Measure GS

{{Short description|2022 Santa Monica ballot measure imposing a real estate transfer tax}} {{Use mdy dates|date=February 2026}} {{Infobox referendum |date=November 8, 2022 |yes= 19,467 |no= 16,926 |invalid= |total=36,393 |country=California |question='''Funding for Homelessness Prevention, Affordable Housing, and Schools Initiative''' }} '''Measure GS''', officially the '''Funding for Homelessness Prevention, Affordable Housing, and Schools Initiative''', is a ballot measure approved by voters in Santa Monica, California, in the November 2022 election. The measure amended the city's real estate transfer tax code to add a third tier at a rate of $56 per $1,000 of value (5.6%) on property transfers of $8 million or more. Revenue is earmarked for homelessness prevention, affordable housing, and the Santa Monica-Malibu Unified School District. The measure was approved by 52% of voters. A competing, less aggressive transfer tax measure (Measure DT) was defeated on the same ballot.<ref name="smdp-trickle">{{cite web |title=With election results slowed to a trickle, officials will update over the weekend |url=https://smdp.com/2022/11/11/with-election-results-slowed-to-a-trickle-officials-will-update-over-the-weekend/ |website=Santa Monica Daily Press |date=November 11, 2022 |access-date=February 17, 2026}}</ref><ref name="ballotpedia-gs">{{cite web |title=Santa Monica, California, Measure GS, Property Transfer Tax for Schools and Homelessness Prevention Initiative (November 2022) |url=https://ballotpedia.org/Santa_Monica,_California,_Measure_GS,_Property_Transfer_Tax_for_Schools_and_Homelessness_Prevention_Initiative_(November_2022) |website=Ballotpedia |access-date=February 17, 2026}}</ref>

The measure's legal validity was upheld in court following a challenge by the California Business Roundtable.<ref name="smdp-prevails">{{cite web |title=City prevails in transfer tax lawsuit |url=https://smdp.com/2023/08/07/city-prevails-in-transfer-tax-lawsuit/ |website=Santa Monica Daily Press |date=August 7, 2023 |access-date=February 17, 2026}}</ref> Critics have argued it has suppressed high-value real estate transactions and raised less money than initial projections.

== Background ==

According to the U.S. Department of Housing and Urban Development, one in five Santa Monica renter households were both low-income and "severely cost-burdened," meaning they paid more than half of their income on rent and utilities. An additional one in ten renter households were low-income and "rent-burdened," paying between 30% and 50% of income on rent.<ref name="sm-measuretext">{{cite web |title=Measure GS |url=https://www.santamonica.gov/elections/2022-11-07/measures/measure-gs |website=City of Santa Monica |access-date=February 17, 2026}}</ref> Also, the state of California has ordered the city to provide 8,895 new housing units, with 6,200 designated affordable, by 2029. If the city does not, it will lose control of housing development approval processes, potentially leading to the construction of large developments into which the city will have no input.<ref name="smnext-oconnor">{{cite web |title=New Ballot Measure Could Exempt Multi-Family Dwellings from City's Transfer Tax |url=https://santamonicanext.org/2024/04/new-ballot-measure-could-exempt-multi-family-dwellings-from-citys-transfer-tax/ |website=Santa Monica Next |date=April 5, 2024 |access-date=February 17, 2026}}</ref>

The concept for Measure GS was developed by former mayor Sue Himmelrich in order to fund those concerns. The measure was endorsed by Santa Monicans for Renters' Rights, the Santa Monica Democratic Club, the Los Angeles County Democratic Party, and the progressive housing organization Santa Monica Forward, among others. Opponents, including developers and landlords, spent more than $500,000 campaigning against it.<ref name="smdp-oconnor-amend">{{cite web |title=Former Santa Monica mayor proposes initiative to amend Measure GS |url=https://smdp.com/2024/04/05/former-santa-monica-mayor-proposes-initiative-to-amend-measure-gs/ |website=Santa Monica Daily Press |date=April 5, 2024 |access-date=February 17, 2026}}</ref><ref name="smdp-ballot-measures">{{cite web |title=Ballot measures head to Council |url=https://smdp.com/2022/07/11/ballot-measures-head-to-council/ |website=Santa Monica Daily Press |date=July 11, 2022 |access-date=February 17, 2026}}</ref>

