Laura Croft | September 29, 2014
Do you handle transactions in San Francisco? Who wins and who loses with the proposed tax on housing in San Francisco?
Proposition G likely started out well intentioned, a tax that would create affordable housing; however as written, it is deeply flawed and so riddled with loopholes that in turn it is making the housing problem in San Francisco worse.
Prop. G creates a new tax on certain properties sold in San Francisco-up to 24% of the total sales price-making it one of the highest taxes ever levied in San Francisco. The costs of the 24% tax can be passed on in total to new owners and new tenants, which will make housing in San Francisco even more expensive, not more affordable. As it stands, there are no protections against passing on all the costs to new owners or new tenants.
Importantly, not one cent of any of the proposed tax revenue is dedicated to creating more affordable housing or any housing, as the revenue can all be diverted to other uses.
If Prop. G becomes law:
- Renters Lose: New renters are not protected from the increase in prices driven by Prop. G.
- Seniors Lose: Their retirement could be compromised by this massive new tax. Seniors were not afforded relief in the proposition.
- Residents of Large Buildings Lose: Proponents exempted large buildings, making large buildings a target for exactly the kind of “flipping” the backers say they want to stop: The tax would not apply to “single-family homes, condos, owner-occupied tenancies in common, properties not being sold at a profit, new construction, properties being turned into affordable housing, and buildings with more than 30 units.”
- Owners will face a massive new tax if forced to sell within five years, with no exceptions for unfortunate or unforeseeable circumstances.
Prop G is not the answer or solution to the present housing crisis. City officials including Assessor-Recorder Carmen Chu and Supervisors Mark Farrell, Scott Wiener and Katy Tang—all say NO to Prop. G.
On November 4th, San Francisco residents will vote on Prop. G. If you have questions or concerns relating to how Prop G will impact you, please contact Bay Capital Real Estate.