Sacramento Mayor Kevin McCarty gives his first State of the City address on Monday, Oct. 20, 2025, at the B Street Theatre in Sacramento.
HECTOR AMEZCUA
hamezcua@sacbee.com
Sacramento Mayor Kevin McCarty said Monday he would withdraw a measure from the November ballot that would have raised taxes on a small number of properties to generate revenue for housing and homelessness services.
McCarty unveiled the initiative last year during his State of the City address as a way to fulfill what he described as the American Dream. The tax rate was set to triple for “high value properties” — which the mayor previously said exempted 95% of transactions — to help first time homebuyers, renters who could end up homeless and the tiny homes intiative.
A city-sponsored poll found 51% of voters supported the referendum. McCarty said he required a higher margin of error before placing the initiative up for consideration.
“There’s angst among the people of Sacramento for inflation,” McCarty said in a phone interview. “This (survey was done) before the gas prices jacked up with the war.”
Proposed ballot measure said a real property transfer tax would increase to 1% on transfers worth more than $1.5 million. The city would collect an estimated $9.3 million annually, which was welcome news for City Hall dealt with a budget deficit for three consecutive years. This year, the City Council will balance a $66.2 million budget deficit by June.
A general tax measures requires an approval by a simple majority, but a special tax requires passing a two-thirds threshold.
The survey demonstrated residents had diverging views on what McCarty’s ballot measure hoped to address.
Establishing tiny homes ranked extremely or very important for 49% of voters. Yet, providing financial assistance for first-time homebuyers — another core part of the referendum — drew just 38% of people ranking it as extremely important or very important.
Sacramento Association of Realtors also raised concerns about the measure. Some Realtors sited inflated revenue estimates and potential negative impact on much-needed housing production, according to The Sacramento Bee’s previous reporting.
The survey also concluded residents felt “ambivalent” about living in Sacramento, and a majority felt the city needed more funding. Asked if “things” in Sacramento are headed in the right direction, 45% of voters said the city was on the “wrong track.”
Voters also ranked addressing homelessness, maintaining rapid 911 response times and protecting water quality as the three top priorities. McCarty said those issues aligned with the City Council’s priorities as well.
“That is very reassuring,” he said. “We’re going to stay the course.”
McCarty has banked on tiny homes as a cost-effective way to offer seniors a temporary place to live. Sites in North Natomas and south Sacramento will each contain 40 120-square-foot homes.
The proposed ballot measure would have cleared a path for more tiny homes, McCarty said. Still, he believed the council supports expanding those temporary structures. Last week, councilmembers approved expanding the number of miniature dwellings at a homeless shelter on Roseville Road, with Councilmember Lisa Kaplan casting the sole opposing vote.
McCarty said he may revive this referendum in upcoming years. He’s been having conversations with those opposed to the current proposal. “These conversations will always continue,” he said.
This story was originally published March 30, 2026 at 2:37 PM.
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Ishani Desai is a government watchdog reporter for The Sacramento Bee. She previously covered crime and courts for The Bakersfield Californian.