New VMT Tax Will Drive Up Housing Costs For Everybody

What is the VMT?   It is the Vehicle Miles Traveled Tax.    And its working its way through Sacramento.  The state is currently looking at way to replace declining gas taxes and the geniuses have come up with the ‘road charge’, of fee per mile traveled to help fund the cost of road repairs.

The Los Angeles Business Federation, (BizFed) is sounding the alarm.   “This is a new housing tax Los Angeles families simply cannot afford, adding $197,000 to the cost of a new home and driving monthly rents up by $1350″.   This misguided VMT housing tax will disproportionately hurt low-income families and households of color, while stalling housing construction and deepening California’s housing crisis.”

AB130, which recently passed the California State Senate and was signed into law in June by Governor Newsome, exempts most infill housing project from California Environments Quality Act, (CEQA) review, places a $100 limit on HOA fines, and limits local governments’ ability to change or modify building standards until June of 2031.    Inside AB130 was sections 57/58 that give local governments and regional agencies the sole option to impose VMT taxes on builders, new homeowners, and renters. The impacts of these new taxes are massive according to a Caltrans study on VMT housing taxes.

Caltrans conducted a pilot program in January 2025 that collected ‘real money’ from volunteers to test the revenue collection process.   A flat rate of 2.8 cents per mile was applied.  Participants could choose from various methods to report their mileage, such as a plug-in device with or without GPS, or manually submitting odometer photos.