In the bustling landscape of San Francisco politics, a storm is brewing, centered around a proposed repeal of Proposition I and a broader attempt to reshape the city’s democratic processes. At the heart of this unfolding drama are two prominent figures: Marie Hurabiell, a conservative congressional candidate and founder of ConnectedSF, and Mayor Daniel Lurie, whose vision for San Francisco appears to align with a more developer-friendly, and some would argue, less inclusive, future.
The initial flashpoint is Proposition I, a measure designed to fund affordable housing by increasing taxes on high-end real estate sales. ConnectedSF, a group that supported Mayor Lurie’s election, has now thrown its weight behind the repeal of Prop. I. This isn’t surprising, as Mayor Lurie himself advocates for its removal, arguing that it hinders market-rate housing construction. However, a recent email from ConnectedSF has ignited a debate over factual accuracy, as it claims Prop. I’s increased transfer tax is stalling thousands of approved housing projects.
This claim, however, is being vehemently challenged. Critics argue that while many housing projects are indeed stalled, the culprit isn’t Prop. I’s transfer tax. Instead, they point to broader economic forces: high interest rates making financing difficult, and rents not being high enough to make new developments profitable. Developers themselves have openly stated that they need a significant increase in rents to make new projects economically viable. The current global economic climate, with inflation, higher fuel prices, and increased construction costs, further complicates the picture, making housing development across the board more expensive, regardless of a specific local tax.
Furthermore, the very nature of the transfer tax is being highlighted as a misdirection. Typically, the seller, not the buyer, pays this tax. In many of the stalled projects, developers already own the property, having incurred those taxes years ago. The argument that Prop. I is deterring investment by making San Francisco less appealing for businesses, particularly for housing development, is thus deemed misleading. The significant revenue generated by Prop. I has largely come from downtown office building sales, not housing, suggesting its impact on housing development is being exaggerated. Critics contend that repealing Prop. I is not about boosting affordable housing or even market-rate housing, but rather a substantial tax break for wealthy real estate interests, effectively a “giveaway to big real estate and very rich people.”
Beyond the specific issue of Prop. I, Mayor Lurie and his allies are also pushing for changes to San Francisco’s local ballot initiative process. The mayor seeks to eliminate the current system, which allows four supervisors to sponsor an initiative, and proposes raising the threshold for community-based signatures required to get a measure on the ballot. His office frames the current system as one that leads to “lengthy, confusing ballots that often result in unintended consequences.”
However, this proposed change is meeting strong resistance from those who believe it would weaken direct democracy and disproportionately impact less wealthy residents. Randy Shaw, director of the Tenderloin Housing Clinic, an ally often in disagreement with the author, argues that the current system of gathering signatures has historically empowered non-wealthy residents, providing a crucial mechanism for them to shape city policy. He cites numerous successful ballot measures achieved through citizen initiative that have benefited tenants by saving them billions, limiting evictions, expanding rent control, and even establishing the nation’s first local minimum wage. Shaw emphasizes that many of these vital progressive measures would likely not have materialized under the more restrictive rules Mayor Lurie proposes. The fear is that these changes would make it significantly harder for ordinary citizens and grassroots organizations to bring important issues to a public vote, thereby consolidating power in the hands of established political and economic interests.