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Council Places Bed Tax Increase on the Ballot

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By Lookout Staff

June 29, 2022 -- The City Council voted unanimously Tuesday to place a measure on the November ballot that would raise Santa Monica's bed tax to help tackle the city's homeless problem.

The measure -- which requires a simple majority of the vote -- would raise the transient occupancy tax from 14 percent to 15 percent for hotels and to 17 percent for home-shares.

The increase is expected to generate an estimated $4.1 million a year "to address community needs in the context of a slow and uncertain recovery" from the coronavirus shutdown, staff said in a report to he Council.

Last raised in 2004, the increased bed tax will help fund priorities identified in a poll that found 70 percent of Santa Monica residents supported the tax measure, staff said.

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The funding priorities include expanding the Police Department’s Homeless Liaison Program (HLP) to seven days a week and the City’s homeless multidisciplinary outreach teams’ work beyond the Downtown area.

The increased funding also would be used to expand the Police Department’s Downtown Services Unit (DSU) and the Public Services Officer (PSO) program to "provide the needed coverage levels for the Downtown, Pier, and Beach areas.

"These teams would further increase resources responding to people experiencing homelessness," staff said in its report.

It also "would allow public safety resources that have been shifted to deal with increased activity in these areas to be redistributed to neighborhoods and patrols throughout the City."

The funding would also pay for the redesign of SAMOSHEL, allowing it to stay open around the clock so police can bring those "experiencing homelessness and non-urgent behavioral health issues" to the shelter after hours.

The steeper increase in the bed tax for home-shares will help the City pay for "the greater regulatory oversight that home-shares require, and the greater impacts these home-shares have on residential neighborhoods and areas not typically subject to the impacts of commercial endeavors."

The Council designated Councilmember Glean Davis to draft the arguments supporting the tax increase, with Councilmember Phil Brock as a back-up.

In addition to the bed tax, Santa Monica voters could be asked to weigh in on rival measures to increase Santa Monica's real estate transfer tax.

A measure sponsored by Mayor Sue Himmelrich would charge a real estate transfer tax (RETT) of $53 per $1,000 on properties valued at $8 million or more ("Mayor's Tax Measure Appears Headed for Ballot," June 16, 2022).

The measure -- which appears to have the voter signatures needed to be placed on the November 8 ballot -- is expected to generate $50 million a year to help pay for "homelessness prevention, affordable housing and schools."

A rival measure proposed by Brock would charge a real estate transfer tax of $15 per $1,000 on commercial properties that sell for more than $8 million, with the tax applying only to the amount above that threshold ("Brock Proposes Alternative to Mayor's "Outrageous" Transfer Tax," May 26, 2022).

Brock's measure, which the Council will consider placing on the ballot, would raise some $15 million a year to address a menu of budget line items that can change over time as funding needs arise.

If both measures receive more than 50 percent of the vote, the one with the most votes would be adopted.

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