A DSA-backed coalition is racing to qualify a November ballot initiative that would constitutionally earmark transfer-tax revenue from large property deals for housing programs — arguing that voters already approved exactly that in 2020, and that City Hall spent the money on other things anyway.

The proposed Affordable Housing Guarantee Act targets the same Prop. I transfer taxes at the center of Mayor Daniel Lurie and Supervisor Bilal Mahmood's now-shelved BUILD Act. While City Hall pivots to a competing November foreclosure-tax measure, housing activists say the real problem isn't a lack of new revenue — it's that $504 million generated by existing taxes since 2021 was never reliably spent on the housing programs voters were promised.

San Francisco's November ballot is shaping up as a direct clash over who controls the city's transfer-tax windfall — and who it's actually for.

On one side: Mayor Daniel Lurie and Supervisor Bilal Mahmood, who last week shelved their controversial BUILD Act proposal to cut high-end property transfer taxes and are now advancing a standalone measure to tax commercial foreclosure sales instead. On the other: a coalition anchored by the Democratic Socialists of America's local social-housing working group, which is gathering signatures for a competing initiative that would do something simpler and, they argue, more honest — dedicate existing transfer-tax proceeds to housing by law.

The measure, dubbed the Affordable Housing Guarantee Act, would earmark revenues from Proposition I — a 2020 measure that doubled transfer-tax rates on large property transactions — for housing programs including rent relief. Under current law, that money flows into the general fund, where it has been available for any purpose.

"We're full-steam ahead on signature-gathering," said Scott Feeney, co-chair of the DSA's social-housing working group and a listed proponent of the measure. "It's going really quickly, and we're getting great responses from voters. People are really convinced of the need to fund affordable housing."

Proponents say they are confident they will submit the required signatures before the July 6 deadline. A fair housing committee supporting the campaign has supplemented volunteer crews with paid gatherers.

The case they're making is rooted in what they call a broken promise. Prop. I, authored in 2020 by then-District 5 Supervisor Dean Preston and four colleagues, was pitched to voters as housing funding. It passed with a simple majority because it was structured as a general tax. A unanimous Board of Supervisors resolution passed alongside it affirmed the intent to direct proceeds to a COVID-19 rent-relief fund and a social-housing program fund.

But the commitment didn't hold. The city Controller's Office figures cited in the SF Examiner show Prop. I generated $504.6 million through February — peaking at $178.1 million in fiscal year 2021-22 before falling to $44.9 million in FY2023-24. Housing allocations tracked a similar arc: substantial in the first two years, then declining sharply under former Mayor London Breed.

Preston, who lost his 2024 reelection bid to Mahmood and is now involved in the initiative campaign, called that history a betrayal.

"City Hall's refusal to spend Prop. I revenue on housing in recent years has been deeply disappointing and directly contradicts the intent of the voters of San Francisco," Preston said.

Tuesday Rose Thornton, an eviction-defense attorney and co-listed proponent, put it in terms of the current eviction crisis.

"We think it's a shame that the manifested intent of the voters was ignored by the city government, and the funds were not spent in the way that the voters explicitly wanted them to be spent," she said, adding that the money could help stem an eviction surge driven by rising rents.

The proposed initiative includes a carve-out to exempt first-time sales of multifamily residential properties, a provision designed to avoid discouraging new housing investment.

The measure also navigates a legal distinction that matters: because it would be a citizen-initiated tax earmark rather than a new tax, proponents argue it can pass with a simple majority vote — the same threshold that let Prop. I succeed in 2020 — rather than the two-thirds supermajority required for legislatively-referred specific taxes.

That matters because Mahmood's competing foreclosure-tax measure, also headed for November, is a Board-referred proposal — subject to different legal standards and, activists note, entirely within City Hall's control to redirect later.

Whether voters can hold City Hall to a housing mandate is a question SF has tried and failed to answer before. This fall, they'll be asked again — and this time from both sides of the aisle simultaneously.