By Zach Drucker
To culminate San Francisco’s busiest election year in recent history, San Francisco residents will participate in their fourth election on Tuesday, November 8. Voters will have to fight election fatigue as they face a packed ballot of local, state, and federal candidate races and over 20 local and state ballot measures. But if the results of the San Francisco Chronicle’s recent poll about the direction of the City are any indication, the October 10 mail-in ballots could not arrive any sooner.
WHAT’S AT STAKE IN THE SAN FRANCISCO NOVEMBER 2022 ELECTION?
Unlike the previous San Francisco elections this year, the November ballot does not offer a contentious race on the level of a recall or open State Assembly seat. The lack of a marquee campaign race, however, does not lessen the significance of the November ballot. As San Francisco comes to terms with the stark reality that it ranks last or near the bottom in most economic categories following the pandemic, electing quality leaders and passing vital ballot measures becomes much more critical.
San Francisco voters will have ample opportunity to impact the makeup of city leadership this election cycle. Voters will weigh in on even-numbered supervisors’ seats, District Attorney, Assessor-Recorder, Public Defender Board of Education members, City College Board trustees, Assembly Districts 17 and 19, Board of Equalization, and BART Board. For statewide races, San Francisco will join other Californians in deciding on races for Governor, Lieutenant Governor, Secretary of State, Controller, Treasurer, Attorney General, Insurance Commissioner, and State Superintendent.
Not sure if you live in an even-numbered district? Use this tool to find your district.
Before voters can work their way down the ballot, though, they must also contend with races at the federal level. Speaker Nancy Pelosi and Senator Alex Padilla should win in a landslide, but California’s new 15th Congressional District—which includes the southern part of San Francisco—has turned into a close race as voters will choose between two Democrats to replace the retired Congresswoman Jackie Speier.
Shifting toward ballot measures, San Francisco voters will face 14 local ballot measures on the November 2022 ballot. While these measures cover a range of issues, from a charter amendment that moves all San Francisco elections to even-numbered years to three ordinances dealing with JFK drive, sf.citi wanted to highlight three measures that focus on addressing the City’s housing shortage: Proposition D: Affordable Homes Now, Proposition E: The Affordable Housing Production Act, and Proposition M: Tax on Empty Homes.
WHAT DO YOU NEED TO KNOW ABOUT PROPOSITION D and E: COMPETING AFFORDABLE HOUSING MEASURES?
What is the purpose of the measure? It takes too long to approve housing in San Francisco. The California Department of Housing and Community Development found that between July 2020 and December 2021, San Francisco had the longest timeline to permit housing projects at an average of more than 450 days.
The lengthy timeline to approve housing developments did not go unnoticed by city officials. Mayor London Breed unsuccessfully tried three times to get the Board of Supervisors to approve a measure to address the issue before she finally placed Affordable Homes Now on the ballot through the voter initiative process. Proposition D seeks to expedite construction by streamlining the approval process for qualifying affordable housing developments.
However, the Board’s progressive faction did not agree with the details of the Mayor’s measure. In response, Supervisor Connie Chan authored The Affordable Housing Production Act to develop a streamlined process that aligned more with their values and would create “real affordable housing.”
Overall, both charter amendments seek to achieve the same goal of cutting the red tape that slows down the City’s approval process for affordable housing projects. But the requirements for how developments qualify for the speedy approval process significantly differ.
What will the measure do? Proposition D would streamline the production for three types of projects: 100 percent affordable housing, educator housing, and mixed-income projects with substantial affordability. Projects would qualify by complying with the existing San Francisco planning and zoning code and meeting one of the following criteria below.
- Include 100 percent below market rate units affordable to lower- and middle-income households in San Francisco. The individual units can go up to 140 percent of the area median income (AMI), and the AMI of the total project average is at most 120 percent.
- Include ten or more homes and provide more affordable units than required under existing city law. San Francisco currently requires projects to designate 21.5 percent of units as affordable, but through this measure, that designation would increase by 15 percent. For example, if a 100-unit project under existing city law requires 22 affordable units, this measure would require 25.
- Designate 100 percent of its units for households with at least one San Francisco Unified School District or City College employee, with certain household income restrictions.
Like Proposition D, Proposition E would expedite the approval process for the same housing projects: 100 percent affordable housing, educator housing, and mixed-income projects with substantial affordability. These housing projects, however, face different criteria to qualify for streamlined approval under Proposition E.
- All units in multifamily projects must be for households with income up to 120 percent of area median income (AMI). The average household income for all residential units can be at most 80 percent of AMI.
- Mixed-income buildings must allocate 29.5 percent of units as affordable (eight percent more than the current rate). Of these affordable housing units, 20 percent must be three-bedroom units, and 30 percent must be two-bedroom units. Under this measure, a 100-unit project would require 30 affordable units rather than the 22 under existing city law.
- Residential buildings must designate all units for households that include at least one San Francisco Unified School District or City College employee, with certain household income restrictions.
Each charter amendment also lays out guidelines for the construction workers involved in affordable housing projects. Proposition D requires qualifying projects with ten or more units to pay workers prevailing wages. On projects of 40 or more units, the project sponsor must pay for health coverage and provide apprenticeship opportunities. Proposition E also requires qualifying projects with ten or more units to pay workers prevailing wages. But on projects of 25 or more units, the project must use a “skilled and trained” workforce, meaning workers must come from state-certified apprenticeship programs.
Proposition D adds two more important details that separate it from Proposition E. It removes discretionary review around the permitting and funding for projects with 100 percent of units for low- and middle-income households. By removing discretionary review, housing proposals that meet the requirements mentioned above would be entirely streamlined and would not require a California Environmental Quality Act (CEQA) review. Proposition E, on the other hand, does not remove discretionary review. Not removing discretionary review makes 100 percent affordable housing projects seeking city funds vulnerable to CEQA review and a lengthy approval process from the Board of Supervisors.
