing Authority; Economic & Planning Systems.
25 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 15 Market Context
Table 6. Retail Market Data
Figure 8 details the changes in the nominal market rent per square foot and vacancy rates for San Bruno retail from 2015 to 2024. Like many cities, San Bruno’s retail market struggled due to the COVID-19 pandemic, with vacancy rates increasing from less than 1 percent in 2019 to 9.65 percent in 2020. These trends are also directly related to the gradual market decline of the Tanforan Mall which makes up a significant square footage of San Bruno’s retail market. Excluding the mall, San Bruno’s retail vacancy rates have been returned to pre pandemic levels and are on rate is on par with neighboring jurisdictions.
Figure 8. San Bruno Retail Rent and Vacancy Rate (2015-2024)
Jurisdiction
Direct Rent
Per Sq. Ft.
Inventory
(sq. ft.)
Percent of
Jurisdiction
Inventory
San Bruno $32.05 2,739,600 18%
Tanforan $33.75 887,200 6%
Downtown $29.97 418,400 3%
Rest of the City $31.61 1,434,000 9%
Millbrae $34.42 1,081,799 7%
Redwood City $37.72 3,928,721 26%
San Mateo $41.32 4,990,107 33%
South San Francisco $31.03 2,598,701 17%
Subtotal 15,338,928
San Mateo County $37.85 31,090,001
Source: CoStar.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Market Rent Vacancy
26 of 79
Economic & Planning Systems, Inc. 16 Market Context
Figure 9 illustrates the gross retail sales in San Bruno from 2015 to 2024 for all retail categories except Motor Vehicles and Parts Dealers and Non-store Retailers. Most retail categories experienced a significant dip in sales during 2020, and while certain retail categories have recovered, such as gas stations and restaurants, many have not. The gradual loss of tenants at Tanforan Mall and corresponding increase in online shopping has likely contributed to the lack of sales growth for retailers focused on home furnishings and appliances, clothing and general merchandise.
Figure 9. San Bruno Gross Sales (Inflation Adjusted 2024$)
Source: California Department of Tax and Fee Administration.
The challenges in San Bruno’s retail market may present opportunities for redevelopment for other uses, such as residential. With lower rents and higher vacancy rates than many of their peer jurisdictions, redevelopment may become more attractive to property owners along the corridors than holding on to a vacant retail site. $0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Dining and Food Services General Merchandise Gasoline Stations
27 of 79
Economic & Planning Systems, Inc. 17 Appendix: Funding Sources
3. Opportunity Site Analysis
This chapter describes the land use conditions along the TCP and provides detailed residential development scenarios for representative sites. Based on a review of prevailing parcel and ownership information along the corridor, EPS worked with City staff to identify five (5) representative sites ranging in size from
0.125 to over two acres. EPS then evaluated these sites to “test fit” various housing product types on each. Chapter 4 provides additional analysis on the financial feasibility of each product type from the perspective of a real estate investor / developer.
TCP Parcel Ownership and Development Patterns
Existing parcel ownership and development patterns within the TCP present both challenges and opportunities for intensification, reuse, and development. On the one hand, many sites appear under-utilized from an economic perspective and there are several larger properties held in single ownership or by the City that could be targeted for redevelopment. On the other hand, the TCP overall exhibits numerous and fragmented ownership patterns with properties that are relatively small and not well configured for larger scale development.
As part of this analysis EPS evaluated parcel data from the County Assessor to the ratio of improvement-to-land value, a frequently used metric of the redevelopment potential. As shown in Figure 10, this data suggests that a large proportion of the properties appear to be underutilized from an economic perspective. Specifically, about 42 percent of parcels have improvement values that are either zero (vacant land) or less than the land itself — a strong indicator of underbuilt or aging properties with limited income-generation relative to land value. These parcels represent prime opportunities for reinvestment or redevelopment, particularly where zoning allows for higher intensity residential or mixed-use projects. In contrast, only 14 percent of parcels show high-value improvements (ratio greater than 2), suggesting that the TCP remains largely untapped in terms of development capacity.
28 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 18 Opportunity Site Analysis Figure 10. Improvement to Land Value Ratio Distribution
In addition to the existing level improvements, development potential will also be affected by parcel size and ownership. As summarized in Figure 11, over 550 parcels are located within the TCP Area, with the majority being less than 1/8th of an acre. Smaller sites can pose development challenges because they do not accommodate certain building/parking formats, and it can be harder to realize economies of scale.
Figure 11. Distribution of Parcels by Size
9%
28%
19%
29%
15%
0: Vacant Land
0–0.5: Underutilized
0.5–1.0: Modestly Improved
1.0–2.0: Typical Income-
Generating Uses
>2.0: High-Value
Improvements
324
125
50 27 16 12
0 50
100
150
200
250
300
350
<.125 .125-.25 .25-.5 .5-1 1-2 >2
# Parcels
Acerage
29 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 19 Opportunity Site Analysis Additionally, ownership concentration in the TCP area presents limited opportunities for large-scale assemblage. As shown in Figure 12, of the 520 privately held parcels, approximately 61 percent (337 parcels) are owned by single-parcel owners. This high degree of fragmented ownership poses a challenge for assembling larger sites that support higher-density or mixed-use development.
Among the remaining private owners, 32 entities hold portfolios of fewer than 10 properties, with an average portfolio size of 2.6 parcels, suggesting only marginal assemblage potential within this cohort. Notably, only four private entities control portfolios exceeding 10 parcels, collectively accounting for 100 properties, or nearly 20 percent of the privately held inventory. These few large portfolio holders may offer the most viable opportunities for coordinated redevelopment.
In addition, public agencies own 34 parcels within the 555-parcel study area.
Publicly controlled sites can also offer strategic opportunities for catalytic development, particularly when aligned with planning objectives and/or paired with adjacent privately held land.
Figure 12. Share of Total Properties by Owner Type
Housing Product Types and “Test Fit” Analysis
Given the development patterns and site opportunities described above, EPS evaluated a range of housing types that might “fit” along the corridor. EPS worked with City staff to identify a range of parcel sizes and configurations representative of potential housing opportunity sites within the TCP. EPS then assessed different building typologies—including townhomes, stacked flats, podium structures, and wraps—to identify the best fit with the characteristics of each site. The analysis can elucidate regulatory constraints (e.g., setbacks, height, open space, and density) affecting housing development.
Public Agency
6%
Single-Property
Owners
61%
Small Portfolios
(2–10 units)
15%
Large Portfolios
(10+ units)
18%
30 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 20 Opportunity Site Analysis To reflect the range of opportunity sites along the corridor, EPS identified five parcel size and geometric configurations ranging from 1/8th of an acre to two (2) acres. EPS then evaluated each site under a for-sale (typically townhomes), and rental scenario (typically stacked flats or podium construction). EPS then modeled the representative massing for each site based on typical building typologies and market-average unit sizes to create feasible and efficient designs. By way of example, the massing ensuring that each development would achieve at least one parking space per unit with a target of 1.2 (i.e., parking ratios ranging from 1.0 –
1.2). Of course, the design of any project will likely differ from those depicted herein due to site and developer specific peculiarities.
EPS also considered specific zoning-related constraints that affect achievable development density. Smaller / shallow sites are constrained by setback requirements, while larger sites, better suited for podium-style developments, face limitations such as height restrictions and FAR constraints, which hindered the potential for maximizing density. To maximize building efficiencies, the EPS typologies suspend the City’s open space requirements (40 feet of open space per unit) but comply with the required step backs.
Given the depth of the sites along the corridor, it was determined that a so-called “wrap” multi-family project (stacked flats wrapped around an internal parking structure) is unlikely to be feasible for any of the sites, as this product type does not align well with the site dimensions and zoning constraints. Additionally, EPS excluded the possibility of a residential tower (i.e., more than eight floors), given the unlikely feasibility of this project due to both economic and physical considerations (additionally, existing TCP height limits restrict this type of development).
Based on EPS professional experience, residential towers are unlikely to be financially viable in San Bruno. This is because once a residential building exceeds certain construction thresholds, the costs rise significantly. For example, State Building Codes limit Type V wood-frame buildings to four stories, and Type III construction—also wood or light-gauge steel—to five stories. A project can build Type III or Type V on top of a concrete and steel Type I podium to get additional height, but even then, most developers stay within a 5-over-2 configuration (five floors over two) to remain under the 75-foot height cap required by fire access codes. A 5-over-2 or 5-over-3 building is often the economic “sweet spot” because it yields high unit density without incurring the high costs of full Type I construction. Type 1 buildings, which can go up to 180 feet (Type IB) or higher (Type IA), only begin to make economic sense when land values are extremely high and the number of units, and possible view premiums, can offset the added cost. In addition, these buildings require a very large footprint.
