March 2024 Election: San Francisco Measures and a State Proposition to Watch

Coblentz Patch Duffy & Bass

Voters in San Francisco and California will again confront a formidable ballot during the election on March 5, 2024, with an array of qualified City measures and one state proposition to consider. Key measures related to real estate and housing are as follows:

San Francisco Proposition A (Affordable Housing Bonds): Proposition A would allow the City to borrow up to $300 million by issuing general obligation bonds to construct, develop, acquire, and/or rehabilitate affordable housing. Of that $300 million:

  • Up to $240 million of bond proceeds would be used for new rental housing, including senior and workforce housing, for extremely low-income, very low-income, and lower-income households.
  • Up to $30 million would be used to preserve existing affordable housing that is affordable for lower-income and moderate-income households.
  • Up to $30 million would be used to serve extremely low-income, very low-income, and/or lower-income households who need safe and stable housing and are experiencing street violence, domestic violence and abuse, sexual abuse and assault, human trafficking, or other trauma relating to homelessness.

The measure proposes to raise these funds through an estimated average tax of 57 cents per $100 of assessed property value. For rent controlled units, landlords can pass through to tenants 50 percent of this real property tax increase. The Citizens’ General Obligation Bond Oversight Committee would audit the expenditure of these bond proceeds.

One of the major drivers of the measure is the City’s need to meet its state-mandated Regional Housing Needs Allocation of over 46,000 affordable housing units by 2031, which we’ve written about here and here.

Support and Opposition: Proposition A was placed on the ballot by an 11-0 vote of the Board of Supervisors, the ordinance for which was signed by the Mayor. Proponents of Proposition A, including Board of Supervisors President Aaron Peskin, the SF Democratic County Central Committee (DCCC), SPUR[1], TogetherSF, SF YIMBY, the San Francisco Labor Council, the San Francisco Chronicle, the Council of Community Housing Organizations, the San Francisco Tenants Union, and the Mission Housing Development Corporation, argue that the measure provides essential affordable housing for working parents and families, teachers, firefighters, nurses, veterans, and seniors on fixed incomes. Opponents, including Larry Marso, argue that the City should push back against state-mandated housing levels, reign in borrowing, and protect against rising property taxes on existing home owners.

Proposition A requires a two-thirds vote to pass.

San Francisco Proposition C (Real Estate Transfer Tax Exemption and Office Space Allocation): For any property owner that receives permission to convert a property from commercial to residential use before January 1, 2030, Proposition C would exempt its initial post-conversion transfer from the transfer tax, up to a combined limit of 5 million square feet of space converted. The measure also allows the Board of Supervisors to amend the transfer tax without voter approval (but not to increase it), and permits office space that has been converted or demolished to be returned to the Proposition M allocation pool for allocation to new office developments of at least 50,000 square feet.

Support and Opposition: Proposition C was placed on the ballot by the Mayor, and is supported by certain members of the Board of Supervisors, the Housing Action Coalition, GrowSF, SF YIMBY, SPUR, TogetherSF, YIMBY Action, Senator Scott Wiener, the San Francisco Chronicle, and various small business and merchants associations, who assert that the City’s current transfer tax – which is up to 6 percent on transactions of $25 million or more – is a significant barrier to a more vibrant downtown and disincentivizes the conversion of underused office buildings to housing. Opponents of the proposition, including Supervisor Dean Preston, John Avalos, the SF DCCC, the Affordable Housing Alliance, the San Francisco Labor Council, the San Francisco Tenants Union, and the Harvey Milk LGBTQ Democratic Club, maintain that the measure would take power away from the voters, provide unnecessary tax breaks to the rich, and limit funding for vital City services. A recent report by the Office of the Controller concludes that although the goals of revitalizing San Francisco’s downtown and increasing housing opportunities are important, office to residential conversion may not be currently financially feasible, and the proposed incentive is likely too small to close the feasibility gap.

Proposition C requires a simple majority to pass.

San Francisco Proposition D (Changes to Local Ethics Laws): Proposition D would tighten City ethics laws, including by:

  • Expanding the types and sources of gifts that City officers and employees are prohibited from accepting;
  • Amending the definition of bribery to prohibit City officers and employees from soliciting or accepting anything of value for themselves or a third party with the goal of influencing any government action;
  • Requiring City department heads to report additional information about gifts to their department and allowing discipline for failing to meet these requirements;
  • Creating a uniform set of rules for all prohibited nonwork activities for City officers and employees;
  • Allowing for monetary penalties when City officers and employees fail to make required disclosures about their personal, professional, or business relationships;
  • Requiring all City employees with decision-making authority to complete an annual ethics training; and
  • Requiring voter approval or supermajority votes by both the Board of Supervisors and the San Francisco Ethics Commission to amend most City ethics laws.

According to the Ethics Commission, these changes are also designed to standardize ethics rules and enforcement across City departments. If this measure passes, the provisions would become effective six months after the election.

Support and Opposition: Proposition D was placed on the ballot by a unanimous vote of the Ethics Commission in response to recent incidents involving corruption on the part of City officials and those doing business with the City. Proponents, including SPUR, the San Francisco Chronicle, the SF DCCC, the San Francisco Labor Council, and TogetherSF, argue that recent City government corruption lays out a case for much-needed internal reform. Opponents of the proposition, including Larry Marso and 11th Congressional District candidate Eve Del Castello, state that it is more efficient to have City departments set individual, tailored policies rather than creating a uniform set of rules and that the measure would continue to expand the headcount, and spending, within the Ethics Commission.

Proposition D requires a simple majority to pass.

California Proposition 1 (Behavioral Health Services Act and Behavioral Health Infrastructure Bond Act): Proposition 1 would authorize the state to sell a total of $6.4 billion in new bonds to build treatment facilities for those with mental health and substance use challenges (up to $4.4 billion) and to fund the state program that gives money to local governments to turn hotels, motels, and other buildings into housing and to construct new housing ($2 billion). Proposition 1 would amend the Mental Health Services Act (Proposition 63), which was passed by voters in 2004 and taxes individuals with incomes over $1 million per year, to allow funding to be used to treat substance use disorders (and not just mental health disorders), reallocate funding for full-service treatment programs, behavioral health services, and housing programs, and require annual audits of programs.

Support and Opposition: Proposition 1 was put on the ballot by the Legislature. Proponents, including Governor Gavin Newsom, California Professional Firefighters, the California Chamber of Commerce, the SF DCCC, the Veteran Mentor Project, the San Francisco Chronicle, SPUR, TogetherSF, and the National Alliance on Mental Illness–California, argue that the state’s mental health system is broken and that the proposition would move people permanently off the streets, out of tents, and into treatment. Opponents, including Senate Minority Leader Brian W. Jones, Assemblymember Diane B. Dixon, and Mental Health America of California, argue that Proposition 1 is a heavy burden on taxpayers and that a better tactic is to attack the problem of homelessness and mental health challenges through the regular budget process. They also assert that the proposition reduces local control, bringing a one-size-fits-all approach to a program that counties already offer.

Proposition 1 would modify Proposition 63 and requires a simple majority to pass.

[1] Links provided in this post to substantive voter guides, where available.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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