== Measure DT ==

The November 2022 ballot featured a competing transfer tax measure, Measure DT, placed on the ballot by the Santa Monica City Council at the initiative of Councilmember Phil Brock. Measure DT proposed a transfer tax of $25 per $1,000 of value on the portion of property value exceeding $8 million, making it a marginal tax, unlike Measure GS, which applied to the entire transaction value. Measure DT also included a clause to expire after ten years with possible Council extension and to adjust the $8 million threshold for inflation.<ref name="westsidevoice-dueling">{{cite web |title=Dueling Real Estate Tax Measures Added to Santa Monica's November Ballot |url=https://westsidevoicela.com/2022/07/dueling-real-estate-tax-measures-added-to-santa-monicas-november-ballot/ |website=Westside Voice |date=July 28, 2022 |access-date=February 17, 2026}}</ref><ref name="sm-measuredt">{{cite web |title=General Election 2022 – Measure DT |url=https://www.santamonica.gov/elections/2022-11-07/measures/measure-dt |website=City of Santa Monica |access-date=February 17, 2026}}</ref>

Proponents of Measure GS characterized Measure DT as an attempt to split the vote and prevent GS from passing. Supporters of DT countered that GS's 5.6% rate represented an excessive increase of more than 800% over the existing transfer tax rate for properties in that bracket. They also asserted that the lack of an inflation adjustment would cause GS to affect an increasing number of properties over time.<ref name="sm-measuredt" /> Voters defeated Measure DT, with 65% against to 35% in favor.<ref>{{Cite web |title=Santa Monica, California, Measure DT, Property Sales Tax Measure (November 2022) |url=https://ballotpedia.org/Santa_Monica,_California,_Measure_DT,_Property_Sales_Tax_Measure_(November_2022) |access-date=2026-02-24 |website=Ballotpedia |language=en}}</ref>

== Provisions ==

Measure GS amended Santa Monica Municipal Code Chapter 6.96 to add a third tier to the city's existing two-tier transfer tax structure, of $56.00 per $1,000 (5.6%) on the whole transaction value for property transfers of $8 million or more. The measure exempts certain kinds of affordable housing projects, nonprofit corporations, community land trusts, and governmental property sales. The ballot wording claimed that the measure would "[provide] an estimated $50,000,000 annually for homelessness prevention, affordable housing, and schools."<ref name="sm-measuretext" />

Of the 5.6% third tier rate, five percentage points are allocated to two designated funds, with the remaining 0.6% going to the city's General Fund. The first $10 million per year is deposited into the School Fund and provided to the Santa Monica-Malibu Unified School District. The next $40 million is deposited into the Homelessness Prevention and Affordable Housing Fund. Revenue exceeding $50 million is split 20% to the School Fund and 80% to the HPAH Fund.<ref name="ecode360">{{cite web |title=City of Santa Monica, CA: Chapter 4.90 – Funding for Homelessness Prevention, Affordable Housing, and Schools |url=https://ecode360.com/42728602 |website=eCode360 |access-date=February 17, 2026}}</ref>

The measure established an eleven-member Resident Oversight Committee responsible for making recommendations to the city council for use of funds and evaluating cost effectiveness of funded programs. <ref name="sm-measuretext" /> It stipulates that "Four members shall be members of lower income households in Santa Monica, at least one of whom is a participant in a locally funded rent subsidy program (such as the Preserve Our Diversity programs), at least one of whom is a senior, at least one of whom has minor children, at least one of whom faces mental or physical challenges, and at least one of whom is formerly homeless."<ref name="ecode360" />

== Revenue and impact ==

The city's proposed biennial budget for fiscal years 2023-25 incorporated the $50 million per year projection.<ref name="trd-50m">{{cite web |title=Santa Monica expects $50M yearly revenue from new transfer tax |url=https://therealdeal.com/la/2023/05/23/santa-monica-expects-50m-yearly-revenue-from-new-transfer-tax/ |website=The Real Deal |date=May 23, 2023 |access-date=February 17, 2026}}</ref> In its first year of implementation, from March 2023 to February 2024, the measure raised $17 million.<ref name="smnext-signatures">{{cite web |title=Ballot Measure That Would Exempt Multi-Family Housing from New Tax Submits Signatures to City Clerk, But Future Of Measure Is Uncertain |url=https://santamonicanext.org/2024/05/ballot-measure-that-would-exempt-multi-family-housing-from-new-tax-submits-signatures-to-city-clerk-but-future-of-measure-is-uncertain/ |website=Santa Monica Next |date=May 10, 2024 |access-date=February 17, 2026}}</ref>

