Mayor Lurie, Supervisor Melgar Announce Transformative Funding For Affordable Housing

SAN FRANCISCO – Mayor Daniel Lurie and District 7 Supervisor Myrna Melgar today announced a transformative investment that will unlock affordable housing across San Francisco. Mayor Lurie will support Supervisor Melgar’s Charter Amendment for the November 2026 ballot in partnership with District 10 Supervisor Shamann Walton, District 3 Supervisor Danny Sauter, District 2 Supervisor Stephen Sherrill, District 6 Supervisor Matt Dorsey, and District 4 Supervisor Alan Wong that will expand and renew the city’s Housing Trust Fund by responsibly increasing the city’s contribution to the fund to support affordable housing production and preservation citywide. The announcement comes as Mayor Lurie, Supervisor Melgar, and Supervisors Dorsey, Sherill, and Sauter. also introduced an ordinance to update the city’s inclusionary housing requirements and development impact fee requirements in line with the recommendation of housing experts and with the support of affordable housing providers, tenant-rights advocates, and labor leaders.  

The expansion of the Housing Trust Fund and updates to inclusionary housing requirements continue the work Mayor Lurie and Supervisor Melgar have done to build more housing in San Francisco. Last year, the mayor and supervisor worked together to pass the Family Zoning plan—a one in a generation plan to modernize San Francisco’s zoning map and support more housing options across the city. Mayor Lurie and Supervisor Melgar also collaborated on a policy to move families living in large vehicles into housing and keep the city’s streets safe and clean. The policy has already moved 138 households into housing since last fall.  

“Right now in San Francisco, housing is not getting built at the pace we need, and the consequences are all around us. Families don't know if they can stay in the city they love. Young people are questioning whether they can build a future here. Workers are getting priced out of the communities they serve. We must take bold action,” said Mayor Lurie. “Today, we’re jumpstarting affordable housing in San Francisco. Through Supervisor Melgar’s measure, we will expand the Housing Trust Fund, giving our city stable, local dollars that allow us to plan ahead and keep affordable housing projects moving. We’re also unlocking construction by reducing inclusionary housing requirements and cutting fees with the support of affordable housing experts, tenant-rights advocates, and labor leaders. Thank you to Supervisor Melgar and to all of our partners for helping lead this work and for making this moment possible.”  

“The affordable housing shortage is the biggest crisis in San Francisco. It keeps families from setting roots, young people from staying, workers from living close to their jobs, and our neighborhoods from remaining diverse,” said Supervisor Melgar. “The new approach we are taking with this legislation sets forward a predictable, stable source of financing that allows us to plan, produce, and build affordable housing for the next 30 years. It represents an investment in the billions for future for generations of San Franciscans, who will have a more affordable, just and sustainable city.”

The expansion of the trust fund and the updates to the inclusionary housing and development impact fee requirements follows the unanimous recommendations of the controller and the Inclusionary Housing Technical Advisory Committee (TAC). The TAC is panel of affordable housing providers and local housing developers appointed by the mayor and Board of Supervisors to advise the controller on a report every three years analyzing the economic feasibility of the city’s inclusionary housing requirements.

The Housing Trust Fund was originally established in 2012 through a Charter Amendment approved by the voters to support creating, acquiring, and rehabilitating affordable housing and promoting affordable home ownership programs. The fund currently provides $52 million per year, increasing each year at the rate of increase in the city’s overall General Fund discretionary revenue, through 2043. Additional resources are needed for the Mayor’s Office of Housing and Community Development to continue to advance its full citywide pipeline of affordable housing projects.

The ballot measure proposed today would increase the city’s annual contribution to the Housing Trust Fund by allocating a portion of future property tax growth every year, until it reaches $125 million. After that, the fund would grow at the same rate as General Fund discretionary revenue up to 3% per year, through 2058. The measure includes important fiscal guardrails, including the ability to freeze or reduce the annual appropriation in budget years with large budget deficits or during a recession.

To ensure funding availability in the near term, the Housing Trust Fund may be used to support the issuance of revenue bonds and other forms of municipal financing to fund affordable housing production. The mayor and Supervisor Melgar also announced an additional $70 million revenue bond to be issued next year, specifically for affordable housing preservation through both reinvestment in existing deed-restricted affordable housing buildings, and the acquisition and conversion of private rental housing to permanently affordable housing through the city’s Small Sites Program.

Building on the affordable funding expansion, the proposed changes to the inclusionary housing requirements will also help unlock stalled housing at all levels.  

The controller’s triennial report published on April 30 recommended lowering the city’s inclusionary housing requirements while increasing stable, recurring public funding for affordable housing development through growth in the city’s property tax base over time. This was also the unanimous recommendation of TAC.  

The ordinance introduced today by Mayor Lurie, Supervisors Melgar, Dorsey, Sherrill, and Sauter would implement those recommendations by lowering the required amount of affordable housing provided on-site to 5% for projects with 25 units or more, while allowing developers to alternatively pay an in-lieu fee, dedicate land, or provide off-site affordable units equivalent to 10% of the project’s total units.

Smaller projects with fewer than 25 units would be exempt from inclusionary requirements. These reductions and the exemption for small infill projects will also make it more attractive for housing developers to choose the recently adopted Family Zoning plan’s local program by making it more feasible to develop projects that fit within Family Zoning controls available.

