SF Groups Push Ballot Measure to Dedicate Transfer Tax to Affordable Housing

A coalition of affordable housing advocates moved Thursday to place a November ballot measure before San Francisco voters that would permanently dedicate the city's real estate transfer tax revenue to subsidized housing projects, setting up a direct confrontation with Mayor Daniel Lurie over one of the city's most contentious fiscal levers.

The push came as the city's Technical Advisory Committee voted April 9 to recommend slashing San Francisco's inclusionary housing requirement from 15 percent to 5 percent for new residential developments, a move backers say is needed to revive stalled construction in a sluggish market. For affordable housing advocates, that proposed rollback made a guaranteed funding stream non-negotiable.

Saki Bailey, executive director of the San Francisco Community Land Trust, backed the temporary reduction in inclusionary requirements but insisted the city must simultaneously secure a dedicated revenue source. Bailey and other progressive committee members appointed by the Board of Supervisors argued for allocating real estate transfer tax revenues directly to housing, lifting the $50 million annual cap on the Housing Trust Fund, or creating a special tax district. Rebecca Foster, CEO of the San Francisco Housing Accelerator Fund, called these mechanisms "fundamentally connected" to ensuring reliable funding for affordability.

The transfer tax has a charged political history in San Francisco. Voters approved Proposition I in 2020, doubling the transfer tax rate on property sales of at least $10 million, with the highest tier reaching 6 percent. Between January 2021 and March 2024, that measure raised $324 million, with more than $203 million allocated to affordable housing and rent relief initiatives. The ballot measure now being proposed by housing groups would go further, binding that revenue stream to subsidized housing rather than letting it flow into the general fund at the discretion of the mayor and Board of Supervisors.

The timing is fraught. Mayor Lurie and District 5 Supervisor Bilal Mahmood introduced the BUILD Act in late February, which would cut transfer taxes in half on transactions of $10 million or more, reducing the rate from 5.75 percent to 2.75 percent. City Hall estimated the change would save developers roughly $32 million on qualifying deals. Lurie has framed the cut as essential to unlocking tens of thousands of entitled but stalled housing units across the city.

The mayor's office has not indicated support for the housing advocates' counter-proposal to dedicate transfer tax proceeds. That silence prompted skepticism from Bailey, who warned that cutting inclusionary requirements without securing independent funding creates an affordability gap the city cannot close on goodwill alone.

San Francisco faces a structural budget deficit that makes any effort to wall off a revenue stream from general fund use politically sensitive. A November ballot measure would put the question directly to voters, bypassing the mayor's budget authority and forcing a public reckoning over whether the city's most lucrative property tax mechanism belongs to the general fund or exclusively to the housing mission that originally justified raising it.