On November 5th of last week, voters took to the polls to cast their ballots in an election with several measures that will affect businesses and City Commissions. With preliminary election results available, below is an overview of some of the key results.

Proposition 33: Local Government Residential Rent Control – Failed

Prop 33 sought the statewide repeal of the Costa-Hawkins Rental Housing Act of 1995 (“Costa-Hawkins”), which restricts the ability for local jurisdictions to impose rent control. Proponents for the proposition argued that repeal of Costa-Hawkins would allow jurisdictions to expand rent control, while opponents argued it would freeze construction of new housing and effectively reverse dozens of new state housing laws. Preliminary election results show 60.8% of voters voted no on Prop 33, keeping Costa-Hawkins in place and delivering a resounding rejection of stricter rent control.

Measure D: City Commissions and Mayoral Authority – Failed

Measure D proposed to limit the total number of commissions in the City of San Francisco to 65, while also giving the Mayor sole authority to appoint and remove City department heads. The Measure would also have given the police chief the sole authority to adopt rules governing the conduct of police officers. Preliminary election results show that 56.39% of voters voted no on Measure D, maintaining the current number of commissions in the City.

Measure E: Creating a Task Force to Recommend Changing, Eliminating, or Combining City Commissions – Passed

Also aimed at commission reform within the City, it appears that Measure E won out over Measure D, with preliminary election results showing 52.05% voter approval. Measure E asked voters to decide whether the City should create a task force to make recommendations by February 1, 2026 on ways the City could change, eliminate, or consolidate commissions to improve the administration of City government.

Measure L: Additional Business Tax on Transportation Network Companies and Autonomous Vehicle Businesses to Fund Public Transportation – Passed

With preliminary election results showing 56.88% voter approval, it looks like voters have passed Measure L, which places a permanent additional tax on transportation network companies and autonomous vehicle businesses to support Muni transportation services and fare discount programs, titled the “Ride-Hail Platform Gross Receipts Tax.” The Measure will impose the tax specifically on businesses that provide passenger service for compensation and receive more than $500,000 in gross receipts. The tax rates range between 1% and 4.5% of gross receipts. The Controller estimates annual revenue from the measure at approximately $25 million.

Measure M: Changes to Business Taxes – Passed

Measure M proposed to modify several existing taxes in the City, including the Gross Receipts Tax, Homelessness Gross Receipts Tax, Overpaid Executive Gross Receipts Tax, Business Registration Fee, and the Administrative Office Tax on Payroll Expenses. In general, the Measure is expected to cut taxes for many small businesses and shift more tax burden onto medium, large, and wealthier businesses through a variety of changes. Preliminary election results show that Measure M was approved by 69.73% of voters so far.

 

Authored by Reuben, Junius & Rose, LLP Attorney, Kaitlin Sheber.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.