San Francisco ‘social housing’ measure loses after heavy real-estate opposition

See full election results here → Proposition I, one of two affordable-housing measures on the San Francisco ballot this November, has been defeated. It was losing 52-48 as of Monday and trailing by 11,735 votes with 99.5% of the vote counted. Prop. I faced $2.8 million in opposition spending by the real-estate lobby and housing developers , which took out a bevy of ads blasting the measure. Mayor Daniel Lurie also opposed it. The measure would have dedicated half of the city’s “transfer tax” on sales of real estate worth more than $10 million toward various forms of affordable housing, including “ social housing .” That revenue currently goes into the city’s general fund. In social housing complexes, tenants would have had “the right to participate directly and meaningfully” in running their own buildings. Some housing professionals worried that was too prescriptive and presented problems — tenants, for example, might be reluctant to increase their own rents to pay for needed upkeep. The measure would have also locked in the transfer tax rate, which is one of the highest in the country, and forced it to go back to a vote of the people for future changes, removing control of the tax from city supervisors. But that change was purposeful and meant to create a permanent source of affordable-housing funds — proponents criticized past mayors for funneling that revenue to the general fund. Voters in 2020 had overwhelmingly approved doubling the transfer tax on multi-million-dollar real estate deals, but that revenue was not legally earmarked for affordable housing despite promises at the time. Then-Mayor London Breed and Lurie instead put it toward the general fund. Removing city control of that tax and requiring another ballot measure to amend it worried developers and others, and a separate measure supported by Lurie, most city supervisors and affordable housing nonprofits won out over Prop. I. That measure, Proposition C, will grow the city’s affordable housing trust fund, which is used to subsidize low- and moderate-income housing, until it reaches $125 million a year . Prop. C passed handily and had 82% of the vote as of Saturday. The two measures were not in strict opposition but while Prop. I was championed by the Democratic Socialists of America, progressive supervisors and labor unions, Prop. C was the consensus measure of most city supervisors and the mayor. Lurie’s ally Michael Moritz, the venture capitalist billionaire and a real-estate investor, chipped in $200,000 to fight Prop. I and pass Prop. C. The private developer Related, the real-estate lobbying group the San Francisco Apartment Association, and the San Francisco Chamber of Commerce put in similar amounts. Lurie blasted the measure as a “slush fund” despite the fact that his office would control the money . The city’s former controller and affordable housing developers told Mission Local that the mayor’s housing office tightly controls funds it disperses, and that the idea of a “slush fund” living inside that office was wrong. Still, the No on I campaign spread that message to mailboxes and TVs across the city.