Op-Ed: Fighting Inequality At The Ballot Box

Vote Yes On Props G & J

Dyan Ruiz | 10/27/2014

A family threatened with an Ellis Act eviction for the fourth time as their building keeps being resold. A restaurant worker holds down two jobs so he can afford to share a studio apartment.

“A lot of people are being pushed out of San Francisco because they can’t afford the rent,” said resident Danisha Floyd, at a rally on October 8, 2014. “I don’t want to have to move across the Bay like a lot of people are doing because I can’t afford to stay here. This where I grew up at. This is my roots and I want my kids to stay in San Francisco as well,” she said. 

Floyd lives with relatives because she can’t afford to live on her own in the City. "With the minimum wage as it is now, I can’t afford anything, she said. With an increase in the minimum wage, “We can survive and take care of our families,” she continued.

San Francisco’s vulnerable residents are barely hanging on. But this November, grassroots organizations hope to pass ballot measures that will help to close the gap between San Francisco’s rich and poor, the fastest growing in the US.

Organizations advocating for the City’s low-wage workers and tenants are pushing for the passage of Proposition G, the Anti-Speculator Tax, and Proposition J, to increase the minimum wage.

Proposition G is designed to stop speculators who are buying apartment buildings with the sole intent of reselling them quickly. Typically this means using the Ellis Act to get rid of rent controlled tenants so the vacant units can be sold at a huge profit. This not only displaces residents in those buildings, but also fuels increasing rents throughout the City.

Proposition J increases San Francisco’s minimum wage to $15/hour by 2018, returning the City as a national leader for paying a fair wage. With the cost of living in San Francisco being one of the highest in the country, this wage boost will help low wage workers stay in the City.

Here’s what you need to know about these two ballot measures.

VOTE YES ON G

Prop G would create a targeted tax for housing speculators, AKA “flippers” and others who buy and sell apartment buildings– and clear out existing residents in between– to turn quick profits.

Why you won't get taxed:

-If you have lived in your building for at least one year, the new tax does not apply to you.

-The tax applies to sales of multi-unit buildings (two to 30 unit buildings). 

-A single family home WITH AN IN-LAW UNIT (i.e. an illegal apartment in the garage) is considered a two-unit building. As noted above, as long as the owner is living in the building and has lived there for at least a year, then this tax does not apply when the owner sells the building.

-The tax would apply to the sale price of the property, with a tax rate of 24 percent if sold in less than a year, lowering to 14 percent if sold between four to five years, then it goes to the normal rate. 

-There are many exceptions with some important ones listed here. You DO NOT have to pay the new tax if:

The sale price of the property is equal or less than the price you paid.

The property is sold within one year of a property owner’s death.

The property is newly built housing.

The property is legally restricted to low- and middle-income households.

How it got on the ballot:

-In reaction to rising evictions and displacement in the City, tenant advocate groups held a series of neighborhood tenant conventions starting in late 2013, culminating in city-wide convention last February. Hundreds of people voted on a measure to pursue. The Anti-Speculator Tax got the most support.

-Progressives are calling it Proposition [G]ullicksen after longtime tenants rights advocate and Executive Director of the Tenants Union, Ted Gullicksen who passed away on October 14, 2014. Like the late Supervisor Harvey Milk in 1978, who proposed a similar bill before he was killed, Gullicksen was a leader in efforts to pass the legislation until his unexpected death.

Video: "Fighting to stay in San Francisco": our coverage of the grassroots efforts to fight evictions in the City published on June 7, 2014.

The problem it’s solving:

-Speculators buy property to quickly sell it at a profit and don’t live in the property.

-Speculators are taking advantage of State law, the Ellis Act, to do no-fault evictions on all of the buildings’ existing tenants. Once the tenants are evicted, the owners sell the units for ownership.

-Because housing prices are rising so quickly in San Francisco, speculators make a huge profit even if they sell the units within a few months or a couple of years.

-Many of these speculators repeat this process with multiple buildings and use the Ellis Act to enable their serial evicting, contrary to the intent of the law.

-Often these are rent controlled tenants who have lived in the building for many decades. Rent-controlled buildings are cheaper to buy because the rents collected are low, so the potential income from those units is also assessed to be low. Speculation removes the limited stock of rent-controlled units from San Francisco.

-The displaced are often seniors and other low-income residents who have few alternatives to live in the City after being evicted.

-Prop G creates a tax to deter housing speculation and makes exceptions to exclude the average home seller.

The numbers

-51 percent of Ellis Act evictions were commenced by owners within the first year of their ownership.

-78 percent of Ellis Act evictions are commenced by owners within their first five years of ownership.

-71 percent of Ellis Act evictions filed in 2012 were against a senior or person with disabilities.

-At least 10,000 San Francisco tenants have been displaced through the Ellis Act.

Support

-As far as we can tell, all tenant and affordable housing organizations in the City support Prop G.

-Latino Democratic Club, Coalition for San Francisco Neighborhoods, Harvey Milk Democratic Club, Senior and Disability Action

Opposition

-The “No on G” lobby has raised over $1.7 million (as of Oct. 24, 2014) on leaflets, signs and other negative advertising to spread misinformation on Prop G.

-Supervisor Mark Farrell said on KQED Forum that Prop G is a “blunt instrument” that will affect thousands of San Franciscans who have to unexpectedly sell their home.

-Any tax revenue collected is not earmarked for building new affordable housing.

Rebuttal

-The final word of Dean Preston, Executive Director of advocacy group, Tenants Together, on the KQED forum was that Prop G is a deterrent. The tax is supposed to discourage speculation by making it more expensive to sell the housing units quickly. Landlords and homeowners who have or are looking for a long term investment in City real estate will not be affected.

VOTE YES ON J

Prop J will increase the minimum wage with annual increases to reach $15.00/hour in 2018.

The numbers

-The current minimum wage in San Francisco is $10.74/hour.

-The increases would start on May 15, 2015 with an increase to $12.25/hour.

-An estimated 142,000 workers, 23 percent of San Francisco’s workforce would receive a pay raise.

-71 percent of the workers who would receive a pay raise are people of color.

The problem it’s solving

Ten years ago, San Francisco passed a measure that increased the minimum wage to the highest in the country. But since then, the wage has only increased according to the Consumer Price Index, not the rising cost of living in the City.

Video: "Community & Labor Push for Higher SF MInimum Wage as Cost of Living Soars" published on April 9, 2014.

How it got on the ballot

-Labor groups such as Jobs with Justice and SEIU 1021 negotiated with Mayor Ed Lee to get as strong a measure as possible after the Mayor said increasing the minimum wage was a priority.

Support

-Progressive Workers Alliance, Jobs with Justice San Francisco, San Francisco Labor Council, SEIU Local 1021, Chinese Progressive Association, Young Workers United

-We haven’t seen one progressive or grassroots group against this measure.

Opposition

-During negotiations business associations, such as the San Francisco Council of District Merchant Associations and the Restaurant Association, spoke out about not being able to afford pay increases and possible layoffs.

-No official oppositions have been filed.

Rebuttal

A UC Berkley study said the last minimum wage increase had no effect on job growth in San Francisco compared to surrounding regions that didn’t increase their minimum wage. Also businesses benefit with less turnover and more productive staff when wages increase.