Board Unanimously Adopts Two-Year Budget Restoring $28M in Services

San Francisco's Board of Supervisors unanimously approved the city's two-year budget on July 28 — the first unanimous budget vote in six years — restoring more than $28 million in cuts to vital services while building $1.3 billion in reserves against anticipated federal funding losses. In a wide-ranging session, supervisors also sent a transfer tax loophole measure to the November ballot, introduced sweeping renter-protection legislation, and honored Afghan American community leaders during a lengthy commendations session.

• First unanimous budget in six years restores $28M in cuts to senior services, immigration defense, Free City College, and HIV prevention while shielding $1.3B in reserves against Trump administration cuts
• Transfer tax loophole measure heads to November ballot, estimated to generate $100–$150M annually by closing a foreclosure exemption exploited by commercial real estate investors
• Supervisor Sauter introduces renter-protection package targeting elevator neglect, uncapped banked rent increases, and rental scams
• 175-unit affordable senior housing approved in Chinatown at 758 Pacific Avenue with $13.7M loan and rent forgiveness for New Asia Restaurant
• Fireworks penalty ordinance passes 9-2, with Supervisors Walton and Fielder dissenting over tiered fines and possible imprisonment
• Public commenters demand Board fill nine vacancies on the Sunshine Ordinance Task Force, warning the city's transparency watchdog has effectively ceased to function

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A Budget Built for Uncertainty

The Board voted unanimously to adopt San Francisco's FY2026–2028 two-year budget, a package that restores more than $28 million in proposed cuts, invests in frontline services, and stockpiles reserves in anticipation of federal funding disruptions.

Why it matters: The unanimous vote — the first in six years — signals a rare alignment between the Board and Mayor's office during a period of deep fiscal uncertainty. With the Trump administration signaling cuts to federal programs that fund everything from HIV prevention to immigrant legal defense, the budget's $1.3 billion in reserves represents a financial buffer for a city that relies heavily on federal dollars.

Where things stand: Budget Committee Chair Connie Chan, who shepherded the budget through four years of committee leadership, framed the vote as both a victory for vulnerable communities and a defensive measure against Washington.

"We will restore more than $28 million in cuts to vital services, retain frontline jobs and safeguard more than $1.3 billion in reserve funds to protect against further anticipated cuts from Trump's administration," said Supervisor Chan.

Key investments include $8 million annually to replace aging fire trucks, new PFAS-free uniforms for firefighters, full funding for immigration legal defense, and restored services for seniors, LGBTQ+ communities, Free City College, HIV prevention, 311 call centers, Laguna Honda Hospital, and childcare.

Supervisor Matt Dorsey, vice chair of the Budget Committee, praised the collaborative process and highlighted a priority close to his district's recovery community: "Perhaps closest to my heart, I'm proud that we found a way to stabilize funding for programs that train the next generation of addiction and recovery specialists and community mental health counselors."

Supervisor Danny Sauter noted the budget restores small business grants, senior programs, and immigrant services. Board President Rafael Mandelman thanked Chan for four years of budget leadership and Supervisor Chyanne Chen for stepping in on committee meetings.

Decisions: The budget passed on a voice vote, same house same call, without objection — 11-0.

What's next: Implementation begins immediately with the new fiscal year. The Board's reserve strategy will face its first real test if anticipated federal cuts materialize.

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Closing a $450 Million Tax Loophole

Supervisor Bilal Mahmood presented a motion to place an ordinance on the November 2026 ballot that would eliminate the real property transfer tax foreclosure exemption for commercial properties — a provision originally designed for traditional bank foreclosures that has been increasingly exploited by sophisticated investors.

The basics: Under current law, properties acquired through foreclosure are exempt from San Francisco's transfer tax. The exemption was intended to ease burdens on homeowners losing their properties. But Assessor-Recorder data shows a dramatic shift in who benefits.

Why it matters: Between FY2023–24 and FY2025–26, more than half of exemption claims involved properties valued at over $10 million — compared with just 4–5% in the prior 15 years. The Controller estimates that closing the loophole for large commercial properties would generate $100–$150 million annually.

