Committee backs extending and broadening transfer‑tax exemption for rent‑restricted affordable housing

The Budget and Finance Committee on Nov. 15 forwarded to the full Board of Supervisors an ordinance that would broaden and extend San Francisco’s transfer‑tax exemption for rent‑restricted affordable housing and waive related penalties and interest retroactively.

Supervisor Dean Preston, the ordinance sponsor, said the measure would extend an existing exemption through Dec. 31, 2030, apply it retroactively to Jan. 1, 2017, expand the definition to include properties with at least 90% rent‑restricted units, and clarify that common transactions such as limited‑partner exits at roughly year 15 would not trigger transfer taxes.

Fiscal effect: The Budget and Legislative Analyst (BLA) estimated a reduction in general‑fund revenues of roughly $30 million to $45 million over the 2017–2030 period, noting that figure could be understated because it does not fully account for the expanded definition of affordable housing.

Support and testimony: Representatives of nonprofit developers and housing advocates—including John Avalos (Council of Community Housing Organizations), Kevin Kitching (Mission Housing), and Katie Lamont (Tenderloin Neighborhood Development Corporation)—testified that the change would relieve unintended tax burdens on nonprofit affordable‑housing partnerships and free up funds for operations and preservation. The sponsor and co‑sponsors argued the tax relief can flow back into construction and preservation when the city recovers loan repayments.

Committee action: After public testimony and discussion, Chair Supervisor Connie Chan moved and the committee recorded a 3–0 vote to forward the ordinance with a positive recommendation to the full Board of Supervisors.

Next steps: The ordinance will next be considered by the full Board; the BLA and proponents said they expect the exemption to encourage more nonprofit affordable‑housing preservation and redevelopment.