MY WRTIE — City Hall politicians are on the hunt for new tax revenues. So, hold onto your hat, Martha, you're going to be soaked and it's not the ALS ice bucket challenge.
City Council has placed two measures – an ordinance and a resolution -- on the November, 2014 ballot. The first, Measure (H), would set a real estate transfer tax at $9 per thousand dollars of the sales price for all real estate transfers over $1 million. This tax is "in perpetuam."
Voter approval of the transfer tax measure is expected to increase general fund revenues by $4 million to $10.2 million per year, depending on the number and value of real estate transfers. The tax, if approved by voters, would be the highest tax of its type in the state. It is also three times the current Santa Monica real estate transfer tax.
With the dissolution of all redevelopment agencies, including the Santa Monica Redevelopment Agency (RDA) by the State of California a couple of years ago, a major source of funding for the construction of affordable housing and affordable (low income) housing rent subsidies dried up. The RDA funding provided about $15-million annually. Another roughly equal amount from private and other governmental sources was leveraged from the RDA contribution.
Well over 90 percent of the development these days in Santa Monica is housing — and that includes private, market rate, mostly apartment construction as well as subsidized or non-profit funded public housing. Voting "yes" on Measure H is literally voting for more development — and it may not even be used for housing, let alone low income housing.
The City Attorney points out, "The City Council could decide to use the transfer tax revenue for any lawful City purpose that best serves the City's needs" – like a trophy project, say another $46-million dollar civic park or a $60-million Civic Auditorium renovation.
Affordable housing in Santa Monica means "rental" as City Hall has no program involving low interest loans or subsidies for home ownership. The dominant political power - Santa Monicans for Renters' Rights (SMRR) — and City Hall itself has placed a priority on affordable housing to insure an economically and culturally diverse resident population. Unfortunately, it's resulted in more segregation and isolation of those in the lower incomes, but that's another issue.
According to a July 8, 2014 staff report, "Since 1994, approximately 38 percent of all new housing built in Santa Monica has been affordable to low- and moderate-income households, totaling nearly 1,600 residences..." During 2014, over 250 new affordable apartments have gone online and another 32 affordable apartments are expected to be completed in early 2015.
The report doesn't tell us that most low-income housing has gone to people recruited from outside Santa Monica. Very little goes to long term Santa Monicans, especially seniors. In fact, Santa Monica builds so much housing it exceeds the Southern California Association of Governments (SCAG) recommended amount of low income housing for Beverly Hills and Culver City, too
To insure that the level of funding to non-profit housing providers in general and Community Corporation of Santa Monica (the city-affiliated developer and operator of the majority of low income apartments in the city) continued unabated, City Council proposed this tax under the guise of "it's for housing" not "development." Excuse me?
The second measure (HH) is advisory and non-binding. It allows voters to recommend using Measure H's revenues for affordable housing.
Even if Measure H were to pass in November (it needs a simple majority to win), its backers readily admit that additional tax measures will be needed as they are determined to meet and exceed the total of some $40-million in annual RDA revenues reclaimed by the State.
City Hall can cut back on the development of housing but it obviously doesn't want to do so. Politicians and SMRR power brokers know that adding renters to the voter base is one sure way to stay in power. More renters means more housing — market rate and affordable — the better it is for everyone, so they say.
What does their obsession with building more and more housing do for us? Thirty plus apartment house projects are in the pipeline. They will add nearly 4,000 new rental units and an estimated 6,000 new residents (assuming one and one-half persons per apartment.
City Council approved zoning ordinances a few years ago that declared a housing emergency and put public housing on a fast-track. They allowed low income housing projects to benefit from a whole raft of bonuses — no public review, greater height and density and lower parking requirements.
A year or two from now, there could be another 20 or 30 apartment buildings with additional thousands of apartments awaiting city approval. What affect will they have on traffic, parking and consumption use of natural resources such as water?
Think of the cost of additional infrastructure — road improvements, power, solid waste and sewers, police and fire personnel to handle this tidal wave of development in one of the most crowded and densest cities in the country.
New Federal mandates say that public housing be built throughout the community, not just in lower income neighborhoods such as the Pico corridor. Residents north of Wilshire Boulevard and Montana Avenue could find oversized, public housing next door or across the street, courtesy of Measure H.
The choice is obvious. A "NO" vote on H and HH is a "No" vote on more development.
Bill can be reached at mr.bilbau@gmail.com
