Sacramento's Housing Crisis: Will a Tax Hike Turn the Tide on Homelessness?

As Sacramento Mayor Kevin McCarty marches into his second year, he’s rolling up his sleeves and preparing to bring a bold proposition to voters—one that could help alleviate the city’s homelessness and affordable housing woes. With a $60 million budget deficit hanging over the city’s head, McCarty’s plan calls for a significant bump in the real property transfer tax for properties over $1.5 million, more than tripling it to 1%. This move could potentially raise an estimated $10 million each year, dedicated to building tiny homes, offering rental support, and assisting first-time homebuyers.

Housing advocates are cautiously optimistic about the proposal, though they are highlighting some concerns. Michael Turgeon from House Sacramento noted that the tax could affect not just cozy homes but also large vacant lots, which might limit low-income housing opportunities. Meanwhile, the Sacramento Housing Alliance is particularly keen on the rental assistance aspect, suggesting that even a small increase in funding could drastically impact those teetering on the edge of homelessness.

McCarty’s ballot measure is still being fine-tuned, and he’s working to ensure it has robust support from both the housing community and business leaders. With a target timeline leading into a potential November 2026 ballot, there’s a palpable sense of hope mixed with skepticism. Can a tax increase really pave the way for a brighter future for Sacramento’s most vulnerable? It’ll be a jam-packed summer as McCarty hones his plan. Let’s hope those tiny homes get built before summer turns into a sweltering autumn!