Shall the City tax owners of vacant residential units in buildings with three or more units, if those owners have kept those units vacant for more than 182 days in a calendar year, at a rate between $2,500–5,000 per vacant unit in 2024 and up to $20,000 in later years with adjustments for inflation, to generate estimated annual revenue of $20–37 million, with the tax continuing until December 31, 2053, and use those funds for rent subsidies and affordable housing?
Digest by the Ballot Simplification Committee
The Way It Is Now: The City does not tax owners of apartments, condominiums or other residential properties for keeping these properties vacant.
The Proposal: Starting on January 1, 2024, Proposition M would tax owners of vacant residential units in buildings with three or more units if those owners have kept those units vacant for more than 182 days in a calendar year and where no exemption applies. The tax would not apply to units intended for travelers, vacationers and other short-term occupants or units in a nursing home or residential care facility. This tax would also not apply to units owned by nonprofit organizations or government agencies. This proposed tax would expire on December 31, 2053.
Proposition M provides exemptions for a primary residence where the owner has a homeowner property tax exemption and a property with an existing residential lease. Proposition M also allows additional time to fill vacant units before the tax applies in some circumstances, including repair of an existing unit, new construction, a natural disaster or death of the owner.
Under Proposition M, in 2024, the tax would range from $2,500 to $5,000 per vacant unit, depending on the unit’s size. In later years, the tax would increase to a maximum of $20,000 if the same owner kept that unit vacant for consecutive years. The tax would also be adjusted for inflation.
The City would deposit these tax revenues into a Housing Activation Fund that would primarily fund two programs. One program would provide rent subsidies for people age 60 or older and for low-income households. The other program would fund acquiring and rehabilitating unoccupied buildings for affordable housing, and later operating those buildings. The City could also use these tax revenues to repay bonds the City may issue for projects funded under either program.
A "YES" Vote Means: If you vote "yes," you want to tax owners of vacant residential units in buildings with three or more units, if those owners have kept those units vacant for more than 182 days in a calendar year, and use those tax funds for rent subsidies and affordable housing.
A "NO" Vote Means: If you vote "no," you do not want to make these changes.
Controller's Statement on "M"
City Controller Ben Rosenfield has issued the following statement on the fiscal impact of Proposition M:
Should the proposed ordinance be approved by the voters, in my opinion, it could result in additional revenue to the City exceeding $20 million annually.
If the number of residential vacancies were similar to average vacancies from 2011 to 2020, and if this measure did not induce property owners to fill vacant residential units more quickly than they did during this period, we estimate it would result in an annual revenue increase to the City of $20 million in tax year 2024, $30 million in tax year 2025, and $37 million in tax year 2026. However, if the tax achieves its stated purpose of reducing the number of residential vacancies, it will result in lower revenue. The proposed tax is a dedicated tax and proceeds would be deposited into the Housing Activation Fund.
The proposed ordinance would amend the City’s Business and Tax Regulations Code and Administrative code to impose an excise tax on owners of vacant residential units in buildings with three or more units if those owners have kept those units vacant for more than 182 days in a tax year. Starting in 2024, the tax would be $2,500 to $5,000, depending on the size of the unit. In 2025, the tax would increase to $2,500 to $10,000, depending on the size of the unit and whether the owner kept the property vacant in the prior year. In 2026, the tax rate would increase to a maximum of $20,000 if the owner kept that same unit vacant for three consecutive years. The tax rate would be adjusted annually in accordance with the increase in the Consumer Price Index and would expire on December 31, 2053.
The proposed ordinance would establish the Housing Activation Fund. The Fund would provide rental subsidies and fund the acquisition, rehabilitation, and operation of multi-unit buildings for affordable housing.
How "M" Got on the Ballot
On July 14, 2022, the Department of Elections certified that the initiative petition calling for Proposition M to be placed on the ballot had a sufficient number of valid signatures to qualify the measure for the ballot.
8,979 signatures were required to place an initiative ordinance on the ballot. This number is equal to 5% of the total number of people who voted for Mayor in 2019. A random check of the signatures submitted by the proponents of the initiative petition prior to the July 11, 2022, submission deadline showed that the total number of valid signatures was greater than the number required.
This measure requires 50%+1 affirmative votes to pass.
Proponent’s Argument in Favor of Proposition MProp M will help fix San Francisco's Hidden Housing Crisis: 40,000 Vacant Homes
According to a pre-pandemic report by the city’s Budget and Legislative Analyst, based on US Census data and other sources, 40,000 units sit vacant in San Francisco. Let that sink in.
From the highrises downtown, to the new construction in SOMA, and the controversial towers in the Mission, 40,000 homes remain empty while our housing and homelessness crisis rages on.
The fact is, if we reduce vacancies we will have more housing. Other cities that have implemented a vacancy tax, such as Vancouver, Canada, have seen up to 10% of their vacant units become occupied after their vacancy tax became operational.
Here’s how it works:
• In buildings of 3 units or more, any units that remain vacant more than 6 months will be taxed.
• The tax will increase the longer a unit stays vacant.
• Revenue collected will be dedicated to an affordable housing fund and rental subsidies for low-income families and seniors.
• Single family homes and duplexes are exempt, as are units vacant due to repairs, new construction, disaster or death of the owner.
Prop M isn’t about taxing those who call San Francisco home. It’s about tackling the large, corporate landlords keeping units vacant, and those wealthy individuals who purchase units but don’t use them.
