Mayor proposes San Francisco housing budget adjustments amid funding challenges

The San Francisco City Council convened on June 5, 2025, to discuss the mayor's proposed budget for the upcoming two fiscal years. The meeting focused on the intricacies of the budget, highlighting significant reductions, policy changes, and the implications for various city services.

The presentation began with an overview of the budget, which totals approximately $846 million for the current fiscal year. A notable point was the expected 12% drop in funds, primarily due to the expiration of one-time funding sources related to initiatives like the Safe for Families program and transitional age youth support. The budget for the second year is projected to grow by about 2%, largely due to a combination of state grants and one-time funds being allocated for future use.

Key discussions included the allocation of funds, with over half dedicated to housing subsidies and support services. The budget also reflects a shift in expenditure categories, particularly in salaries and benefits, which have increased due to cost-of-living adjustments for city workers. Despite the mayor's directive for a 15% ongoing reduction in the general fund, the department managed to avoid a $42 million cut in services, although some reductions in grants and community-based operations were necessary.

The council addressed the challenges posed by flat funding amidst rising operational costs for service providers. A $3.9 million reduction in community-based operations was highlighted, alongside the elimination of certain contracts, including funding for Project Homeless Connect. The budget also anticipates a significant loss of state grant funds in the second year, which could impact ongoing programs.

New initiatives were introduced, including the expansion of interim housing and support for families experiencing homelessness. The budget allocates $121 million over three years for these initiatives, which aim to address street homelessness and improve overall service delivery. Additionally, the mayor's office is consolidating various relocation assistance programs to enhance support for individuals transitioning out of homelessness.

The meeting concluded with a discussion on the funding sources for the budget, which include general fund allocations, the homelessness gross receipts tax, and federal funds. The city is currently awaiting clarity on federal HUD Continuum of Care grants, which have been delayed due to ongoing legal challenges.

Overall, the council's discussions underscored the complexities of managing the city's budget in a challenging fiscal environment while striving to maintain essential services for vulnerable populations. The next steps will involve further evaluations and potential adjustments to ensure the budget remains balanced and effective in addressing the needs of the community.