“San Francisco is facing a severe affordability crisis, and the city needs more housing at all income levels so every family can continue to call this city home," said Rebecca Foster, CEO of the Housing Accelerator Fund and member of the Inclusionary Housing Technical Advisory Committee. “The TAC's recommendations reflect the delicate balance that the city must strike: making market-rate housing more feasible while creating a broader, more reliable funding source for affordable housing that's tied to economic growth. This measure will help make San Francisco more affordable for the people who keep this city running while creating a more financially sustainable pipeline for housing production and preservation for decades to come.”

“Working people are getting squeezed from every direction, and San Francisco will not solve its affordability crisis if nothing gets built. Expanding the Housing Trust Fund while updating the city’s inclusionary requirements is about keeping housing production moving and keeping union members on the job,” said Rudy Gonzalez, San Francisco Building Trades Council Secretary-Treasurer. “We need a balanced approach that creates more affordable housing, protects good middle-class careers, and makes sure the workers who build this city can still afford to live in it.”

“As a member of the TAC and a housing developer in the city for over 20 years, I view the expansion of the city’s Housing Trust Fund as a historic commitment to fund housing and to make the city we love more affordable for its residents,” said Eric Tao, Interim CEO of TODCO Group, Principal of L37 Development, and a member of TAC. “At the same, time, the changes to the inclusionary requirements will stimulate the delivery of additional homes, jobs, and tax revenue to help fund the Housing Trust Fund.  This combination of policies demonstrates a resourceful complimentary combination of policies enabling new housing production and strengthening public support of affordability in San Francisco.”

"San Francisco's affordable housing crisis is not a mystery—it is a funding gap. We are losing the fabric of our neighborhoods, not from a lack of vision or zoning, but from a lack of resources to act.  Projects are stalled, families are being displaced and cannot afford to stay in San Francisco,” said Karoleen Feng, Council of Community Housing Organizations Board President. “The expansion of the Housing Trust Fund to $125 million a year, protected in the city charter for the next 30 years, is the kind of durable, structural commitment our communities have been fighting for. As a coalition of the community-based housing organizations, CCHO is proud to have planted the seed of this idea, and we are grateful to Supervisor Melgar, Mayor Lurie, and the Housing Accelerator Fund for turning it into something real. Now we need to win in November—and we will.”

The mayor and Supervisor Melgar also announced an additional $70 million revenue bond to be issued next year, specifically for affordable housing preservation through both reinvestment in existing deed-restricted affordable housing buildings, and the acquisition and conversion of private rental housing to permanently affordable housing through the city’s Small Sites Program.

“The Housing Trust Fund provides critical support for future preservation work that keeps San Francisco’s anti-displacement strategies alive and effective. Every day without a preservation strategy is another day the market gets ahead of us,” said Saki Bailey, San Francisco Community Land Trust Executive Director. “The $70 million revenue bond announced today is not an abstraction—it is the difference between rent-controlled buildings that stay in community hands and buildings that get flipped to the highest bidder. For tenants living in those buildings right now, it is the difference between stability and displacement.”

“These legislative proposals from the mayor and Supervisor Melgar are precisely what this moment calls for.  Housing is too expensive to build and implementing the TAC’s recommendations to lower fees and inclusionary requirements will help to address that challenge.” said Jesse Blout, Principal at Strada Investment Group. “When paired with the plan to increase funding for the Housing Trust Fund, our partners in City Hall are bringing us closer to the goal of delivering thousands of new housing units a year to residents at all income levels.”

The Charter Amendment will be heard at the Rules Committee next month and will require a majority vote of the Board of Supervisors to be submitted to the November 2026 ballot where it must be approved by a simple majority of voters to be enacted.

The inclusionary housing and impact fees ordinance will be appear before the Planning Commission for recommendation in June, before being considered by the Board of Supervisors Land Use and Transportation Committee and full Board of Supervisors later this summer.

“For too long, affordable housing in San Francisco has been underfunded and under-resourced, leaving communities like mine watch neighbors get displaced while projects sit stalled. Tripling the Housing Trust Fund and locking that commitment into the city charter for the next 30 years is the kind of structural change our communities have been demanding,” said Supervisor Walton. “This is not a one-time fix, it is a foundation. When we invest in affordable housing production and preservation at this scale, we are investing in the stability of the families and communities that make San Francisco what it is.”

“This housing package responds to the urgent needs of today’s housing and affordability crisis. It's exactly the leadership and action that our residents deserve, and I applaud Mayor Lurie and Supervisor Melgar for their work,” said Supervisor Sauter. “In the years to come, this package means more than a billion dollars of new funds for affordable housing and a development environment where we'll see more housing at all income levels ready to welcome new neighbors across our city.”  

“This ambitious legislation aims to fulfill the promise of inclusive 21st century urbanism and make real progress on our shared commitment for a more affordable city,” said Supervisor Dorsey. “I am grateful for the work of my colleague Supervisor Melgar and Mayor Lurie on this transformational legislative package, which will help us deliver the housing our city desperately needs.”

“Last year, we passed the Family Zoning plan that increased our capacity for new homes citywide. But to get shovels in the ground and new housing constructed, we need to bring down construction costs and truly finance more affordable housing, said Supervisor Sherrill. “I’m proud to cosponsor this legislative package that will deliver more homes and more funds, making sure we all can benefit from a more affordable San Francisco.”

“Housing affordability remains one of San Francisco’s biggest challenges,” said Supervisor Wong. “Our Housing Trust Fund is running out of runway and is no longer sized to meet the scale of the housing challenges we face today. Renewing and expanding this fund will help San Francisco build and preserve the affordable housing our communities need so working families, seniors, educators, and future generations can continue to call this city home. I’m proud to co-sponsor this effort.”