Prop C Wins – San Francisco Taxes the Rich for Affordable Housing

Published On December 5, 2018 | By Seraphina Cobeen | Housing

San Francisco voters made history this November by passing a $300 million tax on large corporations with over 60% of the vote. This money will go to providing housing and services to the homeless of San Francisco – providing an estimated 4,000 homes and creating 1,000 shelter beds for immediate needs. This is a victory not just for San Francisco but for the housing movement across California and the country.

Bay Area workers have been facing a severe housing crisis, possibly the worst in the country. In 2016 and 2017, more people were forced by rising housing costs to move out of the Bay Area than moved in. This year, there are literally not enough U-Haul trucks to meet the demand for people who are being displaced. In San Francisco, the cost of living is so high, even if you make six figures you’re still considered low income. On any given night 10,000 people are forced to sleep on the streets of San Francisco, 1,200 of whom are children.

A Response to Trump’s Tax Cuts

Last December, Trump and the Republican Party passed the “Tax Cuts and Jobs Act” into law which reduced the federal corporate tax rate by 14%. These corporations saved billions while workers across the country continued to struggle and the housing crisis only grew worse.

In response, activists in San Francisco decided to tax those corporations to help fight back against the crisis. They proposed a 0.5% revenue tax on any revenue over $50 million, which would raise an estimated $300-380 million with a detailed plan and oversight committee. Prop C’s approach of taxing the wealthiest San Francisco corporations to create affordable housing stands in contrast to the popular but mistaken strategy of expanding the number of units of housing while leaving the development decisions to the real estate industry.

Months later, we’re able to celebrate the passing of this historic bill, with over 200,000 votes proving that the people of San Francisco want to tax the rich to fund affordable housing. The opposition, which included the Chamber of Commerce and tech companies like Lyft and Square, spent millions in an attempt to defeat the bill, seeing their profits as more valuable than the people forced out of their homes. Some Democratic Party politicians also opposed Prop C, including San Francisco mayor London Breed and State Senator from San Francisco Scott Wiener.

How the Vote Was Won

It was a broad, grassroots movement and the mood of anger and frustration at an increasingly severe crisis that won an overwhelming vote. The Democratic Party-dominated city council and mayor have failed time and time again to put forward a response to the affordable housing crisis. Working people saw this bill as a clear way to fight back, and to target the corporations that have profited while thousands slept in the streets. Early on, that anger was clear. A July poll found support among likely voters at 66%.

As anger at homelessness and displacement became clear in robust support for Prop C, several establishment politicians and CEOs endorsed Prop C. Senator Dianne Feinstein, Representative Nancy Pelosi, and Salesforce CEO Marc Benioff jumped on board. Benioff, whose company’s tower dominates the San Francisco skyline, donated $2 million to the Yes on C campaign despite the fact that the law will mean a multi-million dollar annual tax bill for Salesforce.

Why did one of San Francisco’s most prominent CEOs choose to become the public face of Prop C in the last weeks of the campaign? Benioff undoubtedly noticed how Jeff Bezos was portrayed after Amazon succeeded in repealing the much smaller “Amazon Tax” in Seattle, and saw an opening to put himself forward as a “progressive” billionaire benefactor. Benioff’s largesse toward Prop C reflects a certain difference of opinion within the ruling class. In general, the CEOs and major shareholders are elated by Trump’s tax cuts and deregulation, but a wing of the ruling class has serious concerns about the levels of deprivation and social crisis that accompany the most economically unequal society in human history, not to mention the mass anger at inequality that is surfacing more and more frequently. One percenters like Benioff recognize that something has to be done, even if it means taxing themselves, to address the very worst suffering of San Francisco’s working poor in the shadows of their own gleaming skyscrapers.

The entrance of Benioff and his millions into the core of the Prop C campaign strategy altered the grassroots character of the effort. The New York Times and Wall Street Journal jumped to cover Benioff’s Twitter war with another tech company CEO over Prop C, but didn’t report on the weekly canvasses that regularly drew 50 or more volunteers. The last campaign rally before election day became a platform for Benioff and Pelosi with no mention of the Trump tax cuts that Benioff himself lauded weeks earlier, saying companies like his “benefitted really dramatically from these tax cuts.”

It was not Benioff, Pelosi, or the Democratic Party establishment that won this victory, it was the hard work of the activists who wrote and campaigned for this bill for months, who tapped into the anger that existed, especially in the wake of the repeal of Seattle’s Amazon Tax. In the weeks after Jeff Bezos’s blackmailing and backroom deals in Seattle, new energy poured into gathering signatures for Prop C to first get it on the ballot in San Francisco.

That anger also led to the passing of Measure P, also known as the Google Tax, in Mountain View, the Silicon Valley town where Google is headquartered. This measure passed with over 70% of the vote, to fund transit and housing. These are important victories that can inspire the growing housing movement across the country.

In part, Benioff, Pelosi, and Feinstein endorsed Prop C to in an attempt to erase the grassroots organizing and movement building that ushered Prop C to victory. The recent housing defeats dealt to working-class people by the politicians and the billionaire class must not be forgotten.  In Seattle, it was the Democratic Party establishment that repealed the Amazon Tax to build affordable housing, which was a fraction of the size of Prop C.

Prop C is only one part of the solution to the housing crisis. Neither Benioff nor Pelosi supported the statewide rent control initiative Prop 10. Its failure shows why we need a powerful housing movement of our own, and that we can’t rely on corporations and the Democratic Party to always be on our side. It will be the combination of independent working class movements and independent politicians like socialist Kshama Sawant, architect of the Amazon Tax in Seattle, that will lead to future victories.

Wall Street is not happy about San Francisco passing a law to Tax the Rich. They probably thought such laws were a thing of the past, given that the past 20 years have been dominated by tax cuts for the rich. Prop C highlights the severity of the housing crisis and points the finger at those that are the architects of inequality: the rich. It is only a mass housing movement that can spread the victory of Prop C to other cities, that can fight back against the inequality that large corporations profit off of. If we build from this victory and organize independently we can build a movement that will win housing and rent control for all.

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