Voters Nix Transfer Tax on Luxury Homes

Transfer tax fails in special election 3,845-4,557

The New Mexican

Santa Fe voters Tuesday turned down a proposed tax on sales of expensive homes.

Unofficial results indicate more than 8,400 residents cast ballots in the special election, with 54 percent voting against the Workforce Housing Funding Initiative.

The sole ballot question was whether to impose the real-estate transfer tax on top-tier homes and use the money for affordable-housing programs. The point-of-sale tax would have tacked a 1 percent fee onto any portion of a home sale price higher than $750,000.

Turnout was strongest in the voting districts that cover the city’s north and east sides, where many of the houses that could have been subject to the tax are located.

In Districts 1 and 2, which includes historic downtown, South Capitol and foothills neighborhoods on the north and east sides of the city, an average of 60 percent of votes were against the measure.

By contrast, in Districts 3 and 4, which include the southwest sector and most of the Rodeo Road area, about 57 percent of voters favored the tax.

Although his house would not likely be subject to the proposed tax if he sold it, Paul McConnell was among those who stood in line around the lunch hour to vote at Fort Marcy Complex.

“I’m against all taxes these days. There are too damn many of them,” said McConnell, who also predicted the election to be “a cliffhanger.” “I think there are better ways to generate funds. Such a targeted tax is not good.”

Local, state and national Realtors associations waged an advertising campaign against the tax, and some members celebrated their victory at a private house party late Tuesday.

“I am very excited and really pleased to see that the citizens of Santa Fe understood the message that we put out and the explanation that we put out,” said Baro Shalizi, acting president of the Santa Fe Association of Realtors. “Now we would like to invite the city to sit down at the table and let’s work on a way that will work.”

Meanwhile, the mood at City Hall was somber.

“It’s so sad. I thought it would at least be close,” said Kathy McCormick as she left downtown just after 8 p.m., when the outcome became apparent. As director of the city’s Housing and Community Development Department, McCormick took the lead on the proposal as it moved through the city drafting process.

“It’s a disappointment,” she said. “It tells you that you can’t run a campaign on very little money and fight against that kind of spending.”

The Realtors group, calling itself Santa Fe Housing Opportunity Partnership, raised about $144,000 for advertising, compared to about $18,000 spent by a pro-tax group called United for Affordable Housing, which included labor, church and other groups. It cost the city about $93,000 to pay for the election.

Literature for the anti-tax group said the city didn’t have a good plan for spending the money and argued that it would not provide enough revenue to make a dent in the region’s housing problems. Those who favored the tax said it would make it easier for young people to live in their hometown and would keep workers such as police officers, nurses and teachers in the city, where the median home price of $350,000 is out of reach for many.

“The people have spoken,” Santa Fe Chamber of Commerce director Simon Brackley said. “They have rejected an initiative that, I believe, was an ill-conceived solution to a community problem that all of us need to come together to solve. But it’s a clear victory for the community that believes new taxes are not a good solution in this economic climate.”

Loretta Lovato cast a vote in District 4 at Ortiz Middle School against the measure.

“I just don’t trust this,” she said. “I have lived in Santa Fe my whole life and affordable housing is great, but it’s not going to help our people.” She said she also worried about longtime residents whose property values in trendy neighborhoods such as Canyon Road have risen dramatically. “It’s not their fault that the place they live in is now so expensive,” she said.

After years of study, city councilors narrowly voted in September to hold the special election, well before major changes in the nationwide economy sent the real-estate market and other sectors tumbling.

Pro-tax voter Judy Herzl said the economy is one of the reasons she had hoped the measure would pass. She e-mailed friends to remind them to vote, but said she was discouraged by the abundance of direct mail and other advertising from tax opponents.

“It’s such a humble issue,” she said before casting a vote at Larragoite Elementary School in District 3. “My feeling is that it is not going to make that much of a difference to homebuyers the way that it is structured. I am unimpressed that in this time of crisis the self-serving attitude is still so pervasive.”

Others who voted for the tax cited fairness as a factor.

“I believe that folks that work here, like the police and the nurses … they deserve a chance at low-cost housing,” said Don Gaspar Avenue homeowner Michelle McGinnis, who said she voted in favor of the measure even though if she sold her home it could have been subject to the tax.

She said she wants people like her son to have shot at homeownership, too. “l think we should start thinking about our young people,” said McGinnis, a District 2 resident.

Jeff Martinez is one of the people she had in mind.

“I have been here my whole life — born and raised,” said Martinez, who cast a ballot in District 3 after getting off work at Coronado Paint. “I think this is what Santa Fe needs. I felt it was important to vote.”

Maynard John Chapman worked as presiding judge at Nava Elementary School in District 4, which saw a steady stream of voters at lunchtime and at the end of the work day.

“I would say the turnout is moderate to heavy,” said Chapman, who also offered his speculation on why voters showed up. “I think it was the word tax. Affordable housing is such an important issue for Santa Fe, and I think those on both sides of the issue have gotten their message out, so with the publicity surrounding it, I think that is also resulting in the turnout.”

About 16 percent of the city’s 52,000 registered voters cast ballots in the decision, a far better record than the last single-issue special election in 2005, in which fewer than 2,000 voters weighed in on a new gross-receipts tax increment to raise money for water projects.