Vindicating the work of democratic socialists who taxed the rich to fund social housing, permits have now been filed to build more than 100 affordable homes at 650 Divisadero. I’m proud to have authored Prop. I, the tax on billionaires that made 650 Divisadero possible. With this funding, we have a large, steady stream of cash that can be leveraged to scale up social housing in San Francisco.
Here’s the background on 650 Divisadero, most of which you won’t find in media coverage or press releases.
The site should have been a prime opportunity for a developer to build. The project was fully “entitled” (all approvals secured) for years. No environmental appeals or permit appeals were filed. The developer had the unfettered right to “build baby build.” But even with upzoning and fully approved plans, this privately owned site sat undeveloped.
This fully entitled site joined the growing number of sites across San Francisco during the pandemic where developers simply abandoned market-rate housing development plans. We pushed hard for San Francisco to take this opportunity for the city to buy up these sites to create affordable housing.
To this end, we passed a ballot measure in 2020 to tax the rich to fund social housing. The real estate industry and tech billionaires fought hard against Prop. I, but still passed. It’s raised more than $400 million already.
Recommendations on how to spend the revenue are made annually by a panel of experts on the Housing Stability Fund Oversight Board. One of the top recommendations has been site acquisition. And one of the little noticed, but intentional benefits, of the Prop. I tax—which charged sellers of properties worth $10 million or more a tax when they sold the property—is that owners who sell for affordable housing development are spared the tax, a huge incentive to sell to a buyer developing affordable homes.
Armed with Prop. I, we pushed the aymor and Planning Department to invest in site acquisitions when prices were low and to scoop up sites. The Breed Administration had no plan for such acquisitions and seemed uninterested in scaling up social housing. The former mayor refused to allocate the Prop. I funds in her budgets for housing acquisitions and affordable housing development, prompting annual budget fights, and the new mayor is similarly refusing to spend Prop. I revenue on affordable homes.
Despite the Administration’s unwillingness to spend Prop. I revenue on social housing, we were able to clawback hundreds of millions of dollars for these purposes. For example, in 2022, we won an historic $112 million budget deal premised on Prop. I revenue. The deal included $40 million for site acquisitions for affordable housing.
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These are the funds that enabled the city to acquire 650 Divisadero for affordable housing, as well as other sites including 1234 Great Highway, 250 Laguna Honda Boulevard, 3300 Mission Street, and 249 Pennsylvania Avenue.
The bottom line: We taxed the rich to fund social housing and acquisition of sites for affordable housing development. Neoliberals and the industry fought our tax, and then fought every effort to spend the money on affordable homes. But in the end, 650 Divisadero is proof that persistent organizing gets the goods, and that the concept of taxing the rich to fund social housing is viable.
I continue to fully support creating affordable housing at 650 Divisadero. I live just a few blocks from the site, and look forward to welcoming hundreds of new lower-income neighbors. The neighborhood overwhelmingly supports this project.
While the private housing market failed for this site and is failing in many other sites like it across the city today, the success of socialist housing interventions has made more than a hundred units possible here, and that’s something to celebrate.
Even those who opposed the funding and acquisition strategy that led to this project are now celebrating 650 Divisadero. We welcome their support. This project will help people survive and thrive in San Francisco. There is still time for the city to acquire more sites like this one and use our voter approved law to fund the construction of more affordable homes for San Franciscans. Our mayor should seize this opportunity for the benefit of all San Franciscans.
Dean Preston is former District Five supervisor
