Prop. C backers buzz the John's Grill Election Day luncheon in 2018. Photo by Abraham Rodriguez

Some $492 million dollars held in escrow, pending a final legal decision on Proposition C, can now flow to city homeless and housing services after the California Supreme Court today declined a legal challenge to the 2018 ballot proposition. 

That measure, which passed with more than 61 percent of the vote, levied a tax upon any San Francisco business that earns more than $50 million in gross receipts. That money would be directed toward housing and services. Voters, at the time, were told this could lead to some $300 million yearly going to these causes.

A memo penned by deputy city attorneys Scott Reiber and the late Buck Delventhal posited that the city only required a bare majority to enact this proposition, not the two-thirds majority required for many state tax measures. That legal theory held up in a Superior Court victory for the city in 2019 and a state Court of Appeal win in June of this year.

City Attorney Dennis Herrera called the legal triumph over The Howard Jarvis Taxpayers Association, the California Business Properties Association and the California Business Roundtable a victory for the city, especially in regard to the democratic power of voters. 

From the beginning, this case has been about upholding the will of the voters,” he said in a statement. “We’re pleased that this legal victory will free up millions of dollars to provide services, housing and mental health treatment for those in our City who most desperately need it.”

Today’s move by the state Supreme Court was not surprising, considering the three-judge panel from the First District Court of Appeals affirmed the ruling in the city’s favor by citing two precedent-setting state Supreme Court cases. 

Following two California Supreme Court cases interpreting other language from Proposition 13 and Proposition 218, we construe the supermajority vote requirements that these propositions added to the state constitution as coexisting with, not displacing, the people’s power to enact initiatives by majority vote,” read the ruling.

This is germane because Prop. C was a citizen-generated initiative — and not placed on the ballot by city government.

“It is just amazing. I mean, we’ve tried for so many years to make large, substantive change for unhoused San Franciscans and finally we just took matters into our own hands,” said Coalition on Homelessness director Jennifer Friedenbach.

“In the end, what we’re talking about is equity. We’re talking about moving large amounts of money from the very richest to house the very poorest. It just feels like the right moment for this to be happening.”

In 2018, Friedenbach continued, millions of dollars from Marc Benioff and Salesforce led to 300 unhoused people being hired to call 90,000 voters — and more than 30,000 doors were knocked on. More than 600 unhoused people also weighed in on how the money could be spent.

“It’s a great day for San Francisco,” added Joe Wilson, the executive director of the homeless shelter and service provider Hospitality House. “Given the people’s run of luck, it would not have surprised me at all to have the legal system rule against us. It is refreshing on those rare occasions when the people’s voices do count, and we can make some significant investments now in permanent solutions to homelessness and poverty in San Francisco. All the credit in the world to a tremendous, citywide grass-roots effort.”

Supervisor Matt Haney excitedly tweeted the news on Wednesday and thanked some of the organizations involved. 

The city has collected the tax and held the money in abeyance awaiting this day. Controller Ben Rosenfield confirmed the $492 million total on Sept. 10, an upgrade from his Sept. 9 initial estimate of $470 million. The funds will be disseminated at a timeline meeting his discretion, and to the causes outlined within the text of the legislation.

Joe Eskenazi contributed to this report.

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REPORTER. Annika Hom is our inequality reporter through our partnership with Report for America. Annika was born and raised in the Bay Area. She previously interned at SF Weekly and the Boston Globe where she focused on local news and immigration. She is a proud Chinese and Filipina American. She has a twin brother that (contrary to soap opera tropes) is not evil.

Follow her on Twitter at @AnnikaHom.

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  1. Wow. Commenters here are awful. Let homeless people die on the streets because:
    1. They’re not all “from here”
    2. Nonprofit orgs are bad
    …basically the same old lame argument that people in poverty deserve what they get and should be abandoned. Shame on all of you. The voters of SF approved this because a majority of us still beleive that all humans deserve love and care and even, gulp, housing! How radical.

    1. The majority of San Francisco voters do not believe all humans deserve housing in San Francisco. Have you ever seen our zoning map or tried to build a high rise?

  2. awesome…I will be sure to print off 1000 flyers to hand out to all the homeless in Colorado…..winter is coming and it will be good to see them leave our cities here. SF can take care of them with the millions that will be handed out.

  3. Defund the politically backed & corrupt enablers that have nothing to account for after being given $300 million + per year.

    Every year it seems to get worse. Every year the streets are dirtier and there are more homeless.

    There is no accountability for this homelessness racket, and everybody is distracted by police brutality to even care why there is one billion every three years being spent –and it is not working.

    Defund the non-profit thieves calling themselves helpers of the homeless. For the $1 billion they got in 3 years you could have built an entire city for them. It is not inhumane to homeless to call out these organizations that are a failure. There has to be some other way that is more effective at lower cost.

  4. $500m could house everyone that is homeless in SF by giving them housing & services. You know what is going to happen? The Poverty Pimps & Charlatans & Corrupt Officials and Corrupt Board Members of the Non-Profit Poverty Pimp agencies will take their cut and, as usual, nothing will happen.

