Santa Cruz Sentinel: Editorial | Yes on Santa Cruz affordable housing Measure C

Voters in the city of Santa Cruz are being asked to decide about a parcel tax/real estate transfer tax to generate millions of dollars for badly needed affordable housing.

We urge Santa Cruz voters approve the Workforce Housing Affordability Act (“Measure C”) on the Nov. 4 ballot.

But unless potential voters have studied the measure, unfortunate confusion could sway the vote, as “Measure C” led by Santa Cruz Mayor Fred Keeley and the nonprofit Housing Santa Cruz County is being countered on the ballot by the Workforce Housing and Climate Protection Act (“Measure B”), which is backed by the real estate industry.

On the surface they seem similar. But they’re not.

Measure C if passed by voters will put in place an annual $96 parcel tax — with a number of exemptions: low-income households (below 60% of area median income), most seniors and 100% below-market housing developments, schools and religious institutions.

It also would place a levy (“transfer tax”) on property sales above $1.8 million, with progressive tiers — 0.5% over $1.8 million up to $2.5 million, with higher rates up to 2% on higher sale amounts, subject to a cap.

Backers say Measure C could generate over $5 million a year for affordable housing and homelessness prevention if passed.

The Realtors’ Measure B would put in place a $50 per parcel tax, with a transfer tax that begins on higher value properties, with lower overall rates in many tiers.

Because of lower rates, B would generate less revenue but still backers say it would provide funding for climate-repair projects (including the Municipal Wharf) in addition to housing and homelessness programs. B also contains exemptions, although these are more limited given the lower rates.

Opponents to Measure C accuse Keeley and other city officials of passing off C as a “citizens’ initiative” thus needing only a majority vote instead of a two-thirds threshold required for special taxes initiated by a local government. They also say that C, if passed, will make it difficult, or prohibitively expensive, for parents to share home-equity wealth with their children.

Moreover, they say, nearly a thousand “affordable” apartments have already been built in the city with many more in the pipeline.

Keeley and C proponents say the real-estate industry came up with Measure B to confuse voters who might be reluctant to agree to a new tax.

Clearly, that is exactly what the Realtors’ measure aims to do.

One indication of that is the amount of money Realtors have put into the campaign. According to initial campaign finance reports, the National Association of Realtors put “just” $150,000 into Measure B over the last three months. For context, the beverage industry spent $2.8 million to try and defeat the Measure Z soda tax in 2024.

Pro-C had raised about $185,000 through June 30, including $56,000 from Keeley, $25,000 from Eden Housing and $10,000 from Assembly Speaker Robert Rivas.

Will the effort to confuse voters be successful? The two seemingly similar measures won’t help. Moreover, the resentment felt by many residents as the city continues to approve large-scale housing developments (never mind Santa Cruz city officials’ hands are mostly tied in this approval process because of state mandates) could hurt C as well.

Another question raised by our Editorial Board is whether the affordable units financed through C would go to local residents. Santa Cruz’s Tenant Preference Policy states a housing project owner retains discretion in the selection of eligible renters, but that when multiple rental applications exist, preference shall be given to city residents and then those working in the city.

Bottom line is that despite recent housing developments, Santa Cruz isn’t close to meeting the need for housing by local families and workers in the most expensive rental market in the nation.

Moreover, times are getting tight in terms of public subsidies for housing, and Measure C will provide money to get more projects underway. Should it fail, future “affordable” projects might find financing unaffordable.

Measure C isn’t perfect, but its goals are laudable. Don’t be confused. Yes on Measure C.