San Francisco’s big real-estate players have raised over $2.7 million to defeat an affordable housing ballot measure that proponents say would fund the kind of European-style “social housing” rare in American cities.
The outlay against the initiative, Proposition I, is the largest source of spending to oppose any measure on the November ballot — a full $1.9 million more than was raised this year to defeat Prop. G, which would bring cars back to the Great Highway.
Supporters of Prop. I are heavily outspent — they have raised $687,000, a quarter of their opponents’ war chest.
Prop. I would dedicate 50% of the city’s “transfer tax” — levied on sales of properties valued at $10 million or more — to various forms of affordable housing, including social housing where residents “have the right to participate directly and meaningfully” in running their building, according to the measure’s text.
Prop. I would also lock in the city’s current tax rate, among the nation’s highest, and ensure it can only be changed by voters — not city supervisors — going forward.
Locking in the high tax rate and forcing a vote of the people to lower it has the real estate lobby worried. The list of 73 donors against the Prop. I is a who’s who of developers, real estate tycoons, investors and others active in the city’s construction scene:
- The San Francisco Apartment Association, the landlord lobbying group, donated $211,000 and is the largest donor to the measure.
- Micheal Moritz, the billionaire venture capitalist developing high rises in San Francisco and financial backer of the San Francisco Standard, has donated $200,000. Moritz is a key ally of Mayor Daniel Lurie, who has called the measure a “slush fund” — even though his office would administer it.
- Related California, the real estate development and investment juggernaut that has built thousands of units in the city, also donated $200,000.
The funds are going to the “Yes on C, No on I” committee, which is fighting Prop. I and also backing a separate affordable-housing measure on the ballot.
The committee did not make anyone available for an interview.
John Doherty of the San Francisco Building and Construction Trades Council, one of the groups fighting Prop. I, wrote in a statement, “Labor and business have come together on Yes on C and No on I because working families need housing they can afford and neighborhoods that are clean and safe.”
Other donors against Prop. I include the San Francisco Chamber of Commerce ($185,000); the Fisher family, the clan behind the Gap dynasty ($125,000); and Kilroy Realty, the real estate giant that has been one of the biggest spenders to local political pressure groups ($100,000).
Prop. I, by contrast, is relying heavily on a few wealthy, progressive donors:
- Saikat Chakrabarti, the congressional candidate who lost his primary race to Connie Chan and Scott Wiener, is the campaign’s top donor and has given $150,000. Chakrabarti is much more involved in city politics since his primary loss: He has given hundreds of thousands to progressive ballot measures this cycle, and is pledging money and support to Chan in her congressional race.
- Dean Preston, the former District 5 supervisor who authored the original 2020 ballot measure that doubled the city’s transfer tax (also Prop. I), has donated $118,000. Preston, a tenants attorney, is a longtime tenant and housing rights activist.
- Dylan Hirsch-Shell, a former mayoral candidate and social housing advocate, has donated $105,000.
Christin Evans, a member of the Prop. I campaign, said the measure’s opponents see their opposition spending “like an investment.”
“It’s essentially spending $100,000 to potentially get millions in tax cuts in the future,” she said.
The backstory goes back years. In 2020, voters passed a separate Prop. I to double the city’s transfer tax rate on sellers of properties valued at $10 million or more, moving it from about 3% to about 6%, depending on the value of the property.
Those selling luxury homes, large apartment or office buildings subsequently saw the city cut into their profits during sale.
The funds collected by the 2020 tax adjustment were meant to be earmarked for affordable housing, but legal questions surrounding whether that could be written into the measure allowed then-Mayor London Breed to use the money for the city’s general fund. Mayor Lurie has followed suit, also allocating the tax revenue to the general fund.
Hundreds of millions have been raised by the tax.
Prop. I of 2026 would amend the 2020 measure and reserve half of the revenue received from San Francisco’s transfer tax to affordable housing, social housing developments, homelessness prevention programs and housing assistance. The measure would also lock in the transfer tax rate at between 5.5% and 6%.
The real fight is over who gets to control that transfer tax rate. If Prop I. wins, the rate is not only locked in, but put under the purview of voters instead of the Board of Supervisors.
That is far more restrictive for owners of large real estate, and the mayor — Lurie has come out against the measure, seeking to preserve his control over the funds. The mayor is instead backing Prop. C, a consensus measure to boost the city’s affordable housing fund to $125 million or more starting in 2028 and build potentially tens of thousands of units with the funds.
Lurie, for his part, has had other designs over the transfer tax.
Earlier this year, the mayor co-sponsored the “BUILD Act” with Supervisor Bilal Mahmood to cut the tax rate in order to incentivize more housing development in San Francisco, though it was unclear it would do so.
Cutting the transfer tax rate would have also been a boon to office developers and the “BUILD Act” was not narrowly tailored to housing construction. The proposal was subsequently shelved because it did not have the votes on the board.
Evans says she too supports Prop. C — it is a long term solution to the housing crisis, she said. Prop. I, she says, is a steady and predictable stream of funding for affordable housing.
“I think [Lurie] can understand why we feel it’s important that City Hall be held accountable to the original tax on properties over $10 million, and that those additional funds be used for housing,” Evans said.
