What is it?

Prop H would create a new annual tax on most property in San Francisco to fund Muni, running 15 years, from July 2027 through June 2042. The tax is based on building square footage rather than property value, and rises with inflation after the first year.

The measure's findings cite an SFMTA deficit of over $300M per year once pandemic relief funding runs out.

New tax rates

• Single-family homes
  • $0 if you're 65 or older and live in the home you own; for everyone else...
  • $129 up to 3,000 square feet
  • $0.42 per square foot between 3,000 and 5,000 sq. ft.
  • $1.99 per square foot above that, with no cap
• Multifamily buildings
  • $0 if you're 65 or older and live in a unit you own under 5,000 square feet; for everyone else...
  • $249 up to 5,000 square feet
  • $0.195 per square foot above that, capped at $50,000
• Non-residential
  • $799 up to 5,000 square feet
  • $0.76 per square foot between 5,000 and 50,000 sq. ft.
  • $0.84 per square foot between 50,000 and 250,000 sq. ft.
  • $0.99 per square foot above 250,000 sq. ft., capped at $400,000
• Mixed-use
  • $799 up to 5,000 square feet, above which the residential and commercial portions are taxed separately and added together, capped at $400,000
• Empty lots:
  • $0 if 2,000 square feet or less
  • $392 if 2,001 square feet or more

Because commercial and multifamily rates are capped, the biggest buildings in those categories pay the lowest rate per square foot. A 449,000 square foot commercial building hits the $400,000 ceiling at about $0.89 a square foot, while a 1.4M square foot tower pays that same $400,000, or about $0.29 per square foot. Single-family homes are the exception: that rate has no ceiling, so the largest houses pay the highest rate in the measure.

Parcels that pay no property tax are exempt. Homeowners 65 or older living in a home they own pay nothing on a single-family parcel and get a $249-per-unit reduction in a multifamily building, and SRO square footage comes out of the calculation entirely. Both exemptions must be applied for with the SFMTA.

Landlords of rent-controlled units can pass through up to half the tax, capped at $65 per unit per year, but not on units whose square footage is exempt and not on tenancies starting on or after June 1, 2027.

After collection costs, all revenue goes to the SFMTA for transit operations, subject to annual appropriation, and a citizens' group must review the spending at least every two years. The Board of Supervisors can amend or repeal the tax by majority vote without returning to voters, though it cannot increase or extend it without them. Nothing in the measure requires the City to keep its current General Fund support for Muni at today's level.

Read the full annotated legal text →