Mayor London Breed said Tuesday that she won’t promise to spend the money from last fall’s real-estate tax measure on housing subsidies and new affordable housing.
Prop. I, which passed with 58 percent of the vote, raised taxes on high-end property transfers, and is projected to bring an average of $196 million in new revenue to the city each year.
Breed did not support Prop. I.
Ballot arguments supporting Prop. I made clear that the money from the measure would be used for housing:
Prop I is also an important step to prevent a wave of evictions that will increase homelessness due to renters being unable to make rent payments because of the pandemic. In August, the Board of Supervisors unanimously passed a resolution making emergency rent relief and permanently affordable housing a top priority for new revenue. This will help renters who have lost jobs and income, and will also help small landlords who depend on rental income to live.
The August 2020 resolution, which passed unanimously, states:
RESOLVED, That the Board of Supervisors intends to support the funding of the COVID-19 Rent Resolution and Relief Fund by appropriating funds raised by the transfer tax ballot measure to such a program;
and, be it FURTHER RESOLVED, That the Board of Supervisors intends to support the funding of the Social Housing Program Fund described herein by appropriating funds raised by the transfer tax ballot measure to such a fund.
The mayor didn’t sign the resolution, but it took effect without her signature.
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The legality here is a bit tricky: By state law, any special tax that is earmarked for a specific purpose requires a two-thirds vote, which is a nearly impossible threshold. So the supes put it on the ballot as a general tax, but resolved to put it into housing subsidies and new social housing.
Based on the ballot arguments and the campaign literature, the voters clearly got that message when they approved the measure.
Sup. Matt Haney, chair of the Budget Committee, has vowed that as long as he holds that position, he will allocate all Prop. I money to rent relief and new non-market housing.
During Question Time Tuesday, Sup. Dean Preston, the author of Prop. I, asked Breed if she would make the same commitment.
Her answer: Prop. I “was on the ballot as a general tax that made no mention of its use. I am going to assume that any additional revenue will go to the General Fund.”
That means the mayor plans to spend the money that was supposed to go to rent relief and social housing on anything else she wants.
If the money goes to new rent-relief and social housing programs, she said, “we will have a $200 million shortfall over the next two years. The voters elected me and the board to make these tough decisions.”
The voters also approved Prop. I with the understanding that it would be used to fight homelessness by keeping people in their homes and to create new social housing.
“Both the voters and the Board of Supervisors made that clear,” Preston said. He then asked her if she would at least promise to put the Prop. I money into critical rent relief in this year’s budget.
“I said what I said, and I am going to do not what you want me to do but what the voters need me to do,” Breed responded.
In other words: The new money from a tax Breed didn’t support will go, if she has her way, for her priorities in her budget – not for what the supes and voters had in mind.
This will be a big battle as the supes tangle this spring with the mayor’s draft budget.