Copyright CBS News
Sacramento Mayor Kevin McCarty held his first State of the City address on Monday, and he used the occasion to unveil a new tax plan that could help get more people into permanent housing. McCarty is proposing a real estate tax increase to help fund more housing projects like tiny home communities and downpayment assistance for first time homebuyers. He wants to get the tax increase on the 2026 ballot. It's called the property transfer tax and is a fee paid each time a home is sold in Sacramento, with the amount based on a home's value. For example, a home that sells for $500,000 currently pays $1,375. Last year, the tax raised more than $12 million although the annual amount is volatile due to market fluctuations. The amount of increase hasn't been announced yet, but the MCCarty said it would only be on high-priced homes, likely ones that sell for $1 million or more, which is currently 5% of overall sales. McCarty estimates it could raise an additional $8-9 million dollars a year. Currently, there are around 1,700 shelter beds around the city, according to McCarty, and the process of adding another 500 is underway. "We still see too many unsheltered people on our streets in our community and we need to do things differently," he said. However, homeless and housing advocates say more needs to be done. "It's a public health crisis every single day," Niki Jones said. "I think the lack of urgency from our government is shameful." Jones said the extra money could help get people off the streets. "I don't oppose the idea. I hope the council can support it. I hope it's a step towards transformative changes to how we look at housing solutions," she said. McCarty said the extra revenue can help offset federal funding cuts and uncertainty over the city's general fund deficit. "I think that we need to address this to in order to make sure Sacramento grows and we can take care of our needs today and tomorrow," he said. The tax would need to be approved by voters before taking effect. The City of San Jose passed a similar tax in 2020.
