San Francisco, California, Proposition D, Commercial Rent Tax for Housing and Homelessness Services (June 2018)

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Proposition D: San Francisco Commercial Rent Tax for Housing and Homelessness Services

The basics
Election date:
June 5, 2018
Status:
d Defeated
Majority required:
66.67%
Topic:
City tax
Related articles
City tax on the ballot

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June 5, 2018 ballot measures in California

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San Francisco County, California ballot measures

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Local housing on the ballot
See also
San Francisco, California

A commercial rent tax for housing and homelessness services was on the ballot for San Francisco voters in San Francisco County, California, on June 5, 2018. It was defeated.

| A yes vote was a vote in favor of authorizing an additional tax on the lease of commercial property for landlords with annual gross receipts above $1 million. The measure was designed to levy a new tax of 1.7 percent of gross receipts to fund low-income and medium-income housing, homelessness services, and the general fund.

|

| A no vote was a vote against authorizing an additional tax on the lease of commercial property in the amount of 1.7 percent of gross receipts to fund low-income and medium-income housing, homelessness services, and the general fund.

|

Proposition D—known by supporters as the Housing for All measure—competed with Proposition C, a citizen initiative designed to fund childcare and early education, also by taxing gross receipts from the lease of commercial property. Only one measure could be approved.

A two-thirds (66.67 percent) supermajority vote was required for the approval of this measure.

## Contents

* 1 Election results
* 2 Measure design
* 3 Text of measure
* 3.1 Measure summary
* 3.2 Impartial analysis
* 3.3 Full text
* 4 Support
* 4.1 Proponents
* 4.2 Arguments
* 5 Opposition
* 5.1 Opponents
* 5.2 Arguments
* 6 Path to the ballot
* 7 See also
* 8 External links
* 9 Footnotes

## Election results[edit]

San Francisco Proposition D

Result | Votes | Percentage
Yes | 105,746 | 44.93%

| 129,611 | 55.07%

Results are officially certified.
Source

## Measure design[edit]

City officials estimated that the 1.7 percent tax under Proposition D would generate $70 million a year, with funds designated for the following purposes:[1]

* 45% to the Department of Homelessness and Supportive Housing (HSH);
* 10% to the Mayor's Office of Housing and Community Development (MOHCD) to fund single-room occupancy (SRO) buildings and households earning up to 50% of the area median income (AMI);
* 35% to the Mayor's Office of Housing and Community Development (MOHCD) to fund affordable housing for households earning up to 80% of the AMI and households earning between 70% and 150% of the AMI;
* 10% to the Mayor's Office of Housing and Community Development (MOHCD) to fund senior households earning up to 40% of the AMI;
* Up to $1,500,000 to the city's general fund in 2018-2019; and
* Up to $3,000,000 to the city's general fund in 2019-2020 and following years.

The tax was designed to be levied in addition to San Francisco's existing tax on commercial leases, which ranged from 0.285 percent to 0.3 percent at the time the measure was placed on the ballot.[2] Under the proposition, exemptions would apply to commercial landlords with less than $1 million in gross receipts, and to any rents for nonprofit, government, arts, industrial, and non-formula retail uses, among other state exemptions.[3]

Proposition D required a two-thirds (66.67 percent) supermajority vote for approval, while the competing measure—Proposition C—required a simple majority of 50 percent plus one for approval. [4]

## Text of measure[edit]

### Measure summary[edit]

The measure summary was as follows:[5]

“  |

Ordinance amending the Business and Tax Regulations Code and Administrative Code to impose an additional tax of 1.7% on the gross receipts from the lease of commercial space in the City, to fund low- and middle-income housing and homelessness services and the General Fund; exempting from the additional tax rents from production, distribution, and repair uses, retail sales and services uses, entertainment, arts and recreation uses, and nonprofit uses; and increasing the City's appropriations limit by the amount collected under the new tax for four years from June 5, 2018. [6]

| ”

|
|

### Impartial analysis[edit]

The following impartial analysis of the measure was prepared by the office of the San Francisco Controller:[1]

“  |

Should the proposed ordinance be approved by the voters, in my opinion, it would generate additional net annual revenue to the City of approximately $70 million. The proposed ordinance would raise the gross receipts tax paid by commercial landlords in San Francisco. The revenues from the tax would be designated for affordable housing programs and homelessness programs, except that $3.0 million annually, adjusted for inflation in subsequent years, would be available for any public purpose. Total tax collections would change over time at the rate of inflation of commercial rents in the City.

The current gross receipts tax was passed by the voters in November 2012 and replaced the former 1.5% payroll tax with a gross receipts tax that varies by the size and type of business. Commercial landlords generally pay a rate between 0.285% and 0.3% of gross receipts currently. The proposed ordinance would add a new tax of 1.7% for most commercial spaces, in addition to the current gross receipts tax.

