Lookout: Fact check - Cutting through the fog of competing affordable housing petitions in the city of Santa Cruz
Shoppers walking into Whole Foods along Soquel Avenue last week might have been confronted by a pair of men behind an unfolded table, asking whether passersby were registered city of Santa Cruz voters. Next to the men sat a whiteboard with the words “Rebuild the Wharf” scribbled in black marker.
Curious shoppers would then learn that the men were seeking signatures for the Workforce Housing and Climate Protection Act, a proposal in which the wharf is but a fractional concern, along with homeless shelters and affordable housing construction. Hyper-civically engaged shoppers might have associated this petition with the effort being led by Santa Cruz Mayor Fred Keeley and the nonprofit Housing Santa Cruz County to raise money for affordable housing construction.
Those shoppers would have been wrong.
Right now, two competing petitions are circulating within the city’s boundaries. The Workforce Housing Affordability Act, and the Workforce Housing and Climate Protection Act. The similarly named acts each propose two of the same kind of taxes — a citywide parcel tax and a real estate transfer tax — but at different degrees and with different intentions, creating a confusing situation for the average voter presented with a petition and a pen.
As the petitions make their way through neighborhood blocks, farmers markets and shopping centers, Lookout has parsed through the language to highlight the key distinctions so you, the voting public, can be sure of which proposal you are choosing to support, or reject.
Who is behind the petitions?
Workforce Housing Affordability Act of 2025 (Keeley’s petition)
The WHAA was the product of an intermittent, 18-month process of discussion and collaboration, steered by Mayor Fred Keeley, the nonprofit Housing Santa Cruz County, and a handful of well-known community members, such as Andrew Goldenkranz, the then-chair of the local Democratic Central Committee. During his mayoral campaign in 2022, Keeley vowed to put a measure on a ballot to finance affordable housing and homelessness solutions. The idea was spurred by the results of 2018’s Measure H — a countywide ballot measure to raise tax dollars for affordable housing — which failed overall, but had strong support among city of Santa Cruz voters. The petition has been circulating since January.
Read the full petition notice here.
The Workforce Housing and Climate Protection Act of 2025 (realtors’ petition)
President of the Santa Cruz County Association of Realtors Renee Mello said her organization is philosophically opposed to real estate transfer taxes. So, in March, the group drafted and began circulating its own petition in direct response to the effort by Keeley and Housing Santa Cruz County.
Mello said the mission of their ballot measure is to defeat the Workforce Housing and Affordability Act. To legally do that, however, the realtors had to closely mirror the language and proposals put forth by Keeley and the housing advocates. This meant, despite the group’s philosophical opposition against the notion, the realtors’ petition had to propose a real estate transfer tax
SCCAR is the local arm under the larger statewide and national Association of Realtors organization, a monied group known to be one of the most powerful lobbies in California. The group spent hundreds of thousands of dollars in local Santa Cruz elections in 2018 and 2022 to defeat ballot measures proposing rent control and an empty homes tax.
Read the full petition notice here.
What do the petitions propose?
WHAA (Keeley)
The Keeley petition proposes a real estate transfer tax — a fee charged when a piece of real property transfers ownership — that begins at 0.5%, applied to home sales that eclipse $1.8 million, and climbs from there. It uses a complex, incremental equation that levies a tax only on the value above $1.8 million, rather than the entire sale price. The tax rate reaches 2% for homes that sell for $4.5 million and above. The petition also proposes a parcel tax — a flat, annual fee levied on all land parcels throughout the city of Santa Cruz — of $96 per year.
WHCPA (Realtors)
The realtors’ petition also proposes a real estate transfer tax of 0.5%; however, instead of kicking in at $1.8 million, the realtors propose the tax apply to homes sold for at least $4 million, significantly capping the revenue it can raise. Representatives from SCCAR say the $4 million threshold ensures the levy remains a “mansion tax” and doesn’t apply to middle class home sellers. The realtors also proposed a parcel tax of $50 per year.
How does the parcel tax work?
WHAA (Keeley)
The parcel tax is levied on every parcel according to the assessor in the city of Santa Cruz. Owners of single family homes will have to pay the parcel tax, as will the owners of a standalone business, such as Brazil Cafe or Yan Flower. For apartment and condo complexes — where a single structure on a single property can contain multiple housing units — one $96 tax will be levied on the property as opposed to each unit. The same goes for those properties downtown where many businesses operate out of the same building: one $96 parcel tax will be levied, not one for each business or storefront.
WHCPA (Realtors)
The parcel tax for the WFCPA works in the same way, but charges $50 per year instead of $96.
Is anyone exempt from the parcel tax?
WHAA (Keeley)
The WFHA exempts homeowners who make less than 60% of the area median income. As of May 2024, the area median income sat at about $127,200 for a single person, and $145,300 for a two-person household. (The affordability threshold would be roughly $76,320 and $87,180, respectively.) Homeowners 65 years and older who make 80% of the area median income ($101,760 and $116,240, respectively) are also exempt. Affordable housing complexes, housing sponsored by nonprofits, and religious institutions will also not have to pay the tax.
