Yes on Proposition C
Contributions to the Housing Fund
What is it?
Prop C will increase the City's investment in its Housing Trust Fund, which funds below-market-rate home construction, preservation, and acquisition as well as infrastructure and some downpayment assistance. Voters first created the fund in 2012.
Today, the City puts $50.8M into the Housing Trust Fund every year. This measure would increase that yearly contribution starting in Fiscal Year 2028-29 until it hits $125M per year, in line with either the growth of general fund revenues or property values, whichever rises faster. When the yearly appropriation hits $125M, the contribution growth is capped at 3% per year.
The Board of Supervisors may freeze contributions when the City projects a deficit over $250M, and cut contributions by up to 10% in a year the City taps its Rainy Day Reserve.
The measure also raises the income cap for downpayment assistance loans from 120% to 200% of the Area Median Income and removes the current spending cap on housing-related infrastructure.
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Why vote Yes?
San Francisco currently pays for subsidized low-income homes (often misleadingly called "affordable homes") by taxing the construction of new homes. New UC Irvine research found that these taxation schemes cut new home construction by nearly a third. And since subsidized low-income homes only get built when the regular market-rate projects around them do, the tax suppresses both kinds.
The current tax scheme raises rents for everyone. Adding up the higher rents everyone pays because of that lost housing, each subsidized low-income home the policy produces costs renters about $800,000. Building one directly, without this tax, only costs about $441,000.
This July the Board made a deal with the nonprofits who build low-income housing to lower the tax from 15% to 5%, and grow the Housing Trust Fund. And thus Prop C was born.
We think this is a good deal. It will make all kinds of housing more financially feasible to build, which will put downward pressure on rents across the city and create more low-income housing all at the same time.
We typically oppose set-asides, but this one is built well: growth caps at 3% per year once the fund reaches $125M, and the Board can freeze or trim contributions in bad budget years.