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SF
Prop C
Housing Trust Fund

Charter Amendment

Contributions to the Housing Fund

Amends the city charter to increase and extend mandated annual contributions from the General Fund to the Housing Trust Fund for 15 years.

SPUR's Recommendation

Affordable housing is one of San Francisco's highest priorities, yet it consistently struggles to secure sufficient funding, and state and federal funding is increasingly unreliable. Historically, every dollar San Francisco invests locally in affordable housing has leveraged approximately $2 in additional funding from state and federal sources.9 Expanding affordable housing resources is even more critical as the city reduces its inclusionary requirements for market-rate projects to spur greater production. Although SPUR is cautious about charter-mandated General Fund set-asides because they reduce budget flexibility, Prop. C incorporates thoughtful fiscal controls by allowing temporary freezes or reductions during budget shortfalls. The urgent need for affordable housing funding, along with the measure’s fiscal safeguards and policy reforms to incentivize housing production, leads us to recommend support for Prop. C.

Vote YES

What Prop. C Would Do

Beginning in fiscal year 2028–2029, Proposition C would amend the city charter to increase mandated annual Housing Trust Fund allocations from the General Fund. The measure would increase annual contributions from approximately $52 million in the current fiscal year to approximately $125 million by around fiscal year 2036. Once the annual $125 million threshold is reached, annual allocations would continue to grow with General Fund revenues, subject to a maximum annual increase of 3%.

The Mayor’s Office of Housing and Community Development would administer the revenues to fund the construction and preservation of affordable rental and ownership housing for low- and moderate-income households. The revenues could also fund housing-related infrastructure, down payment assistance, and housing stabilization. The Housing Trust Fund supports projects that serve households earning up to 120% of the area median income (AMI). The measure does not change this AMI limit for affordable housing projects; however, it does increase the income limit for down payment assistance from households earning 120% of AMI to those earning 200% AMI.

Prop. C allows the city to freeze annual contribution increases when there is a budget deficit of $250 million or more. The city could also temporarily reduce the contributions by up to 10% if it has a fiscal emergency and must make a withdrawal from the Rainy Day Fund.1

The measure would extend the trust fund’s sunset date from 2043 to 2058.

The Backstory

San Francisco has one of the nation’s most severe housing affordability crises. The median rent for a one-bedroom apartment in San Francisco is $3,592, up 18.9% from last year.2 Half of renter households are cost-burdened, meaning they spend at least 30% of their income on housing. Across all households, 38% are cost-burdened.3 By 2031, San Francisco is required to approve approximately 47,000 extremely low, low-, and moderate-income units.4 It has fallen behind on these targets.5 Among others, causes include a shortage of market-rate housing and insufficient public funding to subsidize affordable housing construction.

Earlier this year, the city convened its technical advisory committee to review its inclusionary housing requirements, which mandate a certain percentage of affordable housing units in market-rate buildings. A financial feasibility analysis showed that all housing types in San Francisco were infeasible to build because of high development costs. That analysis led the committee to unanimously recommend reducing the on-site inclusionary rate to 5%, among other changes.6 As a condition of lowering inclusionary rates, the committee members also encouraged the city to establish a significant and stable source of subsidy to maintain its commitment to build and preserve housing affordable to lower-income families. This inclusionary rate and in-lieu fee reduction is intended to spur all types of housing development, but it would result in fewer affordable housing units once that development becomes financially feasible. Prop. C would bridge the gap immediately by allocating General Fund money to the Housing Trust Fund.

San Francisco has a structural budget deficit, estimated to exceed $1 billion by 2030. This fiscal deficit may deepen if federal funding cuts are increased. The controller estimates that the proposed charter amendment would additionally impact the General Fund by $6.1 million in its first year and $13.6 million in its second.7 Subsequently, the General Fund would be impacted by $9 million annually, reaching approximately $60 million by 2035.8 To address concerns about General Fund set-asides during fiscally challenging times, Prop. C includes safeguards to allow for freezes in allocations and reductions during fiscal emergencies.

Supervisor Melgar and Mayor Lurie introduced Prop. C, accompanied by a proposed ordinance to reduce inclusionary requirements and fees on new market-rate housing. While the Board of Supervisors can adjust inclusionary requirements legislatively, this measure proposes an amendment to the city charter that would require voter approval to amend the Housing Trust Fund guidelines.

Ten of the 11 members of the Board of Supervisors have co-sponsored the measure. It requires a simple majority (50% plus one vote) to pass.

Equity Impacts

Affordable housing benefits lower-income households, including many Black and Latinx, senior, disabled, and single-parent households. Lowering housing costs can free up income for food, healthcare, transportation, and childcare, while improving long-term health and educational outcomes. Conversely, these mandated contributions may negatively affect other departments and programs funded primarily through the General Fund, including public health, public safety, childcare and youth programs, and other support programs targeted to low-income San Franciscans.

Pros

  • Prop. C provides a dedicated, stable funding source to build affordable housing and leverage other subsidies.
  • The measure funds programs that support affordable housing preservation and prevent displacement.
  • It backfills funding that may be lost by decreasing the inclusionary requirement and in-lieu fees to ensure affordable housing production continues.
  • It includes financial safeguards to allow for temporary freezes or reductions in case of a fiscal downturn.
  • The measure was developed through a consensus process among a broad range of stakeholders.

Cons

  • Prop. C reduces future General Fund flexibility to fund other important city priorities, which means policymakers will have less discretion to respond to changing fiscal priorities.
  • San Francisco faces additional structural deficits, which may make maintaining the higher funding level more difficult over time.
  • The measure changes the city charter, so future amendments could be made only through another ballot measure.
Vote YES on Prop C - Housing Trust Fund
Footnotes

1 When revenues are strong, the city’s charter mandates that it set aside some of its budget surplus in reserve funds. The city withdraws from these reserves during recessions, budget shortfalls, or other emergencies to help keep critical public services running. See: https://www.sf.gov/data--stabilization-reserves.

2 Apartment List, “San Francisco Rental Market Trends,” July 2026.

3 Metropolitan Transportation Commission, “Housing Affordability,” Vital Signs, updated June 2026.

4 Association of Bay Area Governments, “Final RHNA Methodology Report 2023–2031,” June 26, 2026.

5 San Francisco Budget and Legislative Analyst Office, Financing Affordable Housing, June 5, 2026.

6 Greg Wagner, “Inclusionary Housing: Triennial Review of Economic Feasibility, 2026,” Office of the Controller, City and County of San Francisco, May 21, 2026.

7 Office of the Controller Budget and Analysis Division, “FY2026–2027 and FY 2027–2028 Revenue Letter,” City and County of San Francisco, June 9, 2026.

8 Greg Wagner, “Controller Costing Letter,” Office of the Controller, City and County of San Francisco, June 25, 2026.

9 San Francisco Budget and Legislative Analyst Office, Financing Affordable Housing, June 5, 2026.