Supervisors approve limited reallocation of Proposition C funds; divided vote on cap allowing mayoral reallocations

The Board of Supervisors on July 15 approved an ordinance that reallocates prior appropriations and earned interest in the city's Our City Our Home (Proposition C) fund to allow the San Francisco Department of Homelessness and Supportive Housing and the mayor's office additional flexibility to use homelessness gross receipts tax revenues through fiscal year 2026—27.

Divided question on section 4: Supervisors voted separately on a contested provision (section 4) that would allow the mayor and the board to reallocate up to a capped amount of additional Prop C revenue by a simple majority, rather than the two‑thirds or supermajority otherwise required for changes to the proxy allocations. The divided roll call on section 4 produced eight ayes and three no votes; Supervisors Chen, Fielder and Walton voted no. The remainder of the ordinance passed unanimously on the subsequent roll call (11 ayes).

What the ordinance does: As amended in committee and during debate, the ordinance (item 36) reallocates approximately $34.7 million in previously appropriated revenue and unappropriated earned interest within the Our City Our Home fund, and authorizes the city to expend up to an additional $19.1 million of future revenues and interest on programs to address homelessness without complying with the usual expenditure percentages in the BTR code section 28.10. The authority to reallocate is time limited (through fiscal year 2026—27) and capped in amount as amended on the floor by Supervisor Chan.

Why it was controversial: Several supervisors and advocates expressed concern that allowing majority reallocation authority—even capped and time limited—erodes a voter‑approved safeguard. Supervisor Shanelle Fielder framed the supermajority requirement as a voter protection that should not be waived. Chair Chan and other supporters argued amendments narrowed the original administration proposal and set a cap of $19 million, limiting the temporary majority reallocation authority to the 2026—27 fiscal year and preserving two‑thirds approval for larger reallocations.

Votes and implementation: The clerk recorded the separate vote on section 4 (8 ayes, 3 no). The remainder of item 36 passed on roll call (11 ayes). Chair Chan and city officials said the reallocated funds will target immediate needs such as family rapid rehousing, transitional‑age youth supports and RV interventions; the legislative file contains a Prop C budget summary that the chair asked members and the public to review.

Next steps: The ordinance passed on first reading. Departments will be expected to track any reallocated Prop C spending and report back to the board; supervisors said they will monitor whether the capped reallocation is used and whether additional proposals are needed to align spending with evolving needs.