The proposal exempts commercial landlords with less than $1.0 million in gross receipts, rents paid from non-profit tenants, arts, industrial uses, and retail uses as well as other exemptions required under State law. We estimate that these exemptions represent approximately 22% of the tax base, and therefore that 78% of commercial rents paid in the city would be subject to the tax.

As noted above, total tax revenues that would be generated are estimated to be approximately $70 million annually based on the current tax base, exemptions and rates, and would change over time at the rate of inflation of commercial rents in the City. [6]

| ”

|
|

—San Francisco Controller

### Full text[edit]

The full text of the measure is available here.

## Support[edit]

### Proponents[edit]

Affordable Housing for All, Yes on D led the campaign in favor of Proposition D. The group described itself on its website as a "broad coalition of working families, renters and business leaders."[7]

View a list of endorsements for Proposition D compiled by Affordable Housing for All here.

Groups and individuals that endorsed Proposition D include:

* Supervisor London Breed[8]
* The Edwin M. Lee Asian Pacific Democratic Club[9]
* The San Francisco Chronicle[10]
* The San Francisco League of Conservation Voters[11]
* YIMBY (Yes In My Backyard) Action[12]

### Arguments[edit]

The group Affordable Housing for All, Yes on D made the following argument on its website:[7]

“  |

We all feel this affordable housing crisis. Proposition D offers a way to do something about it without burdening people who cannot afford to pay more. Proposition D places a gross receipts tax on corporations to make sure they pay their fair share. It exempts non-profits and small businesses and generates a one-billion-dollar fund for affordable housing and homeless services.

Proposition D will help over 28,000 San Franciscans in the next decade.[6]

| ”

|
|

—Affordable Housing for All, Yes on D

## Opposition[edit]

### Opponents[edit]

Groups that endorsed a "no" vote on Proposition D include:

* Democratic Socialists of America, San Francisco chapter[13]
* Harvey Milk LGBTQ Democratic Club[14]
* The San Francisco Republican Party[15]
* SEIU Local 1021[16]
* SF Berniecrats[17]

### Arguments[edit]

The group Democratic Socialists of America, San Francisco made the following statement on its website:[13]

“  |

DSA San Francisco condemns Interim Mayor Farrell and Supervisors Cohen, Safai, Sheehy, and Tang for playing politics with this disingenuous effort to block Proposition C. We are appalled that these conservative Democrats chose to force affordable housing advocates to compete for funding with child care providers, many of whom are women of color who work for completely inadequate wages. We reject this crass attempt to break working class solidarity.[6]

| ”

|
|

—Democratic Socialists of America, San Francisco

The group SF Berniecrats stated on its website, "Half of the housing would go to people earning over $100k-$150k/year."[17]

## Path to the ballot[edit]

See also: Laws governing local ballot measures in California

San Francisco Board of Supervisors members Ahsha Safai, Jeff Sheehy, Katy Tang, Malia Cohen, and Mark Farrell sponsored the ballot measure.[5]

## See also[edit]

Local measures

* Local measures in 2018
* City tax on the ballot
* Local housing on the ballot
* San Francisco County measures

California

* June 5, 2018 measures in California
* Local ballot measures, California
* San Francisco, California

News and analysis

* State and local preemption conflicts
* Measures advancing national agendas

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|

## External links[edit]

| Suggest a link

|

* Search Google News for this topic
* San Francisco County Elections Office website

## Footnotes[edit]

1. ↑ 1.0 1.1 San Francisco City and County, "Controller's Analysis," accessed March 27, 2018
2. ↑ Lexology, "Dueling Rent Taxes Come Up before San Francisco Voters in June," February 12, 2018
3. ↑ Cite error: Invalid `<ref>` tag; no text was provided for refs named `title`
4. ↑ Pillsbury Law, "Dueling Rent Taxes Come Up before San Francisco Voters in June," February 12, 2018
5. ↑ 5.0 5.1 SFgov.org, "Proposed Initiative Ordinance," accessed March 8, 2018
6. ↑ 6.0 6.1 6.2 6.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
7. ↑ 7.0 7.1 Yes on D, Housing for All, "About," accessed April 26, 2018
8. ↑ ''Yes on D, Housing for All, "Endorsements," accessed April 26, 2018
9. ↑ Edwin M. Lee Asian Pacific Democratic Club, "Endorsements," accessed April 26, 2018
10. ↑ SF Chronicle, "Elections," accessed April 26, 2018
11. ↑ SFLCV, "Endorsements," accessed April 26, 2018
12. ↑ YIMBY Action, "Endorsements," accessed April 30, 2018
13. ↑ 13.0 13.1 San Francisco Democratic Socialists of America, "DSA SF Announces Endorsements for June 5, 2018 Election," March 23, 2018
14. ↑ Facebook, "Harvey Milk Club," accessed April 26, 2018
15. ↑ San Francisco Republican Party, "Endorsements," accessed April 26, 2018
16. ↑ SEIU Local 1021, "2018 Endorsements," March 10, 2018
17. ↑ 17.0 17.1 SF Berniecrats, "June 2018 Endorsements," accessed April 26, 2018

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