We stumbled over something of a revelation while fact-checking a recent claim made by Chamber of Commerce CEO Jerry Sanders.

A group of local business leaders calling themselves the Jobs Coalition calls the City Council’s recent move to hike the fee it charges to help build subsidized housing the “jobs-killing tax.” That same group, which is working to overturn the fee hike, now says it supports six different tax increases that would fund subsidized housing construction instead.

You read that right: A group formed to oppose a tax says it supports six alternative tax increases. Surprise is the appropriate reaction.

“The thought was a little pain spread across a wide spectrum was preferable to a lot of pain on a small group, particularly when the target is jobs creation and will have a negative impact on the economy,” said Jobs Coalition spokesman Tony Manolatos.

The tax increases supported by a majority of the coalition would be shouldered by a broader group than a fee charged only to commercial developers.

But since those broad-based taxes affect more people and more businesses, passing them requires a two-thirds vote of city residents. Affordable housing advocates have always defended increasing the development fee as the one funding source that’s realistically achievable.

We Stand Up for You. Will You Stand Up for Us?

Getting two-thirds of voters to approve a tax increase is really hard to do. The coalition nonetheless says it would support these six proposals if they were ever brought forward by affordable housing advocates.

Megabond, with property tax: A property tax that would be connected to a large citywide bond to pay for streets, sidewalks, street lights and other deteriorating city needs, including subsidized housing. The idea of a large bond for all the city’s needs has been a common citywide political conversation in the last year, and attaching subsidized housing to it has been brought up repeatedly since increasing the affordable housing fee first came up.

Repeal the “People’s Ordinance,” charge for trash pick-up: This one calls for a repeal of the so-called “People’s Ordinance,” which prevents the city from charging a fee for trash collection at single-family homes. A fee on trash collection, the theory goes, could ultimately pay for subsidized housing. This is maybe the least likely of a list of unlikely options, as the “People’s Ordinance” has long been a sacred cow of San Diego politics.

More hotel taxes: Another coalition-supported tax increase is to up the transient occupancy tax, a 10.5 percent tax on hotel room stays, and use the new money to fund subsidized housing. The problem here is the tax is already effectively as high as 15.5 percent, since the city charges another 2 percent to pay to market San Diego to out-of-towners as a cool place, and another 1 to 3 percent, depending on the venue’s proximity to downtown, to fund the convention center expansion.

One-time tax on businesses: The coalition is also in favor of issuing a one-time tax on businesses, based on their net worth. That’s a bit more broad-based than targeting commercial development only, but it also seems to contradict the objection to the affordable housing fee hike as a tax on job creation and economic activity.

Real estate transfer tax: The coalition is also on board with increasing the tax charged whenever the title to a piece of real estate changes hands, and using the new money to pay for subsidized housing construction.

Document recording tax: The group is also OK with a proposal related to a piece of state legislation, increasing the tax charged whenever a document is officially recorded with the city, and using the increased funds to pay for subsidized housing construction.

Now, the coalition isn’t saying it wants to pass each of these tax increases. It’s saying they’re each valid funding streams, and they’d prefer each of them to the decision to increase a fee charged to developers.

And it isn’t saying the entire coalition supports every option, or that all six options would ever be passed. Just that a majority of the group is OK with each one, if city leaders decided to pursue any one of them. That means 29 out of the 57 members need to support each item, but no one necessarily needs to support all of the items.

I asked for a list of the members who are on record for supporting the six different taxes. Manolatos said it doesn’t really work that way.

It was more like an informal straw poll, the group said, with representatives from each member group indicating what they think each group could live with before an item was deemed to have coalition support.

Organizations like the Chamber of Commerce or the San Diego County Taxpayers Association go through a formal process before they support specific policies. They didn’t go through that process with each of these items.

Instead, the coalition tried to build a consensus for each item by having representatives informally indicate what their group might be able to live with. Essentially, there was an unrecorded show of hands from representatives about how their groups were likely to feel about each proposal. That means no one is really on record supporting anything in particular, and support for any alternative could dry up once groups need to take a formal position.

That’s why Manolatos said he couldn’t provide a list of the 29 or more groups that support each of the above items.

But we’re working to approach many of the groups to see which of the tax increases (if any) they would support, if the Housing Commission or the City Council decided to pursue any of them. We’ll also see if any group would proactively champion any of these six tax increases, or whether support simply means they won’t stand in the way of someone else’s initiative.

