Supervisor Myrna Melgar plans to introduce legislation Tuesday that would more than double San Francisco\u2019s annual budget for affordable housing to some $125 million, part of a bargain she hammered out with Mayor Daniel Lurie.<\/p>\n
Melgar said her proposal would vastly expand the city\u2019s capacity to build affordable housing by allocating $125 million annually into the city\u2019s Housing Trust Fund<\/a>, up from the $52 million that goes into it today, while also extending the fund for another 30 years. That would be a total of at least $3.75 billion.\u00a0<\/p>\n The increase would be funded by \u201callocating a portion of future property tax growth every year\u201d to the fund, according to a press release sent by Melgar and Lurie.<\/p>\n \u201cI cut a deal with the mayor,\u201d Melgar said, to use property taxes \u201ccoming from the increase in the value of all properties in San Francisco\u201d as a result of last year\u2019s upzoning<\/a>. <\/p>\n The proposal would take the increase in future property taxes and \u201cput it aside\u201d into the low-income housing fund, Melgar said.<\/p>\n \u201cHousing is not getting built at the pace we need, and the consequences are all around us,\u201d Mayor Lurie said in a statement. \u201cToday, we\u2019re jumpstarting affordable housing in San Francisco.\u201d<\/p>\n The two also announced an immediate $70 million bond, to be issued next year, that would go towards preserving and maintaining existing affordable housing. Much of that work has happened through the city\u2019s Small Sites<\/a> program, which buys<\/a> smaller buildings and converts them to affordable housing, though the program has been fraught<\/a>.<\/p>\n The city will maintain the current level of allocation to the fund during this budget crisis, but start increasing that in the 2029-30 fiscal year. It will take several years to get to the $125 million level.<\/p>\n The city will also be able to issue bonds against the fund, Melgar said, meaning the city could get hundreds of millions of additional dollars of private money for affordable housing in the coming decades.<\/p>\n The proposal is a charter amendment that would go before voters in November. Melgar\u2019s measure has five co-sponsors on the Board of Supervisors \u2014\u00a0Shamann Walton, Danny Sauter, Stephen Sherrill, Matt Dorsey and Alan Wong. <\/p>\n Those are the six votes she needs to put a charter amendment on the ballot. The measure would then need a simple majority from the voters to pass.<\/p>\n Melgar said she has \u201cbeen working on this for about a year,\u201d since Lurie first committed to a citywide upzoning<\/a> plan last spring. \u201cI will support this, but I need a guarantee of affordable housing,\u201d Melgar recalled telling the mayor\u2019s team then.\u00a0<\/p>\n This is that guarantee. Plus, she said, Lurie is gaining peace on two other fronts: The nonprofit housing developers behind Melgar\u2019s effort will drop their opposition to the city lowering the percentage of affordable units that must be included in most new city housing projects.\u00a0<\/p>\n The \u201cinclusionary\u201d rate is currently 15 percent, but a city committee unanimously recommended<\/a> slashing it to 5 percent for at least three years to spur housing production. Past efforts<\/a> to lower the rate<\/a> have resulted in vicious, drawn-out fights, but Melgar says most of the city\u2019s affordable housing developers won\u2019t take up arms this time around. <\/p>\n \u201cIn return we\u2019re getting this vastly increased fund for affordable housing for the next 30 years,\u201d she said.<\/p>\n And, Melgar added, many of the groups behind another proposed ballot measure<\/a> that would have earmarked another pot of affordable housing funds are abandoning that campaign \u2014 another measure of political peace.<\/p>\n Melgar said her legislation follows a \u201cvery socialist principle.\u201d The city endowed tremendous values upon property owners by upzoning<\/a> their land and making their parcels more desirable for developers<\/a>. This new legislation absorbs some of that municipally bestowed value and directs it toward low-income housing.<\/p>\n \u201cYou confer value on the property and you capture some of that value,\u201d she said. \u201cThat\u2019s where the idea came from \u2014 to take the increase in the value for properties you have just upzoned.\u201d\u00a0<\/p>\n The Housing Trust Fund was created in 2012 via the ballot in another grand bargain<\/a> to reduce the inclusionary rates for new construction, and went back to the ballot<\/a> in 2016 to fiddle with those rates.<\/p>\n Earmarking fund for affordable housing has an equally prickly history: Then-supervisor Dean Preston<\/a> in 2020 introduced a measure<\/a> to hike a real-estate tax<\/a> that was passed by 58 percent of the voters as Proposition I<\/a>.\u00a0<\/p>\n But the money was not specifically allocated to affordable housing<\/a>. The city attorney\u2019s advice at the time was that this would have required a two-thirds vote rather than a simple majority. <\/p>\n Other municipalities have, in the ensuing years, passed similar measures and locked in guaranteed money. But, in San Francisco, the funds were shunted to the general fund with no guarantees regarding how they would be spent.\u00a0\u00a0<\/p>\n