UPDATE: Lawmakers approve San Jose mayor’s spending plan for proposed tax

San Jose Mayor Sam Liccardo’s support for a real property transfer tax has been gaining more traction, as several community leaders, housing advocates and formerly homeless people lined up to speak next to the mayor at a news conference Tuesday to support using the funds generated from the tax toward affordable housing projects and homeless services.

After gaining widespread support across the political aisle, lawmakers on Tuesday voted 9-2 in favor of implementing the spending plan. San Jose lawmakers in November were split on how to divvy up the funds the tax will generate, but the new plan consolidates ideas from the two proposals brought up last month.

Jeffrey Buchanan, director of public policy at Working Partnerships, called the effort a “strong compromise” at Tuesday’s meeting.

Councilmembers Johnny Khamis and Sergio Jimenez dissented, doubling down on their stance against the potential property tax and the new spending plan at Tuesday’s City Council meeting. Councilmember Dev Davis, who initially said she did not support the tax, voted in favor, adding she was “optimistic” about the measure’s spending priorities.

Earlier Tuesday, the mayor stood beside his community partners in front of downtown San Jose’s first permanent affordable housing development — Second Street Studios — to back his spending plan for the potential tax revenue, which sets aside at least 45 percent of the generated funds for permanent supportive and affordable rental housing for extremely low-income residents. Another whopping 35 percent of the funds are set aside for affordable rental housing for low-income households, and 10 percent for the sale of below market-rate homes and moderate-income rental housing.

As the first-of-its kind project in the downtown core meant to address the growing homelessness crisis, lawmakers credit Second Street Studios as a success story for addressing one of the region’s most severe dilemmas. Today, the site houses 134 individuals, considered some of the most vulnerable, chronically homeless and disabled residents in the county.

“The City Council is considering today to allocate the dollars to affordable housing to ensure that the dollars that are generated through this measure will actually be spent building affordable housing and getting homeless neighbors off the street,” Liccardo said at the news conference. “We will be today considering how we will set the spending plan for those dollars. In years like this one, that will generate as much as $73 million.”

“Regardless of the amount, we critically need every dollar right now to help our homeless get off the street and to help more of our struggling working families to be able to stay healthy,” the mayor added.

Liccardo and many of his council colleagues have been pushing to put the new property transfer tax, which applies to all properties valued at $2 million or more, on the March 2020 ballot for months, in an effort to spur new funds for housing. The tax would need a simple majority to pass.

The strict spending plan will be dedicated to critical affordable housing and homeless prevention programs. The lawmakers approved including strong accountability and transparency measures, requiring a 60-day notice and at least two public hearings prior to lawmakers shifting funding or making changes to the annual spending plan, in addition to creating a citizens oversight committee.

They also proposed dedicating 10 percent for homeless prevention and 5 percent for city administrative costs and per Esparza’s request, included opening up both homeless prevention and rental assistance services to all vulnerable members in the community in need of services, not just those mentioned in the proposal.

But not all members of the City Council were on board. Councilmembers Sergio Jimenez and Johnny Khamis opposed the tax, saying Silicon Valley residents are overtaxed and the proposed measure is a general tax that can be spent however the council sees fit — with no guarantee the money will support affordable housing. Khamis advocated for some of the funds to go toward parks maintenance and police presence in park areas where homeless residents congregate, but was quickly rejected by Esparza, and fiercely doubted the idea that the tax will be dedicated toward housing and homeless services.

“I did not support the tax being on the ballot because it is a general tax. Were doing this to inspire people to get behind the tax and support it but saying its going to go to housing and homelessness doesn’t mean it will go toward housing and homelessness,” said Khamis. “On any given Tuesday, we can reverse any of these decisions.”

Still, many at Tuesday’s news conference were hopeful the new funds generated from the potential tax will go toward helping formerly homeless residents, like Raymond Ramsey, who lived on the streets for ten years before finding permanent supportive housing.

“If it passes, the measure will change many lives for the better. The real estate property tax will provide much needed housing for the homeless, still out on the streets suffering each night from dire conditions, such as freezing temperatures, starvation, deteriorating physical health and mental illness,” said Ramsey, who now lives at Second Street Studios. “It was because of the federal and state government tax initiatives like this… that homeless individuals and families with different backgrounds and stories now have permanent housing. We are living proof that the homeless population is neither helpless, or hopeless.”

Contact Nadia Lopez at [email protected] or follow @n_llopez on Twitter.