SANTA MONICA—On July 8, the Santa Monica City Council approved a measure to raise the transfer tax from $3 per $1000 to $9 per $1000. The measure will be added to the ballot this year for residents to decide. The measure has been implemented as a way to provide a local source for affordable housing.
If the measure is approved by voters, the transfer tax is expected to bring in $10 million for affordable housing. The transfer tax would be imposed only on houses that are sold over $1 million.
In a report to the Mayor, Andy Agle, Director of Housing and Economic Development said, â€œWith the dissolution of redevelopment, the flow of funds that can be invested in affordable housing, as well as the Cityâ€™s ability to leverage outside funding, has been radically diminished.â€
During the year before the dissolution, the Housing Division of the Santa Monica Redevelopment Plan invested over $5 million. According to the budget projections, there is less than $1 million per year available for affordable housing production.
City Council reported on February 25, 2014 that the prospect of state and federal funding is very dim.
â€œIf the City desires to maintain its traditionally broad and deep affordable housing program, staff believes that the creation of a new local funding source will be necessary,â€ said Agle.
Adjusting the transfer tax requires the approval of over 50 percent of the voters. FM3 recently conducted a survey on 501 Santa Monica residents. Fifty-six percent of the voters thought affordable housing was necessary. While 57 percent of the participants said they would vote yes, or lean to voting yes for the increase in the transfer tax rate, after hearing educational statements and critical statements about the measure.
â€œWhile the polling shows general support for the measures, it also indicates that the majority support is not definitive and that education plays a critical role in support for the measureâ€ said Agle.