In the first year alone, it is expected that 4,500 new units will return on the market — more than our annual goals — with no increase in taxes, no construction time, no multi-million dollar price tag, and no waiting.
Please join us in supporting Prop M and fix our hidden housing vacancy crisis.
San Francisco Democratic Party
Council of Community Housing Organizations
United Educators of San Francisco
Faith in Action - Bay Area
Senior and Disability Action
Affordable Housing Alliance
Community Tenants Association
fillemptyhomes.com
Rebuttal to Proponent’s Argument in Favor of Proposition MProponents of Prop M will tell you that there are 40,000 vacant homes in San Francisco.
What they won’t tell you is that their residential vacancy tax is a feeble and ineffectual policy that won’t meaningfully address our housing crisis or bring many more homes to the market citywide.
They also won’t tell you that about 10,000 of those “vacant homes” they claim are already on the market and available for rent, or a tenant has rented the home and is in the process of moving in.
An additional 9,300 are in the process of being sold, or have been sold and a new owner is in the process of moving in.
These homes would not be subject to the residential vacancy tax—because they’re not truly vacant.
Many of the remaining units in the proponents’ trumped-up 40,000 figure aren’t even subject to the tax either.
The proponents of this new punitive taxation scheme have purposefully exempted wealthy single-family homeowners with truly unoccupied pied-a-terres in a cynical move to win votes and deceive voters.
So why misrepresent the total number of vacancies citywide? Why write a tax measure that picks and chooses which types of homes it taxes?
Our leadership has failed to address the housing crisis and refuses to allow new housing to be built, continuously voting down projects which would create hundreds of affordable housing units.
Voters should reject the vacancy tax and demand real solutions which truly address our housing crisis.
Vote No on M.
San Francisco Apartment Association
Opponent's Argument Against Proposition M
Prop M is a feeble, misguided attempt at housing policy from the Board of Supervisors who refuses to take our housing crisis seriously. This anti-housing Board is creating a problem that doesn’t exist in order to raise more taxes on San Franciscans.
Proposition M:
• Uses trumped-up, overstated statistics that manipulate the perceived number of vacancies citywide
• Targets small property owners and intergenerational households, not corporate landlords
• Was sponsored by the Democratic Socialists of America and Supervisor Dean Preston, who has blocked the construction of thousands of homes, many of them affordable. His measure is cynically written to exempt some homeowners like himself, while punishing small mom-and-pop property owners and intergenerational households
• Encourages neighbors to report each other’s whereabouts to the government
• Is representative of the City’s attempt to raise more taxes without increasing city services.
Prop M purports to target large property owners “intentionally” leaving units unrented. But any condo owner in a building with 3+ units will be subject to punitive fines should your home have to be unoccupied for 183+ days a year for any reason — if you are hospitalized, traveling for work, staying with your partner, or caring for family members — you will be fined.
The measure is even written so that intergenerational households and relatives living under one roof would be fined in a building that isn’t vacant at all.
Moreover, Prop M is a Trojan Horse, pretending to do one thing and allowing the Board of Supervisors to expand aspects of the law WITHOUT approval by the voters. The proponents have already stated that they plan to extend this measure to duplexes and single-family homes if the law is passed; this measure isn’t about going after corporate landlords.
Enough with the Board of Supervisors’ power-grab and schemes to penalize everyday San Franciscans.
Vote No on Prop M if you want to maintain control of your own home.
San Francisco Apartment Association
Rebuttal to Opponent’s Argument Against Proposition M
Opponents say there's no vacancy problem in San Francisco. Yet they claim that Prop M raises taxes. They can't have it both ways: No vacancies means there will be no taxes. So what are they trying to hide?
The City's Budget and Legislative Analyst conducted an extensive report based on US Census data documenting that there are 40,000 vacant residential units. Opponents offer no research to back up their assertions.
Vancouver's similar measure resulted in a 10% reduction in vacant homes. In San Francisco, that means 4,500 new homes, almost immediately — with no construction costs, or permit delays.
Vacant units are overwhelmingly found in large buildings owned by corporate landlords. They are holding units vacant, waiting to flip them for profit years down the road. It isn't surprising they want to keep the status quo that allows them to do this with no consequence.
We hope no one pays this tax. We want every vacant unit filled with people who need homes. Prop M is a carefully drafted citizens initiative, ensuring units which are being repaired, rehabilitated, or where the owner is in care or has died, are exempted. In an effort to scare voters, the landlord opposition statement ignores these and other exemptions that prevent the tax from applying to any reasonable vacancy.
Prop M is our best weapon against San Francisco's hidden housing crisis: prolonged vacancies. It targets the large corporate landlords hoarding units as investments, not mom and pop owners. Join us, support Prop M.
San Francisco Democratic Party
Council of Community Housing Organizations
United Educators of San Francisco
Faith in Action Bay Area
Senior and Disability Action
Affordable Housing Alliance
Community Tenants Association
Paid Arguments in Favor of Proposition MPaid Argument IN FAVOR of Proposition M
San Francisco Democratic leaders support Yes on M so we can maximize our existing housing stock.
We all know that we need more housing in San Francisco. The rents keep on rising and it’s causing massive displacement. While we need to build, we also have to be responsible with the housing stock we already have. We need the estimated 4,500 homes Prop M will provide. Vote Yes on Prop M so we don't waste any more valuable housing.