    This article relates to: Affordable Housing Fee, Business, Growth and Housing, Land Use, News, Share

    Written by Andrew Keatts

    I'm Andrew Keatts, a reporter for Voice of San Diego. Please contact me if you'd like at andrew.keatts@voiceofsandiego.org or 619.325.0529.

    Augmented Ballot
    Augmented Ballot subscriber

    Repeal of the People's Ordinance is unlikely. Quite possible though is that the city could decide that it's not required to collect trash for SF residences. SF would pay for private pickup just as MF does. (The city provides SF pickup at less cost than private haulers charge, but that's another story.)

    Further, that change might have some allies in the Jobs Coalition. The Downtown Partnership, for example, depends to some degree on legitimately representing downtown as a neighborhood. Our current trash pickup arrangement effectively transfers $40M from MF to SF residents every year and downtown residents are all MF. Ending that transfer should be a top priority of the Partnership. Two more in the Jobs Coalition share this interest unambigiously: SD County Apartment Association and CA Apartment Assoc SD Chapter.

    So, let's make this trade. Step up Jobs Coalition.

    Richard Rider
    Richard Rider subscribermember

    Average 2012 CA impact fee for single-family residence was $31,100, 90% higher than next worst state. 265% higher than jurisdictions that levy such fees (many governments east of the Sierras do not). For apartments, fee averaged $18,800, 290% above average outside state. The fee is part of the purchase price, so buyer pays an annual property tax on the fee!
    California Homes Require Real Reachhttp://www.newgeography.com/content/003882-california-homes-require-real-reachIn the 1950s and 1960s, Southern California was ground zero for the "American Dream" of owning a house. From tony Newport Beach and Bel-Air to the more middle-class suburbs of the San Fernando Valley and Garden Grove to working-class Lakewood, our re...

    Richard Rider
    Richard Rider subscribermember

    I suggest fans of "affordable housing" go back and read the details Voice of San Diego expose' on how incredibly wasteful spending is on such projects -- "Taj Mahals."

    If we REALLY want more affordable housing, get out of the way! Don't make every "evil" developer apartment project an ATM machine for government and somehow an undesirable addition to the housing stock.Building 'Taj Mahals' with Taxpayer Moneyhttp://voiceofsandiego.org/2011/07/21/building-taj-mahals-with-taxpayer-money/Designed to provide homes for those who can't pay San Diego's high rents, affordable housing programs have evolved into a delivery mechanism for social goals that often have little to do with their central mission. The result: a system that is wildly...

    Richard Rider
    Richard Rider subscribermember

    I'm sure this story is true -- to an extent. Disappointing, but not unexpected. As one Congressional wag put it:

    Don' tax you
    Don't tax me
    Let's tax that man
    Under that tree.

    Business groups too often seek to SHIFT taxes rather than keep taxes in check. Indeed, most people do.

    That being said, I have two problems with the article:

    1. The reps for the groups do not SPEAK for the groups. For instance, the San Diego County Taxpayers Association would likely oppose most of not all those other tax increases (I know I'D be raising hell that such would be the case).

    2. What some of the group(s) might do is not OPPOSE such tax increases -- but not, as the article suggests -- actively SUPPORT such tax increases. And yes, there IS a difference.

    Whatever is the case, my grassroots taxpayer group will continue to represent two of the three positions on taxes:
    1. Taxes are too high
    2. Taxes are high enough

    The third group (the one that thinks Californians are undertaxed) can be represented by others.

    Richard Rider, Chairman
    San Diego Tax Fighters

    Derek Hofmann
    Derek Hofmann subscribermember

    A fee on trash collection at single-family homes isn't a tax. So the title of this article is wrong: 'Jobs Tax' opponents only support five taxes, not six.

    Why is this distinction important? Because fees only cover the cost of the service provided (otherwise they would be called "taxes"), and we've built a society on people paying for what they use.

    Jim Jones
    Jim Jones subscriber

    Also property transfer and document recording are fees, but the point is that the Jobs Coalition is really on the side of business, and they will always be for increasing the burden on ordinary people if it is a benefit to business, so the "surprise" expressed in the article is somewhat comical.

    David Hall
    David Hall subscriber

    If they use the money for anything other than trash collection, it's a tax.

    Rick Smith
    Rick Smith subscriber

    No David, if they charge for trash collection it is a fee. And the 40 million dollars or so of the General Fund that is spent on some peoples garbage collection could be used on something else. Potholes, parks, libraries, affordable housing, police, fire or lifeguards..... But the city chooses to pay for some peoples garbage collection out of the General Fund.