Proposition D would also address delays from the planning department by implementing strict time frames for project approvals. After a housing project application is submitted, the planning department must approve projects with more than 150 units within 180 days and projects with less than 150 units within 90 days. These time frames are unique to Proposition D as Proposition E does not address permitting delays.
Talk to me about the $$$. In City Controller Ben Rosenfield’s analysis of Proposition D and E, he found that both measures would have a minimal effect on the City’s finances. By streamlining the approval process for affordable housing projects, the shorter construction and development timelines would reduce costs for the City. Conversely, increasing affordable housing developments—which are assessed at a lower value than market-rate housing—could cause a slight dip in property tax revenue.
How will it affect me? The City needs more housing, especially affordable housing. Proponents of each charter amendment argue their proposal would build more housing, but in the end, both would significantly add to the affordable housing stock. An influx of affordable housing would greatly benefit the City in various ways, the most important being that lower- and middle-income households would have more housing options and, thus, the ability to stay in San Francisco.
The passage of one of these measures could also help the City reach its Regional Housing Needs Allocation (RHNA). The City needs a realistic plan to build 82,000 units by 2030, and the streamlined approval process could make a substantial dent in that goal.
How many votes does the measure need? Proposition D and E require a simple majority of 50 percent plus one to pass. But as competing measures, if voters approve both, the charter amendment with the higher vote total will become law and nullify the other.
WHAT DO YOU NEED TO KNOW ABOUT PROPOSITION M: TAX ON EMPTY HOMES?
What is the purpose of the measure? With concerns about real estate speculators profiting off vacant houses in San Francisco, Supervisor Dean Preston commissioned the Budget and Legislative Analyst (BLA) to study housing vacancies in the City. The BLA report revealed that the City had more than 40,000 vacant homes in 2019. Of those 40,000 homes, the report identified 8,000 empty units as “potential investments or cash havens with no intention of moving in or renting them out.” Many of the other tens of thousands of homes remained vacant because they were awaiting renovation, were on the market for sale, a tenant had not moved in yet, or it was unoccupied for various other reasons.
Still, Supervisor Preston and his allies capitalized on the data revealed by the report to craft a vacancy tax. Emulating the recent vacancy taxes imposed in other expensive and housing-scarce cities like Vancouver and Oakland, Supervisor Preston’s tax intends to make inroads into San Francisco’s housing shortage by freeing up unoccupied existing units and raising revenue for public housing. After implementing their vacancy taxes, Vancouver and Oakland decreased their vacancy rates and raised millions in tax revenue.
What will the measure do? Proposition M will tax the owner of empty residential buildings with more than three units if they keep those units vacant for more than 182 days. The tax ranges from $2,500 to $5,000 in the first year—depending on the unit size— and increases to a maximum of $20,000 in later years if the same owner keeps the unit vacant for consecutive years.
Many residential buildings, however, received an exemption from the vacancy tax. The measure will not apply to single-family homes, duplexes, units intended for tourists and other travelers, nursing homes, single-room occupancies (SROs), and units owned by tax-exempt 501(c)(3) nonprofits or government entities. Even with the many exemptions, the BLA report estimates that 4,500 empty units could make their way to market over the two years following the tax.
Talk to me about the $$$. Through current projections from City Controller Ben Rosenfield, Proposition M could generate the City more than $37 million in annual revenue. Using the average number of residential vacancies in San Francisco from 2011 to 2020, the Controller estimates that the tax would result in a yearly revenue increase for the City of $20 million in 2024, $30 million in 2025, and $37 million in 2026. The revenue, however, could eventually taper off if the vacancy tax works as intended and reduces the number of residential vacancies that can face the tax.
The revenue from the vacancy tax would go into the newly established Housing Activation Fund. This fund would provide rent subsidies to individuals 60 or older and low-income households and allocate funds to acquire, rehabilitate, and operate vacant buildings for affordable housing.
How will it affect me? If the measure passes, owners of residential buildings with three or more units face the brunt of the tax as they must place their units on the market or accrue another tax. Property owners will send the Assessor-Recorder a declaration each year that they do not have vacant units to avoid facing the tax.
Renters could see small but beneficial gains from this tax measure. More units could hit the market as the tax incentivizes property managers to rent out available units (in good condition) at a lower price. But the tax would need to cause more housing units to hit the market than projected to cause a seismic change.
Then down the road, the tax revenue could go a long way in helping the most housing-needy individuals in the City with rent subsidies and new affordable housing. At this moment, however, it is challenging to quantify the tangible difference the Housing Activation Fund could make.
How many votes does the measure need? As a dedicated tax placed on the ballot by the initiative process, this measure only requires a simple majority —50 percent plus one — to pass. The tax would go into effect starting on January 1, 2024 and expire on December 31, 2053.
If needed, the Board of Supervisors can amend the tax by a two-thirds vote and without voter further approval.
WHAT TO EXPECT NEXT BEFORE NOVEMBER 2022 IN SAN FRANCISCO?
As we head into the final stretch of the campaign season, we understand how difficult it is to keep up with all the ballot measures and candidates running for office. To make it as easy as possible for you to prepare for San Francisco’s November 2022 election, sf.citi will release our usual voter guide with insights and detailed explanations about each of the 14 ballot measures, as well as a candidate questionnaire comparing the supervisor candidates running for office. Stay tuned as we launch both in the coming weeks to help you make well-informed decisions on local races. You can also read up on San Francisco elections in our SF Politics 101 guide to San Francisco government—now free to view for everyone!
Voting is the easiest way to participate in local democracy. Make sure to register to vote (The deadline to register in California is October 24).