Five Cities Project Breaks Ground on $57.3 Million Highway 101 Upgrades

Authorities broke ground on the Five Cities Multimodal Transportation Network Enhancement Project in South San Luis Obispo County. This effectively launched a $57.3 million program to improve safety, reduce congestion and expand mobility along Highway 101 through Shell Beach and Pismo Beach.

Caltrans, the San Luis Obispo Council of Governments (SLOCOG) and the City of Pismo Beach announced the start of the project. It is expected to continue for about three years, and is likely to complete in fall 2028.

The project is focused on southbound Highway 101, where traffic backups commonly build during afternoon commutes, summer weekends and major events when large numbers of drivers head south from San Luis Obispo.

Planned improvements for the project include a part-time travel lane by widening the left shoulder of Highway 101 between San Luis Obispo Creek and the railroad overpass in Pismo Beach. The lane will then open during heavy traffic and special events to help tackle congestion.

The project also includes a proposed park-and-ride lot in Pismo Beach with electric vehicle charging stations, along with a new shared-use path for bicyclists and pedestrians.

Construction is happening near Price Street, where crews are building a wall to support a third lane on Highway 101.

According to authorities, drivers are likely to face alternating traffic on southbound lanes from 9 a.m. to 3 p.m. during the current phase of work. However, two-way traffic will resume in the evening. Bike lanes will remain open.

Officials said residents, commuters and businesses should expect delays, lane shifts, changing traffic patterns and increased traffic in construction zones during the project.

The project is designed to improve traffic flow on a section of Highway 101 that officials say struggles to handle peak traffic volumes moving south from San Luis Obispo.

Funding includes $5.5 million in local money and $51.8 million in state funding, bringing the total construction cost to about $57.3 million.

Planning for the project has been going on for years. Environmental review was finished in September 2022, design was completed in spring 2025, and the project went out for bids in fall 2025 before construction began this year.

Officials said the project is a test effort to reduce traffic and improve travel options in the Five Cities area.

Planned improvements include a part-time travel lane, a park-and-ride lot and a shared-use path, all meant to improve travel on one of the county’s busiest stretches of Highway 101.