Measure A: Should San Diego Raise Taxes To Fund Affordable Housing?
Friday, October 16, 2020
Photo by Gregory Bull/AP
One of the most consequential measures on the San Diego ballot this election is Measure A, which would allow the city to issue $900 million in bonds to fund affordable housing. It needs approval from two-thirds of city voters to pass.
Supporters say it's San Diego's best shot at getting people experiencing homelessness permanently off the streets and preventing those at risk from falling into homelessness. Opponents say San Diegans cannot afford a tax increase and should instead urge officials to lower the cost of building affordable housing.
The measure was first proposed by the nonprofit San Diego Housing Federation and has been in the works for years. It was initially planned for the November 2018 ballot, but supporters decided to hold it for 2020 to avoid having to compete with another tax measure.
Stephen Russell, the San Diego Housing Federation's president and CEO, said Measure A was principally motivated by the city's homelessness crisis.
"We have been absolutely heartbroken over the fate of the folks who are living on the streets of San Diego," Russell said. "We've seen what a terrible cost it is to them, to their health, to our common health, to the quality of neighborhoods. We believe we have an opportunity now to resolve that."
The "Yes on A" campaign says the bonds could fund construction of up to 7,500 new affordable homes for the chronically homeless and those at risk of becoming homeless. The measure specifically cites low-income families, veterans, youth, seniors and people with disabilities.
How much each homeowner would pay in additional property taxes depends on the assessed value of their home and other factors including interest rates at the time the bonds are issued.
According to the measure's fiscal impact analysis, property owners could expect to pay roughly $3 for each $100,000 of the property's assessed value, starting next year. For a home assessed at $600,000, that would total an additional $1.57 in property taxes per month.
As time goes on and more bonds are issued, the additional property tax would increase. By 2028, or possibly later, the same homeowner could expect to pay an additional $10.43 in taxes per month. Property owners with higher tax assessments would pay more, and those with lower tax assessments would pay less. Some of those costs could also be passed on to renters through rent increases.
"We believe that as property tax that's spread so thin over so many people, that it's relatively modest, and that it really provides an opportunity for us to create a safety net that is so clearly lacking, as we saw during this pandemic," Russell said.
The authors of the measure settled on the $900 million figure after calculating that San Diego needs an estimated 2,800 homes for chronically homeless people and 4,800 homes for those at risk of homelessness.
They also took into account that the local tax dollars could be matched three to four times over with state and federal dollars — which Russell said could serve as a stimulus program to help San Diego emerge from the recession caused by the pandemic.
San Diego City Councilmember Scott Sherman is among Measure A's opponents. He said the measure's total costs, including interest, would total $2.1 billion over 46 years — and that while the monthly cost to property owners may seem small, it's on top of other taxes, fees and regulations that already go into the cost of housing.
"Politicians told you, 'Oh, it's just a small little bit of tax, it won't amount to much, it's not that much out of your budget,'" he said. "Well, if you keep doing that time and time again, it finally adds up to where now it's almost half the cost of building housing in this city."
Sherman was referring to a study released by Point Loma Nazarene University in 2015 that found roughly 47% of the cost of housing in San Diego can be attributed to regulations.
Sherman said rather than raising taxes to fund more affordable housing, the government should focus on lowering the cost of building it. In particular he took aim at the state requirement that all housing built with taxpayer dollars pay construction workers higher wages, called "prevailing wage," which he said adds 20-25% to the cost of construction.
"I’d much rather get that done without prevailing wage, save that 20% and build more units with that money," Sherman said. "You keep giving the bureaucracy more money to spend, they're never going to have any incentive to implement those reforms and regulations."
Measure A has been endorsed by the San Diego County Democratic Party, Habitat for Humanity and other affordable housing builders and organizations that serve the homeless. It also won support from the San Diego County Taxpayers Association, the San Diego chapter of the Associated General Contractors and the Building Industry Association of San Diego County.
Measure A is opposed by the San Diego County Republican Party, the San Diego Union-Tribune editorial board, three San Diego City Councilmembers and conservative radio host Carl DeMaio.
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