Supervisor Dean Preston sponsors ordinance extending San Francisco affordable housing tax exemption

The San Francisco County Board of Supervisors convened on July 4, 2025, to discuss an ordinance aimed at enhancing affordable housing initiatives within the city. The primary focus of the meeting was Item number 3, which proposed amendments to the business and tax regulations code concerning transfer tax exemptions for certain affordable housing transactions.

Supervisor Dean Preston, the sponsor of the legislation, presented the ordinance, emphasizing its goal of increasing the availability of affordable housing in San Francisco. The proposed amendments seek to broaden the exemption from increased transfer tax rates for transactions involving rent-restricted affordable housing valued at $5 million or more. This exemption would be applied retroactively to transfers occurring since January 1, 2017, and would extend through December 31, 2030.

The ordinance builds upon previous efforts to alleviate the financial burden on affordable housing providers, particularly in light of the city's transfer tax increases over the past 15 years. Notably, a 2020 ballot measure authored by Supervisor Preston doubled the transfer tax for properties valued at $10 million or more. The current ordinance aims to clarify and expand existing exemptions, ensuring that affordable housing projects, including those with a mix of rent-restricted and non-restricted units, can benefit from reduced tax rates.

Key provisions of the ordinance include:
- An extension of the existing exemption by six and a half years.
- Retroactive application of the exemption to previous transactions.
- Inclusion of properties with at least 90% designated rent-restricted affordable housing units.
- Clarification that certain ownership changes, such as limited partner exits, will not trigger transfer taxes.
- Waiving of penalties and interest on transfer taxes for qualifying transactions.

The meeting concluded with a commitment to support affordable housing initiatives, reflecting the board's ongoing efforts to address housing challenges in San Francisco. The ordinance, if passed, is expected to provide significant relief to affordable housing providers and facilitate the development of more affordable housing options in the city.