Quick Take
The Santa Cruz County Association of Realtors opposes Santa Cruz Mayor Fred Keeley’s Workforce Housing Solutions Act, which is gathering signatures for the November ballot. The organization supports affordable housing, writes Renee Mello, the group’s president, but believes the proposed “double tax” – which would put an annual $96 parcel tax on most lots throughout the city of Santa Cruz, and an additional tax on homes sold for more than $1.8 million – would make selling homes too burdensome. “If this measure were only a parcel tax, we may have taken a position of support, but unfortunately this was not the case,” she writes.
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There has been a lot of confusion regarding the proposed “Workforce Housing Solutions Act” and the involvement of the Santa Cruz County Association of Realtors, so please allow us to clear the air regarding many misstatements made by supporters of the measure.
In 2023, the Santa Cruz City Council, under the leadership of Mayor Fred Keeley, took action to use taxpayer funds to pay for a citywide poll, asking Santa Cruz city voters how they would feel about a potential parcel tax to partially fund affordable housing developments in the city of Santa Cruz. The results of that taxpayer-funded poll released in May 2023, indicated that about 57% (on average) of Santa Cruz voters would support a parcel tax of either $75 or $150 per year for the purpose of affordable housing and homelessness services. It fell nearly 10% short of the needed 66.6% to pass if the city council directly put the initiative on the ballot.
Soon thereafter, Keeley asked us to consider support or, at minimum, neutrality on the measure. We agreed to participate in future meetings in good faith, with the goal of trying to find common ground. To be clear, the Santa Cruz County Association of Realtors never agreed not to oppose the measure.
In a very questionable and, in some people’s eyes, disingenuous move, the Santa Cruz City Council decided to take the taxpayer-funded poll, pass it to the “non-government” coalition of affordable housing and homelessness advocates (the campaign committee) and allow them to gather signatures for this ballot measure instead of placing the measure on the ballot themselves. This circumvented and dropped the necessary voter approval threshold to 50% instead of the 66.6% needed if the city council would have placed it on the ballot. During the May 9, 2023, city council meeting regarding this initiative, the mayor explicitly indicated the reason the city was handing this off as a “citizen initiative” was to avoid the two-thirds requirement.
WORKFORCE HOUSING SOLUTIONS ACT: Read more Lookout news and Community Voices opinion coverage here
Even with this move, the Santa Cruz County Association of Realtors, in good faith, continued the conversation with the newly formed ballot measure coalition. We brought this parcel tax measure idea to the board of directors and they decided to explore support of a parcel tax for this purpose if, and only if, accountability of the expenditures were in place, including an expenditure plan.
Soon thereafter, proponents of the ballot measure said that they felt the parcel tax was regressive and that they needed to include the parcel tax, but add a property transfer tax (sales tax) to reach their annual funding goal of $5 million per year. Even though not one local real estate association in California has ever supported a transfer/sales tax, we continued to provide input and committed to Keeley that we would bring the additional tax to our board for consideration.
Our board considered this double tax in late 2024 and voted to take a position of opposition to the ballot measure, though we continue to support the development of affordable housing in our region. If this measure were only a parcel tax, we may have taken a position of support, but unfortunately this was not the case.
We ask Santa Cruz voters to take time to research property transfer taxes, as many communities have seen sales of homes drop tremendously when these taxes are put in place. Sometimes the tax keeps people in homes they do not fully use because they cannot afford to pay the sales tax that can add up to $200,000 per home, in addition to the capital gains tax. The increasing cost of selling homes has led to significantly fewer homes being listed for sale; this measure would only exacerbate this trend.
As this conversation continues, we want to thank the community and the coalition for their shared passion for affordable housing in our region. As realtors, this is what we love – building communities in an affordable manner for our residents.
Unfortunately, the proposed measure is flawed; it punishes seniors and renters and achieves affordability for some by punishing all. As a community, we can do much better.
Renee Mello is the president of the Santa Cruz County Association of Realtors.