San Francisco Supervisor Bilal Mahmood has withdrawn a controversial proposal that would have imposed a new tax on vacant grocery store locations. The plan, part of Mahmood's "Affordable Groceries Act," was met with significant resistance from City Hall and the business community.
Mahmood announced Sunday that he is abandoning the tax measure, which was slated to go before voters in November. He intends to pursue a city ordinance aimed at expanding access to grocery stores through incentives, funding, and zoning reforms.
The original proposal included two measures: one to establish a city-run fund to help corner and convenience stores expand fresh food offerings and support new grocery stores, and another to tax large chains that leave former grocery store locations vacant. The vacancy tax was intended to encourage chains to keep locations operational.
However, the tax proposal faced opposition from Mayor Daniel Lurie, business interests, and fellow supervisors. Lurie's office stated that while the mayor is working to bring more grocery stores to the city, a vacancy tax was not the preferred approach. The Chamber of Commerce and Align Real Estate, a developer, also pushed back against the plan.
Mahmood revealed that Amazon, which owns a vacant former Whole Foods location in Mid-Market, was actively lobbying against the proposed tax. Supervisor Connie Chan, chair of the board's budget committee, did not place the tax proposal on the committee's agenda. Board of Supervisors President Rafael Mandelman expressed concerns that such measures could send an adversarial message and hinder the city's recovery.
"Ultimately, it’s clear there is no consensus at City Hall on corporate accountability or on solutions that mix carrots and sticks at this time," Mahmood stated on social media. "But we have to be driven by results and find a path forward on solutions that are possible to drive consensus around today."
The proposed measures emerged as San Francisco has experienced a series of major supermarket closures, limiting grocery options in some neighborhoods. Mahmood had previously cited New York City Mayor Zohran Mamdani's efforts to promote city-run grocery stores as inspiration.
Mahmood's revised approach will focus on advancing the grocery fund via an ordinance. This revamped effort aims to divert funding toward assisting convenience stores in stocking fresh produce and to use incentives and zoning changes to encourage new supermarkets to open. The ordinance is scheduled for a hearing Monday before the Board of Supervisors' rules committee.
"This is not the end of the conversation," Mahmood wrote. "This is just the beginning of a larger effort to address our affordability crisis, and I won’t stop fighting until every neighborhood has reliable access to affordable, healthy food."