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Anti-speculation tax rejected by SF voters

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Nick Ut/AP file photo
Proposition G proposed an anti-speculation tax that would have penalized property owners from quickly reselling.

San Francisco voters sided with real estate interests Tuesday in rejecting the anti-speculation tax that tenant advocates said was needed to reduce evictions.

One of a series of measures the Board of Supervisors have pursued to address the rise in housing costs and evictions, Proposition G, or the anti-speculation tax, was a levy on the sale of certain multiunit residential properties if sold within five years of purchase.

The tax would have gradually lowered over time. If the property was sold within the first year of purchase, the levy would have been 24 percent of the sale price. The tax does not apply to buildings with more than 30 units nor single-family homes or condos. The measure was placed on the ballot by supervisors John Avalos, David Campos, Jane Kim and Eric Mar and drew the support of state Sen. Mark Leno and Assemblyman Tom Ammiano.

Quintin Mecke, who ran the Proposition G campaign, said that even though they lost the amount of support they did receive – and that was without Mayor Ed Lee’s support, he noted – proves that “there is a desire for change in the city. It shows the winds of change are blowing in our direction.”

He noted that real estate interests outspent his campaign 12 to 1, having raised nearly $2 million to defeat the measure. Mecke said that those involved in the campaign will continue to fight, perhaps moving forward with a similar measure next November. “Until we see evictions and affordability addressed positively we’re going to continue to keep going,” Mecke said.

Proponents said the measure would have helped curb real estate speculation where buildings are purchased, tenants evicted and then the property is sold for a profit. But opponents cast the measure as an unfair tax that wouldn't address the core problem, which is the shortage of housing.

Between March and February, there were 1,977 evictions reported to the Rent Board, up from the previous year's 1,757, a 13 percent increase. That includes 216 Ellis Act evictions, up from last year's 116. The Ellis Act is a state law allowing the eviction of tenants if the building owner takes the property off the rental market.

Analysis by the city controller estimated that in a typical year about 60 properties would have been impacted by the tax with an average tax of $413,000.

Another housing measure on the ballot related to Mayor Ed Lee's ambitious goal of constructing or rehabilitating 30,000 by 2020, his main effort to address the challenges of rising rents and evictions, passed on Tuesday.

Proposition K grew out of a debate over whether to mandate that 30 percent of all new construction must be offered at below market rate, but due to opposition it was dropped and instead Prop. K was born. It's a policy statement that more than 50 of the new units be affordable for middle-class households and at least 33 percent affordable for low- and moderate-income households.

jsabatini@sfexaminer.com

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