Vice Chair of California Democratic Party David Campos
Chair of the San Francisco Democratic Party Honey Mahogany
Treasurer for the San Francisco Democratic Party Carolina Morales
Vice-Chair for the San Francisco Democratic Party Peter Gallotta
Corresponding Secretary for the San Francisco Democratic Party Anabel Ibáñez
Recording Secretary for the San Francisco Democratic Party Janice Li
Vice Chair for the San Francisco Democratic Party Li Miao Lovett
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Small property owners Agree: Prop M benefits us all!
Many homeowners have responded to the housing crisis by creating in-law units. We are not the same as the large corporate landlords who contribute to housing vacancy. In fact, vacancies in San Francisco are concentrated in the neighborhoods with the most new construction and large multi-unit buildings, such as the Downtown/Financial District, Mission Bay, Mission, and South of Market. Because of this, our single family homes and small properties are exempt for this tax. Prop M is a fair tax aimed to reign in the largest companies. Single family homes and duplexes are exempt. Vote Yes on Prop M.
Carolyn Ji Jong Goossen
Christin Evans
Jason Prado
Jeff May
Buck Bagot
Jennifer Kroot
Marcus Chan
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Asian-American and Pacific Islander leaders say vote Yes on Prop M
San Francisco needs more affordable housing immediately. We have 40,000 vacant homes, and it is driving up the cost to rent and buy in San Francisco. By taxing vacant homes in buildings with 3 or more units, we can deliver more affordable housing and lower the cost of housing, without cost to mom-and-pop landlords, taxpayers, nonprofits and builders.
District 1 Supervisor Connie Chan
District 4 Supervisor Gordon Mar
Community Tenants Association
Bart Board of Directors Janice Li
Member of the Community College Board of Trustees Alan Wong
Rudy Corpuz Jr.
San Francisco Public Defender Mano Raju
Vice-Chair of San Francisco Democratic Party Li Miao Lovett
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Latino Leaders Agree - Let's create new opportunities for our people to live with dignity and stay home in S.F. Vote Yes on Prop M
Many Latino families live in multigeneration homes, as a result, the average Latino household is 30% more crowded than the citywide average, according to the US Census Bureau. It is unfair to hard-working families that 40,000 homes sit vacant. This measure will bring 4,500 units back on to the market, increasing the housing supply in our city. Plus, the millions in rental subsidies Prop M will provide for low-income families and seniors will help folks stay in their homes and not be displaced. Vote Yes on Prop M so we can provide more housing for families.
Latinx Democratic Club
Faith In Action Bay Area
Calle 24
La Raza Community Resource Center
Former District 11 Supervisor John Avalos
Vice-Chair of California Democratic Party David Campos
Corresponding Secretary for the San Francisco Democratic Party Anabel Ibáñez
Treasurer for the San Francisco Democratic Party Carolina Morales
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Black Leaders Agree, Vote Yes on M. Stop the loss of our Black population.
Since 1970, San Francisco has lost over half of its Black population and this trend shows no sign of stopping unless we take action. The best way to keep San Francisco diverse and hold on to our Black community is by providing more affordable housing. Fixing this problem won't be solved by Prop M alone, but the measure will activate 4,500 empty homes for people to live in while providing millions for affordable housing and rental subsidies. Vote Yes on Prop M.
President of the Board of Supevisors Shamann Walton
Former District 10 Supervisor Sophie Maxwell
Chair of the San Francisco Democratic Party Honey Mahogany
Member of the San Francisco Democratic Party Gloria Berry
Former CCSF Student Trustee William Walker
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Stand with Women Leaders and Vote Yes on M!
Forced evictions and housing insecurity disproportionately impacts women and reinforces existing gender inequalities. According to a recent report, 25% of California women are "severely rent burdened," spending more than half their income on housing costs, compared with 20% of men. As a result, women are also at a greater risk of facing homelessness. Prop M will increase the city's housing supply and raise millions of dollars to fund affordable housing and rental subsidies for seniors and low-income families. Adequate housing is a central component of women's right to equality, Vote Yes on M.
San Francisco Women's Political Committee
District 1 Supervisor Connie Chan
District 9 Supervisor Hillary Ronen
Chair of the San Francisco Democratic Party Honey Mahogany
Vice-Chair of the San Francisco Democratic Party Li Miao Lovett
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Help prevent LGBTQ homelessness. Vote Yes on Prop M.
LGBTQ residents are at higher risk of displacement and homelessness than the general population. Recent statistics indicate that 27% of the homeless population in San Francisco are LGBTQ. Among homeless youths, 50% are LGBTQ. We need to fix this problem now by activating the estimated 4,500 homes Prop M will provide, which will help lower the cost to rent and buy in San Francisco. Help us alleviate LGBQT homelessness by voting Yes on Prop M.
Harvey Milk LGBTQ Democratic Club
District 8 Supervisor Rafael Mandelman
Former Assemblymember Tom Ammiano
Former State Senator Mark Leno
BART Board of Directors Bevan Dufty
Vice-Chair of California Democratic Party David Campos
Chair of the San Francisco Democratic Party Honey Mahogany
Vice-Chair for the San Francisco Democratic Party Peter Gallotta
Treasurer for the San Francisco Democratic Party Carolina Morales
Jackie Fielder, Community Organizer
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Non-Profit Housing Providers Support Prop M because a vacancy tax worked in Vancouver and it will work in San Francisco.
