San Francisco ballot initiative would tax richest businesses to help homeless

San Francisco's effort could succeed where Seattle's failed. Here's why.

SAN FRANCISCO, CA - APRIL 17: A homeless man leans against a building in an alley in the Mission district, on April 17, 2018 in San Francisco, California. The city doesn't have enough beds for the approximately 7,000 homeless who stay here. (Photo by Melanie Stetson Freeman/The Christian Science Monitor via Getty Images)
SAN FRANCISCO, CA - APRIL 17: A homeless man leans against a building in an alley in the Mission district, on April 17, 2018 in San Francisco, California. The city doesn't have enough beds for the approximately 7,000 homeless who stay here. (Photo by Melanie Stetson Freeman/The Christian Science Monitor via Getty Images)

San Francisco, the most expensive city in the country, has a crisis-level homelessness problem — like most other major U.S. cities do. There are over 7,000 people in San Francisco experiencing homelessness, but each night there are wait lists of 1,000 or more people trying to secure one of the available 2,300 temporary shelter beds.

A coalition of housing advocates is attempting to help put San Francisco’s under-served people back on their feet. This November, a ballot measure will ask voters to support a plan that will increase taxes on the city’s largest businesses so they can raise the funds needed to cut down the lengthy wait list for temporary shelter and provide essential services that get people off the street and into permanent housing.

“We were tired of seeing small band-aid housing solutions,” said Sam Lew, policy director of the San Francisco advocacy group Coalition on Homelessness. “We really believe this measure will transform San Francisco and be a bold solution to the homeless and housing crisis.”

Article 28 will ask San Franciscans to raise (by half a percentage point) gross receipt taxes on companies that earn over $50 million revenue each year, according to Lew. That would generate a dedicated stream of funding for a range of services that would help the city’s homeless population — an estimated $300 million per year, she said.


It is unclear whether the plan will gain the support of the mayor’s office, which did not respond to questions from ThinkProgress about whether they would support the measure. Some of the city’s largest corporations have also declined to weigh in on the measure. A Salesforce spokesperson said the company was still evaluating the ballot measure. Wells Fargo declined comment, and Uber and Gap did not respond to questions.

The San Francisco Chamber of Commerce is opposed to the measure. Its vice president of public policy Jim Lazarus told ThinkProgress he thinks passing the tax would drive large businesses and a number of jobs out of the city, which would mean less money for the other city services. This is because the $300 million — or $1.5 billion over five years — would be raised on the backs of just a few hundred businesses that would essentially be double taxed on earnings over $50 million, including a number of hotels, retailers, financial firms, architectural firms, and law firms.

“I think its too much and I think it will drive some jobs and some businesses out of the city and affect the general fund,” Lazarus said. “It is a high risk strategy to propose these major tax increases on a relatively small number of employers.”

Pressure from big businesses disrupted a similar effort in Seattle earlier this year.

When Seattle city councilors attempted to address its own homelessness problem by raising taxes on its largest corporations, Amazon threatened to stop construction on its new facility, putting an estimated 7,000 jobs in the balance. That prompted city councilors to slash the original proposal from $500 per employee annually down to $275 per employee on companies that gross $20 million or more per year.


Lew thinks San Francisco’s measure has a better chance of passing because the issue will be put before voters, not the city council. She said the coalition was able to collect over 28,000 individual signatures in support of the ballot question, plus support from some members of the business community.

Also in the measure’s favor is last year’s California Supreme Court ruling, which suggested voters could increase city budgets with a simple majority at the ballot box instead of the existing two-thirds vote.

Many of the affected businesses, Lew pointed out, just received huge tax cuts following the passage of the GOP’s tax reform bill.

“I think its a fair share contribution for all companies earning over $50 million,” said Lew. “Contributing to society is beneficial to not just the public but for them as a company. It is good for the company, good for sales, and we all benefit at the end of the day.”

In recent years, San Francisco has significantly increased its funding to help people experiencing homelessness. The city added $29 million to its Department of Homelessness and Supportive Housing’s $250 million budget, according to the San Francisco Chronicle, an increase of more than 11 percent.

Still, San Francisco is the most expensive city in the country, with high rental costs, and a large number of people who are homeless living in tents throughout the city, including youth, people with mental health disabilities or addiction, and people who haven’t had stable housing for decades.


“We have really been struggling as a city. This [measure] is bold,” said Shira Noel, policy and advocacy coordinator for the San Francisco advocacy group Homeless Youth Alliance. If passed, it “would benefit thousand and thousands of people in San Francisco, which is amazing.”

Under San Francisco’s proposal, the anticipated $300 million would go into the “Our City, Our Home Fund” and fully implement the city’s Housing First model, a city initiative that provides permanent housing and services to people struggling with homelessness.

At least half of the funds would allow the city to take on a range of housing initiatives and services including short-term rental assistance and subsidies, permanent “supportive housing” with on-site social services, single-room occupancy buildings (or residential hotels), that are geared towards housing “extremely low- and very low-income households,” especially ones with seniors, veterans, immigrants, and people with disabilities.

The funds would also go to supportive care for people who are living unsheltered, including bathrooms and showers, more funding for shelters and  “navigation centers” with caseworkers that connect them to various services, short-term case management, legal help, and flexible funds that can cover needs like security deposits. And a quarter of the funds would pay for a new mental health service program for people with severe mental health issues who are experiencing homelessness.

“This is huge. To prevent homelessness before it happens is a no-brainer,” said Noel. “We are one of the richest cities in the world and we can really make this happen.”