5 S.F. Props That Could Change Real Estate
In exactly one week, San Francisco voters will decide on five propositions that affect local real estate—some hotly contested. Here is a quick look at what's on the ballot, what each means and what needs to happen for them to pass.
Prop. A: The affordable housing bond
The details: The measure would authorize up to $310M in bonds for the construction, development, acquisition and preservation of affordable housing. Funds would go toward programs such as down payment assistance, repairing public housing, funding middle-income rental housing, and purchasing and preserving affordable apartment rental buildings.
The bottom line: The plan is not expected to raise taxes. The city tends to issue new general obligation bonds only when the old ones are retired to keep property taxes about the same. The annual debt service for the bonds would range from $8.3M in the first year to $26.7M after the final bonds are issued. The average property tax rate over the life of the bonds is estimated at an average of $8.09 for every $100k in assessed value.
To pass: A two-thirds vote. Political consultant David Latterman said in April if the city can prove it won't raise taxes and if the housing plan has the right mix of housing for various income levels, it will help the bond to pass. The last successful bond measure was in 1996.
Prop. D: Mission Rock, a 28-acre waterfront location south of AT&T Park
The details: The Giants are developing this property (now a parking lot), which is held in state public trust that restricts how it can be used. The proposition would increase the height limit to between 120 and 240 feet on up to 10 acres on the site, keeping Pier 48 at the current 40-foot height limit. Buildings with the increased height would have requirements to provide residential, retail or restaurant space above 90 or 190 feet, respectively.
The bottom line: The measure would allow the Giants' plan to proceed while encouraging mixed-use development of the property, including 1,000 to 1,950 residential units (the prop calls for at least 33% affordable, though the Giants already plan for 40%); eight acres of parks and open space; renovation of Pier 48; space for restaurants, retail, commercial, production, manufacturing, artist studio, small business and nonprofit use; and parking. The Giants expect the project could create 11,000 jobs and $25M in tax revenue.
To pass: A simple majority (50%+1).
Prop. F: Restricting short-term rentals (the Airbnb prop)
The details: Of everything on the ballot next week, this one has grabbed most of the attention and is fueling a lot of debate driven by large contributions, such as Airbnb's $8.5M campaign to fight the measure.
The city already limits those rentals of less than 30 days to keep housing available to residents as opposed to tourists. Since May 21, the city's short-term residential rental law says only "permanent residents" may offer a home for short-term rent and can't rent out their space for more than 90 days a year if they're not living in the home at the same time.
Changes from the prop would restrict short-term rentals further, limiting them to 75 nights a year (that will apply whether or not the person renting out the place lives there at the same time). Websites that support rentals (such as Airbnb, HomeAway) would have to stop listing the unit once it hit that 75-day cap and report quarterly on the rentals on their sites. The measure also seeks to prohibit short-term rental of in-law units.
The bottom line: If it passes, the prop could penalize home rental websites for not meeting the requirements (as well as the people renting out the space). It also raises the possibility of lawsuits against those websites.
It is expected to cost the government an additional $20k to $200k a year, though host registration fees could offset the cost. The city might lose future hotel tax revenue if it passes. The city usually budgets for $10M to $15M in hotel taxes from short-term rentals. A lower cap and the removal of renting out in-law units might reduce that revenue.
The controller didn't look at the measure's effect on the private economy.
To pass: A simple majority. A poll released by David Binder Research found 52% of voters opposed the ballot question as written, while 36% were in favor.
Prop. I: Halting market rate development in the Mission District
The details: It would put an 18-month moratorium on certain types of development projects—and authorize the Board of Supervisors to extend it by another year if they so choose. It would affect:
- Permits for demolition, conversion or new construction for any housing project with five or more units.
- Permits for demolition, conversion or elimination of PDR use, including industrial, automotive, storage and wholesale.
Projects with 100% affordable housing would not be affected by the moratorium. The measure also calls for a plan to preserve affordable housing in the Mission District with at least 50% of all new housing affordable and available to residents.
The bottom line: Back in August, there were 24 projects in the planning and permitting process for the Mission District, with up to 1,220 units of housing. If an estimated 85 of the planned units are not built, it could create a loss of up to $1M in property tax and other revenue during the initial 18 months. There also would be a loss of fees, such as permitting and impact fees, during the moratorium.
The controller did not estimate the effect on the private economy, but a study released earlier this month found the moratorium would not help create affordable housing and would delay construction of up to 807 units.
UC Berkeley economist Enrico Moretti wrote an opinion piece stating housing research shows the moratorium will likely increase rents in the Mission District and nearby neighborhoods by lowering the number of affordable units available and increasing competition for existing housing.
To pass: A simple majority.
Prop. K: Surplus city property
The details: This prop would take the city's existing ordinance (which supports developing affordable housing and housing for the homeless on surplus property) and amend it to include affordable housing for those whose incomes are up to 120% of the median income (up to 33% or more in some locations, with 15% or more set aside for those making up to 55% of the median income). It also would allow mixed-income projects in some cases.
The bottom line: No estimated government cost; the controller didn't look at the effect on the private economy.
To pass: A simple majority.