Unlocking the Pipeline: Why HAC Supports the BUILD Act
San Francisco is stuck. While the city has seen success with the Mayor’s Family Zoning plan passing, most of those housing projects remain stalled. The cost to build is just too high and that means our tax code must evolve to meet the current reality.
HAC is proud to support the Balanced Update to Incentivize Local Development (BUILD) Act, a legislative package recently announced by Mayor Daniel Lurie and Supervisor Bilal Mahmood. This strategic intervention is designed to lower the barriers to construction and get our union trades back to work.
The most immediate impact of the BUILD Act is its reform of the real estate transfer tax. In 2020, the rate at which new housing is taxed doubled, creating a massive hit on the very multifamily and commercial projects the city needs to thrive. Our Executive Director Corey Smith writes more about this in our blog post here.
For builders, the transfer tax acts as a hidden construction cost that can kill a project’s viability before it even breaks ground. The BUILD Act restores these rates to pre-2020 levels for multifamily and commercial properties (2.75% for transactions over $10M and 3% for those over $25M). City Hall estimates this change will reduce the cost of construction by approximately $32,850 per unit. For a stalled project, that 3% reduction in total cost is often the difference between shovels in the ground, and an empty lot that sits idle for another decade.
At HAC, we advocate for solutions that benefit all types of housing. A common criticism of tax reform is the potential loss of revenue for affordable housing. The BUILD Act addresses this head-on through a revenue-neutral framework.
Alongside legislation to reduce the cost of building, a November 2026 ballot will work to standardize the tax code by ensuring banks and large investment firms pay their fair share during foreclosures. This reform targets high-value institutional transfers that currently bypass the transfer tax, providing a stable revenue stream for the Affordable Housing Trust Fund while keeping the BUILD Act revenue-neutral.
As Supervisor Bilal Mahmood noted in the recent announcement, San Francisco cannot afford to leave 50,000 entitled homes in limbo due to an outdated tax code.
By aligning our tax structure with the economic realities of 2026, the BUILD Act creates a win-win by restoring the feasibility of market-rate and missing middle housing, securing reliable funding for affordable units, and supporting thousands of local union jobs for electricians, plumbers, and laborers.
HAC is excited to support Mayor Lurie and Supervisor Mahmood in this effort to modernize our city’s approach to growth. It’s time to move past the obstacles of the past and build the San Francisco of the future.
