The housing affordability crisis across the state has inspired several measures on the Nov. 6 ballot. A local response is Measure H, which if approved will authorize the county to issue up to $140 million in general obligation bonds, generating an estimated $8.6 million annually to fund affordable housing throughout the county. The total price tag for the principal and interest of these 35 year bonds is estimated at about $274 million-almost double the face value of the proposed bond issue.
Setting aside the hardship stories of elderly tenants facing eviction due to rent increases, or workers commuting from Los Banos to work in Santa Cruz, the basic pocketbook question put to voters by Measure H is: Should the average homeowner pay an additional $60 to $80 per year in property taxes, or between $5 and $7 a month, to pay for more housing for low-income people in Santa Cruz County?
That cost estimate is based on an average assessed home value of $500,000, with the average property tax levy for Measure H estimated at $12.21 per $100,000 of assessed value. The highest possible annual tax for the bond payments is estimated at $16.77 per $100,000 of assessed value, according to the county’s Voter Information Guide.
The likelihood of two-thirds of voters willing to levee that “compassion tax” onto homeowners, owners of rental property as well as commercial property, is difficult to assess- such a bond issue has not been tried before in Santa Cruz County- but will surely be influenced by the pervasiveness of the problem. In the both the City of Santa Cruz and Watsonville, about 56 percent of all households rent, and throughout the unincorporated county, about 40 percent are renters.
Using the recognized standard of about 30 percent of monthly income dedicated to housing as “affordable”, a single earner needs to make $50.96 an hour to afford the current, median asking price for rent, $2,650 a month in Santa Cruz County, according to a recent report by the California Housing Partnership. It is estimated that at least half of all households earning $56,000 per year or less are “severely cost burdened” with housing costs exceeding 50 percent of monthly income.
The Press Banner sat down with the key proponents and opponents of the Measure H for their analysis and comment, and makes no editorial endorsement of either side.
Proponents of Measure H: Don Lane, former three-term city council member and former mayor of the City of Santa Cruz, and Fred Keely, former three-term state assembly member from Santa Cruz, led the organizing effort that resulted in a broad coalition of community organizations that became known as Affordable Housing Santa Cruz County. After an almost two-year effort of coalition building that created “a really big table with a whole bunch of people from all over the county,” Lane said, Measure H is “where we landed.”
Lane emphasizes the housing crises has become personal for many throughout the county, with most people knowing someone who has either had to move away or experienced some kind of housing emergency, and the key challenge was building local consensus on what to do about, it according to Lane.
Affordable Housing Santa Cruz County, the coalition advocating for Measure H, is made of organizations as diverse as the County Farm Bureau, the Santa Cruz Business Council, SEIU, Santa Cruz 4 Bernie and Santa Cruz Chamber of Commerce. Nearly all the elected leaders of various city councils, including Jim Reed and Jack Dilles in Scotts Valley, as well as school district officials and four of five county supervisors have come out personally endorsing the bond issue.
The key question for Lane is, “How do we have a well-functioning community if people who don’t make very much money but do really important jobs have to move away? - How can we make a difference between a community that’s thriving and a community that’s not,” Lane asked. “Measure H is as close as we can get to consensus on how to deal with this problem,” Lane said.
Lane explained that since the economic crash of 2008, federal and state funding for affordable housing has been reduced to a trickle, and local funding was by and large eliminated when local redevelopment agencies were dissolved as part of the 2012 state budget overall engineered by Governor Jerry Brown.
“We don’t have unlimited options. Sales taxes are pretty much at their legal maximum. We reduced the original amount of the bond issue after talking more with community members, although many continue to think the higher amount was necessary to address the problem,” Lane said. Measure H is aimed at replacing the local, property tax based funding for affordable housing that used to be provided by local redevelopment agencies, Lane said.
This locally generated funding is critical to “match” and leverage other sources of funding for affordable housing projects, according to Alina Harway, Communications Director for the Non-Profit Housing Association. “We can leverage $1 of local funding into $3 with state and federal funding- but we can’t do that without local funding,” Harway said.
Because other counties have passed similar bond issues, like Santa Clara and Alameda counties, Harway explained, Santa Cruz County will wait in line behind these counties for state funding, especially if, for example, state Proposition 1 is passed. “Nonprofit housing developers we work with like Mid-Pen and Eden have identified sites, have identified projects- all they need is the funding,” Harway said.
Opponents of Measure H. The Press Banner met with three of the nine unaffiliated residents of Santa Cruz County who signed opposition arguments against Measure H for the Sample Ballot and Voter Information Guide for the Nov. 6 election. Becky Steinbruner, activist and resident of Aptos, summed up their arguments against Measure H, “We think this bond measure is well intentioned, but is poorly written and ambiguous, and how the funding will be disseminated is nebulous, and it’s putting a tax a burden for generations to come.”
Specific criticisms of the measure is that it is vague in its actual outcomes and somewhat deceptive in the way it has been presented to voters, and that it has no explicit, built-in exception from the property tax for low income seniors.
Unlike some bond measures for school districts, for example, Measure H has no “built-in-blanket” exception for low-income seniors, opponents say, and this additional property tax could be the “tipping point” where some low income seniors could lose their homes, according to Steinbruner. But the supporters of the measure point to a standing program by which low-income seniors can apply for a property tax postponement, aimed as preventing seniors from being “taxed out” of their homes. This standing Property Tax Postponement Program is unacceptable to the Measure H opponents because it requires an annual application, excludes mobile homes, and is a postponement of property tax, with interest, and not a full exemption.
The opposition group claims the measure as printed in the “Ballot Question” may break a state law because it doesn’t specify the term of the bonds or the total cost of the bonded debt that will ultimately have to be repaid. This information is included in the “Tax Rate Statement” by the County Auditor-Controller in the Voter Information Guide, but should have been included “up front” on the Ballot Question, according the opposition.
In other ways, the opposition group finds the information about what the bond issue will ultimately produce somewhat vague, and that the Affordable Housing Santa Cruz County coalition’s campaign for the measure has been somewhat deceptive.
“We don’t know where this housing is proposed to be built, we don’t know the amount of the admin fees the county may charge to manage these funds, and we don’t trust the citizen oversight committee- everything is estimated regarding the length of the bonds and the pay-back,” said Kris Kirby, an Aptos business owner.
“They brought on board all these organizations whose business it is to provide housing-but they left out the common people who are going to be paying for this,” said Steinbruner. “They didn’t go door-to-door to get signatures for the ballot, but went straight to the Board of Supervisors. I think they only solicited organizational support, with a lot of help from the Community Foundation, and lost touch with the actual community,” Steinbruner added.
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