San Jose leaders approve mayor's spending plan to help end homelessness, add affordable housing

SAN JOSE, Calif. (KGO) -- Growing homelessness and the lack of affordable housing are challenges being faced across the entire Bay Area.

City leaders in San Jose are hoping a real property transfer tax on the March 2020 ballot with help to build a better Bay Area.

Come March, voters in San Jose will decide whether to approve the new property transfer tax. It would be levied on transactions involving all property valued at $2 million or more.

Potential revenue? According to Mayor Liccardo, an estimated $70 million a year.

At Tuesday's City Council meeting, lawmakers approved Mayor Sam Liccardo's "spending priorities plan" for any potential revenue to go toward housing projects and homeless services.

Council voted 9-to-2 in favor of implementing Mayor Liccardo's proposed plan. Councilmembers Johnny Khamis and Sergio Jimenez dissented.

A release from Liccardo's office detailed the following:

• 45% for permanent supportive and affordable rental housing for extremely low-income (ELI) households-- defined as earning less than 30% of area median income (AMI)
• 35% for affordable rental housing for 30%-80% AMI households
• 10% for homelessness prevention and rental assistance for homeless college and school-engaged students, victims of domestic violence, seniors, and families; and
• 10% for below-market-rate housing for sale, and moderate-income rental housing-up to and including 120% AMI--including rent-restricted ADU forgivable loans, down payment assistance, and first-time homeownership opportunities for households up to 120% AMI

"The idea is that we need affordable housing at all levels of income," Liccardo told reporters at an afternoon press event. "And obviously we need to focus the dollars where people are hurting the most."

Mayor Liccardo explained to reporters, "We lost $40 million in funding for affordable housing when the state eliminated Redevelopment Agencies in 2011. We have never found a source of funding to replace that loss of $40 million."

He said the measure would enable the City of San Jose to fill the gap that was created back then.

RELATED: San Jose opens first affordable housing complex for the homeless

Ahead of Tuesday's council vote, Mayor Liccardo reminded lawmakers and the public, "These are not legal guardrails. Legal ones would be those that would be imposed through State law or through the measure itself. This is what we are imposing through the council policy, which of course can be changed by future council."

Liccardo added, "The idea is to heighten the attention to the source of this revenue, the revenue itself, and to ensure that we have a process that ensures complete transparency and accountability about how these dollars are spent."

"I understand that people want to solve the housing crisis," Councilman Khamis told ABC7 News. "This is not the answer."

Councilman Khamis remained critical. He's concerned the measure is being promoted as a tax for homelessness. Khamis points out the proposed measure is a general tax which will ultimately go towards the City's general fund.

"It could be spent on pension, it could be spent on potholes, it could be spent on litigation over something else," Khamis said.

Of course, the General Fund is money meant to be spent however the acting council chooses.

"This is not a dedicated tax and may not go to anything that is being promoted as going to," Khamis added. "It does happen, and people move money from 'pavement' to other priorities, just like it did on Measure B."

However, homeless advocates and supporters remain hopeful.

Raymond Ramsey who was formerly homeless, told reporters, "I'm sure if it passes, the measure will change many lives for the better, the way mine changed when we moved in this year."

Ramsey found permanent supportive housing at Second Street Studios in San Jose.

RELATED: History of how many people are homeless in the Bay Area

He trusts the City will use the proposed property transfer tax to build a better Bay Area.

"It is critical that our decision makers be held accountable," he said. "And that the revenue from the tax is actually spent on affordable housing and the homeless."

Take a look at all of ABC7's Building a Better Bay Area stories and videos.