Yes on Proposition C
Contributions to the Housing Fund
What is it?
Prop C will increase the City's investment in its Housing Trust Fund, which funds below-market-rate home construction, preservation, and acquisition as well as infrastructure and some downpayment assistance. Voters first created the fund in 2012.
Today, the City puts $50.8M into the Housing Trust Fund every year. This measure would increase that yearly contribution starting in Fiscal Year 2028-29 until it hits $125M per year, in line with either the growth of general fund revenues or property values, whichever rises faster. When the yearly appropriation hits $125M, the contribution growth is capped at 3% per year.
The Board of Supervisors may freeze contributions when the City projects a deficit over $250M, and cut contributions by up to 10% in a year the City taps its Rainy Day Reserve.
The measure also raises the income cap for downpayment assistance loans from 120% to 200% of the Area Median Income and removes the current spending cap on housing-related infrastructure.
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Fiscal impacts
According to the Controller's Office, Prop C would have a significant impact on the cost of government. It would add about $6M in General Fund costs starting in FY 2028-29, growing to about $60M per year by FY 2034-35, when the annual contribution reaches $125M. It also extends the mandate by fifteen years, from 2043 to 2058.
For comparison, the City put about $50M into the fund in FY 2024-25, and without the measure the formula would require about $65M in FY 2034-35. Those projections assume the City does not use the measure's freeze and reduction provisions.
The Controller notes the measure does not comply with a non-binding, voter-adopted City policy that seeks to limit General Fund spending mandates. Those mandates already total about $2B, or 30% of the roughly $7B in General Fund sources.
Why is this on the ballot?
The Housing Trust Fund lives in the City Charter, and only voters can change the Charter. The Board of Supervisors voted 11-0 on July 14, 2026 to put this amendment on the ballot (File No. 260537).
This is a City Charter amendment introduced by the Board of Supervisors. Since the Board of Supervisors cannot directly amend the Charter, if they want to change the Charter they must go to the voters. A vote of six or more Supervisors is required to place a Charter Amendment on the ballot, and voters must approve it by a 50% + 1 majority.
- Placed on ballot by: The Board of Supervisors, by a unanimous 11-0 vote on July 14, 2026.
- Sponsors: Supervisors Melgar, Walton, Sauter, Sherrill, Dorsey, Wong, Mahmood, Mandelman, Fielder, and Chen.
Why vote Yes?
San Francisco currently pays for subsidized low-income homes (often misleadingly called "affordable homes") by taxing the construction of new homes. The tax is called inclusionary housing: builders must rent or sell a share of the homes in every new building below market, or pay a fee instead, and that loss comes out of the project just as a tax would. New UC Irvine research found that these taxation schemes cut new home construction by nearly a third. And since subsidized low-income homes only get built when the regular market-rate projects around them do, the tax suppresses both kinds.
The current tax scheme raises rents for everyone. Adding up the higher rents everyone pays because of that lost housing, each subsidized low-income home the policy produces costs renters about $800,000. Building one directly, without this tax, only costs about $441,000.
In May 2026, Supervisor Melgar and Mayor Lurie made a deal with the nonprofits who build low-income housing: the nonprofits would stop fighting a cut to the tax, and in exchange the City would grow the Housing Trust Fund. The Board delivered the first half on July 14, 2026, when it cut the tax from 15% to 5%. Prop C is the second half.
We think this is a good deal, and Prop C is how voters keep the City's end of it. The lower tax is what makes every kind of home cheaper to build, which puts downward pressure on rents across the city. The bigger fund replaces the subsidy the tax used to squeeze out of builders, and it does so the cheap way, by paying for homes directly instead of through lost housing. Strictly speaking, the cut is already law and does not depend on Prop C. But the nonprofits stood down on the strength of this fund, and if voters reject it, the fight over the rate starts right back up.
We typically oppose set-asides, but this one is built well: growth caps at 3% per year once the fund reaches $125M, and the Board can freeze or trim contributions in bad budget years.