San Francisco should follow the lead of Vancouver, British Columbia, which was one of the first cities in North America to implement a vacancy tax. The vacancy tax passed in 2018 has been a resounding success, with the total number of vacant units decreasing from 4.3% to 3.1 % while also adding $23 million Canadian per year in net revenue. In addition, Vancouver now has 1,896 more units being occupied than before the tax.
Plus, we need the millions that Prop M will provide for the acquisition of affordable housing and rental subsidies. These funds will help keep working-class San Franciscans from being displaced. Vote Yes on Prop M so we can achieve similar results in San Francisco.
Council of Community Housing Organizations
TODCO Group Vice President John Elberling
PODER
Affordable Housing Alliance
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Protect our tenants. Vote Yes on Prop M.
With the pandemic moratorium over, evictions are rising fast. According to data from the SF Rent Board, evictions rose 43% during the last calendar year and show no signs of abating. Prop. M will make more homes available, and it will also raise millions of dollars to fund desperately needed affordable housing and rental subsidies for seniors and low-income families.
Plus, the rental subsidies will keep San Franciscans from being evicted. Vote Yes on Prop M.
San Francisco Tenants Union
Affordable Housing Alliance
Community Tenants Association
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Join unions and vote Yes on Prop M to help protect our working-class.
The never-ending rise of housing costs is hurting our union membership. lf we don't do something about the 40,000 empty homes that are driving up the cost of living in San Francisco, it will be increasingly difficult for the working-class to stay here. We need to add 80,000 homes over the next decade and we need Prop M to help meet that goal by activating unused homes.
Union workers are the folks that make this great city run and we need them to be able to live here. Prop. M will activate an estimated 4,500 homes in its first two years. Vote Yes on Prop M.
United Educators of San Francisco
San Francisco Labor Council
Service Employees International Union 1021
ILWU NCDC
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
Paid Argument IN FAVOR of Proposition M
Vote Yes on Prop M so we can help solve homelessness.
San Francisco has over 40,000 empty homes while over 8,000 folks sleep on the streets every night. The hoarding of vacant units, many of them in rent controlled buildings, is making this issue worse. If we ever want to stop this crisis, we need to do everything in our power to fill these homes, including the taxation of empty units. Vote Yes on Prop M so we can address this serious problem.
Coalition on Homelessness
The true source(s) of funds for the printing fee of this argument: Activate Housing.
The three largest contributors to the true source recipient committee: 1. Tenant and Owner Development Corporation and its affiliated entity Yerba Buena Neighborhood Consortium LLC, 2. Dean Preston, 3. Jeff May.
End of Paid Arguments IN FAVOR of Proposition M
Paid Arguments Against Proposition MPaid Argument AGAINST Proposition M
PLEASE VOTE NO ON EMPTY HOMES TAX! This new tax was created by elected officials who also voted against the creation of hundreds of new homes proposed for various vacant lots throughout the city!
Supervisor Preston has proclaimed that there are "40,000 vacant homes" in San Francisco. Less than 10% of that number are actually purposely held off the market by owners who may want to use them in the future for their retirement and who hope to avoid the expensive legal battles associated with reclaiming one's own property form a sitting tenant.
The measure has over-reaching "gotcha's" not mentioned in Preston's lofty speeches. For example, perfectly legitimate renters who happen to be family members of current owners or past owners are not considered as real tenants; units occupied by these renters would be subject to the tax. This tax could be altered in the future by a 2/3 majority of the Board of Supervisors, which means that we really don't know what we're voting for.
This is an early step of Preston and his fellow travelers to create "Social Housing," meaning that instead of private ownership, residential property is owned by Government or by non-profits - Public Housing. The Empty Homes Tax violates state law by telling owners they must rent to certain people and may not withdraw their private property from the rental market, even with legitimate reasons. PLEASE VOTE NO!
Small Property Owners of San Francisco Institute
The true source(s) of funds for the printing fee of this argument: Small Property Owners of San Francisco Institute.
Paid Argument AGAINST Proposition M
Vote NO on Prop M.
Democratic Socialist Supervisor Dean Preston wants to give unprecedented control of your home to the Board of Supervisors, through a "vacancy tax" that infringes on privacy, punishes people for basic life circumstances and choices (e.g.: chronic illness, staying with a partner), and surreptitiously eliminates key voter rights.
Prop M will do nothing to increase available housing, and it will not generate fines to support affordable homes. What Prop M WILL do is hurt small property owners, multi-generational households, and renters.
If Prop M passed, use of your home could be tracked with utility bills and neighbors spying and reporting you. Prop M is a politician-backed power-grab that will allow the Board of Supervisors to expand the law without a vote of the people. If Prop M passes, the same politicians who supported it will make it even more far-reaching, including single-family homes and duplexes (which are currently excluded from Prop M).
Proponents of Prop M are peddling false information:
LIE: there are 40K vacant units in the city.
TRUTH: That's a 500% exaggeration, it's 8,000.
LIE: 4,500 units would come on the market in the first year.
TRUTH: 4,500 is a completely fabricated number. And 6,400 units are already available.
LIE: Prop M will raise $45M for housing
TRUTH: Fabricated number and irrelevant as San Franciscans have already allocated an untapped $1B for affordable housing.
We have funds and resources to ensure San Franciscans have housing, but the Board of Supervisors consistently blocks housing projects. The problem is political will. Prop M won't fix that.
