Santa Cruz Local: Ballot measure aims to build more affordable housing in Santa Cruz

Elaine Johnson, executive director of Housing Santa Cruz County, speaks at a Jan. 16 event for a campaign to fund affordable housing. (Jesse Kathan — Santa Cruz Local)

SANTA CRUZ >> A signature-gathering effort kicked off Thursday to put a new parcel tax and property transfer tax on the Nov. 4 ballot in the city of Santa Cruz. The taxes aim to raise $5 million annually for affordable housing and homelessness prevention.

The proposed Workforce Housing Solutions Act needs 3,620 signatures to qualify for the November ballot. It would need more than 50% of the vote to be adopted. Santa Cruz Mayor Fred Keeley, leaders of the community organization Housing Santa Cruz County, and a coalition of housing activists and local professionals are leading the effort.

“There’s still people unhoused, still people struggling to pay the rent,” said Elaine Johnson, executive director of Housing Santa Cruz County. After nearly two years of community meetings with attendees across the political spectrum, “we came up with a little something that everybody was wanting,” Johnson said.

“This is a community problem that needs community-level support,” said Marvin Christie, president and co-owner of Felton-based real estate firm Anderson Christie Inc. “Asking property owners to share in that load seems like a reasonable request.”

How much is the tax and who would pay?

Voters in many cities and counties across the country, including Berkeley and Santa Clara County, have approved local housing bonds to pay for new below-market-rate homes.

The proposal for Santa Cruz is different. Instead of borrowing a lump sum, the city would accumulate money over time through a parcel tax and a property transfer tax.

The proposed $96 parcel tax, unlike a bond, can legally exempt certain property owners. The ballot measure includes parcel tax exemptions for:

• Low-income households earning below 60% of the area median income according to state guidelines.

• Seniors age 65 and older who earn below 80% the area median income.

• 100% below-market-rate housing developments.

• Schools and religious organizations.

The ballot measure also proposes a property transfer tax paid by sellers.

Property transfer taxes have been used elsewhere to fund affordable housing, although Keeley said he doesn’t know of any that have been paired with a parcel tax. In Los Angeles, a 4% “mansion tax” approved in 2022 is assessed on the sale of properties over $5 million to fund affordable housing and homelessness prevention.

The proposed measure for the city of Santa Cruz would kick in for properties sold for more than $1.8 million. The median listing price for homes in Santa Cruz is $1.6 million, according to aggregated real estate listings.

The tiered tax rate would increase for higher-value properties. For example, the seller of a $2 million property would pay a 0.5% tax, or $10,000. A $5 million sale would be assessed a 2% tax, or $100,000. The maximum transfer tax for any property would be $200,000.

Both taxes would start July 2026 and expire July 2047.

How would affordable housing be built? 

About 90% of the money would go towards the city’s Affordable Housing Trust Fund to pay for the creation and protection of below-market-rate housing. 

The city wouldn’t directly build homes, but would offer loans or grants to nonprofit and for-profit developers or other groups. For example, the fund could offer a loan to a developer to buy land for affordable housing, or give a grant for a nonprofit to buy existing apartments and rent them below-market rate.

The money could also be used to preserve existing affordable housing, renovate below-market-rent apartment buildings or offer loans for down payments to first-time homeowners.

The measure allocates 10% of the money for measures to reduce homelessness, including permanent supportive housing, transitional housing and shelters. It could also include temporary assistance to help keep people in their existing homes. 

Although the city has made progress in reducing homelessness, those efforts have been hampered by the number of people who continue to fall into homelessness. 

If one member of a household loses their job and is at risk of eviction, “The cost to us and to them to get back out of homelessness is enormous,” Keeley said. “What if instead we said, ‘Here’s a check for your rent this month. Use that period of time, go find that other job, and we’ll just keep you where you are.’”

Santa Cruz created its Affordable Housing Trust Fund in 2003. It receives money from sales of city property and in-lieu fees from developers who do not build the required amount of affordable housing.

How was the tax developed?

In 2018, then-Santa Cruz County Supervisor Keeley championed Measure H, which would have allowed the county to borrow $140 million for affordable housing and pay back the loan with a property tax increase. Although the measure was defeated, it won more than the required 66% vote within the city of Santa Cruz. Keeley said the results speak to the willingness of voters in the city to put money towards affordable housing, even if it means higher taxes. 