31 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 21 Opportunity Site Analysis Recognizing that specific projects will include a range of styles and unique features, EPS has formulated generic building typologies for the development scenarios on each site, as described below.
Townhome
Townhomes are attached or semi-
detached dwelling units of two to three
stories that are usually developed as
for-sale products but occasionally as
rental. Townhomes typically
incorporate tuck-under garages and
provide a single-family lifestyle. They
are often characterized by shallow front
yards and stoops, rear vehicular access,
and in some cases small rear yards or
courts between the garages and main
dwelling. This analysis assumed an
average parking ratio of 1 per unit.
Stacked Flats
Stacked flats are multifamily buildings
where multiple units are stacked
vertically, often walk-up or served by a
single stairwell or elevator. These are
typically lower-rise, wood-frame
structures that offer a more cost-
efficient alternative to podium
construction (see below) and delivered
as mid-density rental units on smaller or
mid-sized parcels. This analysis assumed
an average parking ratio of 1.1 per unit.
As with townhomes, parking for stacked
flats is typically not located within a
dedicated podium but is instead
accommodated in tuck-under garages,
surface lots, drive aisles, or setback areas
elsewhere on the site.
Example of a townhome project: The Heights, San
Mateo (2025)
Example of a stacked - flat project: Sterling Place,
South San Francisco (2025)
32 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 22 Opportunity Site Analysis Podium
Podium projects typically place
apartments stacked over one or more
levels of structured parking. These
projects may fit in relatively smaller lots
defined in part by the depth of a typical
parking bay. Development costs are
typically highest among the prototypes
examined because the parking and
residential portions are mixed into one
structure with consequent code-
required life safety requirements. These
are typically in between 4 stories to a
max allowable 8 stories. Typical
densities range from 80-150 units per
acre but can get upwards of 200 of
smaller sites in dense urban areas. As
discussed above, the practical maximum
is not based on zoning, but rather on a
combination of State building code and
construction economics.
Further descriptions of the hypothetical development programs for each site are provided below and summarized in Table 7 (additional detail is provided in the Appendix). As shown, EPS has evaluated ten development scenarios (a rental and for-sale for product across five representative sites). The assumptions for rental units vary by product types (stacked flat versus podium) and acreage. The for-sale scenarios are more consistent across the various site acreages (all assumed as townhomes, with the same average unit size, parking ratio, bedroom count, and density ranging from 24 to 30 units per acre).
Example of a podium project: Aperture, San Bruno
(2019)
33 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 23 Opportunity Site Analysis Table 7. Summary of Hypothetical Development Scenarios
Brief descriptions and illustrations of how the scenarios vary by site size and product type are provided below.
Project Attribute 0.125 0.25 0.5 1 2
Rental
Product Type Stacked Flats Podium Podium Podium Podium
Total Units 6 26 56 194 364
Av g. Units / Acre 48 104 112 194 182
Total Parking Spaces 7 27 56 210 352
Avg. Spaces / Unit 1.2 1.0 1.0 1.1 1.0
Avg. Bedroom Count 3 2 2 2 2
Av g, Unit Size (sq. ft.) 1,100 800 800 700 700
Avg. Monthly Market Rent / Unit $4,532 $3,400 $3,400 $3,038 $3,038 Avg. Monthly Market Rent / Sq. Ft. $4.12 $4.25 $4.25 $4.34 $4.34 For Sale
Product Type Townhomes Townhomes Townhomes Townhomes Townhomes Total Units 3 7 14 30 58
Av g. Units / Acre 24 28 28 30 29
Total Parking Spaces 3 7 14 30 58
Avg. Spaces / Unit 1.0 1.0 1.0 1.0 1.0
Avg. Bedroom Count 3 3 3 3 3
Av g, Unit Size (sq. ft.) 1,850 1,850 1,850 1,850 1,850 Avg. Market Sale Price / Unit $1,387,500 $1,387,500 $1,387,500 $1,387,500 $1,387,500 Avg. Sale Price / Sq. Ft. $750 $750 $750 $750 $750
Acres
34 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 24 Opportunity Site Analysis 1/8 Acre Site
The 1/8-acre site is only large enough to support low-
density product types, namely stacked flats and
townhomes. The site’s small footprint and limited
access prevent the inclusion of structured parking, or
the circulation space required for podium
development. In the rental scenario, the site supports
six surface-parked stacked flat units, while the for-sale scenario accommodates three townhomes.
Importantly, this site size is not an outlier—it is by far the most prevalent parcel type along the corridor.
Parcels that are 1/8 acre or smaller account for nearly 60 percent of the total inventory, making this scenario highly representative of the corridor’s broader
redevelopment potential. Despite its limitations, the
1/8-acre site typology provides critical insight into
what small-scale infill could look like throughout the
corridor—and highlights the relative strength of for-sale townhomes and cost-efficient rental prototypes like
stacked flats with surface parking.
1/4 Acre Site
The ¼-acre site offers a modest increase in development potential compared to the smallest parcels, supporting
two tested product types: a 7-unit townhome project
and a 26-unit podium rental project. These scenarios
generally yield between 24 and 30 dwelling units per
acre, with the ¼-acre site achieving 28 du/acre,
reinforcing the viability of compact for-sale development even on constrained infill parcels. With 125 parcels in this acreage range, the ¼-acre site is the second most
common parcel size along the corridor. This makes it a
key typology to understand when planning for future
redevelopment.
Figure 16. ¼-Acre Site Townhome Massing
Figure 13. 1/8-Acre Stacked Flats Massing
Figure 14. 1/8-Acre Site Townhome Missing
Figure 15. ¼-Acre Site Podium Massing
35 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 25 Opportunity Site Analysis 1/2 Acre Site
The ½-acre site represents a transitional scale—large enough to support more complex building types but still limited in its ability to achieve meaningful economies of scale. Two scenarios were tested on this site: a 14-unit townhome development and a 56-unit podium rental project. With 50 parcels in the 0.25–
0.5-acre range, this site size makes up a meaningful share of the corridor’s inventory.
1 Acre Site
The 1-acre site begins to offer the scale necessary to support higher-density residential development with improved construction efficiency. Two scenarios were modeled: a 30-unit townhome development and a 194-unit podium rental project. The resulting density of 30 dwelling units per acre represents the upper end of townhome feasibility while maintaining livability and unit size consistency.
With only 27 parcels in the 0.5–1-acre range, these mid-sized sites are less common along the corridor but represent strategic opportunities for redevelopment where land assembly is feasible.
Figure 18. ½-Acre Site Podium Massing
Figure 20. 1-Acre Site Townhome Massing Figure 19. 1-Acre Site Podium Massing Figure 17. ½-Acre Site Townhome Massing
36 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 26 Opportunity Site Analysis 2 Acre Site
The 2-acre site represents the largest and most flexible development opportunity evaluated. Two scenarios were tested: a 58-unit townhome project and a 326- unit podium rental development. With a resulting density of 29 units per acre, the project effectively balances scale and feasibility while offering a livable, ownership-oriented housing product. Only 12 parcels of this size exist along the corridor, making them relatively rare. However, they present significant opportunities for catalytic redevelopment, particularly in areas with underperforming commercial centers or opportunities for mixed-use.
Key Policy Implications
Building on the typology and “test fit” analysis above, EPS recommends that the City consider targeted amendments to the TCP development standards to better align zoning with feasible housing products. These changes presented below are designed to support a wider range of development outcomes while reducing regulatory burdens—particularly for small and mid-sized infill sites. They are offered as a starting point for further discussion between City staff, community stakeholders, and elected officials and do not represent a comprehensive list.
These and other changes will need to be refined and formalized as part of future planning and implementation efforts.
• Increase Maximum Building Heights
Consider increasing height limits to allow at least 8 stories throughout the TCP.
While most developers will cap buildings at seven (7) stories to remain under the 75-foot threshold that triggers high-rise fire safety requirements, allowing eight (8) stories provide design flexibility and future-proofs zoning to accommodate more dense housing products if development economics substantially improve (e.g., due to evolving construction technology or market conditions). The City may also consider allowing residential towers on a limited number of large opportunity sites.
2 2 Likely, to make towers financially viable, height limits would need to reach 150 feet or more. Towers also require larger site footprints and significantly higher land values to justify the transition to full Type I construction.
Figure 22. 2 Acre Site Podium Massing
Figure 21. 2 Acre Site Townhome Massing
37 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 27 Opportunity Site Analysis • Eliminate or Relax Floor Area Ratio (FAR) Limits
FAR limits were not a binding constraint in the EPS test fit scenarios but can add unnecessary complexity. Eliminating or relaxing FARs would simplify entitlements, increase predictability, and enhance the feasibility of density bonus projects—particularly those serving low- and moderate-income households.
