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Opponents of a recent fee increase on developers now say they’d prefer six different tax increases as an alternative means of funding affordable housing.
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.
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.