    Bill Bradshaw
    Bill Bradshaw subscribermember

    Mr. OConnor , I don’t know what constitutes a “poverty” job and I suspect you might have trouble defining it as well. If the government dictated all wages I’m sure some people would be happier, but I suspect there might be some unintended consequences (See, e.g., Cuba).

    Mr.. Briggs, “Thank you for your service” (In helping get rid of Filner). Now, go away. This taxpayer is tired of your finger pointing and insinuations. No one has clean hands here. I really think the whole area of “affordable housing” ought to be reviewed, not taken as a sacred cow that only needs to be funded more highly, whether by a specific group, in this case developers (whose costs are inevitably passed on to buyers), or by the general public.

    To start the review, Mr. Tinker, please give us a definition of the difference between a tax and a fee (Skip the explanation of how each is imposed, we already understand that a “fee” is a lot easier to get done than a “tax”).

    Then, let’s all reread the expose’ VOSD did on how and why units built to be “affordable” cost about twice as much to provide as those occupied by regular tax-paying citizens like most of us.

    Next, let’s undertake a review of the administrative rules on eligibility for taxpayer-subsidized housing, e.g. what are the income limits, are their any behavior criteria imposed, is there a maximum occupancy time limit, who makes the decisions (i.e., is it a self interested bureaucracy that benefits from an ever-increasing “clientele” or some unbiased authority), stuff like that.

    Finally, what does it cost the city per unit to administer the program in terms of capital tied up in the homes, salaries and other expenses.

    After this is done, maybe doing away with the program in favor of a “voucher” system might look pretty good. I realize that “affordable housing” is different from “rent control”, but some of the same factors are present.

    Cory Briggs
    Cory Briggs subscribermember

    Mr. Bradshaw: You missed my point. Raising fees is not the only option, and AHC was willing to try something different. Industry and city officials did nothing in response. Missing a chance to do something other than raise fees, they left no other option. The perfect musn't be the enemy of the good.

    Let's also not confuse cost with price. Price is set by the competitive market. In such a market, higher costs tend more to translate into lower profit than into higher prices. The question is whether costs are so high that they cause businesses to close or pursue profits elsewhere. I have seen little evidence of that in San Diego. If it exists, I'd appreciate having it pointed out.


    Jim Jones
    Jim Jones subscriber

    "The good" is a misnomer, all subsidized housing does is hurt the 99.9999% of people for the 0.0001% who get it, and for those people it subsidizes them for the businesses who employ cheap, unskilled labor and the builders who eventually pocket the money.

    There is nothing good about paying people to stay in poverty at the expense of the struggling middle class to benefit rich hoteliers. It's laughable to present these housing subsidies as anything other than a heartless scam made for the benefit of business, bureaucrats and faux charity scammers.

    Lucas OConnor
    Lucas OConnor subscriber

    Since the backers of this signature gathering campaign are talking about spreading around the cost rather than concentrating it, it's perhaps worth noting... that's how it currently works.

    Those who are responsible for creating and perpetuating poverty jobs pass the costs on to the general public through safety-net programs on the back end. So what they're really objecting to is not being able to pass the buck on to everyone else quite as much as they already do.

    Cory Briggs
    Cory Briggs subscribermember

    I'm glad to see that so many people--both in comments here and in the reactions I've heard around town--realize that the JOBS Coalition is full of "BS." Jerry Sanders is part of the (JO)BS Coalition, at least that's what the photo above suggests, but I do not recall him putting forward any of the proposals mentioned in the article while he was in office. Opponents of the TMD tax and the Convention Center tax opposed them in part on the grounds that those taxes would render impossible any increase in the TOT to pay for things like affordable housing and other general municipal needs. Sanders blew us off.

    But we ought not blame Sanders for all of the policy failings during his tenure. A few years back, I met with the BIA--on behalf of the Affordable Housing Coalition of San Diego County--and expressed AHC's willingness to support ANY regulatory reforms put forward by housing developers, subject only to two conditions: first, there had to be a sunset on the regulations (we proposed 10 years but were open to a different sunset); and second, the new regulations had to include a thorough but neutral evaluation of the efficacy of the regulations' performance in increasing the supply of affordable housing as the sunset approached. We wanted a sunset and an evaluation so that good aspects could be extended and bad aspects could be fixed/eliminated. Not long after the BIA meeting, at a community meeting on affordable housing attended by Todd Gloria and (if memory serves me) a rep or two from the Housing Commission, I told them about AHC's proposal to BIA and said that AHC was still willing to pursue regulatory reforms on those terms. AHC has not heard back from BIA, Gloria, or the Housing Commission.