Prop M is Misleading, based on Misinformation and sneaks in a Material loss of voter rights. It is a Board of Supervisors power-grab against everyday San Franciscans.
Vote NO on Prop M.
Marie Hurabiell, SOAR-D1.com
Paulina Fayer, Activ8SF
Brian Quan, President, Chinese American Democratic Club
Garrett Tom
The true source(s) of funds for the printing fee of this argument: San Francisco Association of Realtors.
Paid Argument AGAINST Proposition M
M STANDS FOR MISGUIDED – VOTE NO!
It’s a red herring. Just another city bureaucratic expense.
Attorneys —including our City Attorney—will be in court forever arguing over legalities and constitutionality of this measure should it pass.
What’s “vacant” and what’s a second home?
Is a remodel a “vacancy”?
What if the remodel takes more than a year? And on and on.
This is the same City government that hasn’t been able to put a dent in the homeless situation plaguing our streets for the past 30 years and now City Hall has another false panacea to throw at us in Prop M.
The City’s solution to social problems is “throw more money at it”.
The trouble is it is YOUR money!
Vote NO ON M!
San Francisco Taxpayers Association
The true source(s) of funds for the printing fee of this argument: San Francisco Taxpayers Association.
The three largest contributors to the true source recipient committee: 1. Paul Scott, 2. Diane Wilsey, 3. S.F. Board of Realtors.
Legal TextOrdinance amending the Business and Tax Regulations Code and Administrative Code to impose an excise tax on owners keeping certain residential units vacant, to fund rental subsidies and the acquisition, rehabilitation, and operation of affordable housing; increasing the City’s appropriations limit by the amount collected under the tax for four years from November 8, 2022; and affirming the Planning Department’s determination under the California Environmental Quality Act.
NOTE: Unchanged Code text and uncodified text are in plain font.
Additions to Codes are in single-underline italics Times New Roman font.
Deletions to Codes are in strikethrough italics Times New Roman font.
Asterisks (* * * *) indicate the omission of unchanged Code subsections or parts of tables.
Be it ordained by the People of the City and County of San Francisco:
Section 1. Pursuant to Articles XIII A and XIII C of the Constitution of the State of California, this ordinance shall be submitted to the qualified electors of the City and County of San Francisco at the November 8, 2022, consolidated general election.
Section 2. The Business and Tax Regulations Code is hereby amended by adding Article 29A, consisting of Sections 2950 through 2963, to read as follows:
ARTICLE 29A: EMPTY HOMES TAX ORDINANCE
SEC. 2950. SHORT TITLE.
This Article 29A shall be known as the “Empty Homes Tax Ordinance,” and the tax it imposes shall be known as the “Empty Homes Tax.”
SEC. 2951. FINDINGS AND PURPOSE.
(a) Residential vacancies are an ongoing concern in San Francisco. According to census data, there were tens of thousands of vacant residential units in San Francisco as of 2019. A report published in January 2022 by the Budget and Legislative Analyst found that the total number of vacant units in San Francisco increased by about 20% between 2015 and 2019, to 40,500 units in 2019.
(b) According to the Budget and Legislative Analyst report, vacant units in 2019 were concentrated in the South of Market area, downtown, and in the Mission District; generally the same areas where new, large-scale housing construction has been concentrated. Such units are disproportionately in multiunit buildings.
(c) The Empty Homes Tax is limited to buildings with more than two residential units because such buildings are more likely to include one or more units held vacant by choice and are more likely to include multiple vacancies.
(d) Prolonged vacancy restricts the supply of available housing units and runs counter to the City’s housing objectives. Prolonged vacancies can also decrease economic activity in neighborhoods and lead to blight.
(e) The Empty Homes Tax is intended to disincentivize prolonged vacancies, thereby increasing the number of housing units available for occupancy, while also raising funds for rent subsidies and affordable housing.
SEC. 2952. DEFINITIONS.
Unless otherwise defined in this Article 29A, the terms used in this Article shall have the meanings given to them in Article 6 of the Business and Tax Regulations Code, as amended from time to time. For purposes of this Article, the following definitions shall apply:
“Affiliate” means a person under common majority ownership or common control, whether that ownership or control is direct or indirect, with any other person, including but not limited to a person that majority owns or controls, or is majority owned or controlled by, any other person.
“Building Permit Application Period” means the period following the date that an application for a building permit for repair, rehabilitation, or construction with respect to a Residential Unit is filed with the City through the date the Department of Building Inspection or its successor agency grants or denies that application, not to exceed one year. Notwithstanding the preceding sentence, if more than one building permit application is filed by or on behalf of one or more persons in the Owner’s Group for the same Residential Unit, the Building Permit Application Period shall mean only the applicable period following the date the first application is filed with the City by or on behalf of anyone in the Owner’s Group.
“Construction Period” means the one-year period following the date that the City issues a building permit for repair, rehabilitation, or construction with respect to a Residential Unit, provided that if the City issues multiple building permits to or for the benefit of one or more persons in the Owner’s Group for the same Residential Unit, the Construction Period shall mean only the one-year period following the issuance of the first building permit to or for the benefit of anyone in the Owner’s Group.
“Disaster Period” means the two-year period following the date that a Residential Unit was severely damaged and made uninhabitable or unusable due to fire, natural disaster, or other catastrophic event.
