Pacific Research Institute, December 3, 2018
By Kerry Jackson
When San Franciscans went to the polls on Nov. 6, they knew in advance what the consequences are likely to be if an initiative to tax corporations to fund services for the homeless was approved. Yet they passed it anyway. Nearly 61 percent voted for Proposition C, which imposes a tax on businesses in the city and county to raise as much as $300 million a year to “help homeless people secure permanent housing,” for “construction, rehabilitation, acquisition, and operation of permanent housing with supportive services,” and for “programs serving people who have recently become homeless or are at risk of becoming homeless.” They will find that, rather than reducing the number of homeless in San Francisco and helping those who remain on the streets, what is being called the biggest tax hike in city history will only increase their numbers and do little to nothing to improve their plight. The approval of Proposition C stands in stark relief to the views of Mark Farrell, who was briefly San Francisco mayor. Earlier this year Farrell told the San Francisco Chronicle that he was weary of facilitating homelessness. “Enough is enough. We have offered services time and again and gotten many off the street, but there is a resistant population that remains, and their tents have to go,” he said. “We have moved as a city from a position of compassion to enabling (unacceptable) street behavior, and as mayor I don’t stand for that.” The new mayor, London Breed, is left with the the urban equivalent of a cleanup on aisle five. She opposed Prop C because she knew there would be “the inevitable flight of headquarter companies — and jobs — from San Francisco.” She also acknowledged that the initiative will make the homeless problem worse. Yet due to the will of the voters, Breed is now saddled with it, and, according to local television news, is “working with City Attorney Dennis Herrera to validate voter-approved Proposition C in court so that the city can begin gathering funds from the measure.” It will be a failing enterprise. Additional funds will do nothing. If San Francisco is to begin moving the homeless off its streets, it needs to start with adding more housing. Much more. But expanding the housing stock isn’t an option when the costs of building are staggeringly steep, and policymakers have done little to alleviate the construction hurdles that have created the shortage. In the meantime, the city will become a magnet for more homeless, having become a “sanctuary city” for them through Prop C. If residents think they have a problem now with people on the streets, just wait until even more homeless make their way there in search of the promise of housing that will never materialize. San Francisco voters could have also looked up the road to Seattle for some insight before they approved Prop C. There the city council voted to tax businesses within the city limits $275 per employee to fund homeless programs, then turned around and repealed the tax less than a month later. Critics of the repeal said the council went back on the tax hike because members were bullied by big companies opposed to it. Or maybe they simply realized that the company line from Starbucks — “Together we must work to bring families inside, once and for all” — made more sense than a coercive and punitive program straight from a central planner’s desk that would worsen the homeless problem and hurt the city’s economy. San Francisco has to do something about its homeless crisis. It is swimming in human feces and urine, awash in used hypodermic needles, and flooded with litter. Proposition C, which the San Francisco controller estimates will cost $200 million to $240 million a year in city GDP, and 725 to 875 jobs over 20 years, is far from being the answer. Given government’s poor record in eliminating homelessness, there’s little alternative but to turn to the private sector for help.