How San Francisco Real Estate Tax Funds Reparations Now
By Darius Spearman (africanelements)
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San Francisco recently took a giant step toward making things right for its Black residents. Leaders in the city approved a new reparations fund that will use money from property sales. This move aims to fix the damage caused by years of unfair housing and work rules. Many people see this as a solid way to heal old wounds from slavery and modern exclusion (davisvanguard.org). The plan is not just about writing checks. It is about looking at the history of how the city grew by pushing Black people out (localnewsmatters.org).
The story of San Francisco is often told as one of progress and freedom. However, the reality for Black families has been much harder. For decades, the city used laws and urban planning to limit where Black people could live. These policies took away the chance for families to build wealth through their homes (bayareaequityatlas.org). Today, the city is trying to reverse that trend. By using a tax on expensive real estate, officials hope to fund programs that restore what was lost (sfgate.com). This article looks at the deep roots of this struggle and how the new fund works.
The Myth of the California Free State
Many people believe that California was always a land of freedom for Black people. The state joined the Union as a “free state” in 1850. But the laws on the books told a different story (wikipedia.org). In 1852, the state passed a Fugitive Slave Law. This law allowed enslavers to hunt down and capture Black people who had escaped to California. This created an early legal foundation of fear for Black residents (ca.gov). It showed that the state government was willing to support the system of slavery even on free soil.
This history is a vital part of the reparations in California discussion. Even after slavery ended, the spirit of those laws remained. Policies shifted from physical chains to economic ones. For example, Black people were often barred from testifying in court against white people (ca.gov). This made it nearly impossible for them to protect their property or their rights. The current push for reparations seeks to acknowledge that these state actions were the start of a long line of harms (davisvanguard.org).
The Bay Area Wealth Gap (Median Net Worth)
Source: Bay Area Equity Atlas (2016)
Redlining and the Loss of the Home
In the middle of the 20th century, the federal government helped create the wealth gap we see today. Officials drew maps of cities like San Francisco. They marked Black neighborhoods in red. This practice is known as redlining (hud.loans). Banks used these maps to deny mortgages to Black families. This meant that while white families were buying homes and building equity, Black families were stuck as renters (bayareaequityatlas.org). In neighborhoods like the Western Addition, this made it very hard for the community to grow economically.
At the same time, private developers used restrictive covenants. These were rules written into property deeds. They stated that the home could never be sold to a Black person. Neighborhoods like St. Francis Wood and the Sunset District were kept white through these legal tricks (daniellelazier.com). Even after the Supreme Court said these rules were not legal in 1948, many people still followed them. The result was a city divided by race and wealth. This forced segregation is a primary reason why San Francisco is now looking at a reparations fund (sfgate.com).
The Destruction of the Harlem of the West
The Fillmore District was once a thriving hub for Black culture and business. It was so vibrant that people called it the “Harlem of the West.” During the 1950s and 1960s, the city’s Redevelopment Agency targeted this area (sfocii.org). They called it “urban renewal,” but the community had a different name for it. Famous author James Baldwin called it “Negro Removal” (stanford.edu). The city used its power to take land and tear down thousands of homes and hundreds of businesses (sfocii.org).
This was not just about buildings. It was about destroying the economic heart of the Black community. Over 800 Black-owned businesses were forced to close (bayareaequityatlas.org). Families were given “Certificates of Preference.” These papers promised them a spot in new housing later. However, those promises were rarely kept. Many families moved away and never returned. Today, the loss of property value from that era is estimated to be between $3.27 billion and $4 billion (sfgate.com). This massive loss of wealth is what the new fund aims to address.
How the Reparations Fund Works
On December 16, 2025, the Board of Supervisors made history. They voted unanimously to create a formal Reparations Fund. Mayor Daniel Lurie signed this into law a week later (sfgate.com). The fund is a legal bucket. It can hold money from taxes, private gifts, and other sources (localnewsmatters.org). The main source of money for this effort is a tax on big real estate deals. This tax comes from Proposition I, which voters passed in 2020 (sfgate.com).
Proposition I doubled the tax when someone sells a building for $10 million or more. Because the real estate market in San Francisco became so valuable by excluding Black people, advocates say this tax is the perfect source for repair (sfgate.com). The fund does not have a set amount of taxpayer money yet. The city is currently facing a big budget deficit of $1 billion. Because of this, leaders like Mayor Lurie are moving carefully. For now, the fund exists as a structure waiting for its first big deposit (tag24.com).
The Vanishing Community
A community pushed out by decades of displacement (bayareaequityatlas.org).
Beyond Just Cash Payments
The headlines often focus on a single number. People hear about a $5 million payment and think that is the whole plan (foxnews.com). But the African American Reparations Advisory Committee (AARAC) has over 100 ideas for repair. They want to see long-term changes that help people stay in the city. One idea is a guaranteed income program. This would help families reach the Area Median Income, or AMI, which is very high in the Bay Area (davisvanguard.org). This is a pivotal step, much like the California task force that studied these issues at the state level.