• Reduce Parking Requirements
Although the TCP area is already subject to AB 2097, which prohibits parking minimums near transit, codifying a reduced parking maximum (e.g., 1.0 space per unit) would provide greater certainty for developers and insulate local policy from future changes to State law. It also reinforces the City’s commitment to walkable, transit-oriented development.
• Revise Setback Requirements for Small Parcels
Shallow parcels, which make up most of the corridor’s land inventory, are disproportionately affected by existing setback requirements. The City should consider adopting more flexible standards, particularly for lots under 50 feet in depth. Berkeley’s Middle Housing Ordinance offers a useful precedent, allowing site-specific adjustments to better utilize limited lot area. 3 • Reduce or Waive Open Space Requirements for Small Lots Current open space requirements (e.g., 40 square feet per unit) can significantly reduce yield on small sites. Reducing or waiving these requirements, particularly on parcels under 0.25 acres, would improve development feasibility, especially for rental housing. Flexibility could be paired with requirements for shared amenities or high-quality landscaping in lieu of private open space.
3 (See Berkeley example, pg. 28)
38 of 79
Economic & Planning Systems, Inc. 28 Appendix: Funding Sources
4. Development Feasibility
This chapter evaluates the financial feasibility of the opportunity site development scenarios presented in Chapter 3. The analysis identifies if, and under what circumstances, developers are likely to view the hypothetical projects as attractive from a real estate investment perspective.
In this context, it is important to recognize the degree of economic uncertainty currently affecting real estate investment more generally and housing development, in particular. Among other factors, rising interest rates and construction costs, as well as concerns about a potential economic slowdown, have weakened the climate for housing investment. Accordingly, this Chapter discusses how improved market conditions might affect development prospects along the corridor and provides sensitivity testing of key financial variables.
Methodology and Assumptions
EPS created static proformas models to simulate the financial performance of each of the product type and site scenarios described in Chapter 3. The pro- forma models incorporate data on current rent and sale prices described in Chapter 2 as well as construction costs using both market research and vender- based data. Additionally, the proforma models also account for existing City fees and inclusionary housing requirements. Actual outcomes for a specific project can differ significantly depending on design considerations, unique site attributes, evolving market trends, project execution, and other factors.
To test financial feasibility, EPS solved for the residual land value (RLV) likely to be achieved under each scenario. The RLV of a real estate project represents its economic value after deducting all costs needed for financing, design, and construction, but excluding the purchase of the property itself. Development cost includes both “hard costs” such as labor and materials, as well as soft costs, such as building permits and fees, planning, architecture, and engineering, and financing.
A project is generally considered feasible if the RLV is equal to or greater than the expected cost of acquiring the site. While a vacant site may have little opportunity costs, active commercial uses can be more difficult and costly to acquire. By way of example, Table 8 illustrates the potential cost of acquiring a site with an occupied or marketable retail building based on current market data, typical retail densities, and standard underwriting assumptions. As shown, this hypothetical calculation translates to a site acquisition cost of about $11.8 million
39 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 29 Development Feasibility per acre (slightly higher or lower depending on lease rate and FAR). While there have not been many land sales in the City recently, property transactions suggest vacant or under-utilized land traded for about $5-$10 million per acre.4 Table 8. Hypothetical Land Value for Active Retail Site
While the above analysis may reflect average outcomes given current market conditions, site-level performance can vary significantly. For example, a well- positioned corner site that benefits from high visibility and foot traffic, may be able to achieve above average rents and thus may be less likely to transition to alternative use such as housing. In contrast, mid-block sites that often underperform from a retail perspective may fall below this value. However, these same mid-block parcels are typically more favorable for residential redevelopment due to block depth, quieter conditions, and less access conflict.
4 There are a few outliers on either end of this range among land sales, which have unique circumstances preventing them from serving as effective comparisons for this analysis.
Assumption
Small Site Medium Site
Land Use Description
Site Acres 0.125 0.5
Floor Area Ratio (FAR) 0.75 0.50
Gross to Net Leasable Factor 95% 95%
Net Leasable Retail Building Sq. Ft. 3,880 10,346 Operating Assumptions
Annual Market Lease Rate (NNN) $28.00 $32.00
Vacancy Allowance 10% 10%
Net Operating Income (NOI) $108,628 $331,056
Capitalization Rate 6.5% 6.5%
Capitalized Value $1,671,196 $5,093,169
Value / Acre $13,369,569 $10,186,338
Avg. Value / Acre (rounded)
Amount
$11,800,000
40 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 30 Development Feasibility Financial Feasibility Results
As summarized in Table 9, for-sale townhome projects consistently outperform other typologies, with most achieving residual land values over the $11.8 million per acre value estimate for active retail properties. Ultimately, prevailing market conditions remain the most critical determinant of project feasibility. For-sale townhomes appear viable across a range of site conditions, while stacked flats and podium rental projects will require substantial rent increases, cost reductions, or targeted public support to become feasible.
The widespread viability of townhomes compared with rental projects suggests it may be more productive to encourage townhomes and send a positive market signal through smaller scale investments, rather than holding out for large scale high density rental projects. However, doing so exclusively could limit the long- term opportunity for infill density, particularly as market conditions evolve and rents rise. A balanced strategy may involve encouraging near-term townhome development on smaller or more peripheral sites while preserving the flexibility to pursue higher density rental projects on sites better suited to accommodate this type of development (e.g. because they are larger and/or strategically located).
While townhomes appear financially feasible in most site conditions studied in this analysis, the City has not seen an influx of townhome development in recent years. There are several factors likely impeding townhome development in San Bruno, including:
1) Site Conditions – Townhome feasibility is more difficult on the smaller sites, which make up most of the parcels on the corridor. Additionally, major developers are less likely to be interested in a 3- or 7-unit project, the most that will fit on many of the parcels along the corridors. 2) Land Use Policy – Zoning policies such as open space requirements and inclusionary housing policies can impact development feasibility. 3) Administrative Hurdles – While not the primary subject of this analysis, EPS acknowledges the planning approval process may pose a challenge to development feasibility, particularly for smaller, independent, developers who lack familiarity with the process or resources to navigate complex and time- consuming processes.
41 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 31 Development Feasibility Table 9. Summary of Development Feasibility Results by Scenario
Notably, the 1-acre townhome site achieved the highest residual land value per acre, benefiting from a more efficient site shape and optimized layout. While all rental configurations, including podium and stacked flat typologies, produced negative returns under current market conditions, larger sites, such as the 2-acre parcel, demonstrate smaller per-unit losses due to modest economies of scale. This outcome suggests a potential path to feasibility if market fundamentals improve. Smaller parcels (under ½ acre) with challenging geometries often face greater inefficiencies, reducing feasibility. Depth and shape significantly influence site planning, unit layout, and cost distribution, directly impacting overall project returns. Addition findings by site size are summarized below:
• 1/8 Acre Site: The townhome scenario achieves a residual land value of approximately $11.2 million per acre, approaching feasibility on a constrained site. The rental stacked flat scenario, while producing the least negative return the only positive residual land value among all rental typologies, remains unprofitable infeasible under current market conditions. This is primarily due to the lower-cost Type III construction and surface parking, which help reduce overall development costs but still fall short of generating positive returns.
42 of 79
Economic & Planning Systems, Inc. 32 Appendix: Funding Sources • 1/4 Acre Site: The townhome scenario performs well with a residual land value of approximately $11.9 million per acre, aligning with other for-sale townhome projects in the corridor. However, the rental podium scenario performs the worst among all tested rental products on a per unit value basis. Despite a modestly larger unit count than the smallest parcel, the move to a podium product type results in high fixed costs that significantly impact financial viability. The scenario illustrates a clear takeaway: for-sale townhomes remain financially feasible, while small-scale podium rental development faces structural cost challenges that are difficult to overcome without changes in market conditions or public subsidy.
• 1/2 Acre Site: The townhome scenario maintains a high residual land value, at approximately $11.6 million per acre, demonstrating that compact for-sale housing can be both efficient and financially feasible on moderately sized infill parcels. In contrast, the rental podium scenario remains financially unfeasible, unable to spread the high fixed costs of structured podium construction without larger economies of scale and better market conditions. The analysis suggests that for-sale townhomes are feasible and appropriate at this scale, while rental podium development remains challenged without improved revenue assumptions or supportive policy measures.
• 1 Acre Site: The townhome scenario delivers the highest residual land value of the for-sale scenarios, at approximately $12.5 million per acre. The podium rental scenario, though the worst residual land value at the per acre level, shows improved performance at the residual land value per unit level due to modest economies of scale, achieving a density of 194 units per acre. This highlights the potential for significant infill if market conditions improve, though it remains financially challenging under current assumptions. The analysis suggests that for-sale townhomes continue to deliver strong returns, while larger podium rental projects may become viable over time as construction costs stabilize or rents increase.
