San Francisco Voters Pass Affordable Housing Bonds, Conversion Tax Exemption
After a week of tallying election results, Propositions A and C, both aimed at improving the city’s housing stock, have been approved by San Francisco voters, per the San Francisco Chronicle.
Proposition A, a measure to enable the city to issue bonds to build more affordable housing, passed with 70% of voters approving the measure.
Prop A enjoyed broad support from developers and advocates, as well as Mayor London Breed and the Board of Supervisors.
It will fund the new construction and renovation of 1,400 affordable housing units in the city with the $300M bonds the measure authorizes.
San Francisco has a severe housing shortage, and the city must permit 82,000 new housing units by 2031 to meet state-mandated housing goals.
Proposition C, a measure to eliminate the transfer tax on buildings being converted to housing, has also passed, albeit by a slim margin.
With just 16,000 votes left to count, 52.95% of voters approved the tax cut. It needed 50% plus one vote to pass.
Prop C was more controversial among local politicians, with some groups calling the measure a tax cut for the millionaires. Developers, on the other hand, say cutting the tax will at least help make a conversion financially feasible.
The tax could be up to 6% on sales worth more than $25M, saving property owners a significant sum on deals that could bring more units of housing to the city.
Approving the removal of the transfer tax means the city’s budget crisis likely just got worse. A report from the Office of the Controller found that the measure will lead to a “negative economic impact” in the near-term.
Although Proposition C might be a signal to investors that San Francisco is open for business again, it’s just a step in the right direction, some say, pointing to other regulatory and local ordinance barriers that make developing and building housing in the city onerous.
Not all buildings make great candidates for converting from offices to housing, and there are just a handful of buildings downtown that could be converted, analyses show.