    So, Tony, when you say that supporters of the higher linkage fee have put forward nothing, you're wrong. Admittedly you might not have been told about the AHC proposal, so I am sure that your mistake is an honest one. Nonetheless, we put forward the holy regulatory grail of the (JO)BS Coalition's members: the elimination of the very regulations that people like them rail against day in and day out, and carte blanche to write the reforms they deemed most effective to increase the supply of affordable housing. We're still waiting for the call back. When they are ready to talk productively and sincerely, they should let us know. We're always open to dialogue like that.

    (One other suggestion: Drop the hypocritical whining about alternatives not gaining traction because supporters of the increase had the votes on the city council. Ninety-nine out of 100 times, members of the (JO)BS Coalition and other members of the downtown crowd are the beneficiaries of the same political dynamic you now lament. It's called "organizing," and usually your colleagues are schooling the rest of us on how to do it effectively. Don't criticize the supporters for besting the opposition this time around. The opposition should be flattered at being successfully imitated on this one.)

    Mark Giffin
    Mark Giffin subscribermember

    Guess it boils down to whose Ox is getting gored.
    They see the linkage fee as nothing more than a shake down and so they support the alternatives that would spread the costs over a larger base.
    Its easy to be righteous when you have no downside which is the position the supporters have. The coalition appears to be pointing that out here.

    Tony Manolatos
    Tony Manolatos subscriber

    What the Voice should be asking is what alternatives do the supporters of this massive tax increase -- approximately 375 to 750 percent -- on San Diego job creators support? As reported in the fact check, the JOBS Coalition put forward more than 20 alternatives AND two compromise proposals.

    The supporters of this tax increase weren't interested in alternatives, compromises or even negotiating. The alternatives and the compromises didn't gain any traction -- not even a counter offer -- because the votes existed on the City Council for this tax increase.

    So the supporters took the short-sighted approach and grabbed the low-hanging fruit instead of working toward a solution that would generate more than 80 to 100 subsidized housing units a year without hurting San Diego's economy and job growth. That's the real story here.Fact Check: Affordable Housing Fee Alternativeshttp://voiceofsandiego.org/2014/01/07/fact-check-affordable-housing-fee-alternatives/There's been a lot of talk lately about whether business leaders did enough to find an alternative to the City Council's decision this fall to raise the fee it charges commercial developers to help build subsidized housing.

    Felix Tinkov
    Felix Tinkov subscribermember

    PR maneuvering notwithstanding, the council upped an existing fee on a class of development. They did not impose a tax. It is, therefore, not particularly surprising that the group being charged would prefer to spread the cost to the larger populace. Shoot, I would appreciate it if everyone in the city kindly opted to pay my electrical bill.

    Now, where did I put my application for a new ballot measure....

    Chris Brewster
    Chris Brewster subscribermember

    I admire your forthrightness Mr. Keats, but I'd say you've been had. Sorry. They are simply trying to leave VOSD believing they support meaningful alternatives. Mr. Sanders knows as well as anyone that passing a tax with a 2/3 majority is an almost insurmountable hurdle. Mr. Carte's comment, below, is right on point. As well, this calls the fact check on the issue into question.

    In the fact check Mr. Manolatos says, “A majority of the coalition supported every alternative.” Here he says, "It was more like an informal straw poll ... with representatives from each member group indicating what they think each group could live with before an item was deemed to have coalition support." Even with that, if one of these taxes were every to have come to the ballot, they could easily take a pass based on some nuance or just because they changed their minds.

    For the record, I would support having my monthly mortgage payment double to benefit world peace, so long as I know it would never happen.Fact Check: Affordable Housing Fee Alternativeshttp://voiceofsandiego.org/2014/01/07/fact-check-affordable-housing-fee-alternatives/There's been a lot of talk lately about whether business leaders did enough to find an alternative to the City Council's decision this fall to raise the fee it charges commercial developers to help build subsidized housing.

    Jeff Carle
    Jeff Carle

    In other words, do away with the tax we don't want, and replace it with proposals that have no chance of success......