City College in San Francisco announced it will now be free of charge to all the city’s residents, according to an article by Nanette Asimov for San Francisco Chronicle.

The free tuition will begin in the fall for residents who have lived in the city for at least a year. The city will pay out $5.4 million a year to buy out the tuition of $46 per credit hour, the article states.

From the article:

The city’s contribution will also provide $250 a semester to full-time, low-income students who already receive a state-funded fee waiver. They will be able to use the money to pay for books, transportation, school supplies and health fees. Part-time students with fee waivers will get $100 a semester for the same purpose.

San Francisco voters approved this in November by voting for Proposition W, which enacts a transfer tax on properties selling for at least $5 million, the article states.

This free tuition comes at a time when Millennials are losing hope in homeownership as part of the American dream. And, among Millennials, student debt is one of the major barriers to homeownership.

Back in July, the National Association of Realtors explained Millennials with student debt are not interested in buying a home. Another survey from NAR shows that Millennials with student debt struggle to save up for a down payment.

So, is this the first step in the right direction for encouraging Millennial homeownership, or will the increased transfer tax on properties over $5 million prove to only further decrease affordability in the San Francisco market?

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