Santa Cruz real estate lobby opposes proposed affordable housing tax measure

Despite its role in crafting the proposal, a powerful real estate lobby announced Tuesday that it opposes an affordable housing tax measure recently put forth by a Santa Cruz advocacy group. 

Renee Mello, president of the Santa Cruz County Association of Realtors, said in a news release that the organization was “extremely concerned” about the funding measure, known as the Workforce Housing Solutions Act, which proposes an annual $96 parcel tax on most lots throughout the city, and an additional tax on homes sold for more than $1.8 million. The measure – which advocates have petitioned to put on the November ballot – is expected to raise about $5 million per year for affordable housing in the city of Santa Cruz.

Those advocating the tax have long viewed avoiding the wrath of the real estate lobby as a key to passing a tax measure to fund affordable housing. In 2022, the California Association of Realtors helped tank the city of Santa Cruz’s empty homes tax measure by supplying the opposition with $50,000 in campaign contributions. The local group’s opposition now comes less than one week after the group behind the measure, led by Mayor Fred Keeley and Housing Santa Cruz County Executive Director Elaine Johnson, launched a petition drive to put the tax question on the November 2025 ballot. 

Keeley and Johnson appeared taken aback when asked about the Santa Cruz County Association of Realtors’ opposition announcement. 

“Huh, this is interesting,” said Keeley, who said he had spoken with representatives of the group earlier in the day and was not told they were preparing to officially announce their resistance. The mayor later called it “somewhat unsurprising,” and said he hoped this was as far as they would go in opposing the measure.  

“There’s opposition, and then there’s opposition,” Keeley said. “Knowing these folks, I would suspect this is closer to them saying, ‘We’ve made our statement’ than it is to them saying, ‘We’re going to load up our artillery’” and try to tank the measure. 

In a written statement, Johnson said she appreciates “the participation of the local realtors association in the process, with which we negotiated in good faith for over a year.” 

Keeley and the group behind the tax proposal courted the real estate agents by giving them a seat at the table during the measure’s development. Keeley said the association was key to shaping the real estate transfer tax piece, which would go into effect only when a home is sold for over $1.8 million. 

Yet the real estate transfer tax was the poison pill for the Santa Cruz County Association of Realtors. The group also criticized the proposal for not exempting older adults from the transfer tax, though they are exempt from the parcel tax.

“When this conversation first started in 2023, we were happy to explore the possibility of supporting a parcel tax for that purpose that could have achieved the same goal, with the same revenue outcome,” the news release, attributed to the group’s government affairs director, Victor Gomez, said. “Unfortunately, the proposal morphed into a double-tax that penalizes homeowners, creating a huge hurdle for those trying to purchase their first home. … Ultimately we were forced to oppose because of the addition of the transfer tax.” 

The petition for the proposed tax measure needs just under 4,000 signatures over the next six months to qualify for the November 2025 ballot. If it qualifies, the measure would need only a simple majority — 50% plus one vote — to pass.

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