San Francisco District 9 Supervisor David Campos and "Yes on G" Campaign Manager Quintin Mecke the housing crisis plaguing the city at Bird & Beckett Books on Wednesday, October 22, 2014. Photo by Aubrie Johnson.

Opposing sides for two major propositions that San Franciscans will consider on Nov. 4 went head-to-head Wednesday night at a community forum held at Bird & Beckett Books.

Proposition G seeks to address the City’s housing affordability crisis through a tax that would discourage new owners of buildings with two to 30 units from evicting long-term tenants and flipping properties for a quick profit. To do this, the ballot measure would impose a tax of up to 24 percent of a building’s value if it is resold within the first five years of the initial sale.

Proposition E, also known as the Soda Tax, would impose a two-cent tax per ounce of every Sugar-Sweetened Beverage (SSB) sold in San Francisco. The tax, to be paid by distributors, would be used to fund City-operated health, nutrition, physical education and active recreation programs.

Claudia DeLarios Moran, liaison for the San Francisco Unified School District, moderated the debates.

Advocating on behalf of Prop E, Brittni Chicuata, American Heart Association (AHA) director of government relations, declared that it is time for the community to “recognize the connection between chronic illness and sugary drinks.”

Chicuata cited the epidemic of Type 2 diabetes in neighborhoods of color and low-income neighborhoods: 1 in 3 children born after the year 2000 will be diagnosed with the disease before reaching adulthood. According to the American Diabetes Association, the outlook is even worse for blacks and Latinos, for whom one child in two will be afflicted.

Heart Association studies have shown that soda companies have a host of tactics to specifically target children, Chicuata said. Grocery stores, for example, will place these drinks on shelves at eye level with small children, inciting them to beg their parents to buy it. “Why would you target a known harmful product to a child?” Chicuata said. “That’s not right.”

Roscoe Mapps, political director for the “No on E” campaign, countered that a tax on sugary drinks may actually penalize the poor. The tax is regressive, levied at the same rate for every individual regardless of his income, so people with the smallest incomes would get hit the hardest. The tax is imposed on every business that initially purchases these products from producers outside of San Francisco with intent to distribute. For example,a  23.5-ounce can of Arizona Iced Tea would cost businesses an extra $0.47 upfront for the privilege of distributing sugar-laden beverages.

Mapps added that the tax would hurt mom-and-pop businesses as well as their customers, with small business owners scrambling to mark up their prices in an attempt to recover lost income. Furthermore, he noted, the pricier Starbucks drinks, many of which are heavily sugared, would be exempt from the proposed tax.

Campos describes a scourge against San Francisco communities

The discussion of Prop G was more one-sided: Its opponent failed to show up due to illness. Instead, proponents of Prop G piled on.

First, District 9 Supervisor David Campos offered some background to the city’s housing crisis.

Campos, who has lived in San Francisco since 1997, lamented that the city has “the fastest-growing inequality of any major city in the United States.” He cited a figure calculated by San Francisco’s Human Services Agency and published in the San Francisco Chronicle: if San Francisco were a country, the United Nations rank it “behind Rwanda” in terms of its degree of income inequality.

Campos charged that many long-term renters are being systematically driven from their homes under the Ellis Act, a state law giving landlords the unconditional right to evict all tenants from the building in order to “go out of business.” Campos asserted that the Ellis Act has been widely abused by landlords seeking to sell their buildings for a substantial profit.

According to an anti-displacement report conducted by the city’s Budget and Legislative Analyst and released by Campos’ office last year, more than 2,000 units of housing were vacated between March 1, 2012, and February 28, 2013, through either Ellis Act evictions or tenants’ financial settlements with their landlords. Some 49.3 percent of the displaced tenants were living below the poverty line. The report found that between 2012 and 2013, the number of Ellis Act evictions nearly doubled, and that 1,667 eviction notices have been served on San Francisco renters since March 1, 2010.

Quintin Mecke, manager for the Yes on G campaign, asserted that City Hall has “gone all-in handing over almost every free public asset” to the wealthy newcomers who are moving into San Francisco—employees of Twitter and Dropbox and AirBNB and the like. Rent-controlled housing is among the assets being surrendered to this “very particular sector,” he said.

When their apartments are renovated and rented out for three times as much to Google employees and startup CEOs, those units have vanished, never to return. “It is a fixed stock of housing,” Mecke said.

Mecke assured his audience that Proposition G specifically targets speculators and opportunist investors by reducing their economic incentives, and exempts individual homeowners, as well as a number of other property owners, from the tax. “Unless you’re planning on buying and selling a multi-unit apartment building, you will never pay a tax,” Mecke said. “99 percent of all San Franciscans in this town right now will never pay the tax.”

While properties sold within a year after purchase are subject to the steep 24 percent tax, by the fourth to fifth year of ownership, that rate drops to 14 percent.

Mecke recounted a conversation he had with a pair of investors he’d met at Sunday Streets who believed they would be hurt by Prop G. He asked them what they would say to the people who got evicted. “And without missing a beat, [the man] said, ‘Move to Oakland.’”

Aubrie Johnson

Aubrie is a freelance education reporter in San Francisco.

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28 Comments

  1. Sorry, Mecke, rent controlled housing is not a public asset. These units are all private property. Do you understand?

    1. Mecke’s faux pas does serve a useful purpose. That is to show just how extreme some on the left are, that they think that our homes belong to them.

      He wants to tell you what you have to do with your home and who will live there. And if you try and exercize your right to get your home back, he wants to tax you on your right to determine its use.

      He doesn’t understand that it is his policies that have caused the housing crisis.

