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San Francisco's Social Housing Measure Prop. I Defeated After $2.8 Million Real-Estate Blitz
Proposition I, which would have redirected a slice of the city's transfer tax to social housing, lost 52-48 as developers and the mayor's allies spent millions to kill it. The defeat leaves affordable housing funding to a rival measure that passed with 82% support.
San Francisco's Proposition I, a ballot measure that would have dedicated a portion of the city's real-estate transfer tax to affordable and social housing, has been defeated after a costly opposition campaign backed by real-estate interests and Mayor Daniel Lurie.
As of Monday, the measure was losing 52% to 48%, trailing by 11,735 votes with 99.5% of ballots counted.
Prop. I would have earmarked half of the transfer tax on property sales above $10 million for affordable housing, including European-style social housing where tenants hold direct decision-making power over building management. That revenue currently flows into the city's general fund.
The measure also would have locked in the transfer tax rateâamong the highest in the nationâand required a future public vote to change it, removing that authority from the Board of Supervisors. Supporters said the change was designed to create a permanent funding stream for affordable housing, pointing to past mayors who redirected transfer-tax revenue to the general fund despite promises to spend it on housing.
In 2020, voters overwhelmingly approved doubling the transfer tax on multi-million-dollar real-estate deals, but the revenue was never legally dedicated to affordable housing. Then-Mayor London Breed and Lurie instead directed it to the general fund.
The opposition campaign spent $2.8 million, funded by the real-estate lobby, housing developers, and allies of the mayor. Venture capitalist and real-estate investor Michael Moritz, a Lurie ally, contributed $200,000 to defeat Prop. I and support a rival measure. The private developer Related, the San Francisco Apartment Association, and the San Francisco Chamber of Commerce gave similar amounts.
Lurie labeled the measure a "slush fund," a message the No on I campaign amplified across mailboxes and television ads. But the city's former controller and affordable housing developers told reporters that the mayor's housing office tightly controls the funds it disperses, and that characterizing the proposal as a slush fund was inaccurate.
Some housing professionals also worried that the social housing model was too prescriptive, raising concerns that tenants might be reluctant to raise their own rents to cover building upkeep.
Prop. I was championed by the Democratic Socialists of America, progressive supervisors, and labor unions. A competing measure, Proposition C, backed by Lurie, most city supervisors, and affordable housing nonprofits, passed handily with 82% of the vote. Prop. C will grow the city's affordable housing trust fund until it reaches $125 million annually.
The two measures were not strictly opposed, but their divergent fates highlight a deepening divide over how San Francisco funds housingâand who controls the purse strings. With Prop. I's defeat, the city's transfer-tax revenue will remain under the control of City Hall rather than being constitutionally dedicated to housing, a outcome that critics say leaves affordable housing at the mercy of shifting political priorities.