City leaders are pushing to expand San Francisco’s affordable housing fund.
Yalonda M. James/The Chronicle
The city would more than double its annual contribution to an affordable housing trust fund under a charter amendment proposed by District 7 Supervisor Myrna Melgar with the support of Mayor Daniel Lurie.
The charter amendment, which will be on the November 2026 ballot, would expand the Housing Trust Fund contributions from $52 million a year to $125 million in order to “support affordable housing production and preservation citywide.”
The proposed charter amendment comes as the Lurie administration and a group of Supervisors have introduced an ordinance to cut the percentage of affordable housing units market rate developers are required to include from 15% to 5%. The change was recommended by a technical advisory committee made up of housing experts and affordable and market rate developers. Under the proposed ordinance, projects with fewer than 25 units are not required to include affordable units.
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The charter amendment and the ordinance changing the affordable housing requirements also has the support of supervisors Shamann Walton, Danny Sauter, Stephen Sherrill and Matt Dorsey.
The Housing Trust Fund was established in 2012 through a Charter Amendment approved by the voters to support creating, acquiring and rehabilitating affordable housing and promoting affordable home ownership programs. The fund, which is set to expire in 2043, increases each year at the rate of increase in the city’s overall general fund. Under Melgar’s proposed charter amendment the annual contribution would be extended through 2058.
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The ballot measure proposed today would increase the city’s annual contribution to the Housing Trust Fund by allocating a portion of future property tax growth every year, until it reaches $125 million. After that, the fund would grow at the same rate as General Fund discretionary revenue up to 3% per year, through 2058.
The measure includes fiscal guardrails, including the ability to freeze or reduce the annual appropriation in budget years with large budget deficits or during a recession.
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The mayor and Supervisor Melgar also announced an additional $70 million revenue bond to be issued next year, specifically for affordable housing preservation through both reinvestment in existing deed-restricted affordable housing buildings, and the acquisition and conversion of private rental housing to permanently affordable housing through the city’s Small Sites Program.
“Right now in San Francisco, housing is not getting built at the pace we need, and the consequences are all around us. Families don’t know if they can stay in the city they love. Young people are questioning whether they can build a future here. Workers are getting priced out of the communities they serve,” Lurie said in a statement. “We must take bold action.”
Melgar called the affordable housing shortage is the biggest crisis in San Francisco.”
“It keeps families from setting roots, young people from staying, workers from living close to their jobs, and our neighborhoods from remaining diverse,” she said in a statement.
The ordinance introduced today would implement those recommendations by lowering the required amount of affordable housing provided on-site to 5% for projects with 25 units or more, while allowing developers to alternatively pay an in-lieu fee, dedicate land, or provide off-site affordable units equivalent to 10% of the project’s total units.
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Rudy Gonzalez, San Francisco Building Trades Council Secretary-Treasurer, said “Expanding the Housing Trust Fund while updating the city’s inclusionary requirements is about keeping housing production moving and keeping union members on the job.”
Longtime developer Eric Tao, Interim CEO of TODCO Group, called the expansion of the trust fund “a historic commitment to fund housing and to make the city we love more affordable for its residents.”
“At the same time, the changes to the inclusionary requirements will stimulate the delivery of additional homes, jobs, and tax revenue to help fund the Housing Trust Fund,” he said.
The mayor and Supervisor Melgar also announced an additional $70 million revenue bond to be issued next year, specifically for affordable housing preservation through both reinvestment in existing deed-restricted affordable housing buildings and the acquisition and conversion of private rental housing to permanently affordable housing through the city’s Small Sites Program.
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Saki Bailey, executive director of the San Francisco Community Land Trust Executive Director, called the $70 million revenue bond “the difference between rent-controlled buildings that stay in community hands and buildings that get flipped to the highest bidder.
“For tenants living in those buildings right now, it is the difference between stability and displacement,” she said.