The City of Santa Fe is about to embark upon yet another misguided public policy mistake. The latest issue is with the City’s ongoing housing shortage. According to news reports, the plan is to levy a 3% excise tax on sales of million-dollar homes to create a new revenue stream for the city’s Affordable Housing Trust Fund.
As the article describes it, a buyer of a $1.5 million home would pay the tax on $500,000, and the $15,000 collected would go into the Affordable Housing Trust Fund to help cover down payment assistance, rental assistance and housing rehabilitation for city residents.
The problem is the plan won’t actually do anything significant to solve the City’s housing challenges for the simple reason that it doesn’t create any new housing. Rather, by taxing high-end housing and shifting those dollars to the low-end buyers, these new dollars will result in price inflation on those lower cost properties.
If Santa Fe policymakers are serious about making housing more affordable then increased supply (not redistributionist taxes) MUST be the largest part of the equation.
We will try multiple avenues to help alleviate the pain, suffering and exodus of the middle -class, the working class and seniors in Santa Fe. The 3% tax is only on the portion of a home purchase over a million dollars! It does not apply to the first million!
Santa Fe will try anything BUT a concerted effort to increase the housing supply.
Providing the Affordable Housing Trust Fund with a stable funding supply is exactly what you are asking for: a concerted effort to increase the housing supply. The Trust Fund has an 18-year record of sound fiscal management and leveraging state and federal funds to build affordable housing in the city, but it is currently underfunded and can’t increase the housing supply enough to keep up with the demand. You have clearly implied that it is up to the city to increase the housing supply. Doing that requires money. This proposal does exactly what you are asking for.
You don’t need a government program to increase the housing supply, you need to reduce permitting delays and ensure that housing is allowed to be built. I don’t want nor is it a good idea for the government to be in charge of bringing housing to market.
Affordable Housing Trust Fund? Right. Another government agency which has a great cost to run, and lots of paperwork for the poor to go through, no doubt, in hopes of getting help. This is so dumb. Yuck. Thanks for reporting Paul.
Hi Julie, The Affordable Housing Trust Fund was established by State legislation approximately 18 years ago. By law, none of the Trust Fund money can be used for administrative costs. It is a very flexible fund. Past applicants say it is easy to apply for funds. All funds require a match, so it is a great way to leverage other state and federal funds to benefit the city and its residents. You can learn more about it here in these quick facts:
https://santafehousingaction.org/trust-fund/
Many in government positions have good intentions BUT I will never like or agree with a lot of what they do. Whoever said they can take other people’s money and redistribute as they see fit for their pet projects? They think they have the power to do this and I guess to an extent they do because we don’t call them on it. People don’t pay attention to what they are doing. (Thanks Rio Grande Foundation for being an exception). My main point is that government at all levels has gotten to big and too controlling. They should not be in the housing market at all, they should not be in the student loan business at at and they probably shouldn’t be in the health care business either. They should be providing BASIC government functions and leave a the social and market issues to work themselves out, which they will and it would be better for all.