Budget committee approves financing to launch 744-unit Presidio Highlands late 2026

After roughly a decade of planning, the Board of Supervisors budget committee on January 14 approved infrastructure financing districts to kick-start the Presidio Highlands development at 3333 California Street in Laurel Heights. Developer Prado Group expects to begin construction in late 2026 on a project that would deliver about 744 housing units, roughly 40,000 square feet of retail, a 175-child daycare facility and five acres of public open space.

The decision clears a major financial hurdle by allowing the city to use projected future property-tax growth from the site to finance upfront infrastructure and affordable housing needs. City officials and local stakeholders framed the measure as a tool to revive an inactive former UCSF parcel and to unblock several stalled "mega-projects" across San Francisco that have been delayed by the high cost of delivering public infrastructure up front.

Presidio Highlands is planned to be built in phases. Phase one will include 152 units spread across three buildings. The broader development envisions mixed uses intended to add neighborhood retail and an on-site childcare center, amenities that local advocates have said are in short supply in Laurel Heights and the surrounding districts.

The financing approach adopted by the budget committee is significant for city policy and municipal budgeting. Infrastructure financing districts tie future incremental tax revenue to present-day borrowing, shifting the timing of public investment. Proponents argue this enables large-scale projects to proceed without diverting current general fund resources. Critics of similar mechanisms have warned that relying on future growth can expose city finances to economic downturns if projected revenues fail to materialize, and can create competing claims on property-tax increments for other priorities.

Institutionally, the budget committee vote represents a key procedural step in the Board of Supervisors' toolbox for addressing long-planned developments. The move reflects priorities at the intersection of housing production, local amenity provision and neighborhood revitalization. It also spotlights the trade-offs supervisors face when balancing near-term fiscal constraints against long-term goals for housing and infrastructure.

For Laurel Heights residents, Presidio Highlands promises new homes and public spaces while also bringing construction impacts and increased local activity. The addition of a 175-child daycare aims to fill a local gap in family services, and the retail footprint could reshape commercial life along California Street.

What comes next is implementation: Prado Group targeting late 2026 to break ground on phase one, with the broader financing model set to be tested as the project and other stalled developments move forward. The outcome will matter not just for this site but for how San Francisco finances large-scale development in the years ahead.