“Homeowners’ Exemption Period” means the period during which a Residential Unit is the principal place of residence of any owner of that Residential Unit and for which such owner validly has claimed either the homeowners’ property tax exemption under Section 218 of the California Revenue and Taxation Code or the disabled veterans’ exemption under Section 205.5 of that Code, as those sections may be amended from time to time.
“Lease Period” means the period during which any owner of a Residential Unit or any person in the Owner’s Group of that owner leases that Residential Unit to one or more tenants under a bona fide lease intended for occupancy, but not including any lease or rental of that Residential Unit to anyone in the Owner’s Group or to travelers, vacationers, or other transient occupants.
“New Construction Period” means the one-year period following the date that the City issues a certificate of final completion and occupancy with respect to a Residential Unit in a newly erected building or a newly added Residential Unit in an existing building.
“Owner Death Period” means, with respect to a co-owner or decedent’s estate, heirs, or beneficiaries, the period during which a Residential Unit is unoccupied, uninhabited, or unused because of the death of any owner of a Residential Unit who was the sole occupant of that Residential Unit immediately prior to such owner’s death, provided that such period shall not exceed the longer of one year or the period during which the Residential Unit is subject to the authority of a probate court.
“Owner In Care Period” means the period during which a Residential Unit is unoccupied, uninhabited, or unused because all occupants of the Residential Unit who used that Residential Unit as their principal residence are residing in a hospital, long term or supportive care facility, medical care or treatment facility, or other similar facility.
“Owner’s Group” means for each owner of a Residential Unit, with respect to each Residential Unit, the owner, any current or former co-owner, and any Related Person or Affiliate of the owner or any current or former co-owner.
“Related Person” means a spouse, domestic partner, child, parent, or sibling.
“Residential Unit” means a house, an apartment, a mobile home, a group of rooms, or a single room that is designed as separate living quarters, other than units occupied or intended for occupancy primarily by travelers, vacationers, or other transient occupants. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have a kitchen and direct access from the outside of the building or through a common hall. For purposes of this Article 29A, a Residential Unit shall not include a unit in a currently operational nursing home, residential care facility, or other similar facility, or any unit that is fully exempt from property tax under the welfare exemption under Section 214(g) of the California Revenue and Taxation Code, as may be amended from time to time.
“Vacancy Exclusion Period” means the Building Permit Application Period, Construction Period, Disaster Period, Homeowners’ Exemption Period, Lease Period, New Construction Period, Owner Death Period, or Owner In Care Period.
“Vacant” means unoccupied, uninhabited, or unused, for more than 182 days, whether consecutive or nonconsecutive, in a tax year.
SEC. 2953. IMPOSITION OF TAX.
(a) Except as otherwise provided in this Article 29A, for the purposes described in Section 2958, the City imposes an annual Empty Homes Tax on each person that owns a Residential Unit for keeping that Residential Unit Vacant.
(b) The tax on an owner keeping a Residential Unit Vacant for the 2024 tax year shall be as follows:
(1) $2,500 for each Residential Unit with square footage less than 1,000;
(2) $3,500 for each Residential Unit with square footage from 1,000 to 2,000; and
(3) $5,000 for each Residential Unit with square footage greater than 2,000.
(c) The tax on an owner keeping a Residential Unit Vacant for the 2025 tax year, if that owner has not kept that Residential Unit Vacant in the 2024 tax year, shall be as follows:
(1) $2,500 for each Residential Unit with square footage less than 1,000;
(2) $3,500 for each Residential Unit with square footage from 1,000 to 2,000; and
(3) $5,000 for each Residential Unit with square footage greater than 2,000.
(d) The tax on an owner keeping a Residential Unit Vacant for the 2025 tax year, if that owner has kept that Residential Unit Vacant in the 2024 tax year, shall be as follows:
(1) $5,000 for each Residential Unit with square footage less than 1,000;
(2) $7,000 for each Residential Unit with square footage from 1,000 to 2,000; and
(3) $10,000 for each Residential Unit with square footage greater than 2,000.
(e) The tax on an owner keeping a Residential Unit Vacant for the 2026 tax year and subsequent tax years, if that owner has not kept that Residential Unit Vacant in the immediately preceding tax year, shall be as follows:
(1) $2,500 for each Residential Unit with square footage less than 1,000;
(2) $3,500 for each Residential Unit with square footage from 1,000 to 2,000; and
(3) $5,000 for each Residential Unit with square footage greater than 2,000.
(f) The tax on an owner keeping a Residential Unit Vacant for the 2026 tax year and subsequent tax years, if that owner has kept that Residential Unit Vacant in the immediately preceding tax year but has not kept that Residential Unit Vacant in the tax year immediately preceding that tax year, shall be as follows:
(1) $5,000 for each Residential Unit with square footage less than 1,000;
(2) $7,000 for each Residential Unit with square footage from 1,000 to 2,000; and
(3) $10,000 for each Residential Unit with square footage greater than 2,000.
(g) The tax on an owner keeping a Residential Unit Vacant for the 2026 tax year and subsequent tax years, if that owner has kept that Residential Unit Vacant in the immediately preceding tax year and has kept that Residential Unit Vacant in the tax year immediately preceding that tax year, shall be as follows:
(1) $10,000 for each Residential Unit with square footage less than 1,000;
(2) $14,000 for each Residential Unit with square footage from 1,000 to 2,000; and
(3) $20,000 for each Residential Unit with square footage greater than 2,000.