An analysis of Santa Monica transactions published in the ''Santa Monica Daily Press'' found substantial declines in property sales above the $8 million threshold during the measure's first year. Residential sales at or above $8 million fell from 32 to 15. Commercial sales at or above $8 million fell from 18 to 5. Opportunities for trades connected to housing dropped 60% at the $8-million-plus tier. The author of the analysis noted that the measure produced the highest tax rate of any city in California.<ref name="smdp-oneyear">{{cite web |title=Opinion: Measure GS – one year later |url=https://smdp.com/2024/04/19/measure-gs-1-year-later/ |website=Santa Monica Daily Press |date=April 19, 2024 |access-date=February 17, 2026}}</ref>

== Legal challenge == In January 2023, the California Business Roundtable filed a lawsuit against the City of Santa Monica to block Measure GS, arguing that it violated the California Constitution's single-subject rule for ballot measures. The Roundtable contended that the measure improperly combined two unrelated subjects, funding for public schools and funding for affordable housing, in a single initiative, potentially causing voter confusion.<ref name="trd-lawsuit">{{cite web |title=Business group challenges Santa Monica real estate transfer tax |url=https://therealdeal.com/la/2023/02/02/business-group-challenges-santa-monicas-transfer-tax/ |website=The Real Deal |date=February 2, 2023 |access-date=February 17, 2026}}</ref><ref name="smdp-lawsuit">{{cite web |title=City to fight lawsuit over new taxes |url=https://smdp.com/2023/01/31/city-faces-measure-gs-lawsuit/ |website=Santa Monica Daily Press |date=January 31, 2023 |access-date=February 17, 2026}}</ref>

In August 2023, Los Angeles County Superior Court Judge H. Jay Ford III ruled in favor of the city, finding that the funded programs were sufficiently related that the measure did not violate the single-subject rule.<ref name="smdp-prevails" />

== Amendment efforts ==

In March 2024, former Santa Monica mayor Pam O'Connor filed a proposed initiative to exempt multifamily housing from the third-tier transfer tax, arguing that it impedes new apartment construction and threatens the city's ability to meet its state-mandated housing targets. She noted that "most of the housing units subject to Measure GS are apartments and renters - not mansions."<ref name="smdp-oconnor-amend" /><ref name="trd-oconnor">{{cite web |title=Former Santa Monica mayor campaigns to amend city's transfer tax |url=https://therealdeal.com/la/2024/04/01/former-santa-monica-mayor-campaigns-to-amend-transfer-tax/ |website=The Real Deal |date=April 1, 2024 |access-date=February 17, 2026}}</ref>

Himmelrich, the measure's original sponsor, opposed the amendment, arguing that Measure GS already exempted affordable housing projects and that the amendment was "the latest desperate effort by developers, landlords and their allies to undo Measure GS." Both the Santa Monica Democratic Club and Santa Monicans for Renters' Rights, which had supported Measure GS, formally opposed the amendment.<ref name="smnext-oconnor" /> Due to procedural complications involving the gathering of signatures, the amendment did not appear on the November 2024 ballot. O'Connor subsequently threatened to sue the city.<ref name="smdp-signatures-dispute">{{cite web |title=Real estate tax fight escalates into threats of lawsuits |url=https://smdp.com/2024/05/14/real-estate-tax-fight-escalates-into-threats-of-lawsuits/ |website=Santa Monica Daily Press |date=May 14, 2024 |access-date=February 17, 2026}}</ref>

Measure GS faces potential nullification from a proposed statewide ballot measure organized by the Howard Jarvis Taxpayers Association that would cap municipal transfer taxes and earmarked taxation initiatives. If passed, the measure would sharply limit Measure GS and similar taxes adopted by other California cities, such as Measure ULA.<ref name="calmatters-statewide">{{cite web |title=California is about to have a massive fight over taxes. Here's why Los Angeles is the frontline |url=https://calmatters.org/housing/2025/10/measure-ula-howard-jarvis-ballot-mansion/ |website=CalMatters |date=October 7, 2025 |access-date=February 17, 2026}}</ref>

== See also == * Measure ULA * Transfer tax * Housing in California * Homelessness in California * Santa Monica-Malibu Unified School District * Proposition 13

== References == {{Reflist}} *

{{Santa Monica, California}}

Category:2022 California ballot propositions Category:Santa Monica, California Category:Affordable housing in the United States Category:Homelessness in the United States Category:Tax legislation