"Transactions involving income producing and investment oriented properties account for more than $450 million in transfer taxes that otherwise would have been generated, compared with roughly $50 million over the prior 15 years combined," said Supervisor Mahmood.

The other side: Supervisor Stephen Sherrill supported the measure but urged caution about how the new revenue is used: "I would urge us to be aware that this measure looks to provide balance and gives us more optionality as we look forward to levers like the broader transfer taxes that might be blocking especially certain housing construction."

The measure would preserve the exemption for small residential and mixed-use properties with fewer than five units.

Decisions: Passed without objection (For: 10, Against: 0, Absent: 1 — Supervisor Walton excused).

What's next: San Francisco voters will decide the measure on the November 2026 ballot.

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Sauter Targets Elevator Neglect, Banked Rent, and Rental Scams

Supervisor Danny Sauter introduced a three-part renter-protection package during roll call for introductions, drawing on disturbing conditions in his district and across the city.

Why it matters: San Francisco is the only California city with banked rent that lacks guardrails — meaning landlords can accumulate years of unused allowable rent increases and impose them all at once, a practice increasingly marketed to prospective investors as a feature, not a bug.

Where things stand: Sauter's first item is a drafting request to update the city's elevator ordinance, motivated by conditions at 845 California Street, where nearly 100 tenants live with chronic elevator outages. He described what he found: "I met an amazing 94-year-old woman who has contributed decades of her life to San Francisco but is now isolated from the city she loves. I met a man who suffered cardiac arrest in his apartment and when the paramedics arrived he had to walk himself down many flights of stairs because the elevator was broken."

Meanwhile, the landlord markets a $4,200/month studio in the building promising "elevator for effortless access."

His second item is a Budget and Legislative Analyst request to study banked rent increase guardrails, citing 1120 Jackson Street, where a 224% rental upside was marketed to prospective buyers. "Every other city that allows bank rent has guardrails. Every single one except San Francisco," said Supervisor Sauter. "And we have literally been called the Wild West of rent banking because of this."

The third item requests a hearing on rental scams targeting vulnerable renters.

What's next: All three items were introduced for future committee consideration.

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Chinatown Gets 175 Affordable Senior Homes

The Board approved the city's acquisition of 758 Pacific Avenue for approximately $2.2 million, a $13.7 million loan amendment, and a 75-year ground lease for a 175-unit, 100% affordable senior housing development serving low-income households. The project also includes community-serving commercial space and partial forgiveness of approximately $1.2 million in outstanding rent obligations for New Asia Restaurant, with monthly base rent reduced to $5,000 through Sept. 30, 2026.

Why it matters: The project is one of Chinatown's largest affordable housing developments, combining deeply affordable senior units with community commercial space in one of the city's densest and most historically underserved neighborhoods.

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Transparency Watchdog Left Without a Pulse

Three public commenters used general public comment to sound the alarm about the Sunshine Ordinance Task Force, the city's government transparency watchdog, which cannot convene because 9 of its 11 seats are vacant.

Richard Knee, representing the Society of Professional Journalists and Pacific Media Workers Guild, warned against seeking "pragmatic" members who would weaken oversight. Will Hayward, a District 9 resident, noted that four seats have pending nominations from the Society of Professional Journalists and League of Women Voters that could restore quorum immediately.

Roma Lynn Schmaltz connected the vacancies to a live controversy: the Mayor's office refusal to release records of a phone call with President Trump. The Task Force found the refusal violated transparency laws, she said, but then "the task force itself disappeared."

What's next: The Board has not scheduled action on the pending nominations.

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People's Budget Coalition Honored for $28M Victory

Supervisor Jackie Fielder commended Anya Worley Zigman, founder and coordinator of the People's Budget Coalition, a network representing more than 150 organizations that led advocacy to restore the $28 million in proposed budget cuts.

Supervisor Mahmood praised Zigman for hosting town halls and elevating voices often forgotten in budget processes. Supervisor Chen credited the coalition with holding the Board accountable.

Zigman, who has been involved in City Hall since age 18 as an intern for former Supervisor Preston, celebrated the outcome, declaring that the budget process taught working-class San Franciscans that "when we fight, we win."

