Measure E is a transfer tax on luxury homes and commercial properties valued over $2 million. Fees are not collected annually, only when these homes are sold. Even with currently high real estate prices, the city estimates that Measure E would only impact the top two percent of property sales in San Jose.
The new tax should not dampen enthusiasm for San Jose’s real estate market, as it would still be lower than tax rates in other Bay Area cities. San Francisco’s rates range between $5-30 and Oakland’s between $10-$25. Post Measure E, San Jose’s rates would be $3.30-$18.30 per $1.000.
In December, the San Jose City Council passed a spending plan for Measure E funds. While a future Council could overrule this plan with a 2/3 vote, the current Council passed it overwhelmingly, 9-2.
History - In recognition of the housing shortage in San Jose and around the region, in 2017 Mayor Liccardo launched a five-year plan to build 25,000 housing units, of which 10,000 would be made affordable.
The city estimates it would need $548 million to meet the plan’s goal of 10,000 affordable units by 2022. This is in addition to funding anticipated from Santa Clara County’s $950 million general obligation bond for affordable housing, passed in 2016 (Measure A). While San Jose projects can generally compete well for Measure A funding and other state funding programs, far more funding is needed than is currently available.