• 2 Acre Site: The townhome scenario has an estimated residual land value of $12.2 million per acre, slightly below the 1-acre case but still among the strongest across all for-sale prototypes. The podium rental scenario performs similarly to podium developments on 1-acre sites. However, it remains financially infeasible without substantial rent growth, cost reductions, or targeted subsidies.
Sensitivity Analysis
To further assess the feasibility of the projects under varying market conditions, EPS conducted sensitivity analysis on the impact of key financial parameters for both for-sale and rental projects. This analysis examined how changes in factors such as market rent and capitalization rates would affect the financial viability of each development. By testing a range of potential scenarios, EPS was able to
43 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 33 Development Feasibility estimate the level of improvement in these key metrics needed to make each project financially feasible, helping to inform the likely success and timing of future development strategies for the corridor. The ¼-acre sites, and the ½-acre sites performed similarly, as did the 1-acre and 2-acre sites, so for the purposes of the sensitivity analysis the analysis considers Small Sites (1/8-acre), Medium Sites (¼-acre and ½-acre), and Large Sites (1-acre and 2-acre).
Podium
Figure 23 illustrates how improved market rents can significantly impact project feasibility for podium rental developments. As shown, increases in market rents can materially improve the residual land value (RLV). For example, while all five rental scenarios currently yield infeasible RLVs under base case assumptions, an modest increase in market rents from $4.5 per square foot to $5.00 per square foot, would be sufficient to push the 1/8th-acre stacked flats projects into feasible territory.
In addition to rent growth, better market outcomes can be achieved in a variety of ways, including reduced cap rates, development costs, lower interest rates, or public financial support. Conversely, smaller sites with constrained geometry remain more sensitive to these variables and may continue to underperform unless significant cost efficiencies or policy interventions are introduced.
Figure 23. Impact of Rent Per Square Foot on Residual Land Value
-$30M
-$20M
-$10M
$M
$10M
$20M
$30M
$4.00 $4.50 $5.00 $5.50 $6.00 $6.50
RLV / Acre (in $millions)
Monthly Rent / Sq. Ft.
Small Sites (Stacked Flats) Medium Sites (Podium)
Large Sites (Podium) Land Value for Occupied Retail
Current Market
Rent
44 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 34 Development Feasibility Townhomes
As described above, most for-sale townhomes are already likely to be financially viable (i.e., they generate a RLV greater than the price of acquiring land). Figure 24 illustrates how additional price increases will improve this dynamic, making the purchase of a marketable retail site for townhome project even more financially attractive.
Figure 24. Impact of Sale Price Per Square Foot on Unlevered Return
$5M
$10M
$15M
$20M
$700 $750 $800 $850 $900
RLV / Acre
Sale Price / Sq. Ft.
Small Sites Medium Sites
Large Sites Land Value for Occupied Retail
Current Market
Sale Price
45 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 35 Development Feasibility Key Policy Implications
Based on the foregoing financial feasibility analysis, EPS recommends the City balance both short- and long-term market considerations to optimize residential development outcome that advances the TCP vision. These include, without limitation, the following:
• Encourage townhome development on smaller or more peripheral sites to take advantage of the more favorable economics facing this product type in the current market. Doing so can have a catalytic impact by sending a positive market signal about the strength of the TCP, supporting a balanced mix of housing opportunities, and building on the “sense of place”. • Given that the City has finite available land, particularly along transit corridors, and an ongoing long term housing obligation, it should also seek opportunities to maximize higher-density multi-family housing on the parcels that can accommodate this type of development as market conditions improve. Thus, the City should seek to identify and preserve opportunities for higher density, and potentially mixed-use housing projects, particularly on larger and/or strategically located sites, which are more likely to move forward.
46 of 79
Economic & Planning Systems, Inc. 36 Appendix: Funding Sources
5. Funding And Development Incentives
In addition to the residential and commercial development goals, the TCP identifies a variety of infrastructure projects designed to enhance the public realm and catalyze investment. These projects include active transportation improvements such as bike and pedestrian pathways, street greening, and other place-making efforts to make the corridors more inviting and multi-modal. The costs of these projects are significant, and when considered in conjunction with the current financial challenges for private development, indicate a need for creative public-private investment strategies to facilitate the implementation of the TCP.
Accordingly, this chapter describes potential funding tools and resources as well as development incentives that the City may be able to leverage to support public and private sector investment in the TCP. No one funding source, development incentive, or policy will address all the implementation challenges, rather it is likely that a combination of strategies will be necessary to achieve desired outcomes.
Potential Funding Tools and Resources
The TCP, approved in 2013, includes an implementation chapter that describes the public infrastructure improvements envisioned and potential funding tools and resources that could be pursued to deliver them. While some of the improvements have been completed, many remain aspirational, in part due to lack of available funding. At the same time, City staff and other stakeholders have redefined and/or identified new public infrastructure needs, as would be expected during the 12 years since TCP adoption.
Rather than attempt to update the entire list of infrastructure improvements needed to implement the TCP, and recognizing the dynamic nature of needs that will evolve over time, this section takes a fresh look at potential funding mechanisms and resources for the public realm. While the analysis focuses on sources applicable primarily on streets, sidewalks and associated right-of-way needed to support active, multi-modal transportation, many of the funding tools and resources may be applicable to other public improvements (e.g., open space, landscaping, wet utilities).
Table 10 summarized the primary funding tools and resources evaluated as part of this analysis along with the primary actions and responsible parties necessary to implement them. EPS has developed the list based on our expertise in public financing in California, input from City staff, and additional research. While many
47 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 37 Funding And Development Incentives of the sources were also identified in the 2013 TCP, they are included herein because the conditions affecting their applicability to the Plan have evolved, as discussed further below.
Table 10. Summary of Funding Sources Evaluated
Funding Tool / Source Action / Primary
Responsible Party Applicability to TCP
City-wide Voter Approved
Tax Increase
Initiated by Council or voter
petition
Currently exists but could be
expanded
Development Impact Fees City Council Currently exists but could be updated
Community Facilities
District (CFD)
Initiated by Council or
property owners. Requires
2/3rds approval by affected
parties
Does not currently exist but
being considered in Tanforan
Statewide Community
Infrastructure Program
(SCIP)
City Council Not currently in place
Property / Business Based
Improvement District (PBID)
Local property owners /
businesses with potential City
support
Referenced in TCP but not
currently utilized
Developer Dedications,
Exactions, and Community
Benefits
City Council with participation
by developers
Referenced in TCP but not
currently utilized
Federal, State, and Regional
Grants
City Staff with potential
support from other
stakeholders
Would need to be pursued on
case-by-case basis
City-wide Voter Approved Tax Increase
San Bruno residents can vote to increases a variety of taxes, such as local sales, property, or utility user taxes to fund public infrastructure or services. The resulting revenues can be used on a “pay-as-you-go” basis, as a source of reimbursement, or in some cases to support a municipal bond issue. However, initiatives that increase local taxes are limited by State constitutional requirements and statutes that require voter approval of 50 percent plus one (1) (hereafter “simple majority”) for “general taxes” and two-thirds plus one (1) (hereafter “super-majority”) approval for “special taxes” (i.e., revenues are earmarked for a particular purpose).
48 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 38 Funding And Development Incentives In 2019 San Bruno residents approved Measure G, a one-half cent local sales tax that will remain effect until terminated by voters.5 The funds are directed towards street maintenance, attracting and maintaining local businesses, maintaining neighborhood police patrols, and maintaining city parks and playgrounds. To date, revenue from this tax has helped fund street rehabilitation and sidewalk repair, and it is logical that placemaking improvements to the corridors could fall into those categories as well.
Additionally, in 2024, San Bruno voters approved Measure Q, a bond measure to supporting a variety of street infrastructure improvements (storm drainage, pothole repair, and emergency services).
6 Additional input from the City’s
Administrative Services Department may help clarify how funds from either measure could support future corridor-related improvements. Table 11 summarizes the merits of relying on a city-wide voter initiative (placed on ballot either by City Council or resident petition) for additional tax revenue.
Table 11. Citywide Taxes Advantages and Disadvantages
Advantages Disadvantages
• Broad-based taxes, does not tax or
disincentivize development in one
particular district
• Can fund debt service for bond
issuances or used on a “pay-as-you-go”
basis
• Difficult to approve because subject to Citywide
voter approval
• Adds additional tax burden
• Depending on type, tax revenues can fluctuate
Development Impact Fees
Development impact fees are a one-time charge on new development designed to cover a “proportional-share” of the total capital cost of the necessary public infrastructure and facilities. San Bruno has two existing development impact fee programs, one covering the city as a whole and another applicable to the Bay Hill Business Park. While both programs include some of the infrastructure project categories listed in the TCP, neither were created specifically for this purpose.