      1. Just like Campos does not understand trying to steal housing for poor people causes “income inequality”. As soon as rent control is banned, you will see that having people who can actually afford to rent in SF, will end income inequality here and San francisco will be a more fair city.

    2. Well, they read somewhere that property was theft, therefore stealing property from the owners is cosmic justice or something.

      When you maintain the pool of rent controlled tenants in a permanent 4-year-old state, this is what people will vote for.

      With the latest (and hilarious) rebuttal of the giganormous Ellis compensation/extortion attempt + the over-regulated private buy-out law, there is no more downside to an Ellis as opposed to a friendly buyout.

      Get ready for the Great Ellis Tsunami of 2015. (grabs popcorn, reclines La-Z-Boy, brings the keg closer)

      1. The sad fact is that owners who were not even considering invoking the Ellis Act are now thinking very seriously about it.

  2. In an rent controlled city, renters pay a little bit extra in the first years for a insurance policy that they won’t be thrown out in a few years. Property owner should not be allowed to cancel that social policy with the help of a lying mayor..

  3. Campos should go back to the Banana Republic he came from. He uses the U S Constitution as toilet paper. Theft of private property by government goons is evil and he is evil personified.

  4. Onwership of property is never without regulations. It is the owners right to be aware of those regulations and foresee what the future holds. Claiming otherwise is ignorant or schevious.

    What happened to overturning Prop 13?
    Ending landlord and homeowner mortgage subsidies?
    Clamping down on 20%+ yearly property appreciation?
    Stopping abuse of property appreciation as speculative funds?
    Saving rental stock from ultra profitable tourist vacation rentals?

    In a city with 2/3 tenants and Rwandan inequality there is much work left to do.

  5. No on G– Private property is not a “free public asset.” Good grief.

    Yes on the soda tax– help stop the fatness epidemic.

  6. it’s very obvious these previous comments are sponsored by funds from the $1.6 million
    NO on G kitty.

    1. Gloria, is it comforting for you to believe that everyone who happens to disagree with you must be bribed somehow?

    2. Rent control had unforeseen consequences. The laws to mitigate these consequences had their own consequences.

      35 years later a middle class family cannot move to SF because the old-timers are hoarding places they do not own.

      I have a friend who moved from Chicago with wife and kids for a decent office job. He’s gone back because he couldn’t find anything to rent. Too expensive, too crappy, not worth it for the money.

      In the mean time Jane Whatsername collects cuckoo clocks in a 3BR she pays $700. I have seen it. A 200sf bedroom used solely for cuckoo clocks in the middle of the most expensive rental city in America.

      The old are eating the young. The silly are eating the smart.

      But hey, property is theft and all that. Peace out dude. Not.

  7. I’d support Prop G if the tax was levied on profits rather than the total value of the building. If someone purchases a multiunit building and an unforeseen event happens, say a death, a loss of a job, etc, and they have to sell within 5 years, they’ll be forced to pay the tax. If it’s based on the increased value of the property, that’s not ideal but not unfair. But say the value decreased in this timeframe as well – then the owner must sell at a loss, and pay a 24% tax on the total value of the property as well. That doesn’t seem like the intent of the law to me.

    1. the tax is aimed at speculators:Those persons who buy with the intent to flip for profit, at the expense of the existing tenants. The profile of that person you describe above does not fit the profile of the speculator; your theoretical owner would not be buying in this heated market and evicting the residents if s/he were financially vulnerable under those circs. Further: it’s meant to discourage speculation, not to be nice and only tax profits.

      1. Sorry Gloria, but there is no speculator test. A lot of innocent people will be harmed by this. It will most likely be tossed by the courts, as Campos’ last unconstitutional bill was, if it’s voted in.

      2. Speculation? Speculation is one of the founding elements of our society.

        People speculate that in time inflation will make their mortgage smaller when their kids will be old enough to go to college.
        People speculate their jobs will be better tomorrow and plan their lives accordingly.
        People speculate they will have to live until at least 80 and put some money aside for their golden years.

        With speculation come risk and sometimes reward. Of course in a society where someone wants to decide for you what you will do with your life or property, there is no risk and no reward, just the Master Plan from people who know better than you what’s good for you.

        One last thing: these laws make everything more expensive. As places are more expensive, speculators will find ways to extract value. The tougher the laws, the more ruthless the speculators. No kind family guy trying to make a buck and is nice to tenants. Tenants are fair game with today’s speculators. You own the monster and you can’t stop it.

        1. Never have truer words been spoken.These financial illiterates try every unconstitutional thing they can and it always back fires on them and then they blame everyone but themselves ! Sure they stopped condo conversions and 8 Washington. But now the speculators are coming for there rented apartments as what they did, just made their rented apartments much for valuable to the REAL OWNERS ( even if they are speculators).

      3. Here’s the thing Gloria, the courts have already ruled you cannot financially penalize owners to keep them from their right to Ellis act. So your little tax is ILLEGAL and dead on arrival, even if it does pass. Just like the the huge new pay out rules that were just ruled ILLEGAL….

  8. At what point did SF become a hotbed of tech libertarian thought? The Koch Brothers of course were the original funders of the Libertarian party.

    The tax is on multiunit properties owned under 5 years its designed to keep people from outside of SF of bidding up property and flipping it. The tax was Harvey Milk’s idea.

    The progressive soul of this city that tech found so appealing for its creativity is being ruined this measure asks that we slow it down.

  9. Out with Campos the clown &
    NO ON G!
    Stop eating tax payers money with a bill that is UNCONSTITUTIONAL.

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