Her bill, AB 736 (opens in new tab), proposed a statewide cap on property transfer taxes at 3% and would limit most rates to 1.5%. The rates are usually set at the local level. In San Francisco, the transfer tax rate on sales over $10 million has been 6% since 2020. 

Wicks’ bill would take that decision out of cities’ hands. By lowering the taxes, more developers could afford to acquire land for housing, she argues.

The protesters outside her office said the legislation would be a major blow to the progressive agenda of funding affordable housing by taxing high-ticket real estate sales and, potentially, to the budgets of Bay Area cities that rely heavily on transfer taxes to fund all sorts of public services. 

But Wicks, one of California’s most prominent YIMBY legislators, designed the bill to stop an even more drastic change proposed by the Howard Jarvis Taxpayers Association, which wants to slash transfer taxes and prevent cities from ever raising them again. 

The anti-tax advocacy group qualified its own measure (opens in new tab) for the November ballot that would cap transfer taxes at 0.11% and require a two-thirds majority at the ballot box for cities to pass new ones. Wicks’ goal, sources say, was to compel the anti-tax group to pull its measure.

But whatever deal Wicks thought she had to avert the Jarvis measure has fallen apart. 

HJTA president Jon Coupal said Monday the group would not pull its Local Taxpayer Protection Act from the November ballot despite “intense political pressure.” “HJTA regards [AB 736] as a step in the right direction; however, it is not adequate,” Coupal said. 

Wicks’ office did not respond to a request for comment.

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When the activists arrived at Wicks’ office, the lights were off and the door was locked. It was an appropriate metaphor for how they felt: shut out. Many took issue with not only the bill itself but its hasty introduction just days before an Assembly vote scheduled for Thursday. They tried to scan a QR code on the office door to make an appointment, but it didn’t work. 

A staffer at Wicks’ office in Sacramento said, “I guess nobody’s there right now” and told the protesters that Wicks was not available to hear their demands. 

After chanting “Housing is a human right,” the activists were admitted to the office of state Sen. Jesse Arreguín down the hall, where two staffers politely listened to their concerns. 

“[AB 736] is going to make it impossible for us to carry out the social housing that people in California have already voted for,” said Lupe Arreola of the advocacy group Tenants Together. Without robust transfer taxes, she argued, municipalities won’t have money to build social and affordable housing.

Another activist, Scott Feeney, added that the bill would “destroy” the DSA-backed measure to dedicate transfer tax revenue to affordable housing, though it remains unclear exactly how the two laws would interact if both pass.

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Some think Wicks’ bill is worth pursuing anyway. Chris Elmendorf, a law professor at UC Davis and prominent YIMBY wonk, suggested that her proposal may convince voters and donors who would otherwise have backed the Jarvis ballot measure to withhold their support. 

He framed 1978’s landmark Prop. 13 — which suppressed annual property tax increases for certain homeowners — as a response to government inaction: “Had the Legislature done something, maybe Prop. 13 wouldn’t have passed.” 

It’s hard to imagine the average voter thinking this way — most folks who reflexively support anti-tax measures are not monitoring every legislative update — but Elmendorf said that in a tight contest, only a small percentage needs to flip.

It appears Wicks has had success in peeling away support. The California Business Roundtable, which donated more than $10 million to the Jarvis initiative before March, issued a statement Monday praising her bill.

“The Legislature has recognized the critical need for certainty, uniformity, and affordability in the housing market,” the group’s president, Rob Lapsley, said.

Three other big donors — Douglas Emmett properties, Hudson Pacific Properties, and Kilroy Realty Corporation — also announced Wednesday that they’ll be backing Wicks’ legislation instead of the Jarvis measure. They added that they have secured “approximately $10 million dollars to advance the negotiated compromise as an alternative to [the Jarvis measure] and to advocate generally for compromise solutions.”

Despite its success in pulling votes and dollars from the Local Taxpayer Protection Act, Wicks’ bill could rip a $100 million hole in San Francisco’s budget by cutting transfer tax revenue. But proponents say if the cuts lead to more buildings changing hands, the revenue loss could be partially offset by property tax gains triggered by value assessments. YIMBYs also suggest that a higher number of transfers at a lower rate could produce a similar amount of revenue.

It’s one reason Elmendorf — who called the Jarvis measure “ridiculous” — supports Wicks’ proposal.

“If you reduce the cost of building, you will get more homes,” he said. “That’s what she’s trying to do.”