Citizens for Fiscal Responsibility strongly encourages San Jose voters to reject San Jose Measure E, the real property transfer tax measure, projected to raise about $50 million annually, purportedly toward addressing our affordable housing and homelessness problems.
Our opposition is based on several concerns. For starters, providing affordable housing is not one of San Jose’s core service mandates. We suffered devastating service cuts during the Great Recession, cuts that have not yet been fully restored.
Second, the tax proceeds would flow into the general fund, where they can be used for any purpose. We understand the desire to help resolve our housing and homelessness problems, but today’s City Council cannot guarantee that money raised by the measure won’t be diverted to more pressing general fund budget needs as they arise.
For instance, a future council may deem paying down the unfunded pension liability (now about $3.5 billion) a better use of the funds, and there is nothing to stop that council from deploying the transfer tax collections to that end. Or a future City Council might believe that during the next downturn maintaining public safety staffing trumps affordability efforts and divert funds to that purpose.
Worst of all, there is no sunset period for the tax that would allow for a review of the program’s effectiveness. Even in the unlikely event that our housing situation is resolved, the tax would persist.
Citizens for Fiscal Responsibility similarly opposed San Jose’s failed 2018 Measure V, a $450 million bond measure for affordable housing, based on a variety of factors, none of which have changed appreciably. Very little has been done to address the bureaucratic quagmire that frustrates participants in the development process. Virtually nothing has been done to reduce fees that can total over $60,000 per residential unit, other than some relief for downtown high-rises.
Our zoning philosophy remains geared more toward protecting the value of existing homes than encouraging creative solutions to the housing problem. San Jose is making it very difficult to build housing of any sort. This needs to change before the city goes deeper into the housing construction business.
There has been one major change since 2018 — the government entities responsible for directly addressing the issue are deploying significant funds to help resolve our housing crisis. Santa Clara County is beginning to spend some of the $950 million funding authorized by Measure A. The county has committed $234 million for construction of about 1,600 units scheduled for completion by 2022, along with down payment assistance for first-time buyers and other support.
The $4 billion state Proposition 1 passed in 2018, and Gov. Gavin Newsom has released more than $1 billion for infill infrastructure grants, veterans housing assistance, down payment assistance and affordable housing development. Additionally, the governor’s 2020-21 state budget proposal includes $1.4 billion to fight homelessness, with $750 million set aside to develop an Access to Housing and Services Fund.
And, most encouragingly, local companies are stepping up big-time, with Apple, Facebook and Google committing $4.5 billion for housing solutions in the area.
San Jose should indeed be part of the solution, just not by providing additional direct funding of projects and programs. The city must streamline its planning and permitting processes so projects can move from conception to completion in a reasonable amount of time. We must reconsider our zoning priorities, creating opportunities for increased density in residential projects wherever possible. We must re-evaluate our development fees, rationalizing the need for each dollar involved.
It has been over a decade since the Great Recession, and our city has not yet returned core services to acceptable levels. Until they do, taxpayer dollars must remain focused on providing the core services we all deserve, something Citizens for Fiscal Responsibility calls the three p’s: public safety, parks and pavement.
Citizens for Fiscal Responsibility asks that voters vote no on Measure E, sending a strong message to the City Council that its primary focus should be on the core services mandated by our city charter.
Pat Waite is the president of Citizens for Fiscal Responsibility, a nonpartisan organization working to ensure that San Jose city government responsibly allocates tax dollars. Find out more by clicking here.