Despite the sense of an ongoing housing crisis in San Francisco, voters soundly defeated the one ballot measure that might have curbed real estate speculation – the practice in a heated housing market of buying a property and then reselling it quickly for a nice profit.
On Tuesday, some 53 percent of San Francisco voters opted no on Proposition G, which would have levied a tax on buildings resold within five years of being purchased. It was a measure designed by housing activists to curb real estate speculation that incentivized evictions. Many of the two-unit plus buildings on sale in the Mission District have been purchased recently, rid of tenants through buyouts or Ellis Act evictions, and then resold to new owners as tenants in common.
According to data provided by Redfin.com, the Mission had roughly 159 properties that would had been bought and resold within five years. If passed, the measure would have levied a tax of between 14 and 24 percent on the total sale price of 2-30 unit buildings. It would have retroactively effected properties whose first sale was after 2009.
Because it included several exemptions, it’s hard to say precisely how many properties Prop G would have taxed. Transfer of property in the case of divorce, death, or if the building is a tenth occupied by the owner. Yet, given that in the Mission’s 94110 zip code alone 159 multi-unit properties that were sold at least twice within the last five years, Prop G’s impact could have been felt at a substantial number of properties.
In San Francisco, Redfin’s data indicates there were many as 573 properties purchased and resold within five years between November 2009 and November 2014. According to data from the San Francisco Rent Board, there were 670 Ellis Act evictions in that same time period.
Barring exemptions, the map below gives a sense of the properties in the 94110 zip code that might have had to paid taxes on previous sales had Prop G existed in years past.
For more on housing, visit our page Housing Watch.
Please note, we’ve done what we can to make sure this map accurately depicts homes sold twice within the last five years, but a lot can happen in the transferring of ownership, and data varies depending on what records you’re looking at. As such, each property may not represent a traditional “flip.” If you see any information that may not be correct, feel free to send us an email at info@missionlocal.
Correction: As many readers noted in the comments of this article, we previously overstated the retroactive impact of Proposition G. Proposition G wouldn’t retroactively tax properties flipped, it would however be retroactive to sales after 2009. If a building sold in 2010 resold four years later, its sale would have been taxed under Prop G. We forgive the error and appreciate our always thoughtful readers helping us keep things accurate.
The people with the real money are the developers and the owners of the big buildings that are not rent-controlled because they were built after mid-1979.
The only way to get more lower cost housing is to get developers to build it and to REQUIRE them to get Certificates of Occupancy for the below market rate units, whether they are on-site, in the neighborhood, in another neighborhood or built through the fund, BEFORE they can get Certificates of Occupancy for the associated market rate housing. BUILD THE LOWER COST HOUSING FIRST OR YOU CANNOT BUILD MARKET RATE HOUSING.
I’ve always wondered why this idea hasn’t been pushed heavily as a legislative solution to getting lower cost housing built. Condos in the new Vida complex on Mission are ready for sales. Where are the below market rate units that were supposed to be built at Shotwell and Cesar Chavez as part of the deal? The city has the $ from the Vida developers to build those units. Why aren’t they being built? Who has the incentive now to get these below market rate units built?
There has to be a creative solution to this. At least have a below market rate or affordable housing developer in contract before the market rate stuff gets going. What about partnering with Mercy Housing?
I think the Supervisors can just pass legislation requiring it and the Mayor can sign it. Why don’t the people who see themselves as housing advocates and advocates for the 98% demand that? Continuing to target small property owners, and to pit renters against them, clearly is failing.
A direct financial impact on the developers is straightforward legislation and puts the burden where the money is.
To all the morons out there: adding a fee to a building (or a soda) only means it gets passed on to the buyer (or consumer). You want unaffordable housing? Well then make it more expensive to buy/sell ….. AND RENT!
Yes the crazy “housing activists” call it “luxury” housing , but the only luxury your getting, is being extorted to pay for some strangers subsudized below market rate unit in addittion to your own…. That is not luxury, its wealth redistribution.
Go away, Campos. Quit villainizing homeowners…
It seems equally reasonably to say that “because of the housing crisis”, voters defeated Prop G. Prop G wasn’t a serious attempt to solve anything, it was just a loosely targeted attack on certain people deemed “speculators”. It added more regulations to an already over regulated real estate market. Dealing with with SF housing issues requires less ideology and less petty envy and a closer look at whether the existing laws are really benefiting the appropriate people.
Valenchia. You say: “…Dealing with SF housing issues requires less ideology and less petty envy and a closer look at whether the existing laws are really benefiting the appropriate people.”
Well then, what does YOUR closer look tell you about the existing laws and if they are really benefiting the appropriate people…? Please share your analysis.
It was retroactive? If so I am damn glad it went down. Mission Local you sure you got your facts right or are skewed by our blatant lack of objectivity?
It’s NOT retroactive. ML idiots.
I already tried to post a comment to this effect, which was inexplicably removed. The tax was not in fact retroactive. It would have applied to sales of properties January 2015 and thereafter that had been previously purchased within the last 5 years.
Prop G lost!!!
That’s my obituary for gullicksen and SFTU.
Seriously? When did you people- Bob, Run for the Hills, Alex and Local Resident, move to the Mission? This was an excellent proposition designed to keep San Francisco affordable for people who earn less than $200,000/year. It failed because the new-arrivals techies voted in greater numbers than real, honest San Franciscans. If San Franciscans weren’t too lazy to actually vote the wealthy voters wouldn’t have just sold our city to the highest bidder.
I guess techies are imaginary and dishonest, then? But wait, how can one be dishonest if they’re imaginary???
