I’ve written many times about the deep hole that San Francisco’s public transit system is in. The system never recovered from the pandemic but for a few years it relied on government pandemic money to keep it going. By 2023, that money was starting to run out and services had to be cut. But by the start of this year, further shortfalls meant that additional service cuts would be necessary if something didn’t change.
San Francisco’s mayor, Daniel Lurie, has been working on a plan to plug an expected $300 million shortfall next year and now that plan is being revealed. It’s basically a new tax on parcels, meaning anyone who owns property will be hit up for more money.
Aiming to raise about $187 million annually to prevent drastic cuts to the city’s bus and rail system, the tax is set to go before voters in November 2026. It would help patch a $307 million annual budget deficit that could grow to $434 million in five years, all but surely sending Muni into a death spiral if the public fails to provide some form of economic life raft.
After months of deliberation and round tables, policymakers in Mayor Daniel Lurie’s office agreed on a “progressive” tax composition that would link the rate to the square footage and nature of a property. The philosophy, at heart, is to spare middle-class households and small businesses, while asking more of major employers and owners of sprawling real estate.
Not surprisingly, the plan is to soak the rich. There will be several different tiers of new taxes with homeowners paying one rate, commercial landlords paying another and multi-family dwellings paying yet another.
Single-family homeowners on parcels smaller than 3,000 square feet would pay a flat tax of $129 per year. Properties up to 5,000 square feet would be charged at 42 cents per square foot, and anything larger would be taxed at $1.99 per square foot.
Owners of apartment buildings would pay a $249 base tax up to 5,000 square feet, and 30 cents per square foot above that, to a maximum of $250,000. Commercial landlords would face a $799 base tax for parcels up to 5,000 square feet, with per-square-foot rates that rise as the property size increases. The tax would be capped at $400,000.
You’d be right in thinking that all of that money will just be passed on to renters of either residential or commercial space. At least that seems likely, but it’s possible the new plan could also involve a no-passthrough clause which would prevent landlords from charging tenants for the extra tax. Where will landlords get the money if not from renters? Why, from the magical pot of gold at the end of the rainbow. Where else?
An average Muni fare is about $3 so if you own property you’re looking at a minimum of paying for 43 bus rides for other people. And of course if you own a large apartment building that could go up to paying for 83,333 bus rides per year.
There’s another loophole in this plan. Older homeowners don’t have to pay at all.
People over age 65 would not have to chip in the flat fee of $129 for homes under 3,000 square feet, or the incremental charges per square foot for larger homes…
But in a city with a rapidly aging population, the exemption applies to a fair number of people. Census data from 2023 showed around 45,000 household heads over age 65 in homes occupied by the owners. The Census counted about 138,000 such homes in San Francisco that year.
Such numbers suggest that with this provision in place, the city would leave nearly $6 million on the table each year. The amount foregone might depend on residents’ tax literacy: Eligible older homeowners would have to “opt in” to get their responsibility lifted.
The same could be true for renters if the no-passthrough clause only applies to people over 65 who rent and not to the young. Meanwhile, progressives are trying to convince the mayor to remove the caps on commercial property so some larger companies could be asked to pay millions.
It sounds like a terrible way to rebuild the city’s partly empty downtown but Mayor Lurie is right that they have to do something. If they can’t save public transit, they are headed for a doom loop.
Our city is moving in the right direction, and our economy is recovering, but all of that progress will disappear if we lose our public transit system. The Muni team is ensuring they use tax dollars responsibly, finding hundreds of millions of dollars in savings and making the… https://t.co/ODkhlqujOP
— Daniel Lurie 丹尼爾·羅偉 (@DanielLurie) December 8, 2025
Our city is moving in the right direction, and our economy is recovering, but all of that progress will disappear if we lose our public transit system. The Muni team is ensuring they use tax dollars responsibly, finding hundreds of millions of dollars in savings and making the system run more efficiently. In addition, we have put together a plan to fund Muni that protects small businesses and families—and allows us to improve and expand service so San Franciscans can get around the city and accelerate our comeback.
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