Santa Fe Voters Approve Mansion Tax for Affordable Housing
In a significant move to address the affordable housing crisis, voters in Santa Fe, New Mexico have given their approval for a tax on mansions. The tax will be imposed on home sales of over $1 million, aiming to generate funds for affordable housing initiatives in the city.
According to unofficial election results on Wednesday, nearly three-fourths of the ballots cast were in favor of the new tax. Santa Fe, known for its picturesque high-desert vistas, vibrant arts scene, and distinctive stucco architecture, has recognized the pressing need to support teachers, service-sector workers, single parents, and young professionals who struggle with exorbitant living costs.
This ballot measure is seen as a lifeline for those affected by the national housing shortage, exacerbated by the influx of high-income digital nomads to Santa Fe. The approval of the mansion tax demonstrates a growing public support for such measures to fund affordable housing and combat homelessness.
Other major cities, like Los Angeles and Chicago, have also explored similar approaches. Last year, Los Angeles voters approved a tiered-rate tax on real estate sales of $5 million or more to address housing shortages. Meanwhile, Chicago is considering raising real estate transfer taxes, starting with sales over $1 million, as a means to fight homelessness.
The city of Santa Fe estimates that this new tax will generate approximately $6 million annually for its affordable housing trust fund. The fund supports various initiatives, including price-restricted housing, down-payment assistance for low-income homebuyers, and rental assistance to prevent financial hardship and evictions. Affordable housing providers can also secure matching funds from other government and nonprofit sources through the trust.
Under the new tax regulations, buyers will be levied for residential property sales of $1 million or more, with no tax imposed on the first $1 million in value. For instance, on a $1.2 million home sale, the tax would apply to $200,000 in value, resulting in a $6,000 contribution to the city’s affordable housing trust fund.
This victory for affordable housing initiatives marks a notable shift in Santa Fe’s perspective on tax initiatives. In 2009, voters rejected a 1% tax on high-end home sales, and in 2017, a tax on sugary drinks for expanding early childhood education was also defeated.
However, the Santa Fe Association of Realtors has filed a lawsuit to challenge the tax, arguing that the city has exceeded its authority under state law. The outcome of this legal battle remains uncertain, but for now, Santa Fe is forging ahead with its efforts to provide housing relief for its residents.
