Proposition G — Fund Housing for Extremely Low-Income Tenants

Proposition G would reduce rents for hundreds of housing units in San Francisco so that extremely low-income seniors, families and people with disabilities could afford them.

Today, even San Francisco’s so-called affordable housing is often out of reach for those tenants. Proposition G would subsidize rents on certain affordable housing units so owners could offer them at a discount to extremely low-income tenants.

Support

Proposition G aims to help households inadequately served by state and federal government housing assistance programs, according to the measure’s proponents. They call it a key step toward making the city more affordable and keeping its most vulnerable residents off the streets.

The proposition’s architects are local groups Faith in Action Bay Area, the Community Tenants Association and Senior and Disability Action. Aaron Peskin, president of the Board of Supervisors and a mayoral candidate, sponsored Proposition G’s placement on the ballot, a move that the full board then supported. Incumbent Mayor London Breed, who is running to keep her seat, also supports it, as do groups representing racially diverse communities throughout the city.

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Opposition

Proposition G would leave it up to city officials to decide how to pay for the new rent subsidies. The measure’s authors designed it to encourage use of certain tax revenues already earmarked to fund that type of assistance, said “Yes on G” campaign spokesperson Meg Heisler. It’s also possible that officials would draw money from elsewhere in the city’s budget, she said.

If that were to happen, the measure could end up “draining critical resources from essential services like public safety, infrastructure, and education,” said Larry Marso, who wrote the argument against the measure. Marso, Proposition G’s sole official opponent, also wrote arguments against several other measures on the local ballot.

The measure’s opponents include GrowSF and TogetherSF Action, groups funded by tech and venture capital. The “right way to fund these programs is through the regular budgeting process,” reads a statement in the GrowSF voter guide.

But Heisler disagreed, saying that the annual budget process is too unpredictable and outlays can change from year to year. In order for affordable housing landlords to offer units to extremely low-income households on an ongoing basis, they need certainty that the money will keep flowing without interruption.

What it would do

Market-rate housing in San Francisco is far too expensive for many people, and so demand is high for the city’s meager supply of affordable housing, which receives government subsidies so that rents can remain artificially low.

Affordable housing owners and landlords must still charge rents high enough to cover expenses for initial construction and, later, their buildings’ operations and maintenance. They typically set rents at levels recommended for households earning up to 60% of the local area median income, which is $71,950 annually for two people. But that might be four times what extremely low-income tenants could pay.

Proposition G would create an Affordable Housing Opportunity Fund that would pay affordable housing owners the difference between their typical rents and what would be within reach for certain extremely low-income people:

Seniors or people with disabilities, with household annual incomes less than or equal to 25% of the local area median income, or $30,000 for two people.
Families with household annual incomes less than or equal to 35% of the local area median income, or $52,450 for four people.

The fund would subsidize about 550 to 600 housing units, Heisler said, and at least 80% of the money would go to units in buildings that have yet to be built.

The state has mandated that San Francisco make a plan to build nearly 14,000 housing units for extremely low-income people by 2031. The Affordable Housing Opportunity Fund would not be big enough to achieve that goal, Heisler said, but officials could expand it in the future.

Cost

San Francisco would begin paying into the fund in 2026. That year, it would dedicate at least $4 million to the fund, and after that it would inject at least $8.25 million annually through 2046. Each year, the mayor and Board of Supervisors would decide whether to allocate the minimum amount or a figure that was, at most, 3% higher than the preceding year’s contribution, depending on the financial health of the city. Over 20 years, the fund would receive between $161 million and $222 million, City Controller Greg Wagner wrote in an analysis of Proposition G’s estimated financial impact.

For some local taxes, City Hall requires that the revenue be spent on certain purposes. Tax revenues earmarked for rent subsidies, a common form of government assistance, could power the Affordable Housing Opportunity Fund, Heisler said. That includes the Homelessness Gross Receipts Tax, which voters approved in 2018; a tax on homes held vacant for at least half the year, passed by voters in 2022; and Proposition M, a new tax on the ballot for this election.

Campaign finance

As of Oct. 7, the campaign committee backing the measure had received over $94,777 in donations, according to data from the San Francisco Ethics Commission, with over $50,000 from San Francisco Communities Against Displacement and $25,000 from the Housing Accelerator Fund.

No group opposing Proposition G had reported fundraising activity to the city.

History and context

The city has roughly 66,000 extremely low-income households, more than 75% of which include people of color, according to a Planning Department report. Adults 60 and older, often with fixed incomes, also live in many of those households, and their numbers are growing. Over 30% of San Franciscans will be in that age group by 2030.

San Francisco has not built enough housing for people with lower incomes. From 2015 to 2023, the city failed to hit state targets for affordable housing construction permits while it exceeded goals for housing priced at the market rate.

Without adequate housing options, many of San Francisco’s poorer residents have found themselves in homeless shelters or single-room-occupancy buildings, which are often run down, with cramped quarters. Hai Ling Li, a member of the SRO Families United Collaborative, a group of nonprofits that fights for tenants’ rights and access to safe affordable housing, lives in such a building with her husband and their two young daughters.

Their unit, a single room smaller than 100 square feet, is “not a good environment for children to grow up in,” Li said.

The family has tried to move, but their income is too low to afford other rents. Li’s husband earns less than $1,000 a month working “a tiring and low-paying, part-time job.” Li, who has struggled to find suitable work, stays home and takes care of their kids.

“The Housing Opportunity Fund will finally give families like mine the chance to move out of an SRO and into truly affordable housing,” Li said at a July 8 committee meeting of the Board of Supervisors. She spoke in Mandarin, with the help of an English interpreter.