Supervisor Bilal Mahmood and Mayor Daniel Lurie are pausing their plan to halve the city’s transfer tax on sales of multimillion-dollar properties, Mission Local has learned.
Mahmood said he recognizes San Francisco is in a budget crisis, and he and the mayor are “shifting focus” to find new revenue streams for the city. “Until that is resolved, we are not proceeding,” Mahmood said.
The idea behind the proposal was to stimulate housing development and provide jobs for union construction workers.
But the so-called BUILD Act raised concerns, because even sellers of properties of $10 million or more that provided no new housing or construction work would have received a hefty tax break.
A controller’s office report from March estimates that the city’s present tax rate would raise some $400 million for the general fund in the next few years, critical income for the city amid a massive budget deficit that has already resulted in widespread cuts to jobs and services.
The mayor and Mahmood were proposing to halve that tax.
The BUILD Act would have slashed the transfer tax rate put in place by Proposition I in 2020: Taxes would drop from 5.75 percent to 2.75 percent for properties worth more than $10 million, and from 6 percent to 3 percent for those over $25 million.
Prop. I, which increased those rates to where they are today, was a major achievement of Mahmood’s predecessor, former District 5 Supervisor Dean Preston, and passed with 58 percent of the vote. Preston lost to Mahmood in the 2024 election.
Mahmood says he pledged city labor that he would not proceed with the tax break unless he could make it revenue-neutral. To do so, Mahmood and Lurie had promised a November ballot measure to apply the tax to certain properties, namely foreclosures, that are currently exempt from the existing transfer tax.
Mahmood would not comment on whether that ballot proposition is still planned for November.
“From my perspective, this is still generally good policy,” Mahmood said, but added that he hopes to develop a plan with more universal support.
Mahmood also said that separate legislative efforts to boost housing have been encouraging in the months since the BUILD Act was first proposed in February, like the expansion of the city’s affordable-housing fund and reductions to the inclusionary housing requirements, rendering the need for the BUILD Act less urgent.
The change in direction comes days after Mahmood told Mission Local at an event last week that he was open to paring back the tax break, and that he was looking into responsible ways to “restructure” the plan. It is unclear how long the BUILD Act, not yet approved by the Board of Supervisors, will remain on hold.
In a statement to Mission Local, the mayor’s office said little about the reason for the abrupt change in plans.
“We appreciate Supervisor Mahmood’s partnership and will continue moving aggressively to build affordable homes and drive our economic recovery,” said Lurie’s spokesperson, Charles Lutvak.
Thank you for not doing that terrible thing you proposed to do, I guess.
Glad to hear that this proposal is on pause. I’m encouraged that there is growing consensus that this revenue is needed to fund affordable housing. The citizen-led initiative Affordable Housing Guarantee Act that will be in front of voters should we succeed in qualifying it for the ballot will give voters the choice to ensure that this revenue goes to its intended purpose: affordable housing, social housing, and eviction defense! Learn more at https://sfsocialhousing.org/guarantee-act?s=missionlocal
Good news! And it likely has a lot to do with the Affordable Housing Guarantee Act campaign, which is collecting signatures now for the November ballot. The Guarantee Act would protect these funds and deliver them for affordable housing for all San Franciscans, the original voter intent of 2020’s Prop I. Mahmood and Lurie are probably hearing the same thing we’re hearing while collecting signatures: Voters want more affordable housing, and want rich real estate investors to pay their fair share to ensure that.
But without the Guarantee Act, there’s nothing stopping them from ignoring that intent or even bringing back the same tax cut proposal after the election. You can join me at an event and help make social housing a reality in SF: https://www.fairhousingsf.com/upcoming-events
If only the fake neuroscientist had gone to law school to study how work bowl and impactful legislation/ policies are made. Until then, it’s more social media posts about “Bites with Bilal”, music festivals and award ceremony photo ops. SO MUCH ABUNDANCE!
workable not “work bowl.”
I just don’t understand how cutting the transfer tax on, say, the purchase of a third multimillion dollar home in SF by Laurene Powell Jobs would create jobs or building housing for normal people.
She owns (at least) two houses in SF (one cost $50 million, and the other $70 million). They are close enough that she could walk from one to the other in maybe half an hour. But she doesn’t even live in San Francisco. Officially, she lives in Palo Alto and has a giant “compound” in Malibu. (LA Times reports she’s spent at least $175 million there since 2015.) Malibu, as we should all know by now if we didn’t know this 35 years ago, is a great place to live … it’s not like there are every any fires there. And should Malibu somehow against all the odds manage to burst into flames, it is super easy for fire fighters to drive right up to all of the properties to put the fire out.
The rich buying a(nother) megahouse do not need a tax break. What they need, is to have their land seized and put to good use.
We need to stop electing billionaires and closet Republicans.
Since the overpaid tech CEOs defeated Prop D the overpaid CEO tax increase, that means that real estate speculators don’t get their corporate welfare in the form of a transfer tax cut.