(h) The rates set forth in subsections (c), (d), (e), (f), and (g) of this Section 2953 shall be adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/San Jose Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31st of the preceding year, beginning with the 2025 tax year.
(i) The Empty Homes Tax shall be payable by the owner or owners of the Residential Unit kept Vacant. Not more than one tax per Residential Unit shall be imposed under this Section 2953 for a tax year by reason of multiple liable owners. If there are multiple liable owners, each owner shall be jointly and severally liable for the tax, which shall be the highest amount of tax payable by any owner for that Residential Unit for that tax year.
(j) A person shall be liable for the Empty Homes Tax only if that person, while owning a Residential Unit, has kept or is deemed to have kept that Residential Unit unoccupied, uninhabited, or unused, for more than 182 days, whether consecutive or nonconsecutive, in a tax year. In determining whether an owner has kept a Residential Unit Vacant during a tax year, days within any Vacancy Exclusion Period shall be disregarded if that Vacancy Exclusion Period applies to that owner for that Residential Unit, as shall days in which the Residential Unit was not owned by the owner, but the owner shall be deemed to have kept the Residential Unit unoccupied, uninhabited, or unused on all other days that such Residential Unit is unoccupied, uninhabited, or unused during the tax year.
(k) The Empty Homes Tax shall take effect on January 1, 2024. The Empty Homes Tax shall expire on December 31, 2053.
SEC. 2954. RETURNS; PRESUMPTION OF VACANCY.
(a) Each person that is required to pay the Empty Homes Tax shall file a return in the form and manner prescribed by the Tax Collector.
(b) Each person that owns a Residential Unit at any time during a tax year and that is not exempt from the Empty Homes Tax with respect to that Residential Unit under any one of subsections (a) through (d) of Section 2955 shall file a return for that tax year in the form and manner prescribed by the Tax Collector. A person that fails to file the return required by this subsection (b) for a Residential Unit shall be presumed to have kept that Residential Unit Vacant for the tax year for which such return is required. The person who fails to file the required return may rebut the presumption by producing satisfactory evidence that such person did not keep the Residential Unit Vacant during the tax year for which the return is required.
SEC. 2955. EXEMPTIONS AND EXCLUSIONS.
(a) For only so long as and to the extent that the City is prohibited from imposing the Empty Homes Tax, any person upon whom the City is prohibited under the Constitution or laws of the State of California or the Constitution or laws of the United States from imposing the Empty Homes Tax shall be exempt from the Empty Homes Tax.
(b) Any organization that is exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, shall be exempt from the Empty Homes Tax.
(c) The City, the State of California, and any county, municipal corporation, district, or other political subdivision of the State shall be exempt from the Empty Homes Tax, except where any constitutional or statutory immunity from taxation is waived or is not applicable.
(d) A person that owns any Residential Unit located in a building with two or fewer Residential Units shall be exempt from the Empty Homes Tax with respect to any Residential Unit located in that building.
(e) For purposes of this Article 29A, the Empty Homes Tax shall not apply with respect to a Residential Unit for any tax year for which any person is liable for the Vacancy Tax imposed under Article 29 of the Business and Tax Regulations Code with respect to that Residential Unit.
SEC. 2956. ADMINISTRATION; PENALTIES.
(a) Except as otherwise provided under this Article 29A, the Empty Homes Tax shall be administered pursuant to Article 6 of the Business and Tax Regulations Code.
(b) Transactions with the principal purpose of avoiding or evading all or a portion of the Empty Homes Tax shall be disregarded for purposes of determining the amount of the Empty Homes Tax and whether the Empty Homes Tax is due. In addition to the Empty Homes Tax due as a result of this subsection (b), any owner liable for any Empty Homes Tax as a result of this subsection (b) shall be liable for a penalty in an amount equal to the Empty Homes Tax due as a result of this subsection (b).
SEC. 2957. DEPOSIT OF PROCEEDS.
(a) All monies collected under the Empty Homes Tax Ordinance shall be deposited to the credit of the Housing Activation Fund (“Fund”) established in Administrative Code Section 10.100-76. The Fund shall be maintained separate and apart from all other City funds and shall be subject to appropriation. Any balance remaining in the Fund at the close of any fiscal year shall be deemed to have been provided for a special purpose within the meaning of Charter Section 9.113(a) and shall be carried forward and accumulated in the Fund for the purposes described in Section 2958.
(b) Commencing with a report filed no later than February 15, 2026, covering the fiscal year ending on June 30, 2025, the Controller shall file annually with the Board of Supervisors, by February 15 of each year, a report containing the amount of monies collected in and expended from the Fund during the prior fiscal year, the status of any project required or authorized to be funded by Section 2958, and such other information as the Controller, in the Controller’s sole discretion, shall deem relevant to the operation of this Article 29A.
SEC. 2958. EXPENDITURE OF PROCEEDS.
Subject to the budgetary and fiscal provisions of the Charter, monies in the Housing Activation Fund shall be appropriated on an annual or supplemental basis and used exclusively for the following purposes:
(a) To the Tax Collector and other City Departments, for administration of the Empty Homes Tax and administration of the Housing Activation Fund.
(b) Refunds of any overpayments of the Empty Homes Tax, including any related penalties, interest, and fees.
