In June of last year, the City of St. Helena in California’s Napa Valley faced significant budget challenges. In response, the City Council quickly proposed raising the real property transfer tax. However, this tax increase could only be implemented if St. Helena transitioned to a charter city. As a result, a proposal for that transition was placed on the November ballot alongside the tax increase.
The North Bay Association of REALTORS® (NorBAR) immediately sprang into action to protect the interests of local property owners, launching a campaign to defeat both measures. With the support of an Issues Mobilization grant from the REALTOR® Party, they succeeded in their efforts.
St. Helena, with a population of just over 5,200, is a popular tourist destination. However, the City Council dismissed other, more effective and equitable options for addressing the budget shortfall, such as adjusting the scope of city spending, exploring sales tax increases, or tapping into tourism revenue. Notably, the city’s property and sales tax revenues had grown by 25-40% since 2020, far outpacing inflation, and there was a healthy $14 million in reserves at the time. Yet, rather than adjusting spending, the Council chose to place the burden of the city’s financial struggles on the shoulders of a small fraction of the community—local homeowners. This proposal was not only inequitable but would have made housing even more unaffordable in a region already grappling with the aftermath of recent wildfires.
Under state law, only charter cities have the authority to increase the real property transfer tax. So, the City Council’s push to become a charter city was specifically tied to their desire to raise the transfer tax on home sales—1.5% on properties valued between $1 million and $2 million, and 3% on sales above $5 million. This tax, which would be in addition to any capital gains tax, would have cost homeowners tens of thousands of dollars, forcing just a few households to shoulder the city’s budget deficit year after year. Furthermore, the move to a charter city would have granted the City Council sweeping new powers—from zoning and development to contracting and elections—further increasing the potential for tax hikes and anti-housing measures in the future.
At the time, neighboring jurisdictions were also considering similar tax and fee increases. Defeating St. Helena’s ballot measure sent a strong message and helped deter other cities and counties from pursuing similar measures that would exacerbate housing affordability issues.
Lisa Badenfort, Chief Executive Officer of NorBAR, credits the association’s strong, member-led leadership for their successful campaign to block both ballot measures. With the backing of an Issues Mobilization grant, NorBAR’s leadership team spearheaded a robust campaign, utilizing digital advertising, member mobilization, text messaging, and direct mail. Additionally, they engaged in direct advocacy and public affairs efforts with local media and key stakeholders.
Local NorBAR leader and campaign co-chair, Chris Wunderlich, noted that homeowners already supply nearly 30% of the city’s general fund through property taxes and housing-related fees and this would have made housing even more expensive and homeownership even further beyond the reach of many. Forcing just a few homeowners to cover millions in an escalating citywide deficit is inequitable – and a poor strategy to fix spending problems.
Their members’ hard work paid off: both ballot measures failed decisively in November, with the charter city proposal being defeated by 56%, and the transfer tax increase, which was contingent on the charter city vote, failing by 59%. “This is a win for the City of St. Helena, its homeowners, and anyone who aspires to homeownership,” says Badenfort. “Our members were thrilled. It was all thanks to our incredible leadership team—they truly got it done.”
To learn more about how the North Bay Association of REALTORS® is working to protect housing, homeownership, and the rights of property owners, contact CEO/Government Affairs Director Lisa Badenfort at lisa@nba.realtor or 707-636-4294.
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