Politics
Gracia Affordable Housing Referendum: Downtown Renters Gain Units, Shoppers Pay Higher Sales Tax
The November ballot measure would raise the local sales tax by 0.5 points to build 1,500 subsidized units, shifting costs to consumers while targeting housing relief in specific Gracia wards.
How we reported this
The ballot measure listed as Referendum 4 would increase Gracia's sales tax rate from 7.75 percent to 8.25 percent starting January 2027, with all new revenue directed to construction of 1,500 affordable housing units in the downtown and riverside wards. Property records from the city assessor show these areas contain 62 percent of Gracia's rental households earning under 60 percent of area median income. The change would apply to most retail purchases, including groceries and household goods, according to the text filed with the elections office on June 12.
Local housing costs rose 12 percent between 2024 and 2025, the regional planning department annual report states, after the city council failed to obtain state matching funds for three consecutive budget cycles. Council records show the measure was placed on the ballot after a May public hearing attended by 180 residents, where testimony focused on waitlists for existing subsidized units that now exceed 4,200 households.
Daily Effects for Gracia Residents
Households that spend $400 a month at local stores would pay an additional $24 a year under the new rate, the finance department estimate calculates. A single parent in the riverside ward could apply for one of the new units at rents capped at 30 percent of income, while a family in the Hilltop neighborhood that owns its home would see no direct housing benefit but would face the tax increase on everyday purchases. Local advocates note that current subsidized buildings are concentrated in five census tracts, leaving outer wards without new construction under the plan.
The legislation states that 70 percent of the projected funds must go to family-sized units and 30 percent to senior housing. The city budget paper for fiscal year 2026 lists current spending on housing vouchers at $11.8 million, covering 1,950 households, a figure unchanged since 2023.
Ballots will be mailed to registered voters on October 15, with in-person voting open from October 20 through November 3 at 14 polling sites. The elections office projects a turnout of 38 percent based on the 2024 local referendum. If approved, the first construction contracts are scheduled for award in March 2027, the housing authority timeline shows.