A $6,000 tax on empty single family homes could be implemented this November. But how would this affect Santa Cruz homeowners?
If a simple majority votes to pass Measure N, also known as the Empty Home Tax, every homeowner in Santa Cruz will be required to submit a yearly declaration to the city regarding the vacancy status of their property. Property that is not in use for eight months or more out of the year or 120 days consecutively will be taxed. The measure states that the annual tax would be $6,000 per vacant single family residence, $6,000 per parcel with six or fewer units, and $3,000 per parcel with seven or more units.
Kayla Kumar, former City Council candidate and lead organizer of Measure N, said that this measure is a direct step to create more housing.
“What Measure N does is create an opportunity for [homeowners] who choose to have their second home here in the community […] to pay their fair share into a pot of money that will help us address our community’s issues,” Kumar said.
According to the City’s Fiscal Impact Statement, “the measure would result in annual revenue between $2.5 and $4.1 million, taking into account factors such as property owner exemptions which are estimated to range from 34 percent to 60 percent.”
This revenue would be earmarked to fund existing and future affordable housing projects. Additionally, five percent would go to providing hygiene and restroom facilities for the unhoused. Measure N is estimated to cost the city $450,000 with an additional one-time startup cost of $534,000 to administer.
According to Anthony Condotti, Santa Cruz City Attorney and author of the City’s impartial analysis, the tax would apply to a relatively small portion of Santa Cruz residents.
“I don’t think it will affect the average taxpayer,” Condotti stated. “Partly because the average taxpayer either rents or lives in their own home, so I think it will have an effect on a fairly narrow group of individuals who own a residence but don’t live in it.”
In 2020, this narrow group of individuals owned 2,283 vacant housing units out of 24,014 total units in the city of Santa Cruz. Homeowners such as those whose primary residence is outside of Santa Cruz, or those who have a vacation home and only spend the summers here, would be subject to this tax.
Not everyone agrees with what Kumar and her team support. Many of those homeowners believe they are already paying more than their fair share.
Among those potentially affected homeowners is Carrie Clayden, a local art-teacher and painter who thinks it’s the wrong tactic. Clayden spends part of the year in Arizona and fears she may be subject to this tax.
“It’s madness to penalize a homeowner. You buy a house and it’s yours to do what you want with it,” Clayden said. “As Californians, we are already struggling with taxes and mortgages and to tax us more would be unfair.”
The fight for Measure N is tooth and nail, with prominent opponents like incumbent County Supervisor Ryan Coonerty and Councilmember Renee Golder, and prominent proponents such as the founder and president of New Way Homes Sibley Simon, Councilmember Sandy Brown, who helped author the measure, and the UC Santa Cruz College Democrats.
Measure N advocates such as Kumar have been working hard to see it get passed and to not see it come to fruition would be dismaying, but it would not be a major loss given that they are at least making an attempt to mitigate the housing crisis locally.
“We are often told that we can’t build the kind of housing that we need because we don’t have the funding for it, so here is one step in the direction that we could have a local funding source,” Kumar said.
Read City on a Hill Press’ initial coverage of the Empty Home Tax at the beginning of it’s campaign here.
City on a Hill Press issued a correction to this article on Oct. 11 amending an error of a source’s title.