Santa Fe residents will vote next week on whether or not to adopt a mansion tax or an excise tax on buyers of homes over $1 million. The tax would add 3% on the amount a buyer pays over $1 million. So, if a home costs $1.1 million, the buyer would pay $3,000. That money would then go to the city's Affordable Housing Trust Fund.
KUNM’s Megan Myscofski sat down with Santa Fe Mayor Alan Webber and Office of Affordable Housing Director Alexandra Ladd who says this will make the money the city puts into affordable housing more consistent by diversifying it.
ALEXANDRA LADD: Right now, we've got sources that are identified in our code, but they're really reliant on development activity and real estate, what's happening in the real estate market, which can go up and down.
ALAN WEBBER: In a nutshell if this measure passes, we estimate we'll get $6 million a year into the affordable housing trust fund. It's more than what we get now, which is largely dependent upon my putting it into the mayor's budget.
KUNM: Would you mind explaining what the Affordable Housing Trust Fund is?
WEBBER: People should think of the affordable housing trust fund as a dedicated fund. It Is overseen by a group of Santa Fe residents who are appointed, and there are strict rules both at the state level and at the city level governing how the money can be used.
KUNM: What does it look like?
LADD: One of the big uses for it is to help people buy homes, either by newly constructed homes or existing homes in the market. In those cases, it's like a mortgage reduction. So, it helps if somebody can afford a certain amount of a mortgage, which is less than what the home is on the market for, then this can fill in that gap.
It's also used for direct construction of new affordable housing. So, we've helped with several 100% affordable apartment complexes as well as other development costs, like soft costs, design costs. We've used funds for rental assistance and that's helpful because they're local funds so we don't have to use the federal guidelines for assistance, which can be really really onerous.We've used them a lot for rehab.
KUNM: We talked a little bit about this being a tool to diversify where this money is coming from. I'd love to hear a little bit more about that. What does it replace and what is it building on?
WEBBER: Well, it builds on everything we already do. It remains to be seen whether we replace what we're already doing with this. It will really depend on how the home sales actually operate on a year-to-year basis.
There may be years where the numbers are lower and we augment it with general fund revenue. There may be years where the amount of money is so ample, we can take the general fund revenue that we've been using up till now and apply it to other community priorities.
KUNM: Do you have concerns that buyers or other people involved might find workarounds?
WEBBER: After the measure passes, and I hope it passes, we'll have a six-month period to work up all of the implementation details. I'm pretty sure that when this passes, the folks who have up till now perhaps not been in favor of it will recognize that it will help keep Santa Fe the way they want Santa Fe to be, and we'll all work on it collaboratively.
LADD: Because the fee is calculated on the amount of the purchase price above a million dollars, you have to get pretty high before it starts looking like a really huge number, and I don't believe that there's a lot of incentive to try to get around it.
KUNM: Is there anything else you want people to know before they go out and vote?
WEBBER: For people who are reflecting on this, I think there's absolutely no downside to this measure. It meets a crying need for funds to help support affordable and workforce housing. The people who will benefit our folks like teachers, nurses, police officers, firefighters, EMTs, folks whose families have lived here for generations and want their kids and grandkids who work in Santa Fe to live here.
This is a tax designed to provide the funds we need so that anyone can work and live in Santa Fe and we don't become the kind of community where only wealthy people can afford to live. The protections are in place to guide how the money will be spent through the affordable housing trust fund and the appointed board of residents.
LADD: This is not whimsical, “Oh, how should we spend this money?” This is a very strategic deployment. They're telling us and they have to demonstrate how they're going to use the funds and how it meets a need, so that the solution is actually coming from the community. It's not a top-down solution, either.
Opponents of the so-called “mansion tax” say it targets a narrow slice of voters. Election day is November 7th and early voting is available through November 4th.
This coverage is made possible by the W.K. Kellogg Foundation and KUNM listeners.
