Please be aware that there will be two measures on the ballot for the City and County of San Francisco June 5th election that, if successful, would ultimately impose new taxes on commercial property rents.
Current law requires commercial building owners to pay a blend of a payroll tax and 0.3% on gross receipts from leases to the City and County of San Francisco. That money goes into the City’s general fund with the intention to (but not a requirement to) spend on the described services.
The two new taxes on the ballot are:
If successful with a mere majority of votes cast, PROPOSITION C would authorize an additional tax on the lease of commercial property in the amount of 1% of gross receipts for warehouse space and 3.5% for other commercial properties to fund childcare and early education programs (which is estimated to total approximately $146 million a year).
If successful with two-thirds vote, PROPOSITION D would authorize an additional tax on the lease of commercial property in the amount of 1.7% of gross receipts to fund low/medium-income housing, homelessness services, and the general fund (which is estimated to total approximately $70 million a year.)
If both measures are passed, the proposition with the most votes prevails.
Why do we need to fight Prop C and Prop D?
While we acknowledge that the lack of affordable housing and child care are critical issues facing our City, our NAIOP Chapter objects to the commercial real estate industry being singled out to bear an increased tax burden. We object to being singled out with such dramatic increases and by a methodology, which would encourage additional taxes to be passed in the future with a mere majority and potentially setting a precedent for other Bay Area municipalities.
How can you help?
Your assets and commercial real estate portfolio in San Francisco will likely be impacted by these targeted taxes. But polls show that voters will oppose both measures as long as they are exposed to campaign arguments. Messaging and voter contact is critical to win against Prop C and D. The Committee for an Affordable San Francisco, No on Propositions C and D is now collecting donations to fund an aggressive campaign against both measures. But time is of the essence – ballots will be mailed next week.
Join your NAIOP Chapter in actively opposing these measures today.
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