San Francisco is a city that loves to argue about money, and nothing gets the locals talking quite like a ballot measure. If you’ve spent any time looking at the "Prop C" situation, you know it's not just one thing. It's a saga. Honestly, when people search for Prop C San Francisco, they’re usually looking for one of two massive policy shifts: the 2018 "CEO tax" for homelessness or the 2024 "office-to-housing" conversion break.
Both have redefined the city’s skyline and its relationship with Big Tech.
The 2018 Prop C: A Tech Civil War
Let’s go back to 2018. It was the height of the pre-pandemic tech boom. Salesforce Tower was new, the streets were packed, and the homelessness crisis was—as it still is—the city's most visible wound. Proposition C hit the ballot with a simple, albeit aggressive, plan: tax the city’s largest companies to fund homeless services.
This wasn't just another tax. It targeted businesses with over $50 million in gross receipts. We’re talking about an extra 0.175% to 0.69% on that revenue. It was expected to bring in roughly $300 million a year.
What made it truly legendary, though, was the public brawl it sparked. You had Marc Benioff, the CEO of Salesforce, going all-in for "Yes on C." He spent millions of his own money and basically shamed his billionaire peers on Twitter (now X). On the other side? Jack Dorsey, then-CEO of Twitter, and Patrick Collison of Stripe. They argued the tax was poorly designed and would hurt the city's middle-class jobs. Mayor London Breed actually opposed it at the time, too.
Despite the heavy hitters against it, the people spoke. It passed with about 61% of the vote.
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Where did that money actually go?
Because of legal challenges, the funds were locked in an escrow account for years. Finally, in 2020, the California Supreme Court cleared the way. Since then, the "Our City, Our Home" fund has pumped hundreds of millions into:
- Permanent Supportive Housing: Buying old hotels and converting them.
- Mental Health Services: Creating new beds for the "severely impaired" population.
- Eviction Prevention: Short-term rental subsidies to keep people in their homes.
Critics say the streets don’t look $300 million-a-year better. Supporters say it’s a long game. Realistically, it's probably both.
The 2024 Shift: Trying to Save Downtown
Now, let's talk about the new Prop C San Francisco—the one from March 2024. The vibe in the city has changed. Remote work gutted the Financial District. Vacancy rates hit 30% or higher. The city was desperate to get people back downtown.
The 2024 Prop C was a different beast entirely. It wasn't about taxing billionaires; it was about giving real estate developers a massive break.
Basically, if you own a giant, empty office building and you want to turn it into apartments, San Francisco normally hits you with a "Transfer Tax" when you sell. This tax can be up to 6% for big properties. Prop C waived that tax for the first 5 million square feet of office-to-housing conversions.
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Why this matters for the 2026 economy
It passed with about 53% of the vote. It wasn't a landslide. Many people felt it was a "giveaway" to developers who already have plenty of money. But the city's logic was simple: office buildings are worth way less than they used to be. If the city doesn't make it cheaper to convert them, they’ll just sit there, rotting and empty, and the city will lose property tax revenue anyway.
The Controller's office estimated this could cost the city up to $150 million in lost transfer taxes over 30 years. But if it works? You get thousands of new residents in a dead zone, which means more sales tax and more life.
The 2024 Overhaul (The November Prop M Connection)
You can't talk about Prop C San Francisco without mentioning the massive tax reform voters just approved in late 2024 (often referred to as the Prop M reforms). This is the "Big One" for 2025 and 2026.
City leaders realized the gross receipts tax—the system Prop C sits on—was too volatile. It relied too much on a few tech companies. If Google or Salesforce moved employees to Austin, SF's budget collapsed.
The new changes, which are taking effect now in 2026:
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- Small Business Relief: The exemption for small businesses was hiked to $5 million in gross receipts. This saved about 2,500 tiny shops from paying business tax at all.
- Tax Base Expansion: The tax now focuses more on where you sell things, not just where your employees sit. This is a huge win for keeping companies from fleeing just to save on taxes.
- Category Simplification: They collapsed 14 different tax categories into 7. It’s less of a headache for accountants, sort of.
Nuance and the "Benioff Factor"
There’s a bit of irony here. Marc Benioff, the hero of the 2018 Prop C, has recently been more critical of the city’s direction. By late 2025, he was making headlines for suggesting the National Guard might be needed to handle crime and drugs downtown.
It shows how much the "business vs. city" dynamic has soured. The 2018 Prop C was born out of a sense of abundance—"we have so much money, let's fix this." The 2024 Prop C and the subsequent 2026 tax environment are born out of survival.
One thing people get wrong: they think Prop C "solved" homelessness or "killed" the office market. Neither is true. Homelessness is a regional and national issue that $300 million a year can't fix alone. And the office market died because of Zoom, not because of a 0.5% tax.
Actionable Insights for 2026
If you’re a business owner or a resident trying to navigate the fallout of Prop C San Francisco, here is what you need to actually do:
- Check Your Gross Receipts Category: With the 2024-approved reforms fully active this year (2026), your tax rate has likely changed. The city simplified its 14 categories down to 7. If you haven't talked to your tax pro since 2024, you’re probably looking at the wrong numbers.
- Monitor the Office Conversion Waiver: If you’re in the real estate game, that transfer tax waiver for conversions is a "first-come, first-served" deal limited to 5 million square feet. If you wait until 2028 to start a project, you might miss the cap.
- Watch the "Our City, Our Home" Reports: The oversight committee for the original Prop C funds (the 2018 tax) releases quarterly data on where the money goes. If you want to see if your tax dollars are actually funding permanent housing vs. just more "outreach," those reports are the only place to find the truth.
- Small Business Owners: If your gross receipts are under $5 million, make sure you aren't still filing or paying like you're under the old $2.25 million threshold. You might be exempt now.
The reality is that Prop C isn't a single law anymore; it's a permanent fixture of how San Francisco operates. It's the reason some of the biggest companies in the world pay millions into a local fund, and it's currently the primary hope for turning the Financial District into a neighborhood. It's messy, it's expensive, and it's quintessentially San Francisco.