SUPPORT THE AFFORDABLE HOUSING GUARANTEE ACT (PROP I)
## CONTEXT
San Francisco is currently experiencing one of the most severe housing affordability crises in the United States. The Situation is that median rent for a one-bedroom apartment exceeds $3,000 per month, while the median home price hovers around $1.4 million, placing homeownership out of reach for the vast majority of residents. The city’s population has begun to decline for the first time in decades, driven largely by residents unable to afford to stay. The Complication is that despite numerous policy efforts over the past decade—including inclusionary zoning requirements, rent control expansions, and density bonus programs—the pace of affordable housing production has not kept up with demand. The city’s own Housing Element identifies a need for over 82,000 new housing units by 2031, with more than half required to be affordable to low- and moderate-income households. Yet annual production of permanently affordable units has averaged fewer than 1,500. The Question is whether a new, more aggressive policy mechanism—one that guarantees affordable housing production as a right—can break this cycle. The Answer proposed by the Affordable Housing Guarantee Act (Prop I) is to create a legally enforceable obligation on the city to produce a specified number of affordable units annually, funded through a dedicated revenue stream, and subject to judicial enforcement if targets are missed. This approach draws on the "right to housing" frameworks seen in cities like Vienna, Austria, and more recently in Montgomery County, Maryland, where inclusionary zoning coupled with public investment has sustained affordability for decades.
## PROBLEM
The core Problem is that San Francisco’s housing market systematically fails to produce enough units affordable to low- and moderate-income households, and existing policies lack binding enforcement mechanisms. The total cost of inaction is staggering: according to the San Francisco Planning Department, the city faces a deficit of approximately 65,000 affordable units for extremely low- to moderate-income households. Each year of delay forces thousands of households to spend more than 50% of their income on rent, driving displacement, homelessness, and economic segregation. The Complication is that voluntary or incentive-based programs have proven insufficient. For example, San Francisco’s Inclusionary Housing Program requires new market-rate developments to set aside 15-20% of units as affordable, but this only produces units when market-rate construction occurs—and market-rate construction has slowed dramatically due to high interest rates, construction costs, and regulatory uncertainty. Similarly, the city’s Affordable Housing Bond Program, while successful, is subject to voter approval every few years and cannot guarantee consistent funding. The specific harms include: over 7,000 people experiencing homelessness on any given night, the highest rate of income inequality of any major U.S. city, and the exodus of middle-income families, which has led to declining school enrollment and a hollowed-out workforce for essential services like teaching and nursing. The cost of inaction is not merely social but fiscal: every unhoused individual costs the city an estimated $40,000–$60,000 annually in emergency services, shelter, and healthcare, versus roughly $20,000 per year to house them in subsidized housing with supportive services. Comparable analysis from the California Housing Partnership quantifies the statewide affordable housing gap at over 1 million units, with San Francisco’s share representing roughly 6-7% of that.
## PROPOSED SOLUTION
The Proposed Solution is the Affordable Housing Guarantee Act (Prop I), a San Francisco ballot measure that would establish a citywide obligation to produce at least 5,000 new permanently affordable housing units per year for the next 15 years, funded through a combination of a progressive real estate transfer tax surcharge on properties over $5 million, a new annual vacancy tax on residential units left unoccupied for more than six months, and an increase in the city’s commercial rent tax on the largest office tenants. The Situation: the measure would be placed on the ballot by citizen initiative, requiring a simple majority for passage. The Decision: voters must choose between the status quo—which has yielded average annual production of fewer than 1,500 affordable units—and a binding production mandate with dedicated funding. The Action: the measure would create a new Affordable Housing Production Authority within the Mayor’s Office of Housing and Community Development, tasked with developing or acquiring units directly, expediting permitting for qualifying projects, and leveraging the dedicated revenue to issue bonds for large-scale development. The Process: implementation would occur in phases, with year one focused on establishing the Authority, securing bonding capacity, and initiating site acquisition; years two through five would target ramping production to the 5,000-unit annual goal; years six through fifteen would maintain production and begin evaluating long-term sustainability. Rejected alternatives include: simply increasing the existing inclusionary housing percentage (which would add costs to market-rate projects and potentially slow overall construction), relying solely on state or federal funding (unreliable and beyond local control), and expanding rent control without new supply (which does not address the absolute shortage). The Execution machinery would include a dedicated oversight board with representatives from tenant advocacy groups, affordable housing developers, labor unions, and the Controller’s Office, providing quarterly public reports on production, spending, and any deviations from targets. This model mirrors the implementation of Montgomery County, Maryland’s Moderately Priced Dwelling Unit (MPDU) program, which has produced over 13,000 affordable units since the 1970s through binding inclusionary requirements paired with public subsidies.
