San Francisco city officials, realtors, and tenant activists are colliding in their efforts to hold down increasing housing prices and provide more affordable housing.
SFGate reports that Supervisor Eric Mar on Tuesday, with the support of tenant activists, proposed a ballot measure that will impose a huge tax on investors who buy apartment buildings and sell them within five years in order to make a profit.
According to Mar, the quick turnaround drives up the prices of the buildings, and the costs are passed on to the renters. Mar’s ballot measure would apply a graduated “antispeculation” tax that starts at 24% in the first year of the sale and would work its way down to 14% in the fifth year. There would be no tax imposed if sold in subsequent years.
Jay Cheng, deputy director of government and community relations for the San Francisco Association of Realtors, claims the measure, if passed, will have a negative effect on the housing environment. Cheng argues that the tax will discourage development and investments. He suggests, therefore, that it could ultimately increase prices and reduce the number of properties on the market. “All this is really going to do is slow down the pace of the housing market – but prices will still increase,” Cheng argues.
Joining the fray to engineer more affordable housing, San Francisco Mayor Ed Lee has proposed a measure that would require that half of the planned 30,000 new housing units that Lee is pushing for are affordable to low and middle-income households. The mayor’s plan would not regulate the ratio of affordable housing in areas where the city has already laid out land-use plans.
Affordable housing advocate Supervisor Jane Kim remains suspect of Lee’s plan but considers his proposal “interesting.” However, John Elberling, the president of TODCO, an affordable housing provider, takes issue with the mayor’s ballot proposal, claiming that he doesn’t see any provision for bringing in new funding or actually “producing any new affordable housing in any way.” He opined, “There’s no new money, but developers get their wet dream to build anywhere they want without any constraints.”