By Daniel Larios
Staff Writer

November 18, 2014 – Affordable housing has long been a unifying issue in Santa Monica, garnering support from both smart-growth and slow-growth advocates alike, but it was dealt a blow by voters this month.

The loss of a real estate tax hike measure and the uncertain fate of its companion measure that would allocate the funds for affordable housing signals a rare defeat in a city known for its liberal housing policies.

As of Friday’s preliminary results, Measure H – which calls for the tax on real estate transactions of at least $1 million to rise from $3 per $1,000 to $9 – was an insurmountable 4,000 votes behind, while companion Measure HH is ahead by only 35 votes.

The results tend to suggest that voters still care about affordable housing, but just not enough to raise taxes for it, according to political observers.

“I was gratified that the people of Santa Monica registered their support for affordable housing with Measure HH,” said Santa Monicans for Renters’ Rights (SMRR) co-chair Patricia Hoffman shortly after the election.

“It would have been better if they had done so with their pocketbooks as well as their vote on H.”

In addition to the powerful tenants rights group, a number of Santa Monica organizations urged members to back the tax increase, including the hospitality union UNITE HERE Local 11, the Santa Monica Democratic Club and the League of Women Voters of Santa Monica.

Supporters, such as City Council member Kevin McKeown, say that low voter turnout was a big factor in the results. According to the Los Angeles County Registrar’s office, more than 23,000 voters cast a ballot on Election Day, with voter turnout at around 39 percent in a city with a high level of political participation.

“While I haven’t had a chance to look at precinct results, the conventional wisdom is that a low turnout tends to mean less participation by more progressive voters," McKeown said.

But voters’ unwillingness to increase taxes also likely played a major role, McKeown said.

 “The passage of HH would seem to indicate that the issue with H was more the way the money was to be raised than an unwillingness to create affordable housing, which the city is required to do in any case under state law and the City Charter,” McKeown said.

“We may now have to dip into funds we’d hoped to use for other community purposes, because relying on getting a percentage of affordability from market-rate developers will only lead to more development."

Contributing to the defeat of the measures was a well-heeled opposition. 

According to the latest campaign finance disclosure statements, the California Association of Realtors spent more than $160,000 to defeat both Measure H and HH. By comparison, the Committee to Protect Affordable Housing spent less than $53,000 to pass both measures.

While supporters saw Measures H and HH as an opportunity to create more affordable housing, opponents saw it as an attack on potential homeowners, poor homeowners and seniors.

“To increase the cost of housing in the name of increasing the affordability of housing makes no sense,” wrote Tricia Crane on behalf of the Northeast Neighbors association board.

“While our members consider maintaining the affordability of housing in Santa Monica to be an important policy objective of our city, in our view the combined ballot measures H & HH are not the right approach to achieve this goal."

Crane disagreed with proponents who contended that the increased fee would affect only “the very affluent,”  arguing that the twin measures would “impact long-term members of our community of modest and low income whose homes may be their only asset to provide security in retirement.”

“Increased transfer tax fees would also make new homeownership less achievable,” she added. “Families whose mortgages are ‘under water’ and seniors who may need to sell their homes for long term care would experience this increased fee as a heavy burden.” 

Opponents also contend that Measure H represented an unreasonable tripling of the tax rate, making Santa Monica’s taxes the highest in the region.

“Even though it's for low cost housing we have not thoroughly demonstrated an urgent reason for this outrageous tax increase,” said former council candidate Phil Brock on his opposition to the measures.

“A reasonable increase would have been tolerable. Matching Los Angeles and Culver City's rate would have been acceptable if our city clearly showed the absolute need for the increase.”

Helping to stoke the fire of opposition was Santa Monica’s new slow-growth group Residocracy, which gathered more than 13,500 signatures to halt a major development earlier this year.

Residocracy was one of the few community organizations to oppose the twin measures.

“I think that Measure H was about development and I think that development has been the main issue in this election,” said Residocracy founder Armen Melkonians. “I think that the word got out to residents and they voted accordingly.

“I’m very happy that H did not pass in this election,” he added. “It was a property tax disguised as a measure.”