WHCPA (Realtors)
The WHCPA largely mirrors the exemptions laid out in Keeley’s proposal. The key difference is an additional exemption for homeowners aged 55 years and older, regardless of their economic status.
How does the real estate transfer tax work?
WHAA (Keeley)
The real estate transfer tax proposed in the WHAA uses a more complex and incremental equation than its counterpart.
The tax is only levied on home sales that eclipse $1.8 million, and the tax rate only applies to the dollars spent in excess of $1.8 million, as opposed to the total sale price. The increments are as follows:
For every additional dollar spent over $1.8 million and up to $2.5 million, a 0.5% tax will be levied. This tax rate works out to $5 on every $1,000 between $1.8 million and $2.5 million.
For every additional dollar spent over $2.5 million and up to $3.5 million, a 1% will be levied, which works out to $10 per $1,000.
For every additional dollar spent over $3.5 million and up to $4.5 million, a 1.5% tax will be levied, or roughly $15 per $1,000.
For every additional dollar spent over $4.5 million, a 2% tax will be levied, or $20 per $1,000. The real estate transfer tax is capped at $200,000 per transaction.
This equation means that a home sold for $5 million would be subject to a transfer tax of $38,500:
$0 on the first $1.8 million
$3,500 for the 0.5% on the $700,000 between $1.8-2.5 million
$10,000 for 1% tax on the $1 million between $2.5-3.5 million
$15,000 for the 1.5% tax on the $1 million between $3.5-4.5 million
$10,000 for the 2% tax on $500,000 between $4.5-5 million.
WHCPA (Realtors)
The real estate transfer tax proposed by the WHCPA uses a more streamlined equation, though it will drive far less revenue. The realtors want to levy a 0.5% tax on every additional dollar spent over $4 million on the sale of a home.
This means that that same $5 million home would only see a $5,000 real estate transfer tax (0.5% on the $1 million in value between $4-5 million), as opposed to the $38,500 charged under the Keeley proposal. The realtors also propose that the transfer tax caps out at $100,000 per sale.
Is anyone exempt from the real estate transfer tax?
WHAA (Keeley)
Real estate transfers due to bankruptcies, foreclosures and reorganizations are exempt from the tax, as well as property transfers within a family, as well as for any properties that have an enforceable covenant that requires affordable housing.
WHCPA (Realtors)
The same exemptions as the WHAA apply to the WHCPA. The only additional exemption is that homeowners 55 and older are exempt from the real estate transfer tax.
How long do the taxes last?
WHAA (Keeley)
The WHAA’s parcel and real estate transfer taxes would last for 20 years. It will kick off in the 2026-27 fiscal year, and expire after the 2045-46 fiscal year.
WHCPA (Realtors)
The WHCPA would only last 10 years, from the 2026-27 fiscal year and expire after the 2035-36 fiscal year.
How much money will the taxes raise per year?
WHAA (Keeley)
The WHAA estimates it could raise at least $5 million per year.
WHCPA (Realtors)
The WHCPA has not released an official estimate of how much money it would raise, but Victor Gomez, director of government affairs for the SCCAR, told Lookout last month that he expects the tax to raise $1-2 million per year.
How will the money be spent?
WHAA (Keeley)
Using $5 million as the reference point, 87% of the revenue, or roughly $4.4 million per year, will go into a newly created Affordable and Workforce Housing Trust Fund, which can be used in a variety of ways to foster affordable housing in the city, from helping to directly finance construction and preserve existing affordable housing, to providing down payment assistance for first-time home buyers and predevelopment loans to help affordable housing developers with studies or property purchases.
Another 10% of the funds or $500,000, will go into the Housing to Prevent/Reduce Homelessness Fund, which can be leveraged to attract federal and state grants and loans and finance supportive housing, shelter, and navigation center construction.
The final 3%, or $150,000 will fund the administrative staff costs of managing the tax revenue.
WHCPA (Realtors)
The WHCPA largely works in the same way. The only difference is that the 87% bucket gets a little more diluted in the realtors’ proposal.
In addition to affordable housing construction and preservation, the realtors say they’d like to see that money also used for tree planting, and repairs to West Cliff Drive, the Santa Cruz Municipal Wharf, and other “city facilities that have been or will be harmed by climate change.”
In his role as city attorney, Tony Condotti attaches a short, independent summary to all petition proposals, so potential signees can get a legal sense of what they’re being asked to support. In his official summary for the realtor’s petition, Condotti said it could violate what’s known as the single-subject rule, which requires the money derived from a ballot measure tax to spend on projects and projects that align with a single purpose. Basically, Condotti believes the realtor’s idea to raise tax revenue in the name of affordable housing and climate change could be too broad, making it vulnerable to a court challenge.