A trio of Santa Monica officials are mounting a campaign for a new tax on real estate sales to fund homeless services, affordable housing programs and local education efforts.
Santa Monica Mayor Sue Himmelrich, her husband Michael Soloff (who is Co-Chair of Santa Monicans for Renters Rights) and Jon Katz (President of the Santa Monica Democratic Club) are soliciting public support for an additional real estate transfer tax on property sales greater than or equal to $8 million. If their petition is successful, the question would be put to voters in November of this year.
Santa Monica already has two tiers of real estate transfer tax charging $3 per $1,000 of value transferred on transfers under $5,000,000 and $6 per $1,000 of value on transfers of $5,000,000 or more. The second tier was established in 2020 when voters approved Measure SM.
The proposed third tier would charge $56 per $1,000 of value transferred for transfers of $8,000,000 or more.
The proposal would also establish two funds, one for housing and another for education. Of the 5.6 percent charged for the tax, 5 percent would be split between the two funds and the remaining money would be allotted toward the City’s General Fund. According to the proposal, the measure contains a specific annual distribution of the allocated funds with the first $10,000,000 deposited into the School Fund and the next $40,000,000 collected each year deposited into the Homelessness Prevention and Affordable Housing Fund. Any funds collected above $50,000,000 each year would be deposited 20% into the School Fund and 80% into the Homelessness Prevention and Affordable Housing Fund.
“This tax will be largely paid by real estate investors selling high-end properties and developer interests—and will not be paid by ordinary homeowners or mom and pop landlords who sell their property for less than $8 million,” said the trio in a public notice regarding the proposal. “And we believe it is fair that such real estate investors and developer interests pay this tax because they can sell their properties for so much money only because the quality of our community and taxpayer funded City services—including public education—create high real estate values in Santa Monica.”
The measure contains a provision that would require all money be kept in Santa Monica if Malibu were to receive its own school district.
“An eleven-member Citizens Oversight Board will be created to advise the City Council on how to spend the homeless prevention and affordable housing funds on the most important and cost-effective programs, and the City’s independent auditors will review and publicly report on annual receipts and expenditures from the fund,” said the notice.
According to the notice,the measure would establish an eleven-member Resident Oversight Committee to provide recommendations to council regarding the money and the City’s auditors would audit the Homelessness Prevention and Affordable Housing Fund annually and publicly provide the results to the Resident Oversight Committee and the Audit Subcommittee.
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