Moreover, future development in Bayhill is governed by a Development Agreement that specifically defines eligible infrastructure and fee levels.
A new TCP Area Impact Fee would supplement the existing Citywide development impact fees but focus more narrowly on infrastructure
5 The official ballot language describes eligible expenditures as “… city services/facilities such as neighborhood police patrols; fire prevention services; urban wildfire protection; crime suppression/investigation; pothole/street repair; increasing parking su pply; upgrading parks/other city services/facilities; expanding services supporting local businesses…”. 6 The official ballot language describes eligible expenditures as those that “…. repair deteriorating storm-drains, preventing failure, flooding, water pollution/sinkholes; repair potholes/city streets; upgrade fire stations, improving emergency response, accommodate modern firefighting/lifesaving emergency medical equipment, function during earthquakes/natural disasters…”
49 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 39 Funding And Development Incentives improvements that primarily serve the Plan area. Proceeds may be used to reimburse property owners who pay up-front costs for facilities or infrastructure needed to facilitate development on their property. Developers can also be given the option to finance the fees through a Community Facilities District (a CFD, as described below) or, conversely, pay fees in-lieu of participating in a CFD.
Table 12 summarizes the advantages and disadvantages of development impact fees. In terms of advantages, development impact fees do not require voter approval and create a revenue source that can fund infrastructure project overtime. The key limitation of development impact fees is the timing of funding.
Infrastructure often is needed “up-front” while fees are paid through time as development occurs. This means that other funding or financing methods are needed to close the timing gap. Fees also are irregular, as they depend on development activity that varies with economic conditions. In addition, impact fees will also only provide partial funding of the infrastructure, and do not provide upfront payments for infrastructure. Finally, impact fees add additional cost burden to real estate developers and, if too high, can render property investment financially infeasible.
Table 12. Development Impact Fees Advantages and Disadvantages Advantages Disadvantages
• Nexus-based fee on developers to
Pay a “Fair Share” for infrastructure
• “Pay-as-you-go” approach
• Can be set up to reimburse
developers for “oversizing”
infrastructure
• No voter approval required
• No on-going tax burden
• Typically, doesn’t provide full funding for
infrastructure when needed
• “Bridge” funding measures required to fund
infrastructure needed prior to development
(water, sewer)
• Reimbursements may take years for other new
development to pay fees
• Requires an updated “nexus study” and City
Council approval
• Dependent on development activity
• Adds additional cost burden on development
50 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 40 Funding And Development Incentives Community Facilities Districts (CFDs)
A CFD can support implementation of San Bruno’s TCP by providing a mechanism to finance corridor-wide infrastructure improvements, particularly those aligned with the City’s complete streets goals. While many of the development sites within the TCP are small and generate limited on-site infrastructure needs, they still depend on broader public investments such as upgraded sidewalks, pedestrian- scale lighting, bicycle infrastructure, and green stormwater systems, improvements that are essential to creating a cohesive, walkable urban environment.
To overcome parcel-level limitations and fund shared improvements, the City could consider establishing a corridor-wide CFD overlay, potentially inclusive of larger redevelopment sites like Tanforan. A shared district would allow costs to be distributed across a larger set of participating properties, enabling small and mid- sized infill projects to contribute proportionally without bearing the full burden of off-site public realm enhancements. The City is currently evaluating the feasibility of approving a CFD to help fund both public services and infrastructure serving the redevelopment of the Tanforan Mall. A TCP wide overlay could supplement this more localized district.
A CFD may be initiated by the City Council or by property owner petition, and must be approved by a two-thirds majority of either property owners or registered voters (if there are more than 12 registered voters living in the area). 7 While the City may be able to require property owners to “opt-in” to a CFD over- lay as a condition of project approval, this approach would only apply to developments seeking or requiring discretionary approvals.
Because CFD special taxes are levied in addition to the base 1 percent property tax and are not tied to the City’s share of general fund revenues, they offer a fiscally neutral method to deliver infrastructure without impacting ongoing municipal budgets. However, several challenges and trade-offs should be acknowledged:
• Net Operating Income (NOI) impacts for rental housing: CFD taxes are considered operating expenses in underwriting, which can reduce NOI, lower project valuations, and limit debt capacity for rental developments. • Affordability concerns for ownership units: For-sale products like townhomes may become less affordable to end users if CFD obligations are high, unless mitigated through fee reductions or increased density.
7The boundaries of a CFD can be formed to only include “willing” property owners, with annexation requirements triggered by development. An alternative (and usually more optimal) approach is to structure the rate and method of taxation in a way that’s amenable to all parties (e.g. tax is only triggered upon development, not on existing uses).
51 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 41 Funding And Development Incentives • Administrative and legal complexity: Establishing a CFD requires a formal process that includes a tax engineer’s report, public hearing, and landowner or registered voter approval, potentially adding time and soft costs to the development process.
Despite these challenges, a corridor-scale CFD offers a practical and fiscally sustainable tool to help bridge feasibility gaps while advancing San Bruno’s goals for high-quality urban design, equitable infrastructure access, and long-term public realm investment.
Statewide Community Infrastructure Program (SCIP)
The Statewide Community Infrastructure Program (SCIP) allows for the creation of project specific CFDs to finance public facilities and/or development impact fees. SCIP pools bond issuances three times to allow for smaller project areas to participate. One potential benefit of SCIP is that a local agency only needs to become a member of the California Statewide Communities Development Authority (CSCDA) and then developers can submit applications directly to the program, rather than using local agency resources to administer the program.
The California Municipal Finance Authority (CMFA) offers the Bond Opportunities for Land Development (BOLD) program to assist in funding improvements though CFDs. The CFD special tax is not subject to the same “special benefit” tests required under Proposition 218. As such, BOLD may be able to fund more development impact fees than the SCIP program for a particular project. An example is that BOLD allows for the financing of school impact fees.
The City of San Bruno is not currently a member of either the CSCDA or the CMFA, meaning projects in the City are not eligible to participate in these programs. The City may consider looking into these programs further to identify whether there is sufficient demand among developers for financing opportunities for fee requirements.
Enhanced Infrastructure Financing District
Enhanced Infrastructure Financing Districts (EIFDs) provide an emerging form of tax increment financing available to local public entities in California. Cities and other local agencies may establish an EIFD for a given project or geographic area to capture incremental increases in property tax revenue from future development and assessed value appreciation. In the absence of the EIFD, this revenue would accrue to the city’s General Fund (or other property-taxing entity revenue fund). Unlike prior TIF/Redevelopment law in California, EIFDs do not automatically provide access to property tax revenue beyond the share agreed to by participating jurisdictions (e.g., City and County).
52 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 42 Funding And Development Incentives The establishment of an EIFD requires approval by every local taxing entity that will contribute to its property tax increment. EIFDs require 55 percent voter approval to issue bonds but may be formed and gain access to unlevered (debt free) revenue without a vote via a city or county’s legislative board or through a Joint Powers Authority. Revenues generated by an EIFD may be used to provide funding and financing for a broad range of infrastructure projects, provided those projects have a useful life of 15 years and are of “community-wide” significance.
Capital improvements do not have to be located within the boundaries of the district, but must have a “tangible connection” to the district.
Table 13. EIFD Advantages and Disadvantages
Advantages Disadvantages
• Does not impose a new tax on property
• Allows for the use of property tax
increment to fund infrastructure
without increasing overall tax burden
for property owners
• Can be leveraged through the issuance
of debt
• EIFDs requires 55% approval by
owners or residents within district to
issue debt
• Must negotiate with
• Relatively small amounts of revenue
available during early development
• Unproven bond market; small district
implies high-risk profile
• Takes revenues away from public
agencies for services funding (police,
fire, road maintenance)
• Limited standalone applicability: The
small size and shallow depth of many
TCP parcels make individual CFDs
impractical, which underscores the
value of a shared district overlay that
aggregates participation and focuses on
corridor-wide infrastructure delivery.
Property / Business Based Improvement District (PBID)
A Property and Business Based Improvement District (PBID) places a special assessment on property within the district boundaries to fund specific services and improvements within the district. Funds collected by the local government are then directed to the PBID, which is operated by a nonprofit entity formed by district property owners. Revenues are commonly used to augment district services, e.g. sanitation, security, marketing and economic development initiatives, but can also be used to fund small- and large-scale capital improvements.
Improvements may also be financed via issuance of bond debt supported by benefit assessments.
53 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 43 Funding And Development Incentives The formation process for a PBID and special assessment levy requires voter approval and typically requires up to 12 months. District proponents (typically representatives of District business and property owners) will need to prepare a Management Plan identifying the district boundaries, assessment rates and methodology, activities and budget. The Management Plan is then submitted to the City Council and must be accompanied by a petition signed by property owners representing at least 50 percent of the proposed assessment value.
