SF Drove Out Its Grocery Stores. Now It Wants to Pay to Get Them Back.

Supervisor Bilal Mahmood wants to create a publicly backed fund to lure grocers back to neighborhoods they abandoned, without fixing the retail theft, permitting costs, or labor mandates that drove them away.

TL;DR

TL;DR: SF Supervisor Bilal Mahmood wants to create a city-funded grocery subsidy program inspired by NYC Mayor Zohran Mamdani. The problem: SF drove its grocery stores out through retail theft, permitting costs, and labor mandates, and this package fixes none of that. SF’s answer to a grocery desert of its own making is to pay to get the stores back.

Supervisor Bilal Mahmood announced Tuesday that he will introduce two November ballot measures to address San Francisco’s grocery desert crisis. One would create a publicly funded program to subsidize grocery stores and hold down food prices. The other would tax chain corporations that leave stores deliberately vacant. It is a well-intentioned proposal for a real problem. It is also the wrong fix, because it treats the symptom without touching the disease: San Francisco made it too expensive and too risky to run a grocery store, and nothing in this package changes that.

Over the past several years, the city has watched grocery stores and pharmacies shutter across entire neighborhoods. Walgreens closed 12 San Francisco locations in January 2025 alone. When Lucky’s shut down in Bayview in 2025, the neighborhood became a food desert. The city opened a free grocery store in Bayview in 2024 because private grocers had stopped serving the area entirely. Mahmood’s proposal is a response to that reality. But it layers a new government program on top of the conditions that created the problem, rather than fixing those conditions.

In addition to the two ballot measures, Mahmood plans to introduce two related ordinances at the Board of Supervisors: one establishing tax credits for grocers and pharmacies willing to open for business in the city, and another creating a task force to determine how the fund’s money would be allocated. The fund would draw from city dollars and private philanthropy. It could also help corner stores convert into full-service grocers with fresh food, and allow the city to purchase vacant buildings and lease them at below-market rates to grocers willing to commit to keeping prices low.

“Everyone deserves access to fresh food, prescription medications, and everyday essentials close to home,” Mahmood said.

Nobody disputes that goal. The question is how San Francisco got here, and whether this fixes it.

The answer? It doesn’t.

The Mamdani Playbook, Imported to SF

Mahmood said he was directly inspired by New York City Mayor Zohran Mamdani, who has been gradually rolling out a city-owned grocery store proposal as a signature policy commitment, starting with neighborhoods like the Bronx’s Hunts Point.

“Mayor Mamdani definitely led the way in showing comprehensive solutions and innovative, bold ideas for addressing food insecurity,” Mahmood said. “I’m definitely inspired by his leadership.”

The concept has drawn criticism in New York from those who question whether a handful of government-backed stores can meaningfully affect food affordability across a major city. The full cost of Mahmood’s proposal in San Francisco remains unclear. A report from the city controller is expected. Mahmood estimated that revenue from the vacancy tax would amount to several million dollars annually, but he did not say what the subsidy fund itself would cost to operate.

What Critics Are Saying

The business community is skeptical, but not on the food access question.

“Everyone agrees San Francisco needs more grocery stores and pharmacies,” Chris Wright, senior VP of Advance SF, which represents major corporations operating in the city, told the San Francisco Standard. “The question is about whether a new tax will bring them back, or whether we should focus more on addressing the underlying reasons those businesses left in the first place.”

The underlying reasons are not hard to identify. Years of lax prosecution of retail theft drove up shrink rates that made some locations economically inviable. Permitting costs, labor mandates, and a customer base squeezed by one of the most expensive cities in the country all contributed. Grocery stores operate on margins of 1 to 3 percent. The stores did not leave because a subsidy fund did not exist. They left because operating in San Francisco had become too expensive and too risky for that margin to survive.

Enrico Moretti, a labor and urban economics professor at UC Berkeley, raised a different concern about who the proposal would actually help. Most low-income San Franciscans are already covered by CalFresh, California’s version of the federal Supplemental Nutrition Assistance Program, which provides free or heavily subsidized groceries to eligible households.

“The population this proposal seeks to help is already largely covered by food assistance programs,” Moretti told the San Francisco Standard. A city-backed grocery store would be open to all residents, not just those facing food insecurity. The practical effect would be a general food subsidy for the entire city, not a targeted intervention for residents who actually lack access.

There is also the matter of what the city can actually afford. San Francisco is currently grappling with a $643 million budget deficit beginning in July. Mayor Lurie has been proposing cuts across city departments to close the gap, including reductions to programs serving low-income residents. Mahmood has said the fund would draw on private philanthropy in addition to city dollars, but the exact public cost remains unspecified. Launching a new subsidy program with an unknown price tag while the city is cutting existing services is a hard case to make.

Why Prop D Failed

There is a detail worth noting alongside Mahmood’s announcement. Proposition D, the “Overpaid CEO Tax,” was on the June 3 ballot and was defeated. It would have imposed a roughly 800 percent rate increase in gross receipts taxes on companies where the CEO-to-median-worker pay ratio exceeds 100 to 1. As Garry’s List reported in May, that threshold would have exempted Google, Meta, and Amazon while hitting Safeway, Walgreens, Target, and Walmart the hardest. Safeway’s CEO-to-worker pay ratio is 475 to 1. Walgreens is 410 to 1.

Voters rejected that measure. But the underlying contradiction remains: San Francisco is now proposing to create a taxpayer-funded subsidy to attract back the same chains it was, until two weeks ago, trying to hit with an 800 percent rate increase. Neither approach addresses why those stores left. Prop D would have made the problem worse. The grocery fund papers over it.

What Happens Next

To place the ballot measures before November voters, Mahmood needs support from three other supervisors. He said he has commitments from Supervisors Myrna Melgar, Stephen Sherrill, Danny Sauter, and Chyanne Chen. He still needs at least one more vote to pass the two related ordinances through the Board.

The food deserts in Bayview and other underserved neighborhoods are real, and the people living in them deserve better. The question San Francisco keeps not answering is this: if the city wants grocery stores, why does it keep making it harder to run one?

A subsidy fund does not fix the conditions that drove stores out. It just makes the city the new landlord for the problem it created.

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