Terra Lawson-Remer’s Property Transfer Tax Hike Will Worsen the Housing Crisis

John Franklin is the mayor of the city of Vista and Chairman of California Families.

San Diego County is already grappling with sky-high home prices, soaring rents, and a severe housing shortage. Instead of providing relief, County Supervisor Terra Lawson-Remer proposed hiking taxes by $1 billion in her “State of the County” address by increasing the “transfer tax,” a tax on the transfer of documents when a property is sold. The transfer tax is effectively a sales tax on real estate.

Lawson-Remer’s transfer tax hike will worsen the affordability crisis, raise rents, discourage home sales, drive away investment and make the dream of home ownership even less attainable for San Diegans. It will severely damage the real estate sector, which accounts for 17 percent of California’s economy. Critical jobs – including contractors, real estate and escrow agents, mortgage lenders, and appraisers – will be lost as a direct result of Lawson-Remer’s tax hike.

The supervisor is pitching the tax increase as a way to generate new revenue for public services, but the reality is far different. Similar policies in other municipalities have stifled real estate activity, reduced available housing, and failed to deliver promised benefits. If San Diego County follows this path, it will worsen affordability while collecting less revenue than supporters expect.

Some claim this tax only affects wealthy property owners, but the consequences will ripple through the entire housing market. Higher transaction costs will deter homeowners from selling, limiting supply and driving up prices. First-time buyers will face greater hurdles, long-time residents looking to downsize will be stuck, and middle-class families will have even fewer affordable options.

And it’s not just homeowners who will suffer. This tax will also hit commercial properties —apartment complexes, office buildings, and retail centers — discouraging investment and new development. That means fewer housing units, fewer jobs, and higher rents as landlords pass the cost onto tenants. At a time when families are already struggling with inflation and high interest rates, this tax would make San Diego County an even more expensive place to live.

We do not need to guess what will happen if the transfer tax is increased. We can simply look north to Los Angeles.

In 2022, LA voters passed Measure ULA, or the “mansion tax,” imposing as much as a 4 to 5.5 percent tax on property sales. The measure was supposed to generate $900 million annually for affordable housing and homelessness initiatives. Instead, home sales plummeted, revenues fell dramatically short of expectations, and investment dried up. Wealthy property owners found legal loopholes to avoid the tax, while developers and businesses took their money elsewhere.

The result? A weaker real estate market, fewer tax dollars, and worsening affordability. San Diego risks repeating the same mistakes.

No one disputes the need for more affordable housing, but raising taxes on home sales is the wrong approach. If San Diego County truly wants to address housing affordability, it should focus on solutions that increase supply and reduce costs: cutting bureaucratic red tape, reform outdated zoning laws, streamline permitting and approval processes and ensure existing tax dollars are spent efficiently before imposing new burdens on homeowners and businesses.

Housing affordability won’t be solved by making it more expensive to buy, sell, or build homes. Instead of punishing property owners with new taxes, San Diego should focus on policies that expand opportunity and lower costs for everyone.

San Diego County voters should not be fooled by promises that this tax will solve the housing crisis. As Los Angeles has already proven, transfer taxes shrink the housing market, slow economic growth, and fail to deliver the expected revenue.

The Board of Supervisors must reject Lawson-Remer’s harmful proposal to put this tax increase on the ballot and instead prioritize real solutions that promote homeownership, economic stability, and a thriving future for San Diego County. If our current Supervisors fail to stop the tax, then San Diegans must reject this tax hike at the ballot box and continue to fight back, just like El Cajon Mayor Bill Wells and I did, before this damaging tax becomes reality.