CITY HALL — City officials may come to voters as soon as 2014 with a measure to create a local source of funds to pay for affordable housing production in Santa Monica in an attempt to fill the gap left by the loss of redevelopment money.
Instead of a new tax, city officials could also join with those from other cities in asking Los Angeles County to release tax revenue that would have flowed to redevelopment agencies before Feb. 1 2012, the day the agencies died at the hand of the legislature, governor and courts.
The pronouncement came last week from Andy Agle, director of the Housing and Economic Development Department, in a budget report to the City Council.
Agle and his department have been struggling to protect affordable housing developments already being built from the clutching hands of the state Department of Finance, but that does little to replace the roughly $20 million in revenue from the former Redevelopment Agency that was largely used to build apartments for low-income individuals and families.
City Hall still has laws on the books that require private developers to either build affordable housing or pay fees to the Housing Trust Fund, a source of public development dollars, but that won’t be enough to meet local requirements under Proposition R, a 1990 measure that dictated that 30 percent of units constructed in Santa Monica be affordable, Agle said.
“I’m not sure that just relying on for-profit housing developers to meet our needs will … comply with Prop. R and … achieve goals in affordable housing production,” Agle told the City Council.
Even tweaks to existing policies will not meet the needs, City Manager Rod Gould said when Councilmember Kevin McKeown asked about possible changes to the zoning code or other policies that might help address the deficit.
There will be another study session in the fall on the subject.
“We will look at the whole basket of options and find out which you wish us to pursue,” Gould said.
In the meantime, housing officials are looking into possible local funding measures that could help bridge the gap between existing policy, proposed measures at the state level and the amount of money Santa Monica pumped into the cause before the death of redevelopment over a year ago.
Exactly what form that will take has yet to be decided, but efforts by the city of San Francisco seem to have provided some inspiration.
The northern city, which doubles as a county, first proposed to raise certain taxes on property sales, but ultimately asked voters to dedicate money that would have gone to the city’s former Redevelopment Agency under the previous system to affordable housing.
That is a bit easier for San Francisco than it would be for Santa Monica because the city occupies the same space as the county of the same name. Here, Santa Monica officials would have to ask Los Angeles County for the money that once flowed to its redevelopment agency, likely in concert with other cities in the county.
The tax option, called a real estate transfer tax, could be a “successful strategy” in Santa Monica, according to a report delivered in December. San Francisco’s proposal would have levied a tax on property sales over a certain dollar amount to avoid hitting middle-class homeowners that could not afford the charge.
City Hall is studying how much money that would actually bring to local coffers, but it could be “significant,” Agle said.
Santa Monica property owners already shoulder a number of property-based assessments that show up on their tax bill every year. The local school district recently approved the second of two active bond measures that takes its place alongside bond measures for Santa Monica College and two school-related parcel taxes.
On the city side, a property tax pays for clean water initiatives and a sales tax passed in 2010 brought the local sales tax rate up a half-cent, the proceeds of which are evenly divided between the city and the schools.
Although it’s hard to say how successful any of these proposals might be, experts agree that while it’s difficult to get people to tax themselves, it’s not nearly so difficult to persuade them to impose taxes on others.
Proposition 30, a tax measure passed in November, was a rare example of the former, said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC.
“Generally, people are relatively willing to raise taxes on other people,” Schnur said. “Taxes on drinkers, taxes on smokers, taxes on oil executives, taxes on wealthy people — it’s much more difficult to get them to raise taxes on themselves.”
That can be easier when the measure is local because people can see the benefit of the money in their own back yard rather than have it be sucked into the state’s General Fund, never to be seen again.
Also, when it comes to property-related taxes, it helps to be a city of renters.
Roughly 70 percent of Santa Monica’s population rents their homes, and may not see a direct connection between themselves and property taxes, said Brandon Stephenson, vice president of Cerrell Associates, a consultancy.
Either way, it’s critical to ask people where they stand on the issue of affordable housing and a tax to pay for it and then be clear on how the new revenues will address the problem, Stephenson said.
That may entail pointing out construction jobs, or how affordable housing strengthens community, Stephenson said.
“You always have to have a strategic plan. You have to have that road map to figure out what your successful plan may be,” he said. “Without that, polling, strong messages and the right messengers, it’s very difficult to achieve success.”
As Santa Monica struggles with its options, efforts to save affordable housing at the state level continue.
Senate Bill 391 by State Sen. Mark DeSaulnier (D-Walnut Creek) proposes to generate $500 million by applying a $75 fee to the recording of real estate documents. It’s received support from Housing California, a nonprofit that works on affordable housing and homelessness issues in the state.
That’s still only half of what was lost, said Shamus Roller, executive director of Housing California, and officials are also looking to a separate bill that might allow the state to use money raised from an environmental law for housing.
“We need some of those local solutions as well,” Roller said. “The redevelopment agencies were a state and local solution. Some of these local things will fill in some of these gaps.”