San Francisco, square in the middle of a housing crisis and with a pervasive homeless population that warrants such extreme measures as a public excrement map, is close to blindly throwing more taxpayer money at its homeless problem.
On Election Day, San Francisco voters approved Proposition C by a 60-40 percent vote. The proposition hikes the city’s gross-receipts business tax (an onerous tax on revenues, regardless of profit) in a wayward attempt to house and otherwise assist a burgeoning homeless population of over 7,000.
Currently, the city spends about $380 million on its homeless problem. Proposition C would increase this by another $250-300 million annually. Estimates by the city’s top economist put the local cost of the tax hike at $200-240 million in GDP annually and the loss of jobs at 14,700 to 17,500 over 20 years.
One of the strongest advocates of Proposition C was Salesforce CEO Marc Benioff, who sank nearly $8 million of personal and corporate funds supporting the measure.
Meanwhile, San Francisco Mayor London Breed, State Sen. Scott Weiner (D), and a large portion of the local tech sector came out against it. Twitter mogul Jack Dorsey lamented on his own company’s platform that the tax is structured in a way that penalizes his smaller financial services company, Square.
Part of Breed’s opposition to Proposition C is grounded in concerns that it will end up drawing homeless people from west coast cities with large homeless populations, such as Los Angeles, Portland, and Seattle. When and if that occurs, San Francisco residents will quickly realize the folly of their choice actually made the problem worse.
Proposition C’s passage is now confronted with legal questions over whether it constitutes a “special tax,” requiring a two-thirds vote, after falling short of that threshold. This has prompted a host of lawsuits seeking to block the measure. Additionally, City Controller Ben Rosenfield said that his office is unable to certify the funds given the legal uncertainty.
Crippling housing restrictions led to one new home built for every 6.8 new jobs between 2010 and 2015, while rents in San Francisco have increased 43 percent since 2005. Without solving the housing crisis, states and localities will continue to see a steady stream of people who will experience chronic homelessness.
As is typical with liberal-dominated governments in America’s largest cities, the answer is always to double down on failed programs and efforts and spend more taxpayer money.
Such is the case with Proposition C, and while elegant market-driven solutions that create more housing — like relaxing the city’s restrictive zoning laws and easing the permitting process — are obvious solutions, no one should expect San Francisco to pivot in the direction of freedom.