San Francisco continues to struggle with issues of affordability and displacement. These complex problems have not been caused by the technology sector, targeted tax incentives or any other single industry or city policy. They have developed over decades in conjunction with increasing population growth, a slow pace of housing production and many other factors.
Mayor Ed Lee and our city’s leaders are rightfully concerned and are taking actions to make the city more affordable for all those who live and do business here. Working together with business and labor over the past several years, our city has passed meaningful business tax reform, incentives to revitalize Mid-Market and created a Housing Trust Fund. And these policies are having an impact.
Business Tax reform is helping to keep growing companies – and jobs – in the city. As the gross-receipts tax is phased in starting this year, the city’s tax base will also grow, bringing in even more revenue to the General Fund. The Housing Trust Fund, enacted by voters in 2012, has invested in hundreds of new affordable housing units, with thousands more to come.
The Central Market and stock-based payroll tax incentives, enacted in 2011, have been particularly successful. According to the San Francisco Office of Economic and Workforce Development, the Central Market Payroll Tax Exemption has helped bring 18 technology companies, 17 small businesses and space for more than 13,000 jobs to the long-blighted Mid-Market area.
Rather than costing the city money, the Central Market incentive has generated $8.4 million in real estate tax revenue for the city – money that can be used for housing, transportation and other services. Business tax collections are also expected to grow almost 12 percent this fiscal year, versus an inflation rate of just 2.4 percent. While the incentives are having the intended effects, more needs to be done to ensure affordability.
The San Francisco Chamber of Commerce is now participating in the consensus-building process that was kicked-off last week under the leadership of Mayor Lee to explore a November ballot measure to increase the minimum wage. We are also putting our full support behind the Mayor’s efforts to pass a transportation bond measure and alter the Vehicle License Fee (VLF) to generate revenue for Muni, transportation and other General Fund needs.
Unfortunately, labor-backed groups acting outside of the collaborative process are putting these efforts at risk. Last week, Chris Daly and a group of labor activists filed their own preemptive minimum wage ballot measure with no input from the city or local employers. Earlier this week, SEIU rallied against Twitter in a media stunt demanding the company forego its tax incentive in order to increase city revenues for new wage and benefit demands for city employees.
Like commuter shuttle protests, these actions are misguided and counterproductive. Business tax reform and the targeted tax incentives passed in 2011 have never been about Twitter, or any other individual company doing business in our city. They are about providing employers of all types and sizes with the incentive to stay and expand in our city, while generating money for housing and revitalizing a long-blighted area of the city.
Affordability is a complex and significant issue. It took years to develop and it will take collaboration and compromise from all stakholders to make our city more affordable for those who live here, work here and create jobs in our city. It’s time to stop protesting and start collaborating.