"it violates transgenders' human rights to privacy?"
The US has never recognized a broad category of "human rights."  The law still provides different levels of protection to suspect classes.  For example, discrimination based on race or religion are strongly protected while discrimination based upon sexual orientation or age are hardly protected at all (with some change in the winds).  Because there is no state or federal law that protects "transgenders' human rights" as a suspect class they are still freely discriminated unless a law or ordinance specifically protects, like Title 5 of the muni code.  If the only protection is on the same "level" it is not grounds for rejection.  If there was a "higher" state law that protected transgender rights then that would be grounds for rejecting an initiative at the "lower" municipal level.