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Supervisors Push Hearings on Drugs and Sexual Assault

Board President Rafael Mandelman called for a hearing on the city's drug market response, citing persistent open-air drug scenes: "Drug scenes have persisted in historically challenged neighborhoods at levels of activity that are unacceptable and new areas have emerged as hubs of drug related activity, notably including the areas around the BART plazas at 16th and 24th streets."

Separately, Supervisor Myrna Melgar called for a joint hearing on the city's sexual assault response, citing a troubling statistic: "San Francisco's rape case clearance rate has dropped significantly to the point where we are at half the national rate with only 14% of rapes cleared."

Both hearing requests were introduced for future scheduling.

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Afghan American Leaders Honored Across Six Districts

Five supervisors honored Afghan American community leaders during a 2:30 p.m. Special Order for Afghan American Heritage Month.

Supervisor Chan honored attorney Rabi Mahadidi. Supervisor Sherrill honored Zarina Yousafzai of the Union Square Alliance. Supervisor Sauter honored immigration attorney Sarah Ferozi. Supervisor Mahmood honored Assistant U.S. Attorney Ilham Husseini, cousin of author Khaled Hosseini. Supervisor Dorsey honored Yosef Azeem, Mayor Daniel Lurie's assistant chief for public safety and the first Afghan police officer promoted to sergeant in SFPD. Mayor Lurie also spoke to commend Azeem.

During public comment, Mahanaz Ibadi, Dorsey's legislative aide who drafted San Francisco's first Afghan American Heritage Resolution in 2023, noted the recognition has grown from a local celebration to California's statewide designation.

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Fentanyl Awareness: 3,000 Lives Lost Since 2020

The Board unanimously adopted a resolution recognizing Aug. 21 as National Fentanyl Prevention and Awareness Day.

Supervisor Dorsey noted fentanyl is up to 50 times more potent than heroin, with a lethal dose of just 2 milligrams: "The more than 3,000 people we've lost to fentanyl related overdoses since 2020 has made this the deadliest public health emergency in our city since the darkest days of the AIDS crisis."

Dorsey recognized intern Eva Seligman, who drafted the resolution, and invited the public to the 5th Annual International Overdose Awareness Sunset Vigil on Aug. 30 at City Hall steps. (For: 10, Against: 0, Absent: 1 — Walton excused.)

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Minor Items

• Fireworks penalties ordinance passed 9-2, establishing first-offense fines of $125–$250 and repeat-offense fines of $250–$750 or up to six months imprisonment. Supervisors Walton and Fielder voted no. (Item 27)
• 22 historic properties designated as San Francisco landmarks on first reading across Districts 5, 8, and 11 — the largest single batch of landmark designations. (Items 47–68)
• Consent agenda (Items 1–18) passed 11-0, including: Sheriff's Office overtime budget adjustments ($14M to overtime); reduced paid parental leave eligibility from 180 to 90 days; five lawsuit settlements totaling $1.385M; three tax refund settlements totaling $3.6M; expanded hotel uses in residential districts (up to 10 rooms); banner fee waivers for nonprofits; DBI audit amnesty fee waivers; illegal dumping enforcement; House of Latin Rock landmark designation; repeal of library lending restriction for under-21s; and Health Code cleanup.
• Supervisor Chen introduced a resolution urging Kaiser to drop contract demands related to AI therapy platforms replacing clinicians, citing concerns about patient safety.
• Supervisor Mandelman introduced legislation to fix an inadvertent omission that would have applied term limits to the Rent Board, noting the original task force recommended preserving the current structure.
• Supervisor Mahmood introduced a letter of inquiry to inventory city-owned property for potential food security uses, noting grocery store closures and tariff-driven cost increases.
• Disability Pride Month resolution adopted, with the late Alice Wong honored by Eli Gillardin, director of the Office on Disability and Accessibility.
• Board assigned ballot argument writing duties for November 2026 measures, including the Great Highway initiative and mayoral power charter amendments. (Item 94)
• A public commenter named Amelia warned about the potential removal of peer counselors from the street crisis response team, urging supervisors to act before an Aug. 14 effective date. Dr. Lynn Rivas of the California Association of Mental Health Peer Run Organizations made a similar argument, citing research showing peer specialists prevent hospitalization and reduce costs.