Other plans include helping people buy homes again. The city could offer $1 housing options or low-cost mortgages for people who were displaced. There is also a push for debt forgiveness. If the city cancels student or personal loans, Black families would have more money to invest in their future (davisvanguard.org). These ideas recognize that the harm was more than just a one-time loss. It was a multi-generational theft of opportunity. Reparations must be as deep as the roots of the problem (sfgate.com).
Health and Environmental Justice
The damage to the Black community was not only financial. It was also physical. For many years, the city concentrated public housing in polluted areas. Bayview-Hunters Point is a prime example of this. The neighborhood was home to a naval shipyard where nuclear ships were cleaned (sfocii.org). This left behind dangerous chemicals and radiation. The EPA called it a “Superfund” site because it was so toxic. Even so, the city continued to place Black families in the area (sfocii.org).
The result is a health crisis. People in Bayview suffer from high rates of asthma and cancer. The AARAC calls this a human rights violation (sfgate.com). They argue that the city and federal government failed to protect residents from known toxins. Part of the reparations effort includes better healthcare and cleaning up the environment. It is about making sure that Black residents can live long and healthy lives in the city they helped build (davisvanguard.org). This holistic view of repair is becoming a model for others, including the New York reparations movement.
The Challenge of the Budget Deficit
Even though the fund is now law, the path forward is difficult. San Francisco is struggling with its finances. President Donald Trump has been critical of urban spending, and the city must manage its own $1 billion shortfall (tag24.com). Mayor Lurie has warned that the city cannot afford big cash payouts right now. He emphasizes that the ordinance creates the “structure” for reparations but not the money to pay for everything immediately (localnewsmatters.org).
This has led to frustration among some supporters. They worry that the fund will sit empty while more Black residents are forced to leave. However, the Board of Supervisors can redirect money from the General Fund if they choose to do so. Proposition I money currently goes into the General Fund. This means the city has the legal power to move that money into the Reparations Fund with a simple vote (sfgate.com). The debate now is about priorities. Will the city prioritize repair even during a budget crisis? (sfgate.com).
Certificates of Preference: A Broken Promise
When the city tore down the Fillmore, they gave people Certificates of Preference. These documents were supposed to be a “golden ticket” back into the neighborhood (sfocii.org). They were meant to give displaced families the first chance at new affordable housing. But for decades, these papers were nearly worthless. Many families found that the new housing was too expensive even with the certificate. Others found that the city simply did not build enough units (sfgate.com).
In 2021, a new state law tried to fix this. It expanded the certificates so that children and grandchildren of the original owners could use them (sfgate.com). This acknowledges that the harm did not stop with the people who were moved. It affected their descendants too. However, even with the new law, only about 250 people have been housed using these certificates in the last ten years (sfocii.org). Over 5,000 households are still on the waitlist. For many, these certificates are a symbol of a promise that the city has yet to fulfill (sfgate.com).
The Role of the Current Administration
The national political climate is also playing a role in this local story. With Donald Trump as the current president, there is a focus on how cities spend their tax dollars. Some critics of reparations argue that the money should be used for police or transit instead. They see reparations as a “special interest” project (foxnews.com). But supporters in San Francisco argue that repair is essential for the city’s future. They believe that a city that is not fair to all its people cannot truly thrive (davisvanguard.org).
Mayor Lurie and the Board of Supervisors must now find a way to balance these pressures. They have built the legal frame for the fund. Now they must decide how to fill it. Some people suggest looking for private donations from the tech companies that now sit on land once owned by Black families (localnewsmatters.org). Others say the city must stay the course with the real estate transfer tax. The struggle for reparations is a test of the city’s values. It asks if San Francisco is willing to pay the price for its past mistakes (tag24.com).
Conclusion: A Concrete Path Forward
San Francisco is at a turning point. The creation of the reparations fund is a massive victory for those who have fought for justice for years. It moves the conversation from “if” the city should help to “how” it will help (davisvanguard.org). The use of the real estate transfer tax provides a logical link between the wealth of today and the exclusion of yesterday. It is a concrete path that many other cities are watching closely (localnewsmatters.org).
The journey is far from over. With a big budget deficit and political debates, the real work is just beginning. But for the families who lost their homes in the Fillmore, and for those who were redlined out of the American dream, this is a sign of hope. It is a sign that the city is finally ready to face its history. By working to repair the harms of the past, San Francisco can build a better and more honest future for everyone (sfgate.com).
About the Author
Darius Spearman is a professor of Black Studies at San Diego City College, where he has been teaching for over 20 years. He is the founder of African Elements, a media platform dedicated to providing educational resources on the history and culture of the African diaspora. Through his work, Spearman aims to empower and educate by bringing historical context to contemporary issues affecting the Black community.