District formation then follows a Proposition 218 compliant balloting process, whereby property owners can object to district formation. If fewer than 50 percent of property owners (as weighted by assessment valuation) object, the district is approved.
Multifamily Improvement District law is modeled on PBID enabling statutes, but focus on providing services to benefit apartments, condominiums, mobile home parks, and other high-density residential uses. These types of districts are most commonly used in disadvantaged communities to augment existing services and promote activities beneficial to the district. MID assessments may pay for a variety of activities and improvements, including supplemental security services and improvements, parking, sidewalks, street lighting, and landscaping.
Improvements may also be financed via issuance of bond debt supported by benefit assessments.
Formation requires a petition signed by two-thirds of the property or business owners within the proposed district and a detailed Management Plan identifying the proposed assessment methodology and other pertinent elements of the proposed District. If approved by a two-thirds majority via a weighted ballot election, the MID will be in place for 5 years and can be renewed for successive 10-year periods.
Table 14 summarizes the advantages and disadvantages of improvement districts.
The main advantages are that improvement districts do not require Citywide approval and that revenues generated within these districts are invested directly into the district. These funds can be used to finance infrastructure improvements, and revenues can even be used to underwrite bond issuances.
In terms of disadvantages, while not requiring Citywide approval, the districts still require approval of property and business owners and require the formation of a separate BID non-profit entity. The district also adds additional burden to the area, which can disincentivize economic activity. Finally, the districts are best to augment district services, either through added operation and maintenance or through investment in additional amenities. While districts are likely not appropriate for backbone infrastructure, they can be uses for other types of greening and calming measures.
54 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 44 Funding And Development Incentives Table 14. Improvement Districts Advantages and Disadvantages Advantages Disadvantages
• Not subject to Citywide approval
• Revenues generated invested directly
into the district
• Can be used to fund/reimburse costs of
infrastructure improvements
• Can fund debt service for bond
issuances or used on a “pay-as-you-go”
basis
• Approval of property and business
owners required; potentially challenging
to organize across multiple landowners
• Requires formation of a non-profit
entity
• Adds additional tax burden to area
• Not well suited for backbone
infrastructure
Developer Dedications, Exactions, and Community Benefits The City may seek to require some developers within the TCP, as a condition of approval, to make or fund necessary improvements for street frontage and utilities adjacent to and serving their projects. To the extent that developers over- build such improvements (e.g. for economies of scale or to facilitate a continuous street design) an area wide reimbursement mechanism could be implemented.
Additionally, developers may elect to provide dedications or one-time payments for other project infrastructure requirements, improvements, or mitigations in lieu of participation in one or several of the financing mechanisms identified herein.
For example, developers may want to “buy their way out” of required participation in an area CFD. The City should approve the terms and conditions associated with such dedications or contributions.
Requiring developers to make desired infrastructure improvements or community benefit contributions on a project by project basis is usually most applicable for very large projects that involve discretionary approvals (e.g. because they do not conform with existing zoning). These agreements are typically implemented and enshrined as part of a negotiated Development Agreement (DA), a relatively time- consuming and costly process.
8 By way of example, the redevelopment of the
Tanforan Mall is currently proceeding as part of a DA. However, this approach is less appropriate for smaller projects that largely conform with the TCP’s existing regulatory framework and would likely have an unfavorable impact on desired outcomes by increasing uncertainty and costs.
8 As a legally binding contract, a DA would differ from ordinary rezoning decisions or other public approval because, in addition to binding developer to detailed plans and conditions, they also commit public entities to a specified course of action. In addition, DAs usually incorporate vesting provisions that protect the project from future regulatory changes by the City. A DA and any amendments must be approved by the City Council.
55 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 45 Funding And Development Incentives Federal, State, and Regional Grants
There are a variety of regional, state, and federal grant programs that provide funding to cities, other public agencies, and non-profits for the type of transportation improvements identified in the TCP. However, the requirements and funding availability of these programs usually evolve over time and are subject to political and funding cycles. As part of this study, EPS has conducted additional research to provide updated information on grant programs most applicable to the type of active transportation projects identified in the TCP as summarized below and further described in the Appendix.
Regional
San Mateo County Sales Tax (Measure K)
Measure K is a one-half cent countywide sales tax passed by San Mateo County voters in 2016 extending the previously approved tax until 2043. The funds provide limited-term funding to meet critical service needs, address service gaps, or save money by improving performance. The County releases a Notice of Funding Opportunity (NOFO) each fiscal year, soliciting proposals from nonprofit organizations and public agencies and departments. In April 2025, the County of San Mateo issued a letter to current Measure K funding recipients notifying them of the potential for a decrease in the federal share for mandated services and a shortfall in the County’s Vehicle License Fee Adjustment Amount. If these challenges impacted the County’s budget, the County may adjust the Measure K funding available in future years.
Metropolitan Transportation Commission Funding Opportunities MTC administers several grant programs, including the Housing Incentive Pool Grants, Priority Development Area Grants, Affordable Housing and Sustainable Communities Program, and the Mobility Hubs Pilot Program. Depending on the cycle of the program, MTC will issue a Call for Projects and solicit applications from local governments and public agencies or nonprofit organization in partnership with public agencies.
As part of the regional planning effort associated with Plan Bay Area 2050, MTC identified census tracts with a significant concentration of underserved populations, such as households with low incomes and people of color, as Equity Priority Communities (EPCs). Projects benefiting these communities receive prioritization for some programs, such as the Active Transportation Program, or are eligible for more restrictive programs, such as the Lifeline Transportation Program, which provides grants to projects that meet mobility and accessibility needs in EPCs. A substantial portion of the El Camino Real Corridor, spanning from I-380 to San Juan Avenue is designated as an EPC, and therefore projects may be eligible for additional funding opportunities.
56 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 46 Funding And Development Incentives One Bay Area Grant (OBAG)
The One Bay Area Grant program is the policy and programming framework for investing funds from the federal Surface Transportation Block Grant Program (STP), Congestion Mitigation and Air Quality Improvement (CMAQ), and other programs in the Bay Area. The Metropolitan Transportation Commission (MTC) issues a regional call for projects, and county transportation authorities then conduct outreach before submitting a project nomination list for MTC’s consideration. While the next round of application has not been announced yet, it is anticipated to be in FY26-27.
State Funding Sources
Active Transportation Program
Caltrans administers the Active Transportation Program (ATP), which consolidates existing federal and state transportation programs, including the Transportation Alternatives Program, Bicycle Transportation Account, SB1, and State Safe Routes to School, into a single program. Eligible projects include those that encourage increasing the proportion of trips by biking and walking, increasing safety and mobility for non-motorized users, advancing the active transportation efforts of regional agencies to achieve greenhouse gas reduction goals, enhancing public health, ensuring that disadvantaged communities fully share the benefits of the program, and providing a broad spectrum of projects to benefit many types of active transportation users.
Forty percent of ATP funds must be distributed to Metropolitan Planning Organizations in urban areas with populations greater than 200,000. In the Bay Area, that organization is the Metropolitan Transportation Commission. Program requirements will shift from cycle to cycle. Overall, project must encourage increased use of active transportation modes, which including bike and walking.
The program typically encourages but does not require matching. Funding can be for both infrastructure and non-infrastructure projects, and preference is given to disadvantages communities. The minimum project amount is $250,000.
Strategic Growth Council Affordable Housing and Sustainable Communities Program
The Strategic Growth Council (SGC) Affordable Housing and Sustainable Communities (AHSC) Program funds land-use, housing, transportation, and land preservation projects to support infill development that reduce greenhouse gas emissions. The AHSC Program will assist project areas by providing grants and/or loans, or any combination thereof, that will achieve GHG emissions reductions and benefit disadvantaged communities through increasing accessibility of affordable housing, employment centers, and key destinations via low-carbon transportation options.
57 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 47 Funding And Development Incentives The type of projects funded through the AHSC program appear to be consistent with TCP attributes and infrastructure needs, including those that improve transit connectivity and encourage bicycling or walking. Project area types include Transit Oriented Development (TOD), Integrated Connectivity Project (ICP), and Rural Innovation Project Area (RIPA). The program does not require a match, and both capital project and programs costs are eligible for program funds. The minimum grant amount is $1 million and the maximum is $20 million.
State/Regional Transportation Improvement Program
The California Transportation Commission develops the TIP on a biennial five- year basis to provide allocation of funds for state highway improvements, intercity rail, and regional highway and transit improvements. This funding source is focused on highway, rail, and transit improvements, with the transit improvements being the most relevant to the TCP.
Developer Incentives and Engagement
In addition to effective public financing, realization of the TCP vision may also require the City to offer targeted financial incentives as well as proactively engage property owners and developers. These efforts are particularly warranted in the short to medium term given the current economic climate and to foster catalytic development at key sites. Key efforts and initiatives often used to advance this process are described below.
