HOUSING TAX TAKES EARLY LEAD
Voters were narrowly backing a new San Jose tax aimed at raising tens of millions of dollars to ease the chronic shortage of affordable housing and address the homelessness crisis in the nation’s 10th largest city, according to early returns Tuesday night.
For months, affordable housing advocates and San Jose Mayor Sam Liccardo have campaigned hard for Measure E — a tax on the sale of San Jose properties worth $2 million or more — which was commanding a slight majority with more than a third of the votes counted.
Supporters were optimistic.
“San Jose is a compassionate community and we’re confident that number will grow over time as more votes are counted,” said Michael Lane, deputy director of affordable housing advocacy organization SV@Home.
The city estimates that the new tax, which leaders have vowed to use to build affordable housing and expand homeless services, would generate up to $73 million annually and at least $22 million during a recession year.
Supporters of the measure raked in nearly $900,000 of donations for the campaign in recent months, including tens of thousands from affordable housing developers Bridge
Housing Corp. and Eden Housing and California billionaire Kieu Hoang.
Measure E was the second attempt in two years by city officials to pass a local funding model for affordable housing. In 2018, a $450 million general obligation bond measure narrowly failed by 2%.
Unlike a bond measure, money raised by a general tax like Measure E would flow into the city’s general fund — a stipulation that allows the tax to pass with a simple majority, rather than two-thirds of votes. Because of that, city leaders cannot legally restrict the use of the funds and opponents of the measure raised concerns that the money generated might not wind up funding the kinds of affordable housing projects that its backers stated.
City leaders, however, did pass a nonbinding spending plan in an attempt to ease the minds of voters and lay out how they would use the money for affordable housing and homeless services.
The tax would vary based on a property’s transfer value — $3.75 per $500 for $2 million-$5 million properties, $5 per $500 for $5 million-$10 million properties and $7.50 per $500 for properties worth more than $10 million. For the affected properties, the new tax would be on top of the city’s current property transfer tax, which is applied to properties at a rate of $3.30 per $1,000.
Meanwhile, in Mountain View, an effort to change the city’s rent control ordinance, which opponents argued would put its affordable housing stock in jeopardy, was losing by a 2-to-1 margin in the first reports after polls closed Tuesday night. Most notably, Mountain View’s Measure D would have allowed landlords to raise rents by up to 4%.