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To the editor:
I appreciate our Santa Cruz city officials seeking a path to funding housing for the all-but-millionaires priced out of our cherished but coveted city through a bond. But I want to understand what we are being asked to champion.
I researched bond debt and how it’s repaid. “Bond debt can be compared to a home mortgage … repaid over time ... typically financed over a 20-year period.” Like mortgages, interest is charged.
But how are bonds repaid?
I read that cities repay bonds through “taxing power” … the ability to collect property taxes — billing homeowners — to repay the debt. This, to me, sounds like a regressive tax — taxing poor and rich alike.
I wondered about funding housing through a real estate transfer tax.
I learned: All California cities pay state transfer tax — $1.10 per $1,000. And that California — holding 20% of the nation’s housing market (measured by value) —is the vanguard of emerging tax policies!
In recent years, many California cities — including Los Angeles, San Francisco, Santa Monica, Culver City, Albany, Berkeley, Richmond — have voted to implement property sales transfer taxes, sometimes with incremental increases based on price tag.
In 2019, San Jose city voters approved Measure E— a real property transfer tax on sales of $2 million or more, with a detailed allocation plan and required community oversight committee:
The breakdown of where the money would go is:
Extremely-low income housing: 40%
Homeless prevention: 10%
Homeless shelter/support: 15%
Administration: up to 5%
Throughout California, voters are passing real estate transfer tax plans to raise significant funding for housing!
Why not Santa Cruz?
50-year resident of Santa Cruz County