Supervisor Eric Mar and a group of tenants activists proposed a new ballot measure yesterday that, if passed, would impose a hefty "antispeculation" tax of up to 24% on any budding real estate tycoon who unloads a building within a year of buying it.
The tax would be applicable on the sale of small, rent-controlled buildings like the ones that tend to get bought up and flipped in order to evict longterm, low-rent tenants. Because the tax is designed to deter quick turnovers, the rate decreases every year and would not apply if the owner keeps a building for more than five years.
Per the Chronicle, single-family homes, condos, owner-occupied TICs, anything not sold for a profit, new buildings, buildings with more than 30 units or buildings that are being converted into affordable housing would also be exempt.
As Supervisor Mar told an assembly of activists on the steps of City Hall yesterday, the goal is to keep housing affordable for long-term residents, especially those who are low- and middle-income.
Ana Gtierrez, a member of social justice group Causa Justa, told the Business Journal, "We need to keep fighting because this housing crisis has reached a fever pitch. [...] We won’t stand for people coming into our neighborhoods snatching our homes from under us to enrich themselves.”
The tax has some precedent — Harvey Milk proposed something similar in 1978. The current proposal, however, came from the San Francisco Anti-Displacement Coalition.
Although the SFADC claims the measure is aimed at "hit-and-run" or out of town real estate investors, the local realtors association believes it will actually cut the number of units on the market and end up inflating housing prices even more. According to the S.F. Association of Realtors' deputy director of government and community relations Jay Cheng the limitations and exemptions would hurt small-time landlords and younger buyers. (Take a lick of salt though: any realtor would likely oppose a measure that discourages real estate sales, thus denying them commission.)
As the president of the Small Property Owners of San Francisco, who owns one four-unit building, told the Chronicle, "The tenant activists are reacting to a situation that they themselves have caused by creating a business environment where small operators are forced to operate at a loss by subsidizing people at below-market rents that don't keep up with inflation."
The measure only needs support from four supervisors to show up on the already crowded November ballot. In addition to Supervisor Mar, Supervisors John Avalos, David Campos and Jane Kim are all on board.