Voters approved a mansion tax to fund affordable housing initiatives in Santa Fe, New Mexico’s capital.
Uncertified results from Wednesday’s election show that nearly three-quarters of the votes were cast in favor of a new tax on sales of homes over $1 million, in a city popular for its mountain views. deserts, its vibrant art scene and its stucco architecture.
The ballot measure was touted as a lifeline for teachers, service industry workers and single parents and young professionals who can’t afford local mortgages or are struggling to pay rent amid a national housing shortage and the arrival of high-income digital nomads in Santa Fe.
Andrea Romero, a Santa Fe resident and state representative, said the tax galvanized voters and would bolster spending on local affordable housing in perpetuity.
“This is exactly at the heart of what matters,” said Romero, a Democrat who has led a fundraising and education campaign in support of the tax. “Really, we are in crisis.”
Tuesday’s vote signals new public support for so-called residential taxes to fund affordable housing and stave off homelessness.
Los Angeles voters last year approved a progressive tax on residential and commercial real estate sales of $5 million or more to address the housing shortage, while Chicago may ask voters next year s They must increase real estate transfer taxes, starting with sales over $1 million. , to fight against homelessness.
The city of Santa Fe estimates the tax would generate about $6 million a year for its Affordable Housing Trust Fund, which finances price-restricted housing, down payment assistance for low-income home buyers and assistance rent to avoid financial difficulties and evictions. The trust awards funds annually to affordable housing providers who can obtain matching funds from other government and nonprofit sources.
The new tax is levied on the buyer for residential property sales of $1 million or more – with no tax on the first million dollars of value.
For example, on a $1.2 million home sale, the new tax would apply to a value of $200,000. The buyer would pay $6,000 to the city’s affordable housing trust fund.
Santa Fe voters had previously shied away from major tax initiatives, rejecting a 1 percent tax on high-end home sales in 2009 and defeat a tax on sugary drinks develop early childhood education in 2017.
The city of about 90,000 residents is in the midst of a construction boom, with thousands of newly approved housing units gradually coming online within city limits since 2021 — but most of the new housing is renting at free market rates, which can put a strain on personal or family finances.
Meanwhile, more than 400 single-family homes sold for more than $1 million in Santa Fe in 2022, according to an analysis commissioned by the city.
The Santa Fe Association of Realtors filed a lawsuit seeking to block the voter-approved tax, arguing that the city had exceeded its authority under state law by extending an excise tax to -beyond services and goods, such as tobacco and vehicles, to real estate.
Association President Drew Lamprich said the tax falls on the buyer’s side when selling a home, but ultimately has implications for the seller and the overall value of the properties. houses in the city.
“We are just confirming that they have the legal right to do this,” he said. “Ultimately, it’s going to have to go to the state level to adjust state statutes, if that’s what the voters want.”