One of America's most expensive cities is now offering free college to residents

San Francisco's City College is taxing wealthy homeowners to collect tuition money.Justin Sullivan/Getty

San Francisco, one of the nation's most expensive cities to live in, is trying to ease the financial burden for students by offering free college to all of its residents.

City officials announced Monday that, for at least the next two years, tuition for all residents attending the City College of San Francisco will be free, beginning next fall.

With education costs soaring and student loan debt hitting $1.3 trillion in the US, the city hopes the initiative — which it says is the first of its kind in the country — will give some residents an economic boost.

"Making City College free is going to provide greater opportunities for more San Franciscans to enter the middle class and more San Franciscans to stay in the middle class, if they currently are," the city's supervisor Jane Kim said during the press conference.

The tuition money for students attending the two-year community college will come from a transfer tax placed on San Francisco homes and commercial properties selling for $5 million or more, which was approved by voters last November under a ballot measure.

The median home value in San Francisco — the nation's most expensive housing market — in January was $1,146,800, according to Zillow.

The city expects to raise $44 million annually from those taxes. About $5.4 million of that sum will be sent directly to students attending City College over the next two years, effectively buying out students' $46-a-credit fee.

Money will also go toward full time low-income students, who already qualify for a fee waiver, in the form of a $250-per-semester stipend.

Residents who have lived in the city for at least a year will be eligible. The number of local students set to benefit from free tuition is estimated at 30,000.

After two years, the city will review and decide whether to keep funding the initiative.

The free tuition agreement follows a five-year "accreditation nightmare" surrounding City College that saw a decline in enrollment from 90,000 to 65,000 full- and part-time students, according to The San Francisco Chronicle. The school's accreditation was renewed in January.

The mayor said during the press conference that he hopes the free tuition agreement will bolster enrollment and increase federal funding.