Question

San Francisco voters rejected proposition E years ago. Read the proposition (see Moodle for Prop E summary) and answer the following questions.

a) Describe Proposition E?

b) List some of the arguments in favor of Proposition E. Do you agree with them?

c) List some of the arguments against Proposition E. Do you agree with them?

d) How will Proposition E affect the soda market? What will happen to the quantity of soda bought and sold? What will happen to the price of soda? Who will ultimately pay this tax?

e) Would you vote for a soda tax?

Answer 1

1. Proposition E
   1. Proposition E (Limits on Office Development), says that the city will have to either meets it affordable housing goals or reduce the amount of new office space it permits each year.
   2. John Elberling of Tenants and Owners Development Corporation (TODCO) originally proposed the proposition. Elberling alleges that the city has a binary choice: build more housing or fewer offices, framing Proposition E as a tool to enforce that balance.

2. Arguments for Proposition E

   1. Elberling and other backers argue that SF suffers from a jobs-housing imbalance, as the city continues to attract new businesses and new employees to fill those jobs, but then has nowhere to put them. Either accelerate the latter or put the brakes on the former, the Todco crowd suggests. Allowing business to continue creating housing demand that the city can’t satisfy is a recipe for disaster.

   2. Backers also say that Proposition E is a way to finally incentivize meeting SF’s RHNA goals, which have no penalties attached to them, making them at best guidelines.

   3. Supported by
      1. Todco
      2. Council of Community Housing Organizations
      3. SF Tenants Union
      4. AIDS Housing Alliance
      5. Most of the Board of Supervisors, most vocally Aaron Peskin.
3. Arguments against Proposition E
   1. Opponents of the plan point out that the major source of funding for affordable housing is office development; driving down one would reduce rather than encourage development of the other. City Hall’s own economist, Ted Egan, buttressed this argument with his own projection of the proposition’s possible effects if passed.
   2. Another common complaint is that Proposition E punishes the city for building more, but doesn’t make it easier to create new affordable housing—a combination of the “We’re working as hard as we can” and “You’re not helping” arguments.
   3. Further, reducing office development will likely restrict SF’s economy and possibly drive up prices on current spaces, which opponents suggest will harm small businesses and nonprofits.

   4. Opposed by

      1. SF Chamber of Commerce
      2. Small Business Commission
      3. YIMBY Action, SFHAC
      4. Three SF Supervisors, most notably Catherine Stefani
      5. Mayor London Breed previously favored a different, competing plan
4. A sugary drink tax or soda tax is a tax or surcharge designed to reduce consumption of drinks with added sugar.
   1. Drinks covered under a soda tax often include carbonated soft drinks, sports drinks and energy drinks
   2. Proposition E in San Francisco would have added $.02 per ounce on sugar drinks such as sodas, energy drinks, iced tea and juices. The burden of paying that tax falls on the distributor. Exceptions would include diet sodas, milk, natural fruit and vegetable juices and baby formula.
   3. new tax on beverages like juice drinks and soda would have driven up grocery prices, and made it more expensive to live and work in San Francisco

5. Facts

   1. There is a growing percentage of people who are obese in the United States

   2. It is not necessarily the case that a tax on sugary drinks would result in less consumption

   3. However recent evidence suggests that a tax on sugary drinks does change people’s buying habits

   4. Opposition to taxes on sugary drinks focuses on freedom of choice and that these taxes disproportionately hit the poor

   5. Too high a tax can result in unintended consequences

• No, I dont