Fall Ballot Measures Aim to Build More Affordable Housing That San Francisco Desperately Needs

Staring down a jaw-dropping $17.9 billion price tag to build enough affordable housing units in San Francisco to accommodate population growth by 2031, housing advocates seemingly don’t have many reasons to celebrate.

But on July 2, dozens of community members, organizers, and current and former elected officials cheered delivery of 20,700 signatures to the city Department of Elections. If certified, the signatures will place a measure on the November ballot that would use money from an existing real estate transfer tax to build affordable housing and fund rental assistance.  

“For too long, city leaders have looked to private developers to fulfill this need,” Yolanda Porrata, a member of the steering committee of Small Business Forward, said during a rally to celebrate the measure. 

Voters are taking it upon themselves to get housing built, even when the market doesn’t want to, she said. “Not for luxury development, not for tax breaks, but for homes, for families, for our collective future.”

The measure would dedicate revenue from a tax on property sales worth more than $10 million, with a few exemptions, to affordable housing and eviction prevention. Supporters say this would result in about $100 million set aside every year for these programs. The city needs an estimated $3 billion annually to hit its affordable housing goals, making this a small but significant first step.

The measure’s supporters describe it as one tool in a wide arsenal of possibilities to address the affordability crisis. San Francisco has struggled to build enough units amid a lack of sustained, substantial government funding at all levels and a private market that is unfavorable to development.

Local officials say spending $17.9 billion on housing just isn’t realistic, especially absent state and federal support. But advocates and experts point out that the city can invest in a variety of solutions to spur affordable housing production in the coming years, several of which will be on the ballot this November. They also emphasized that San Francisco needs to commit to long-term, self-sustaining funding mechanisms as part of a broad vision to lower the cost of housing.

“While it’s not the $17 billion we need, it is $100 million per year,” said Reina Tello, a community organizer with PODER SF, a community-based organization focusing on Latino immigrant families. 

Quintin Mecke, executive director of the Council of Community Housing Organizations, said this measure is the bare minimum in a struggle that needs to get much more ambitious and creative to meet the needs of San Francisco residents: “We’re not thinking in a big enough fashion.”

How many affordable units do we need and how much will that cost?

The Mayor’s Office of Housing and Community Development manages about 36,300 affordable units, about 8.6% of the city’s housing stock. That’s according to a June report from the Budget and Legislative Analyst’s Office. Almost half of those households include seniors, 36% have children and 81% are non-white residents.

To keep up with growing housing needs, the state mandates that municipalities adjust zoning regulations to encourage production of housing at various income levels. This is known as the Regional Housing Needs Assessment.

In the current cycle, which spans from 2023 to 2031, San Francisco must prepare for 46,600 units of affordable housing, ranging from extremely low to moderate income. Locally, that is between $24,300 and $194,500 for a family of four. 

San Francisco has for many years failed to meet state affordability goals and is falling behind this cycle, in part due to higher construction costs and other factors that have slowed the production of housing at all income levels.

The June report estimated that the city would need to spend a whopping $17.9 billion to hit its targets. That is $1 billion more than the city’s entire budget for the next two fiscal years. 

Daniel Adams, the director of the Mayor’s Office of Housing and Community Development, said in a June 8 hearing at the San Francisco Board of Supervisors Land Use and Transportation Committee that he would be “very depressed” if he spent his days judging the office’s success by the state affordable housing goals. 

“My focus is really on what we can do with the resources that we have, with the political opportunities that we have, with the partnerships and expertise that we have to increase our production to the maximum degree possible,” he said.

Why San Francisco is lagging in its affordable housing goals

Current economic conditions are making it difficult to develop housing for all income levels. 

“We are facing a growing feasibility gap for both affordable and market-rate housing,” Lisa Chen, deputy director of community planning at the SF Planning Department, said at the hearing.

Most affordable housing projects leverage local, state and federal funds to cover construction and insurance costs. But right now, getting state subsidies is highly competitive and there is uncertainty around federal funding. 

Reduced production by the private housing market also has hampered the development of affordable housing. 

To build a project, market-rate developers must include a certain number of affordable units or pay a fee, known as the inclusionary housing requirement. However, market-rate development has greatly slowed since the start of the COVID-19 pandemic because of high construction, insurance and labor costs. Lower rents and condo prices before 2026 also reduce potential revenues, impacting project viability, the report said.

Some advocates for accelerating housing development, including Mayor Daniel Lurie, call for lowering inclusionary housing and development impact fees to encourage housing development. The Board of Supervisors slashed the inclusionary housing fee in 2023 for that reason.

But the Budget and Legislative Analyst Office also found that reducing fees did not spur housing development. It computed that for a hypothetical project, the change would lead to cost savings of between .44% and 1.83% of development costs. These negligible savings take away funds from affordable housing and, for developers who opted to include affordable units instead of paying the fee, reduced the number of units produced.

On July 2, the Board of Supervisors Government Audit and Oversight Committee advanced legislation that would reduce inclusionary housing requirements even further. But affordable housing advocates and some non-elected officials say that bigger changes are needed to put a dent in the city’s goals and that removing inclusionary requirements and fees could be shortsighted. 

“We’ve seen so many booms here and busts, and the fees have been in place a long time. There’s been a lot of construction before COVID, so I don’t think we should lose sight of that,” said Fred Brousseau, director of policy analysis at the Budget and Legislative Analyst’s Office. “It might be premature to say, ‘We’re not going to have affordable housing requirements anymore.’ I think a flexible approach to it would be sensible.”

What we can do to build affordable housing

Data suggests local housing funding helps produce affordable units. Residents and legislators have repeatedly voted to fund affordable housing, including in 2016, 2019 and 2024. Increased local money added about 400 to 500 affordable housing units per year on average, a Planning Department analysis found. However, these funds are not self-sustaining. 

Experts and advocates said the city needs to commit to a grander vision for reaching affordable housing goals. Brousseau noted that the city needs someone to carry out that commitment in the long term, beyond any elected officials’ term limits.

The Budget and Legislative Analyst’s Office highlighted several actions the city could take to increase affordable housing production, many of which would require upfront city investment but pay for themselves over time.

“This is really a policy choice for the board to say: ‘We’re going to make that kind of commitment and allocate more money, because we can’t make it at the rate we are going at now with the resources we have,’” Brousseau said during the hearing. 

With signature campaigns and supervisorial support, several options have made their way onto the ballot this November. These include dedicating $125 million annually to the Housing Trust Fund (more than double the current allocation), setting aside money from the real estate transfer tax for social housing, and taking steps to create a municipal bank that could issue loans to affordable housing developers. 

But local ballot measures aren’t the only answer. 

Last month Congress passed the largest housing affordability bill the nation has seen in decades. It is set to go into effect July 10 unless President Trump vetoes it. 

Officials also pointed to several state housing measures this November and a regional housing bond slated for the 2028 general election. Local representatives should also advocate for increased state and federal resources, they said. 

“We’ll need those other sources really to advance our pipeline,” Adams said. 

In the meantime, voters, community-based organizations, affordable housing advocates and elected officials are charging ahead.  

The path to build affordable housing is very difficult, former District 5 Supervisor Dean Preston said following the rally, but City Hall and Lurie should not accept defeat or limited progress. With multiple measures that could advance affordable housing on the ballot this November, “if we take an ‘all of the above’ approach, we’re really on a path to hitting these goals,” Preston said.