During his campaign for Santa Cruz mayor in 2022, Keeley vowed to propose another measure to fund affordable housing. But it took two years of community meetings and collaboration with nonprofit Housing Santa Cruz County to work out the details.

The challenge was to craft a tax that would raise money for affordable housing and be palatable to voters.

Some attendees at the community meetings spoke out against parcel taxes as a regressive tax that disproportionately affects lower-income taxpayers. Others said they didn’t like a real estate transfer tax. To compromise, the coalition created versions of both taxes that most attendees could accept. 

“We were trying to accommodate different values and belief systems in coming together, and that’s what this represents,” Keeley said.

Santa Cruz Together, which formed to oppose rent control proposal Measure M in 2018 and campaigned against the empty-home tax Measure N in 2022, announced in a Jan. 16 newsletter that the organization will be neutral on the proposed measure.

Lookout Santa Cruz: Before the headlines, a snapshot from downtown Santa Cruz

Santa Cruz Mayor Fred Keeley speaks to the crowd at Thursday's kickoff event for a housing funding measure supporters aim to get on the November ballot.

After nearly two years of discussion and negotiation, a group of Santa Cruz politicians and housing advocates on Thursday began circulating a petition for a measure to fund housing that it hopes to place on the ballot in November.

The group officially introduced the petition for what it’s calling the Workforce Housing Solutions Act with a sizable event outside the new, 65-unit affordable housing complex at 525 Cedar St. in downtown Santa Cruz. 

The proposed funding measure could raise around $5 million per year, deriving revenue from a pair of new taxes: an annual $96 tax on every individual parcel throughout the city and a 0.5-2% real estate transfer tax tacked onto home sales greater than $1.8 million.

The petition will need nearly 4,000 signatures from city of Santa Cruz voters over the next 180 days to qualify for the November ballot. – Christopher Neely

Santa Cruz Sentinel: Signature-gathering campaign launches for Santa Cruz workforce housing initiative

Executive Director of Housing Santa Cruz County Elaine Johnson got the crowd pumped up about the new affordable housing measure called the Workforce Housing Solutions Act. (Aric Sleeper – Santa Cruz Sentinel)

SANTA CRUZ — A group of about 30 community members and officials gathered in the paseo of the Cedar Street Apartments in downtown Santa Cruz Thursday afternoon to launch the signature-gathering campaign for the Workforce Housing Solutions Act, a new ballot measure intended to collect funds for affordable housing projects in the city.

The potential ballot measure is the result of about two years of effort by a coalition of community members and organizations that began with a series of community meetings facilitated by the city.

“What you’re going to hear about today is: How did this all come together,” said Santa Cruz Mayor Fred Keeley. “We had some community meetings at the front end, hosted by the city. That was designed to get folks together and get them thinking about this, and then hand it off to our good friends at Housing Santa Cruz County. They conducted meeting after meeting, public meetings and conversations with various elements of the community.”

Housing Santa Cruz County Executive Director Elaine Johnson leads the campaign for the potential ballot initiative. If the backers can gather 3,620 signatures by May 17, it will qualify for the city of Santa Cruz’s November 2025 election and would require a simple majority vote to pass into law.

“When I woke up this morning I was thinking about the process that led us here today — two years,” said Johnson. “It was two years of engagement with the community and city staff.”

Johnson thanked the many community members who had a hand in the measure and worked to get the gathering excited about affordable housing.

“It’s going to take all of us to get over this finish line,” said Johnson. “And I can tell you, I feel it already that this is going to be a success.”

The Workforce Housing Solutions Act has two components. If the initiative makes it on the November ballot and is approved by voters, it would enact an annual parcel tax of $96 per parcel in the city of Santa Cruz. According to the text of the measure, “Exemptions would be available to qualifying low-income households, low-income senior households, affordable housing projects, schools, religious institutions and other entities that are otherwise exempt from property taxes.”

The initiative also includes a real property transfer tax for homes sold at the price of $1.8 million or more. The tax increases incrementally from 0.5% to 2%, dependent on the home’s sale price and caps at $200,000. The act would include parcel tax exemptions for seniors and low-income homeowners, and real estate transfer tax exemptions for families transferring ownership of property within immediate family.

