Santa Cruz needs an affordable housing tax measure; a $95 parcel tax is the best option

The third meeting of Santa Cruz residents working to formulate a housing measure to bring to voters in 2024
Last week’s third meeting of Santa Cruz residents working to formulate a housing measure to bring to voters in 2024 attracted around 50 people, plus more on Zoom.
(Kevin Painchaud / Lookout Santa Cruz)

The city of Santa Cruz needs more taxes to support affordable housing, writes James Weller, a local housing advocate. A proposed 2024 ballot measure is under discussion by a citizens committee and in recent polls 63% preferred equally either a parcel tax or an assessed-value tax-rate increase. That leaves Weller optimistic. Anyone can join in the planning process over the next month; Weller invites Santa Cruz residents to participate.

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I favor the prospect of a tax measure for affordable housing now under discussion in the city of Santa Cruz.

Nearly everyone agrees — affordable housing is a critically unmet need. Because of astronomical house prices, homeownership is mostly impossible. Instead, we need housing for rent, at less than a third of our incomes. Within the city limits alone, we need more than 2,000 new limited-rent dwellings, in order to meet mandatory regional housing needs assessments. The economic challenge of this is daunting.

Local government cannot control market prices or general rents. Without public intervention and investment, the private sector cannot produce the quantity of affordable housing we need.

So the public sector must do the job, by building public housing or by subsidizing private nonprofit development. The sums of money we need to invest in affordable housing are huge.

Since the ending of redevelopment agencies that once helped turn property taxes into projects, funding for low-income housing has been meager. We have to create new local tax bases that could yield the many millions of dollars over time that will be required for an appropriate response. We will have some state and federal funding, but we need a meaningful local tax contribution to leverage those. Without all of us helping to meet our community’s needs, we won’t get much outside help.

Polling to gauge the electorate’s willingness to add an affordable housing tax shows that 63% of the 460 representative voters polled equally favor either of two options: a flat per-parcel tax that would raise up to $1.6 million annually or a tax of $12 per $100,000 in assessed value that would raise some $2.76 million annually.

A diverse group of citizens has met three times now to discuss options, following on the affordable housing tax idea that Mayor Fred Keeley promoted in his campaign for election.

It seems the option of a bond measure is currently off the table, due to high interest rates. True, new taxes raised by either of the tax rates polled could secure future bonded indebtedness, but a bond issue won’t happen in the near term.

Polling results and community discussions show a consensus that tax plans should identify defined categories for spending taxes:

  • For increasing housing affordable for low-income households and for the local workforce, including low-paid service workers and essential workers;
  • For providing facilities and housing for those who are homeless or at risk of homelessness;
  • For supportive housing with mental health care and substance abuse treatment.

Some of us think the spending categories could be more clearly defined, but that’s what was recently polled.

Support for both tax rate options is strong. Policy and spending decisions for particular projects would be developed in the ordinary course of public administration, guided by the terms of the tax measure.

Some said we should exclude the “homeless” demographic from affordable housing. Fortunately, that is a minority view. Those among us who have the least are the ones most harmed by the lack of housing options. Most of us believe that those most in need deserve help as much as or more than anyone does.

James Weller is a founding leader of COPA and a member of Peace United Church of Christ in Santa Cruz.
(Via James Weller)

We reviewed a draft ballot measure prepared according to our discussions so far.

After debate, we reached a fairly solid consensus that a $95 annual parcel tax for single-family residential parcels, with exemptions for low-income homeowners, and taxing all other parcels commensurately was the best option. We preferred it over a tax based on assessed value across the board.

In my opinion, it’s a very modest proposal.

Some critics argued that a parcel tax would be unfair, as it means everyone pays the same price — rich or poor. But I ask, should we measure fairness in such small increments? Compared to what? For a homeowner, $95 a year is not much. The most a tenant will end up paying, through a landlord, is $65 more in rent, per year.

We will continue discussions and refine a ballot measure, including the $95 parcel tax, in two more meetings this month. Anyone can participate. The city has not yet announced when the next meeting will be — I expect an announcement this week. Pay attention for the city’s announcement of meeting times and places.

I really hope more of us will join us in this work for the common good. Focus is emerging on a possible one-issue election in June 2024. If we decide that an affordable housing tax measure is a “go,” our work will begin to gather signatures and campaign for the cause.

As it is said, it takes a village.

James Weller is a founding leader in the Central Coast Communities Organized for Relational Power in Action (COPA) organization, and a member of Peace United Church of Christ in Santa Cruz. The congregation is leading the development of a 40-unit apartment project to be built on the church campus at 900 High St. COPA’s Housing Action Team has studied the proposed draft City of Santa Cruz Housing Element and has made key recommendations, including tenant protection policies and a per-unit inclusionary housing subsidy program.

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