Public-Private Partnerships and Engagement
Expanding public-private partnerships (PPPs or P3) and proactively engaging qualified and mission-driven development entities can help unlock infill opportunities in the TCP, particularly on constrained or publicly owned sites. P3 projects are often effective on large opportunity sites that are owned in full or in part by a public entity (e.g., the City or transit agency) and require leveraging both public and private sector assets, resources, and expertise. For example, the City’s existing City Hall site may be a good candidate for a larger-scale P3 project.
Conversely, many parcels within the corridor are too small, shallow, or fragmented to attract institutional capital seeking scale, yet remain viable for modest-sized developers when paired with targeted public support or creative financing strategies. One proven operator in this space is Habitat for Humanity Greater San Francisco, which recently completed a 20-unit affordable homeownership project on Jefferson Avenue in Redwood City. Developed on an approximately 5,500 sf publicly owned infill lot, the project achieved strong urban design and density (174 units per acre) by leveraging low-cost loans, unconventional financing tools, and mission-driven development capacity (Habitat
58 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 48 Funding And Development Incentives for Humanity GSF). The homes serve households earning up to 120 percent of Area Median Income (AMI), a level that meets or exceeds prevailing market affordability for many working families in cities like San Bruno.
At the state level, legislation such as SB 336 (currently under consideration) could further improve feasibility for this model by exempting affordable homeownership units serving households up to 120 percent AMI from property taxes. If adopted, policies like SB 336 would reduce operating burdens and long- term buyer costs, making nonprofit-led, moderate-income homeownership models even more feasible.
San Bruno could replicate this approach by identifying small city-owned or underutilized parcels within the TCP area, issuing targeted RFQs or RFPs to nonprofit or small-scale developers, and offering support during entitlement and predevelopment phases. By doing so, the City could diversify the development landscape, lower per-unit production costs, and enable a broader mix of housing types, including family-sized ownership units that are underrepresented in the local infill market.
Sunset-Based Incentives
In the current economic climate, where development feasibility is constrained by high construction costs, interest rates, and limited capital availability, even modest incentives can meaningfully shift a project from infeasible to viable. San Bruno has an opportunity to deploy a targeted set of sunset-based incentives, specifically transfer tax rebates, inclusionary housing requirement waivers, and fee waivers to catalyze near-term infill housing in the Transit Corridors Plan (TCP) area.
These tools are most effective when structured with clear sunset mechanisms, such as time-limited windows, unit or square footage caps, or market-triggered expirations. This ensures that public benefits are targeted and aligned with market conditions, avoiding open-ended fiscal exposure while promoting shovel-ready activity. Each incentive addresses a different component of development feasibility and can be tailored to San Bruno’s specific parcel patterns, revenue sensitivities, and housing production goals.
Fee waivers
Fee waivers can reduce upfront soft costs of development, particularly for smaller or mid-scale infill projects where feasibility margins are tight. These costs, typically associated with entitlement applications, planning and zoning reviews, building permits, and impact fees, can represent a substantial portion of a project’s pre-construction expenses. In dense, high-cost environments like the TCP area, where parcel fragmentation, shallow lots, and irregular configurations are common, these fixed fees can become disproportionately burdensome
59 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 49 Funding And Development Incentives especially for smaller projects. Waiving fees for a defined set of projects, on a temporary basis, can help offset these barriers and signal the City’s active commitment to enabling housing production.
San Bruno can utilize a high level of flexibility with which fees are waived and for which types of development. For example, it could choose to waive only planning and impact fees for projects located within the TCP boundary, or provide broader relief to include building permit fees for developments below a defined size threshold. Alternatively, the city could apply fee waivers only to specific product types such podium projects to encourage density. The flexibility of this tool allows it to be closely aligned with both housing goals and fiscal management strategies.
A relevant precedent comes from the City of Oakland, which implemented a time- limited impact fee waiver program for affordable housing projects between 2016 and 2020. The policy was explicitly temporary and tied to Housing Element production goals as well as bond funding availability. Oakland’s waiver was designed to activate stalled affordable projects during a market downturn and succeeded in bringing several developments into entitlement by removing a key financial barrier. Importantly, the City sunset the program after the designated term, thereby protecting long-term fiscal health while achieving short-term production objectives.
9 Inclusionary Requirement Relaxation
San Bruno’s inclusionary housing ordinance mandates that new residential developments of five or more units include affordable housing. Specifically, for for-sale residential units, 15 percent must be affordable, with 5 percent designated for low-income households and 10 percent for moderate-income households. For rental residential units, 15 percent must also be affordable, distributed evenly among very low-income, low-income, and moderate-income households, each comprising 5 percent of the total units.
While these requirements are vital for promoting long-term affordability and equitable housing access, they can pose significant challenges for small and mid- sized infill projects, particularly in areas like the TCP. The area is characterized by fragmented parcels, high land costs, and complex entitlement processes, which already strain project feasibility. Imposing strict inclusionary requirements on such projects can further hinder their viability, potentially deterring development that aligns with the City's revitalization goals.
9 (City of Oakland. Impact Fee Waivers and Reductions for Affordable Housing Projects, 2020. [https://www.oaklandca.gov/topics/impact-fees]).
60 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 50 Funding And Development Incentives To address these challenges, San Bruno could consider implementing temporary or project-specific waivers or adjustments to its inclusionary housing requirements. For instance, the city might waive or reduce inclusionary obligations for projects below a certain size threshold, such as developments with fewer than 30 units. Alternatively, the City could modify the structure of its inclusionary requirements by focusing solely on the five (5 )percent, very low- income tier, rather than requiring affordability across multiple income levels. In the current market, rent levels in many new San Bruno developments are already approaching those affordable to households earning around 100 percent of Area Median Income (AMI). As a result, the moderate-income units required under the inclusionary ordinance may offer little to no discount compared to market-rate housing. From a resident’s perspective, it is disincentivizing to apply for or remain in an inclusionary unit if similar housing is available without income restrictions.
A relevant precedent is found in Sacramento, where the city amended its inclusionary housing ordinance in 2021 to exempt ownership projects with fewer than 20 units from affordability requirements, provided the homes served buyers earning up to 120 percent of AMI. This policy adjustment was based on a feasibility analysis indicating that smaller-scale homeownership projects were unlikely to proceed under the existing inclusionary mandates. By offering this exemption, Sacramento facilitated the development of moderate-income homeownership opportunities without compromising its broader affordability objectives.
Transfer Tax Rebate
Transfer taxes, typically imposed at the time of real estate sale or title transfer, can be a non-trivial cost for developers. While not incurred during construction, transfer taxes can shape a developer’s acquisition strategy and affect willingness to pursue complex infill projects, particularly those involving the assembly of multiple parcels. This is especially relevant in the TCP area, where viable development sites often require land assembly across small, fragmented parcels.
In these contexts, the cumulative transfer tax incurred across multiple acquisitions can materially impact project feasibility. A well-structured transfer tax rebate program would reduce this barrier by lowering the effective cost of land aggregation, making it more financially viable for developers to consolidate parcels and bring forward higher-density, mixed-use, or transit-oriented development.
San Bruno could implement a rebate program that returns a portion of the City’s transfer tax on qualifying residential or mixed-use projects in the TCP area, contingent upon delivery of a minimum number of housing units or compliance with development performance standards. Rebates could be issued upon project entitlement or at the issuance of building permits, allowing the City to ensure that relief is tied to actual development outcomes.
61 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 51 Funding And Development Incentives A strong precedent for this approach is San Francisco’s 2024 Downtown Recovery Incentive Ordinance, which waives real estate transfer taxes for the first 5 million square feet of office space converted into housing. To qualify, projects must be entitled by 2028 and permitted by 2029. This program not only creates urgency but also directly supports adaptive reuse and reinvestment in a struggling market segment by targeting relief at a key friction point in the capital stack—land acquisition and disposition.
10 For San Bruno, adopting a similar structure would send a clear signal that the City is prepared to support development through the full lifecycle, from acquisition through construction. It would also align well with the City’s goal of activating underutilized sites and achieving corridor-wide transformation. By lowering the friction associated with parcel assembly and capping rebates through sunset mechanisms or project limits, the City can encourage early action and avoid long- term exposure while advancing key housing goals.
Sunset Structuring Mechanisms
A variety of sunset structuring mechanisms can be used to enhance the effectiveness and fiscal responsibility of these incentives.
Time Based
Time-based incentives are designed with a clear expiration date, creating a deadline that drives developer urgency. When access to financial or regulatory relief is temporary, developers accelerate project timelines to capture the benefit before it disappears. This structure is especially effective during uncertain or high- cost market conditions, when even modest changes in feasibility can shift a project from dormant to active. The incentive isn’t just the benefit itself—it’s the countdown clock attached to it.