The potential initiative is estimated to raise $5 million each year for the city’s affordable housing trust fund and would sunset in 20 years. About two-thirds of the $5 million would be collected from the real estate transfer component of the measure, and one-third from the parcel tax.

About 90% of the total revenue raised would be used to bolster affordable housing projects and programs, and 10% of the funds would be used to prevent evictions and address homelessness. A maximum of 3% would be used for “community oversight, accountability and administrative expenses in implementing the measure.”

The signature-gathering launch event featured a panel of the measure’s supporters including Marv Christie, owner of Anderson Christie Real Estate in Downtown Santa Cruz.

“The community-led process developing this initiative was invaluable, allowing input from many voices that are impacted,” said Christie. “We all know that money alone will not solve the problems but we also know that solving a problem of this magnitude requires major investment. This is a community problem that needs a community level of support and asking property owners to share in that seems like a reasonable request.”

For information, visit workforcehousingnow.net.

Press Release: Workforce Housing Solutions Act Advocates Launch Signature-gathering Effort for City of Santa Cruz Ballot Initiative

Measure aims to increase the supply of workforce housing, prevent evictions, preserve senior housing, establish shelters and gain new access to state and federal housing funds 

SANTA CRUZ, Calif. — Responding to the ongoing and acute housing crisis in Santa Cruz, a broad coalition of local housing, education, labor and business advocates and leaders convened by nonprofit Housing Santa Cruz County today launched the signature-gathering effort for the Workforce Housing Solutions Act, a measure planned for the November 2025 ballot in the city of Santa Cruz. The Workforce Housing Solutions Act will deliver needed community benefits, including: 

• Investment to construct new homes for lower-income workers, especially downtown and in transit-rich areas in the city of Santa Cruz.  

• Funding to prevent evictions, preserve senior housing and establish housing-focused shelters.  

• Greater access to state and federal workforce housing and supportive housing funds. 

• Reduction in vehicle miles traveled by workers by locating housing closer to jobs, which helps reduce production of greenhouse gases by motor vehicles – the leading contributor to climate change in Santa Cruz County. 

 The measure will raise approximately $5 million annually for a period of 20 years through an innovative hybrid tax model that includes a real estate transfer tax that will apply to property sales of $1.8 million or more, and a modest parcel tax.   

Funds raised by the measure will be managed through the City of Santa Cruz’s Affordable Housing Trust Fund, which has an outstanding track record of creating and preserving housing for Santa Cruz residents who have a lower-than-average income. In the past five years, the fund has helped create approximately 400 affordable apartments. 

Speakers at the launch event included: 

• Fred Keeley, Santa Cruz Mayor 

• Elaine Johnson, Executive Director, Housing Santa Cruz County 

• Kyle Kelley, Trustee, Santa Cruz City Schools 

• Barbara Meister, COPA 

• Marv Christie, Owner/President, Anderson Christie Real Estate 

• Elizabeth Madrigal, Policy Manager, Midpen Housing 

• Liam McLaughlin, Lead Organizer, SEIU 521 

• Jorian Wilkins, Executive Director, Downtown Association of Santa Cruz 

Additional Background 

The parcel tax will be $96 per parcel annually ($8 per month) in the city of Santa Cruz.  

The real property transfer tax will apply to transaction prices of $1.8 million or more:  

• 0.5% tax will apply to the price paid over $1.8 million, but less than $2.5 million 

• 1% tax will apply for the price paid over $2.5 million, but less than $3.5 million 

• 1.5% tax will apply for the price paid over $3.5 million, but less than $4.5 million 

• 2% tax would apply for the value paid over $4.5 million, subject to a cap of $200,000 

• Annually, the thresholds will be increased by the change in the consumer price index for the prior year 

Nearly 90% of revenue will be allocated to affordable housing projects and programs, with 10% to be allocated to programs and facilities to prevent and address homelessness. 

Revenue from the real estate transfer tax will represent approximately two-thirds of funds raised, with the remainder coming from the parcel tax. 

The Workforce Housing Solutions Act will include parcel tax exemptions for seniors and low-income homeowners, as well as real estate transfer tax exemptions for families transferring ownership of property within an immediate family.    

Learn more at www.workforcehousingnow.net.  

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