Proposition I

Changes to Real Property Transfer Tax

Proposition I would permanently dedicate half of the transfer tax revenues collected when certain real estate with a value or sales price of more than $10,000,000 changes hands, which will continue to be taxed at rates of 5.5% to 6%, to be spent only on affordable housing, including social housing developments and housing assistance, and exempt certain sales from the dedicated portion of the tax, for an estimated annual revenue decrease of approximately $1 million.

This measure requires approval by a majority of voters voting on the measure to pass.

Fiscal Impact: Proposition I would represent a moderate annual decrease of approximately $1 million to the City’s overall revenues starting in Fiscal Year (FY) 2027-28. However, the ordinance would also shift $120 million per year of existing revenue from the more flexible General Fund to a special revenue fund dedicated to affordable housing programming and support. Because the ordinance would remove existing revenue from the General Fund, it would increase the City’s projected General Fund deficit by $120 million annually.

See Endorsements for Proposition I

Pro:

Supporters argue that San Francisco's housing crisis is pushing families, seniors, teachers, nurses, artists, immigrants, and young people out of the city they love. They say that in 2020, voters approved a tax on the sale of properties worth more than $10 million, specifically so that money could fund affordable housing and rent relief. It worked until politicians ignored the will of voters.

This tax on San Francisco's wealthiest property owners provided emergency rent relief to more than 10,000 households and helped preserve and build hundreds of affordable homes. But it wasn't guaranteed. In the past two years, none of this revenue has gone to affordable housing.

www.YesonISF.com (Campaign Website)

A YES vote on this measure means: you support permanently dedicating half of the transfer tax revenues on properties over $10,000,000 to affordable housing.

Con:

Opponents argue that while affordable housing is an important priority, locking transfer tax revenues into rigid set-asides is fiscal mismanagement that threatens San Francisco' s financial stability. It creates dangerous budget earmarks, relies on highly volatile revenue, and deepens downtown economic stagnation, and reduces flexibility and oversight.

A NO vote on this measure means: you are against permanently dedicating half of the transfer tax revenues on properties over $10,000,000 to affordable housing.

Background

The City collects a transfer tax on certain sales and long-term leases of real property in San Francisco. The transfer tax rate depends on the real property’s sales price or value. The tax rate is 5.5% for properties with a sales price or value from $10,000,000 to under $25,000,000, and 6% for properties with a sales price or value of $25,000,000 or more. Certain sales and leases are exempt from the tax or are subject to reduced rates.

Revenues generated from the transfer tax may be used for any governmental purpose.

The Board of Supervisors (Board) may amend, reduce, suspend, or repeal the transfer tax without voter approval. Voters must approve any increase of the transfer tax.

State law limits the total revenue, including tax revenue, the City may spend each year. The voters may approve increases to this limit for up to four years.

Proposal

The proposed measure would reduce the current transfer tax by half for certain properties, and would establish a new transfer tax of approximately the same amount that the City could spend only on affordable housing and other specified purposes. The proposed measure would:

Reduce the current transfer tax from 5.5% to 2.75% for properties with a sales price or value from $10,000,000 to under $25,000,000, and from 6% to 3% for properties with a sales price or value of $25,000,000 or more;
Impose a new transfer tax of 2.75% for properties with a sales price or value between $10,000,000 and $25,000,000, and 6% for properties with a sales price or value of $25,000,000 or more;
Apply the same exemptions and tax reductions from the current transfer tax to the new transfer tax;
For the new transfer tax, exempt the first sale of real property within five years following completion of construction of new residential units on the property for certain properties; and
Allow the City to secure bond debt with proceeds from the new transfer tax.

The City could spend revenue from the new transfer tax only as follows:

At least 60% to affordable housing production programs, at least 50% of that amount to alternative models for permanent affordable housing and the remainder to multifamily affordable housing;
At least 25% to acquisition or rehabilitation of affordable housing, at least 60% of that amount to new acquisitions of affordable housing and the remainder to rehabilitation and stabilization of existing affordable housing; and
At least 10% to tenant stabilization/homelessness prevention programs, at least 50% of that amount to eviction defense and prevention and the remainder to emergency rental assistance.

For both the current and new transfer tax, the Board could amend the tax only to exempt rent-restricted affordable housing or to make other changes consistent with the stated purposes of the new transfer tax. All other changes would require voter approval. All these changes would apply indefinitely until amended or repealed. This measure would increase the City’s spending limit for four years.

Source: Proposition I: Title and Summary

City and County of San Francisco Office of Elections

Pro:

Con:

Background

Proposal

2026 Propositions

2026 Local Ballot Measures

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