A compelling example is San Diego’s Temporary Parking Reduction Incentive, implemented as part of the City’s enhanced Affordable Housing Density Bonus Program. Between 2016 and 2020, San Diego allowed projects that met deeper affordability thresholds to qualify for significantly reduced parking ratios, but only if they applied before the sunset date written into the ordinance. The policy was introduced during a high-cost development cycle, when structured parking was a major barrier to feasibility, particularly for smaller infill sites.
10 (San Francisco Office of Economic and Workforce Development. Downtown Recovery Incentive Program Summary, 2024. [https://sf.gov/news/sf-approves-incentives-revitalize-downtown]).
62 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 52 Funding And Development Incentives The time-limited nature of the incentive spurred a wave of projects that otherwise might not have penciled. Developers actively adjusted designs and entitlements to fit within the eligibility window, and the City saw a measurable increase in bonus-driven affordable housing proposals during the four-year period. Once the program expired in 2020, the enhanced parking reductions were no longer available giving the City a natural off-ramp and a chance to evaluate long-term impacts before adopting further reforms
11. Pipeline or Unit-Based Caps
Some jurisdictions structure incentives around a fixed number of eligible projects or housing units rather than a fixed time horizon. By capping the total amount of incentivized development, cities can create a first-come, first-served dynamic that encourages early participation while maintaining control over fiscal exposure. This model is particularly effective in infill areas where land ownership is fragmented, entitlement processes are complex, and a clear signal is needed to unlock development momentum.
For example, San Bruno could structure a fee waiver or transfer tax rebate program to apply only to the first 500 housing units entitled within the Transit Corridors Plan (TCP) area. This approach would help front-load development activity, drawing in early movers who are ready to act, while allowing the City to sunset the incentive once a critical mass is achieved. A pipeline cap also gives developers clarity: if they secure a place within the eligible pool, they can proceed with greater confidence that the economics will hold.
A strong precedent is the City of Los Angeles’ Citywide Housing Incentive Program (CHIP). Adopted in 2021, CHIP capped the number of units eligible for benefits such as expedited processing, reduced parking requirements, and adjusted design standards. The caps were established to ensure that the program remained fiscally sustainable and aligned with the City’s broader housing goals. By limiting the incentive to a defined pipeline of units, Los Angeles was able to create a predictable and efficient framework for incentivizing near-term development, without committing to long-term financial exposure.
12 11 (City of San Diego. Affordable Homes Bonus Program Annual Report, 2021. [https://www.sandiego.gov]).
12 (Los Angeles City Planning Department. Citywide Housing Incentive Program Fact Sheet, 2021. [https://planning.lacity.gov/odocument/a38fe378-2c4b-4260-807e-af66a053a95b/FD_CHIP_Fact_Sheet.pdf]).
63 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 53 Funding And Development Incentives Market Performance Based Caps
Some incentives are designed to sunset not on a fixed date, but once market conditions improve—tying their duration directly to project feasibility metrics like rent levels, interest or cap rates, building permit activity, or other readily available economic indicators. This structure allows cities to deploy relief only when needed, and to phase it out automatically when the market rebounds. It’s a flexible, data-driven approach that ensures public subsidies are temporary, targeted, and proportional to prevailing conditions.
A strong example is San Jose’s Downtown High-Rise Incentive Program, launched in 2012 to support vertical residential construction in the city’s urban core. The program offered development fee reductions and construction tax discounts to qualifying high-rise residential projects, helping offset the elevated costs of building tall. While the incentive was initially slated to expire in 2017, San Jose extended it multiple times as internal analysis showed that rents and returns had not yet stabilized. The program ultimately sunset in June 2023, after the City concluded that market conditions had sufficiently improved to support high-rise construction without further public relief.
This responsive sunset model helped San Jose balance its housing production goals with fiscal responsibility. The incentive provided meaningful support during a prolonged recovery period but was removed once proformas showed that projects could stand on their own. By grounding the expiration in economic data rather than a political timeline, the City avoided both premature cutoff and unnecessary extension—ensuring the incentive served its purpose and then phased out.
13 For San Bruno, a similar market-responsive sunset could be tied to development feasibility in the Transit Corridors Plan (TCP) area. For example, a temporary fee waiver could remain in place only until average rents or IRRs reach a defined threshold. This would allow the City to respond flexibly to current market conditions without locking in a permanent revenue loss, aligning incentives precisely with the period in which they are most needed.
13 (City of San Jose. Downtown High-Rise Urban Residential Incentive Program, 2023. [https://www.sanjoseca.gov]).
64 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 54 Funding And Development Incentives Key Policy Implications
To realize the public infrastructure vision of the TCP while unlocking near-term housing and mixed-use development, San Bruno should pursue a coordinated strategy that combines local financing tools with external grant opportunities and targeted development incentives. EPS recommends the City conduct additional analysis and implementation efforts that may advance the following actions, without limitation:
• Update or Create New Development Impact Fees
Update the City’s Development Impact Fee program and / or create a TCP- specific program to fund a variety of public realm improvements, including multimodal, wayfinding, and streetscape upgrades. Also consider allowing fee deferrals or reimbursements to reduce early project burden. • Consider an “Opt-In” CFD Program for TCP
Advance formation of a TCP-wide CFD overlay—potentially alongside the currently contemplated Tanforan CFD—to fund shared off-site improvements like pedestrian lighting, green stormwater infrastructure, and bike lanes. Allow small projects to opt in via proportional special taxes. This initiative could be coupled with the Statewide Infrastructure Financing Programs (SCIP / BOLD).
Specifically, the City could enroll in CSCDA and/or CMFA to give developers access to pooled bond financing tools like SCIP and BOLD, which can help fund impact fees and backbone infrastructure without drawing on City resources. • Explore Formation of an Enhanced Infrastructure Financing District for the TCP
Begin discussions with the County to explore creation of an EIFD focused on the TCP corridor. If viable, use future tax increment to support public realm and multimodal improvements without imposing new taxes. • Explore and Support formation of Targeted Improvement Districts City should engage property owners and developer to form a voluntary Property-Based Improvement District (PBID) or Multifamily Improvement District (MID) within the TCP or sub-districts therein. The city should support this effort and encourage the use of assessments to fund lighting, cleanliness, marketing, and small-scale amenities on top of City-provided services. • Pursue State and Regional Grant Programs
Aggressively pursue grants from ATP, AHSC, OBAG, Measure K, and MTC- administered programs. Prioritize shovel-ready projects within designated Equity Priority Communities to increase competitiveness. To be most successful, the City should consider dedicated staff or consultant resources to coordinate applications across departments and partners. Consider pairing with entitlement deadlines to align capital delivery with housing production.
65 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 55 Funding And Development Incentives • Initiate Feasibility Studies for P3 Projects on Strategic Opportunity Sites The City should identify opportunity sites, particularly those under its’ control, that may be well positioned for a catalytic, public-private partnership development project. This could be a large site, such as the existing City Hall, or a smaller site that might be well suited for nonprofits or small-scale developers like Habitat for Humanity.
• Adopt a Sunset Incentive Package to Catalyze Early Projects Offer temporary development incentives to jumpstart shovel-ready housing.
This could include:
1. Waiving planning, impact, or permit fees
2. Rebating real estate transfer taxes, especially for parcel assembly
3. Easing inclusionary requirements for small (<30 unit) or moderate-income projects
4. Capping incentives at a defined number of units (e.g., first 500 units) or time period (e.g., 3 years)
• Consider Sunset Mechanisms for Most Incentives
To better stimulate near term investment structure incentives to expire based on appropriate thresholds, such as:
1. Time (e.g., 2026 sunset)
2. Pipeline caps (e.g., first 500 entitled units)
3. Market performance (e.g., phased out when rents or IRRs exceed thresholds)
66 of 79
Economic & Planning Systems, Inc. 56 Appendix A: Development Scenarios Appendix A: Development Scenarios
67 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 57 Appendix A: Development Scenarios
68 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 58 Appendix A: Development Scenarios
69 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 59 Appendix A: Development Scenarios
70 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 60 Appendix A: Development Scenarios
71 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 61 Appendix A: Development Scenarios
72 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 62 Appendix A: Development Scenarios
73 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 63 Appendix A: Development Scenarios
74 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 64 Appendix A: Development Scenarios
75 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 65 Appendix A: Development Scenarios
76 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 66 Appendix A: Development Scenarios
77 of 79
Economic & Planning Systems, Inc. 67 Appendix B: Funding Sources Appendix B: Funding Sources
78 of 79
SAN BRUNO CORRIDOR STUDY
Economic & Planning Systems, Inc. 68 Appendix B: Funding Sources
79 of 79