    1. You are so close, and yet so terribly wrong. Yes, homelessness is easily solved by, DUH, housing. But the obstruction is not imaginary “Poverty Pimps,” (haven’t heard that in a while). It isn’t the Current Board of Supervisors. It isn’t even your fictional Non-Profit Poverty Pimp agencies. It is the mayor, following the same tactic of using the homeless as a political football to appeal to you, and those like you. The idea that homelessness might be addressed humanely, morally, and legally, apparently outrages you.

      1. No it’s not. Most of the homeless need intensive support even with housing. That’s why SROs and now hotels are a huge source of overdose deaths and also the largest nuisance evictors in the city.

    1. Because Prop C addresses the simple fact that since Jordan, the homeless have been used as a political football nor so-called moderate mayors, who have made sure they are available to manipulate their core base.

  5. I don’t understand why people are declaring victory. There is little evidence that huge amounts of money make huge amounts of difference. Just look at this year’s city budget, which is billions larger in real terms than the budget in 2015.

  6. And if you build it, they will come. Housing drug addicts and mentally ill from everywhere in the country is a great way to spend local tax money! Bravo, because the hundreds of millions being spent now is used so effectively! The more money the city spends, the worse the result. More money with no accountability is a great idea! So, when this fails and our homeless population swells, we raise taxes again?

    1. According to contemporary research including the biannual homeless count, most people who are homeless in SF used to be housed here. We need regional solutions to the affordability issues that will continue to challenge us, and that includes building more shelter, transitional and permanent supportive housing. I’d rather spend money on that humane approach than on emergency psych beds, massive cleanup budgets and negative quality of life issues. There is accountability built into Prop C and its up to us and the press to make sure money is spent as intended.

      1. The survey doesn’t give the data to conclude that. Firstly, it’s self reported. Secondly, its definition of housed is extremely loose and can apply to people who were always homeless but briefly stayed with a friend in an SRO. Finally, it doesn’t pass a sanity check: San Jose’s per capita homeless problem is much better than ours even though their rents have gone up just as much and nobody has rent control.

        1. Spot on Jake and Peter. If an individual reports their home to be Buena vista Park… they’re considered previously housed here. The survey is designed to make the explosion in homelessness a homegrown problem. We have become a destination for endless handouts and THE locale to score drugs, The unopposed open air drug dealing and general tolerance to people with severe addiction and mental illness declining in the street is what has contributed to this mess.

          1. In another words, you don’t like the evidence, so you deny iit. Do you also believe the earth is flat, that the moon landings were faked, and that COVID-19 is not really deadly?

        2. And specifically, you don’t like the truth, and dismiss actual studies performed by professions in favor of a cherished myth. You have supposition, not evidence.

          1. The point in time count is not run by a reputable surveying company. I would be more than happy if YouGov ran a similar survey and applied standard quality measures like checking for accuracy of responses on a random sample of the survey data. And why hasn’t the absurd definition of “last housed” been clarified, or are you saying it doesn’t currently include situations like crashing on a buddy’s SRO bed for a night?

      2. The “data” that most homeless in SF are from here is a complete crock. This data is self reported, and I’ve read that many were coached to report their origins as SF, not to mentoin that it’s quite obvious to anyone who’s talked to any number of homeless people that they are coming from out of state to reap that vast rewards of being homeless in SF: an overly tolerant city government and polulace (yes, sure it’s OK to set up a whole line of tents along the Dolores Street median, no problem! Oh no… don’t enforce sit-lie, don’t enforce sidewalk blocking, and on and on), free needles, free tents, free food, free weed, free hotel rooms, free muni cards, free bicycles, good weather.

        The only thing this money will do is attract even more homeless from around the country as we build up a utopia for drifters from across the US.

        1. Another reporting total myth. And you have triggered the GeekGirl Challenge please provide a list of these “vast rewards” that the City provides with taxpayer money. The rules are simple. The must be freely available to ALL, paid for with local taxpayer money, not required by state or Federal law, and NOT readily available everywhere else. You are limited to what you claim.

          Oh, and if you meet the challenge, you will be the first.

          1. HSH has a $300m budget which doesn’t even include the cost of using our ambulances as Ubers and police and fire department as sidewalk Narcan nurses. Santa Clara county, which has seen similar housing cost increases as San Francisco and doesn’t even have our tenant protections, spends $52m on social services.

    2. Why is it thar every time this subject comes up, this lame clivhé is trotted out? This has been refuted, time after time. Yes, a few people come here from elsewhere. And a few people depart here and go back where they came from. But San Francisco offers little if anything in terms of benefits to attract hoards of homeless. This is a myth that is repeated as an excuse for hatred and abuse. We do have a great climate, and a storied past, but no wonderful handouts. We don’t have enough shelter for those already here.

      1. Even ignoring ODs, ML’s coverage of Ian Carrier’s life included the fact that he was given city subsidized housing yet remained on the streets. I’m sure you’ll find a way to move the goalposts though.