If Muni service is eviscerated in San Francisco, home values could sink along with it.

That’s one takeaway from a new report by the city controller’s office, which details the ripple effects of cuts that could begin next year if voters do not approve Proposition H, the Muni parcel tax measure, in November.

Faced with a $307 million annual budget shortfall, leaders at the San Francisco Municipal Transportation Agency are weighing a future in which 19 bus lines and a street car route disappear, cable cars stop running and trips on the busiest bus and Metro lines are significantly less frequent. To understand what that means for San Francisco, staff at the controller’s office and outside consultants used statistical models to measure the consequences of a depleted transportation system against the cost of imposing a new annual property tax.

The average single-family home or condominium owner would pay $129 annually if Prop H passes, with a higher base rate of $249 for multi-family dwellings and $799 for businesses, industrial buildings, hotels or offices. Owners of larger parcels would pay progressively higher rates, and the tax could put “downward pressure” on property values. But those losses generally pale in comparison to what happens if the service cuts take place. Without a robust bus and rail system, average citywide home prices could fall by up to 0.9%, which translates to a dip of up to $14,100.

Such figures should come as no surprise to real estate agents who highlight neighborhood transit in their listings. For homebuyers in San Francisco, a bus stop within walking distance could be more enticing than hillside views or a tiled fireplace.

“When considering alongside of the impacts of the potential Muni cuts on property values, residential property owners are clearly better off by avoiding the cuts with the tax,” stated a draft copy of the report that was reviewed by the Chronicle. “The tax would only drive property values down by 0.2%, while the cuts would drive it down by 0.6% to 0.9%.”

Since owners of non-residential properties would carry a higher tax burden, their calculus might be different. For them, the greater financial risk may be the tax itself, rather than the transit cuts it’s meant to prevent.

Real estate was one of several economic factors that the controller’s office examined. Analysts also noted that longer commute times would prompt demand for higher wages and possibly dissuade people from working in the city. A dearth of transportation options for shopping or leisure activities would erode people’s quality of life, making them less inclined to pay a premium for housing.

In all, the report predicted more than 15,000 hours of trip delays for San Francisco residents and workers each weekday, caused by infrequent bus service and heavier traffic congestion. There would be an 8% decrease in jobs attainable within a 45-minute transit ride, on average. Muni would also have to constrain its own spending on salaries, maintenance or energy costs for its fleet, which could reverberate out to other industries.

How much more in taxes would you be willing to pay to help save Muni bus lines from getting cut?

Increased taxes are one proposal being considered as Muni faces losing 19 bus lines and other services.

Notably, the proposed tax would generate up to 1,445 jobs over 15 years, along with $400 million in economic growth. Such estimates thrilled Mayor Daniel Lurie, who has elevated public transportation as a priority and is the top proponent of Prop H. In a statement, he characterized the controller’s independent analysis as validation.

“Safe, affordable, reliable transit gets our kids to school, people to work, and our seniors to the grocery store,” Lurie said. “It connects our neighborhoods and makes it possible for people to put down roots here. As we make critical investments in Muni, we will continue to make it more accountable and more reliable so we can serve every San Franciscan.”

The report struck a somewhat more restrained tone. It concluded with a bullet point list of findings, all suggesting “that the potential service cuts would be far worse for the local economy than the parcel tax.”

One factor the report did not evaluate is a regional transit sales tax that’s also bound for the November ballot. If it fails, the devastation to BART and other transit systems — including Muni — could produce more aftershocks for San Francisco. Officials have said that Muni needs both tax measures to pass, and that the agency needs to continue its own budget-trimming work to avoid service reductions altogether.

“If the parcel tax passes and the regional measure fails, Muni will have to slash service significantly,” state Sen. Scott Wiener, D- San Francisco, wrote in a text to the Chronicle. “Muni needs both — equally.”

A region that lacks reliable transit is at this point difficult to fathom, though advocates for both measures warn it could be our reality in less than a year.

© 2026 the San Francisco Chronicle.
Visit www.sfchronicle.com.
Distributed by Tribune Content Agency, LLC.