Next year, the City may spend as much as it wants on short-term rental subsidies for permanent housing under changes to Proposition C, also known as the Our City, Our Home ordinance.
But even if lifting the cap wouldn’t affect how Prop. C monies are distributed for other services such as behavioral health services and homelessness prevention, advocates for homeless people fear the City will shift from the measure’s intent of keeping formerly homeless people housed over the long term.
Last month, the Board of Supervisors unanimously voted to amend the law governing funds for homelessness programs by suspending the 12% cap on short-term subsidies for fiscal year 2027–28. This alteration to Prop. C was part of a raft of budget-related measures passed en masse at the board’s July 21 meeting.
While the supervisors were persuaded by budget activists to restore funding for most vital services, they couldn’t be moved to grant more long-term subsidies.
While acknowledging a tough budget season, Supervisor Jackie Fielder told the board, “In a year with looming federal cuts and no easy options, this board held the line on critical safety net programs that tens of thousands of San Franciscans rely on, and that is a real win.”
Still, Fielder never specified which safety net programs won and which ones lost.
Sixty percent of San Francisco voters passed Prop. C in November 2018. As originally written, the ordinance prescribes how gross receipts taxes on large businesses may be spent by proportion. Of the 50% raised for permanent housing, no more than 12% could be spent on subsidies lasting five years or less. The other half of Prop. C funds are earmarked for mental health and substance use disorder services, prevention, shelter and drop-in services.
Under the new allocation, housing stability might be as temporary as the subsidies themselves: According to a Vanderbilt University study, families who only receive short-term subsidies face a greater risk of returning to homelessness.
The board’s vote marks another significant change made to Prop. C in the last year. At the urging of Mayor Daniel Lurie, the board voted in 2025 to lower the threshold needed to revise the measure from an eight-vote supermajority to redirect homeless funding to a simple majority of six votes.
The redistribution of Prop. C funds also reflects the change in San Francisco’s political winds since 2018. During the campaign, Prop. C received endorsement from seven sitting supervisors and a local Democratic Party that was largely progressive. Since then, both the board and party have shifted rightward.
At the Budget and Appropriations Committee on July 17, about 15 people spoke during the public comment period with most of them urging the supervisors to reconsider the proposed allocation.
One speaker, who identified herself as Lucia from the Latino Parity and Equity Coalition, cited the high cost of living in San Francisco in pleading her case. “This is a serious issue for us,” she said. “Latinos are experiencing high levels of homelessness. In San Francisco’s housing affordability crisis, hundreds remain just one missed paycheck, one rent increase or one subsidy loss away from homelessness. We shouldn’t have to beg for housing stability. This city can do this. We can offer stability.”
