Housing advocates in San Francisco are pushing for Proposition I, a November ballot measure that would allocate a portion of property transfer tax revenue from luxury homes and large property developments to affordable housing projects. But Mayor Daniel Lurie says the measure will take that funding away from other city initiatives.
Known as the “Affordable Housing Guarantee Act,” Prop. I would dedicate 50% of existing real estate transfer tax revenue from property sales over $10 million toward affordable and social housing and rental assistance.
The tax would not be applied to newly constructed properties. The measure would also take away the Board of Supervisors’ ability to amend the transfer tax without voter approval.
The revenue from the tax would be divided, with at least 60% of the money going to affordable housing production programs, at least 25% for acquiring or rehabilitating existing affordable housing, and at least 10% going toward tenant stabilization and homelessness prevention programs.
The measure is led by the Democratic Socialists of America San Francisco chapter. Prop. I supporters Supervisor Jackie Fielder and former Supervisor Dean Preston are members of the DSA.
Labor unions like Service Employees International Union Local 1021, United Educators of San Francisco and other groups like Small Business Forward and the San Francisco Tenants Union support the measure. It’s also been endorsed by Supervisor Shamann Walton and former supervisors Aaron Peskin, Norman Yee, Gordon Mar, Hillary Ronen and others.
Supporters say that Prop. I is needed to secure funding for affordable housing that was originally intended to come from 2020’s Proposition I, a measure crafted by Preston when he was supervisor.
Prop. I from 2020 doubled the transfer tax for properties over $10 million from 2.75% to 5.5%, and from 3% to 6% for properties valued at $25 million or more.
Supporters at the time said the revenue generated from the tax hikes could support rent relief and affordable housing construction, but the measure did not include any binding mandate saying it had to be spent on those initiatives.
“Voters passed Prop. I back in 2020 for a purpose,” Fielder said in a social media video advocating for the measure. “We must keep that promise.”
The city controller estimates that the tax would generate about $120 million, revenue that would be diverted away from the general fund.
Lurie and first responder unions, including San Francisco Firefighters Local 798 and the San Francisco Police Officers Association, strongly oppose Prop. I. In a joint press release with Lurie and the unions, they said that the money coming from the luxury real estate transfer tax supports the general fund and taking it away could hinder investment in other areas like hiring more police officers.
“I do not believe that this measure will lead to any affordable housing being built,” Lurie said in the release. “But it will redirect $120 million of public funds away from investing in clean and safe streets, emergency response and better city services.”
“We are finally turning the corner on staffing after years of losing officers, and this is exactly the wrong moment to drain the fund that’s paying for that comeback,” said SFPOA President Louis Wong.
But earlier this year, Lurie proposed legislation to reverse the high property transfer tax rate from Preston’s 2020 Prop. I, a move that would have lowered the revenue coming in from the tax and going into the general fund.
Lurie was able to try and make the change after voters passed local measure Proposition C in March 2024, which allows the Board of Supervisors to alter the tax rate without the need for voter approval.
In February this year, Lurie and Supervisor Bilal Mahmood teamed up to create the “Balanced Update to Incentivize Local Development Act,” or the BUILD Act. The legislation included a provision scaling back transfer tax rates to pre-2020 levels, essentially doing away with Preston’s 2020 Prop. I.
The legislation was presented as a way to attract more real estate transfers and housing development projects, which Lurie said slowed down in part due to Prop. I’s high tax rates. But the BUILD Act was shelved in June amid city budget concerns.
What happens if Prop. I fails
Now, Prop. I supporters say that if the measure doesn’t pass this November, the transfer tax rate for high-value properties could be scaled back if Lurie or other legislators try to revive something like the BUILD Act again.
“If we don’t pass the Affordable Housing Guarantee Act, it’s at serious risk of being repealed altogether,” reads the Yes on I campaign website. “Voters don’t want to give a tax break to large property owners and real estate corporations, and this measure will prevent the board and the mayor from passing such a tax break, which they want to do.”
Registered voters in San Francisco can expect their official ballot packets to arrive in the mail in early October. Residents can check their voter registration status through the San Francisco Department of Elections website.
Voter pamphlets have already started arriving in the mail, which are packets that include a sample ballot, information about local candidates and ballot measures, an explanation of ranked-choice voting, and instructions for voting by mail or in person.
