Monterey supervisors advance study of transfer tax on ultra‑high‑value homes to fund workforce housing

Monterey County supervisors on March 17 accepted a staff study exploring a special real‑estate transfer tax on ultra‑high‑value single‑family home sales and directed staff to return with refined options and a plan for a possible ballot measure.

The referral, initiated by Supervisor Kate Daniels, asks the county to evaluate a transfer tax that would apply to sales above a high threshold (staff modeled $10 million) and dedicate proceeds to workforce housing, down‑payment assistance and infrastructure to unlock missing‑middle housing. Assistant County Administrative Officer Michael Beaton told the board the county averages roughly 10 sales per year above $10 million in unincorporated areas and presented high‑level revenue scenarios and examples used by other California jurisdictions.

"This referral requests the county to explore a special real‑estate transfer tax on ultra‑high‑value single‑family home sales in the unincorporated area," Beaton said during the presentation, noting staff would need to work on ballot language, legal review and community outreach.

Why it matters: County leaders said the Monterey Peninsulahousing market is bifurcated between global buyers of luxury and second homes and the local workforce, and they argued targeted locally controlled revenue is needed to build homes where jobs are concentrated. Daniels said the goal is to create stable local funding so the county can meet housing‑element goals and support teachers, nurses and hospitality workers.

"If left to market forces alone, developers will never produce units affordable to teachers, nurses, hospitality workers or public employees," Supervisor Kate Daniels said, urging colleagues to consider the study as a path to fund missing‑middle housing.

What staff recommended and the board asked for: Beaton told supervisors a special transfer tax would require a two‑thirds voter approval and careful drafting because it must be a "special" tax restricted to defined purposes. Staff modeled a range of rates (1%–5%) and said a modest 1% on extreme sales could produce low millions in revenue on recent historic averages while higher rates generate more — but revenue is volatile and sensitive to market conditions. Staff estimated 4–6 months of preparation to put a measure on the November ballot and noted the county must finalize any resolution before the end of June to meet elections deadlines.

Supervisors asked staff to return quickly with additional work: alternative thresholds (members suggested studying a $5 million floor and tiered rates), indexing options so a threshold does not become outdated, options to direct funds regionally versus countywide, fiscal and economic modeling, polling costs and an accountability structure such as an oversight committee and annual reporting. The board unanimously accepted the preliminary analysis and directed staff to produce more detailed options and a plan for community outreach, legal review and polling.

Public reaction: Dozens of residents and stakeholders addressed the board. Business and real‑estate groups urged caution about market impacts and recommended modeling; unions, housing advocates, mayors and community leaders urged supervisors to pursue a locally controlled funding source and to consider lowering the threshold to raise more revenue. "This transfer tax addresses some of the funding fundamental issues that we have for people who serve our community," said Jennifer Kyper, a former Monterey Peninsula Chamber of Commerce chair who spoke in favor.

Next steps: Staff will return with a refined set of ballot options, polling and legal review materials as requested by the board. Any final proposal to place a special transfer tax on the ballot would require board action and a two‑thirds voter approval to enact.

Speakers quoted: Michael Beaton, Assistant County Administrative Officer; Supervisor Kate Daniels; Jennifer Kyper, local business leader.

Ending: The board voted to accept the analysis and asked staff for a timetable and options so the board can determine whether to place a measure on the November ballot.