## EXPECTED IMPACT
The Expected Impact of the Affordable Housing Guarantee Act is substantial and multifaceted. First, direct housing production: at the stated target of 5,000 units per year, the measure would produce 75,000 permanently affordable units over 15 years, more than doubling current affordable housing stock in San Francisco. This would house an estimated 150,000–180,000 residents, assuming an average household size of 2.0–2.4 persons per unit. Second, cost savings: a 2022 study by the San Francisco Controller’s Office found that providing permanent supportive housing to a chronically homeless person saves the city approximately $13,400 per year in emergency room visits, jail stays, and shelter costs. If the measure houses even 10,000 chronically homeless individuals over the first five years, the annual savings would exceed $134 million—more than offsetting the estimated $100 million in new administrative costs. Third, workforce stabilization: comparable proposals in cities like Minneapolis, which enacted inclusionary zoning in 2019, have shown that affordable housing production correlates with reduced turnover among teachers, nurses, and other essential workers. San Francisco’s public school district has lost 3,000 students in the past five years, partly due to housing costs; reversing this trend could stabilize enrollment and reduce per-pupil costs. Fourth, displacement reduction: a study of Los Angeles’s Measure HHH found that neighborhoods with new affordable housing saw a 15-20% reduction in displacement of low-income renters within a half-mile radius. Applying this effect to San Francisco could preserve existing communities and prevent further cultural and economic homogenization. Fifth, economic multiplier effects: construction spending generates local jobs—the California Housing Consortium estimates that every $1 billion in affordable housing construction creates over 10,000 jobs and $500 million in local economic activity. If the measure funds $750 million annually in construction, that translates to roughly 7,500 jobs per year. Limitations include the possibility that construction costs rise faster than revenue, requiring mid-course adjustments, and the risk that legal challenges from property owners delay implementation, as occurred with similar measures in Portland and Seattle.
## DECISION LENS
| | If this passes | If this doesn't pass |
| --- | --- | --- |
| What will happen | San Francisco will begin producing 5,000 affordable units per year, reducing housing insecurity by half within 10 years and stabilizing the middle-income workforce. | The housing crisis will continue to worsen: production stays below 1,500 units annually, displacement accelerates, homelessness grows, and the city becomes even more unaffordable for working families. |
| What won't happen | Market-rate construction will not necessarily slow (if the revenue is carefully designed not to discourage new building); the city won't suddenly become affordable for everyone, but the worst effects will be mitigated. | The city won't lose the potential tax revenue; however, the social costs of homelessness and displacement will continue to mount, and the middle class will continue to flee, eroding the tax base further. |
## PRECEDENTS
EXAMPLE: Vienna, Austria — What: Vienna has sustained a municipally-owned housing stock of over 220,000 units, with 60% of residents living in subsidized or public housing, funded through a dedicated housing tax and a policy of acquiring land for development. — Outcome: Vienna maintains some of the lowest rent-to-income ratios in Europe (average 25% of income) and virtually no homelessness, despite being a global city. — Outcome: Vienna maintains some of the lowest rent-to-income ratios in Europe (average 25% of income) and virtually no homelessness, despite being a global city.
EXAMPLE: Montgomery County, Maryland — What: The Moderately Priced Dwelling Unit (MPDU) program requires developers of any project with 20+ units to set aside 12.5-15% as affordable, with the county purchasing some units for deep affordability and tying subsidies to production targets. — Outcome: Since 1974, the program has produced over 13,000 affordable units, maintaining income diversity across the county even as the DC region’s housing costs rose dramatically. — Outcome: Since 1974, the program has produced over 13,000 affordable units, maintaining income diversity across the county even as the DC region’s housing costs rose dramatically.
EXAMPLE: Los Angeles, California — What: Measure HHH (2016) authorized $1.2 billion in bonds to build 10,000 supportive housing units for homeless individuals, with a dedicated oversight committee and annual progress reports. — Outcome: As of 2024, over 7,500 units have been completed or are under construction, with per-unit costs averaging $400,000–$500,000, and preliminary data shows a 15% reduction in chronic homelessness in targeted neighborhoods. — Outcome: As of 2024, over 7,500 units have been completed or are under construction, with per-unit costs averaging $400,000–$500,000, and preliminary data shows a 15% reduction in chronic homelessness in targeted neighborhoods.
August 13, 2026