The reason it lost is because people vote citywide. Even though this is a mission blog they aren’t the only ones voting. How do you define an “real, honest San Franciscan” because I can guarantee a lot of the old mission residents weren’t born in San Francisco so are they less “real,honest” I am born and raised here and struggled to buy my first house but I am not 1%.
Mike, I think Marcia is defining “real San Franciscans” as people who agree with her.
So if you disagree with her then, by her definition, you are not real.
Most if not all could have been tic’d up before resale and would be exempt from the transfer tax.
The reason why this ballot measure failed is because no one wants more taxes even if it doesn’t affect them. If Prop G passed, who’s to say another Prop. won’t be up next? The voting population nipped it in the bud and activists will think twice about proposing another transfer tax.
I didn’t know it was retroactive. Now I’m even happier it went down in flames.
To clarify my earlier comment a bit more, the properties listed in this article would only have been taxed if they were resold again after January 1, 2015 within 5 years of the date of their purchase.
Prop G would have applied to sales occurring January 2015 and after. An injunction would have been slapped on it almost immediately. The city government should be happy it was rejected, not just for the legal cost it would have incurred in defending it in a losing battle, but also because it likely would have exposed that the current transfer taxes the city imposes of 2.5% at the highest tier are themselves prohibited by Article XIII of the California constitution.
As a developer I was almost hoping it would pass just so there would be a brief buying opportunity in the year or so before the courts tossed it out.
Yes, build more housing please, starting with 16th and Mission.
But with a building at 16th and Mission that isn’t taller than the nearby buildings that are about six stories tall.
The current plan for ten stories is way out of whack, even obscene.
What’s out of whack is people saying we can’t build higher. Sorry but it’s time for San Francisco to move forward. Nimby’s have created the housing crisis almost as much as the physical geography of San Francisco. Funny how so many “progressives” are stuck in the past.
A little copy editing would go a long way in this article.
A bit of numerical clarification would be good, too. Reference is made to 53 percent of the *voters* — but shouldn’t that be “53 percent of the ballots cast”? Mid-term elections tend to draw low–and conservative–voter turnouts; I think SF’s turnout on Tuesday was in the 30s. Figures I’ve seen have wavered between 30 – 35 percent (depending on which sources were being cited, etc.) So, if just over 50 percent of the ballots cast defeated Prop G, then we’re looking at less than 20 percent of the voters (never mind SF’s total population) determining citywide policies.
I’m surprised that Prop G’s authors would try to run it on a mid-term election. Maybe they felt things were too urgent to wait until the next general election? They would be wise to set their sights on the next GE, and draft something that would totally crush Ellis, at least on a county level, if not statewide. Oh, and update rent control, bring the eligibility date up to something more contemporry–1999 at least, if not 2009.
If any of youse out there failed to vote, and especially if you just outright refused to vote: Remember, if you don’t vote, you can’t complain.
For those of youse who check creds on these boards: I moved to SF near the end of 1980; moved to the Mission in 1985, and have lived in the Mission (mostly) with occasional sojourns in Bernal Heights and the Tenderloin when we were all suffering through one “boom” or another. I’ve lived on 18th Street for 10+ years, and yes…the triplex is on sale, and yes, it’s being touted as a “TIC” (aka Ellis-to-condos conversion).
prop G was not going to help anything — only cause harm. The only solution to the housing crisis is to build a lot more market rate housing.
There’s no lack of market rate housing. There’s a lack of _affordable_ housing. They’re two different market segments, and in many ways non-fungible.
The only way to provide more affordable housing is to provide housing that is more affordable. The only way to stem the glut of speculation is to prohibit speculation.
The defeat of G is a disaster for those few San Franciscans left who aren’t in the 1%.
oh please, there is no evidence of a glut of speculation. And the passage of measure G wouldn’t have made a big difference on the availability of housing. It was just an exercise in ideology aimed at people like you who resent others.
“…there is no evidence of a glut of speculation.”
Except for all the evidence. Jesus.
Saying there is evidence doesn’t mean that there is. It just means that you want us to believe that there is.
Show me a specific link that selling within five years drives up rents. Show your assumptions and your working.
finally, a reasonable person on this site
As a survivor of an Ellis Act eviction in 2008, I completely agree. I am disheartened and wonder what is next for SF residents who are not in the 1%. SF is becoming—has become—homogenized and so less inclusive of significant kinds of diversity.
Have you walked around the Mission lately? It’s certainly not homogenized.
Kate, if only the one percent can afford a home in SF then why do fully one third of SF households owner-occupied?
I make that 33%.
Actually, I was responding to another post that mentioned the 1%. My position is that of someone who has been an SF resident for some 27 years. The wave of EA evictions has made it very difficult to live in SF if one is in a lower income bracket. Perhaps I need to re-read Prop G to understand why and how it doesn’t address this issue.
Kaia
“The only way to provide more affordable housing is to provide housing that is more affordable.” Witness the sparkling logic of the proponents of “progressive” housing policy in SF.
Not that it matters now, but the proposed transfer tax was not a retroactive tax on sales made within the last five years, but instead was a prospective tax on future sales. There is no telling how many of these properties will be sold within the five year period but if Prop G had passed I am guessing that most investors (aka speculators) would have waited for the five year holding period to expire.
Prop G was a bad idea, it was badly worded, it was riddled with exemptions and loopholes, and it was roundly defeated by the voters. Even if it had have passed, the courts would have thrown it out.
What more do you need? Move on, and learn from the mistake.
The term “Housing Affordability Crisis” that community activists seem to be settling on lately seems to me to be the key to effectively defining the issue for San Francisco residents.