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Mayor Launches Campaign to Hike "Luxury" Real Estate Tax
By Jorge Casuso
March 31, 2022 -- Mayor Sue Himmelrich has launched a campaign for a ballot measure that would dramatically hike Santa Monica's transfer tax on "high end" real estate to help fund "homelessness prevention" and build affordable housing.
The proposed tax measure -- which also would help fund the local School District -- would charge a real estate transfer tax of $53 per $1,000 on properties valued at $8 million or more, primarily apartments and commercial properties.
If successful, the “Funding for Homelessness Prevention, Affordable Housing, and Schools” ballot measure is expected to generate $50 million a year.
Under the measure, 20 percent of funds collected -- the first $10 million -- would go to local Santa Monica schools.
The other 80 percent of the funds -- the next $40 million -- would go to homelessness prevention and affordable housing.
Any funds above $50 million would be deposited in the two funds based on the 20-80 percent formula.
"It is fair, equitable, and right" that property owners who have "enjoyed the benefits of City services and programs" should "leave a small portion of the proceeds with the City to help fund" the targeted programs, according to the measure.
Himmelrich said she chose to launch and personally fund the campaign with her husband, former Housing Commissioner Michael Soloff, because it greatly increases the measure's chances of passing.
A "dedicated purpose" tax measure placed on the ballot by voters requires a simple majority to pass, compared to the two-thirds majority required if it is placed on the ballot by the City Council, Himmelrich said.
But the campaign required to qualify the measure is far more difficult and costly, she said.
The couple is expecting to spend $200,000 on the campaign, which includes the cost of hiring the law firm of Strumwasser & Woocher to draft the measure, Himmelrich said.
Of the total cost, $100,000 is being used to gather the valid signatures of at least 6,800 Santa Monica registered voters, although the goal is to gather a total of 10,000 signatures.
The balance would be used to publicize the measure if it qualifies for the November 8 ballot, Himmelrich said.
The measure marks the second time in two years that voters could be asked to increase Santa Monica's so-called "luxury transfer tax."
In November 2020, voters approved a measure that doubled the real estate transfer tax on sales exceeding $5 million from $3 to $6 per $1,000.
Measure SM, which required a two-thirds vote, won with 71.88 percent of the vote.
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