(c) All remaining amounts to provide funding, including administrative costs, for Eligible Programs, 50% of which shall be used for the programs described in subsection 2958(c)(1)(A) and 50% of which shall be used for the programs described in subsection 2958(c)(1)(B). The voters intend that these remaining amounts be spent on Eligible Programs at levels in addition to amounts currently spent on such Eligible Programs and that such remaining amounts not be used to supplant existing expenditures.
(1) For purposes of this Section 2958, “Eligible Programs” means:
(A) Rental subsidies for individuals age 60 or older and rental subsidies for households with a household income of not more than 50% of Area Median Income; and
(B) The acquisition and rehabilitation of multi-unit buildings, in which at least one-third of the units are unoccupied, for affordable housing, and the operation of such buildings acquired and/or rehabilitated under this subsection 2958(c)(1)(B). Buildings subject to expenditures under this subsection 2598(c)(1)(B) shall be restricted through a recorded deed restriction or restrictions mandated for the useful life of the building to households with an average household income that does not exceed 80% of Area Median Income.
(2) For purposes of this Section 2958, “Area Median Income” means the median income as published annually by the Mayor’s Office of Housing and Community Development for the City and County of San Francisco, derived in part from the income limits and area median income determined by the United States Department of Housing and Urban Development, or its successor agency, for the San Francisco County metro fair market rent area, adjusted solely for household size, but not for high housing cost area. The Board of Supervisors may modify this definition of Area Median Income solely for purposes of subsection 2958(c)(1)(B) to determine area median income by zip code area.
SEC. 2959. TECHNICAL ASSISTANCE TO THE TAX COLLECTOR.
The Department of Public Works, the Department of Building Inspection, the Rent Board, and the Assessor-Recorder’s Office shall provide technical assistance to the Tax Collector, upon the Tax Collector’s request, to administer the Empty Homes Tax.
SEC. 2960. AUTHORIZATION AND LIMITATION ON ISSUANCE OF BONDS.
The City is hereby authorized to issue from time to time limited tax bonds or other forms of indebtedness to finance the costs of the projects described in Section 2958. The City shall be authorized to pledge revenues generated by the Empty Homes Tax to the repayment of limited tax bonds or other forms of indebtedness authorized under this Section 2960. The Board of Supervisors shall by ordinance or resolution, as applicable, establish the terms of any limited tax bonds or other forms of indebtedness authorized hereby, including but not limited to, the amount of the issue, date, covenants, denominations, interest rate or rates, maturity or maturities, redemption rights, tax status, manner of sale, and such other particulars as are necessary or desirable.
SEC. 2961. AMENDMENT OF ORDINANCE.
The Board of Supervisors may amend or repeal this Article 29A by ordinance by a two-thirds vote and without a vote of the people except as limited by Articles XIII A and XIII C of the California Constitution.
SEC. 2962. SEVERABILITY.
(a) Except as provided in Section 2962(b), if any section, subsection, sentence, clause, phrase, or word of this Article 29A, or any application thereof to any person or circumstance, is held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions or applications of this Article. The People of the City and County of San Francisco hereby declare that, except as provided in Section 2962(b), they would have adopted this Article 29A and each and every section, subsection, sentence, clause, phrase, and word not declared invalid or unconstitutional without regard to whether any other portion of this Article or application thereof would be subsequently declared invalid or unconstitutional.
(b) If the imposition of the Empty Homes Tax in Section 2953 is held in its entirety to be facially invalid or unconstitutional in a final court determination, the remainder of this Article 29A shall be void and of no force and effect, and the City Attorney shall cause it to be removed from the Business and Tax Regulations Code.
SEC. 2963. SAVINGS CLAUSE.
No section, clause, part, or provision of this Article 29A shall be construed as requiring the payment of any tax that would be in violation of the Constitution or laws of the United States or of the Constitution or laws of the State of California.
Section 3. Chapter 10 of the Administrative Code is hereby amended by adding Section 10.100-76 to Article XIII, to read as follows:
SEC. 10.100-76. HOUSING ACTIVATION FUND.
(a) Establishment of Fund. The Housing Activation Fund (“Fund”) is established as a category four fund as defined in Section 10.100-1 of the Administrative Code, and shall receive all taxes, penalties, interest, and fees collected from the Empty Homes Tax imposed under Article 29A of the Business and Tax Regulations Code.
(b) Use of Fund. Subject to the budgetary and fiscal provisions of the Charter, monies in the Fund shall be used exclusively for the purposes described in Section 2958 of Article 29A of the Business and Tax Regulations Code.
(c) Administration of Fund. As stated in Section 2957(b) of Article 29A of the Business and Tax Regulations Code, commencing with a report filed no later than February 15, 2026, covering the fiscal year ending June 30, 2025, the Controller shall file annually with the Board of Supervisors, by February 15 of each year, a report containing the amount of monies collected in and expended from the Fund during the prior fiscal year, the status of any project required or authorized to be funded by Section 2958, and such other information as the Controller, in the Controller’s sole discretion, deems relevant to the operation of Article 29A.
Section 4. Appropriations Limit Increase. Pursuant to California Constitution Article XIII B and applicable laws, for four years from November 8, 2022, the appropriations limit for the City shall be increased by the aggregate sum collected by the levy of the tax imposed under this ordinance.
Section 5. No Conflict with Federal or State Law. Nothing in this measure shall be interpreted or applied so as to create any requirement, power, or duty in conflict with any federal or state law.
Section 6. Effective Date. The effective date of this ordinance shall be ten days after the date the official vote count is declared by the Board of Supervisors.