San Franciscans voted to approve Proposition C, which would allow for a one-time transfer tax exemption for property owners who convert office buildings to housing. The exemption would apply to the first sale of a property after its conversion.
As of Monday, the measure had won about 53% of the vote and approximately 9,100 votes still left to count, according to the Department of Elections.
The transfer tax exemption would apply to property owners who get approval to convert commercial property to housing before 2030. The measure required a simple majority to pass.
City properties valued at over $10 million have a transfer tax rate of 5.5% to 6%, higher than other large California cities.
Prop. C also allows the city’s Board of Supervisors to amend, but not increase, the transfer tax without voter approval.
Proponents argue that the tax exemption is necessary to revitalize downtown at a time when flagship retailers like Macy’s are leaving San Francisco. Breed introduced Prop. C in October 2023 to incentivize developers to convert millions of square feet of vacant downtown office space into housing.
“By removing barriers to converting office space to housing, Prop. C will take vacant space, turn it into homes, and bring more people downtown,” Breed said in an October statement about the measure.
Breed, state Sen. Scott Wiener, and Supervisors Matt Dorsey and Rafael Mandelman campaigned for Prop. C earlier this year. Supervisors Joel Engardio and Catherine Stefani also supported the measure.
Prop. C is all about San Francisco real-estate. Here’s what you need to know.#SFStandard #SanFrancisco #Election pic.twitter.com/JOc4TjKyea
— The San Francisco Standard (@sfstandard) March 3, 2024
The San Francisco Democratic Party opposed Prop. C, along with the SF Tenants Union, Affordable Housing Alliance and Senior and Disability Action.
Opponents argued in a ballot statement that Prop. C is a “deceptive ballot measure that takes power away from voters and allows City Hall politicians to hand out corporate tax breaks to billionaires and huge property owners.” They claimed that current law allows tax exemptions for converting office buildings to housing and that the measure gives unnecessary tax breaks to luxury housing developers.
The San Francisco Department of Elections will count all vote-by-mail ballots received with valid postmarks delivered by mail by March 12. Mailed ballots must be postmarked by Tuesday to be counted.