San José City Council: How will the increase in property transfer taxes be spent?

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Eight months after voters approved Measure E – an increase in property transfer taxes – the city will decide how to spend the money for affordable housing projects and homelessness prevention services.

As part of the plan presented to city council on Nov. 10, council members propose to use the $ 30 million in tax revenue to create new properties for low- and middle-income families. The money would also fund permanent supportive housing projects, homeless prevention services and accessory housing units (ADUs).

The Housing and Community Development Commission, which oversees the spending of the E-measure dollars, wants to withdraw $ 6 million from affordable housing projects and create rental assistance programs for people potentially at risk of eviction, unlike to the initial plan proposed by the council. This means that only 59% of the funds would go towards housing projects.

Measure E, as passed by voters, allows the money to flow into the city’s general fund for any purpose, but council members have pledged 80% of the dollars will be spent on social housing and supportive housing.

The ADU program, intended to support housing for middle-income people, would also be phased out as part of the commission’s plan.

Fifty-three percent of voters in San Jose approved Measure E, which took effect on July 1. According to a note from Rachel VanderVeen, deputy director of housing, and budget manager Jim Shannon, the tax would have raised around $ 70 million if it went into effect. in 2017-2018, before the onslaught of COVID-19. Voters also approved the creation of an oversight committee.

Jennifer Loving, CEO of Desirination: Home, an organization working to end homelessness in Santa Clara County, defended the measure ahead of the March election. In an editorial for the post, Loving called the spending plan “a common sense approach to tackling our homelessness and the housing crisis.”

The measure has become all the more important in light of the pandemic, as thousands face deportation in Santa Clara County, Loving said.

“Now more than ever, given what we have been facing this year with COVID and the disproportion of people affected by COVID, it is our responsibility to do everything possible to prioritize families of color over income. the weakest, and that is the objective of this spending plan. to do, ”Loving told the San José Spotlight.

Loving said the city shouldn’t be withdrawing money from much needed affordable housing, especially when the city and community have worked together before to agree on a plan.

Pat Waite, president of Citizens for Fiscal Responsibility, an organization that ensures San Jose responsibly allocates taxpayer money, opposed the measure, expressing concerns the city would not use the money for the intended purpose.

Waite also criticized San Jose’s zoning process in an op-ed.

“Our zoning philosophy remains focused more on protecting the value of existing homes than on encouraging creative solutions to the housing problem. San Jose makes it very difficult to build housing of any kind, ”Waite said. “That needs to change before the city gets into more housing construction. “

Now that he sees the city committing the money for housing and homelessness, he has said he can agree to any plan they come up with as long as the money continues to go to those services.

“Mixing money into the categories that this measure was supposed to meet does not cause me any problem,” he said. “One of the best ways to afford to avoid becoming homeless is to make sure they don’t become homeless to begin with. “

Prior to the adoption of Measure E, property transfer taxes were $ 3.30 per $ 1,000 of assessed property value. The transfer tax is now $ 7.50 per $ 1,000 for properties valued between $ 2 million and $ 5 million and $ 10 per $ 1,000 for properties valued between $ 5 million and $ 10 million.

The proposal will be discussed at the November 10 board meeting. The meeting begins at 1:30 pm To watch, visit the San Jose YouTube page.

Contact Carly Wipf at [email protected] or follow @CarlyChristineW on Twitter.

Editor’s Note: Jennifer Loving, Executive Director of Destination: Home, sits on the San José Spotlight Board of Directors.

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