The Facts

San Francisco leaders are fighting over the city’s Prop. I transfer tax on large property sales. Mayor Daniel Lurie and Supervisor Bilal Mahmood teamed up to lower the tax rates charged on sales of large buildings: from 5.5% to 2.75% on sales from $10 million to $25 million and from 6% to 3% above $25 million. But subsidized housing advocates are threatening to run a November ballot initiative that would keep rates high and lock at least 60% of the tax revenue to new subsudized housing construction.

The Context

Voters approved Prop. I in 2020, raising taxes on property sales above $10 million. It was pitched as a "mansion tax" by Supervisor Dean Preston, but it actually only applies to large apartment buildings and office buildings. Urban think-tank and good-government group, SPUR, opposed the measure.

The GrowSF Take

Right now, San Francisco's need for budget flexibility is higher than its need for more subsidized housing. If the city has to cut back on vital services because millions of dollars are sitting in a bank account that can only be used to build very expensive subsidized housing, are we really coming out ahead? We don't think so. A tax that falls hardest on large multifamily and commercial deals can suppress the very construction the city says it wants. Lowering these rates is the better move; City Hall should not double down on a tax that makes building harder.