What the Measure Would Do

Proposition G would establish a dedicated funding source for rental subsidies to cover operating costs for permanent affordable housing projects serving “extremely low-income” (ELI) seniors, families, or people with disabilities.¹ The Affordable Housing Opportunity Fund for Seniors, Families, and Persons With Disabilities would pay building owners the difference between what qualified tenants could afford and the rents the owners would otherwise charge. Through these subsidies, the measure could support the creation and maintenance of an estimated 550 to 600 new affordable units.²

The Office of the Controller would set aside at least $8.25 million annually from the General Fund or another eligible revenue source beginning in 2026. Through the budget process, the Board of Supervisors could choose to allocate unspent funds from eligible special funds to reduce impacts to the General Fund and allow more flexibility during difficult fiscal years.

This set-aside could be reduced to $4 million for fiscal year 2026–2027 if there is a projected budget deficit of $250 million or more but would increase to $8.25 million in fiscal year 2027–28 and remain stable or increase by no more than 3% every year moving forward. The total cost of the fund would range from $161 million to $222 million over 20 years.³

The fund would expire on December 31, 2046, unless extended by the voters.

The Backstory

San Francisco is home to approximately 66,000 ELI households earning less than 30% of the Area Median Income (AMI). A majority of these households consist of seniors, adults with disabilities, or families, and most struggle to find affordable housing. Eighty percent of these households must pay over 30% of their income for rent.⁴

Under state law, the city has an obligation to approve 13,981 new affordable housing units for ELI households by 2031. However, most affordable housing produced in San Francisco since 2005 supports households earning 30% to 80% of AMI because existing funding sources target those income categories.

Most single seniors and single disabled adults in San Francisco earn approximately 15% of AMI, but at most local affordable housing projects, tenants must earn 50% of AMI to qualify for a studio apartment. A single parent working a full-time, minimum wage job earns less than 30% of AMI and would not qualify for an apartment at most local affordable housing projects.⁵

Area Median Income and Affordable Monthly Rents^* by Household Size

Sponsors of affordable housing projects that serve ELI tenants face significant operating deficits because affordable rents for these households do not cover operating costs. Revenue from higher-paying renters within the same project is not sufficient to cover deficits, and additional subsidies are difficult to obtain. Given these challenges, project sponsors cannot feasibly subsidize enough affordable units for ELI renters to meet San Francisco’s legally mandated housing goal. Providing a reliable, ongoing operating subsidy would make more permanently affordable housing projects feasible and would stabilize tenancies for ELI households.

Local funding is currently one of the only viable tools to provide stable operating subsidies. Federal funding for rental subsidies from the Department of Housing and Urban Development has faced dramatic budget cuts, and there is no state or regional funding source for rental or operating subsidies.

San Francisco has a non-binding voter-adopted city policy that limits set-asides that reduce the discretionary portion of the General Fund budget. Prop. G represents a new set-aside commitment that would impact the General Fund during a financially challenging period. The city is facing a budget deficit of $1.5 billion over the next five years.⁶

Prop. G was placed on the ballot with unanimous approval from the Board of Supervisors. It requires a simple majority (50% plus one vote) to pass.

Equity Impacts

Existing affordable housing programs that exclude ELI households disparately impact seniors, people with disabilities, and people of color. In San Francisco, 64% of senior households and 45% of households that include a disabled adult are ELI. Seventy-five percent of ELI residents are people of color, including 48% of African American households, 31% of Native American households, 23% of Latinx households, and 22% of Asian households.⁷

Existing affordable housing programs have arguably widened the racial wealth gap by targeting low- and middle-income renters, helping these cohorts achieve financial stability while leaving nearly half of the city’s Black residents without affordable housing options. The San Francisco Human Rights Commission’s 2023 San Francisco Reparations Plan includes a key recommendation for the city to adopt policies that prioritize the creation of affordable housing for ELI residents.

Pros

• Prop. G offers an unusual opportunity to expand access to affordable housing for ELI seniors, people with disabilities, and families that have been excluded from existing affordable housing programs, which mainly target higher-income groups.
• This measure could reduce the incidence of homelessness by lowering the rent burden for ELI households and connecting them with permanently affordable units. Intervening before these tenants become homeless would reduce demand for homelessness services and ensure that these resources are available to chronically homeless people.
• Preserving existing permanent affordable housing would prevent the displacement of ELI households.
• Prop. G would bolster the city’s efforts to meet the housing goals that state law requires.

Cons

• The set-asides in this measure would reduce the discretionary portion of the city’s General Fund budget, limiting elected officials’ flexibility to allocate funding during the annual budget process and restricting the city’s options for resolving budget shortfalls in difficult fiscal years after fiscal year 2026–27.