Santa Rosa dedicates more special tax revenue to housing

Santa Rosa has agreed to increase the amount of revenue it dedicates every year to homeless services and affordable housing production from a special real estate tax.

The move follows a stinging critique earlier this year by a downtown developer who charged that the city had exacerbated its current housing crisis by diverting millions meant for affordable housing.

In recent years the city has set aside 20 percent of the revenue it receives from every real estate transaction, known as the real property transfer tax. The money goes to help build housing and to support homeless services.

But developer Hugh Futrell claimed that the intent - though not the letter - of the 1990 tax increase that tripled the tax rate was for all of the increase to go to help build affordable housing. City officials disputed Futrell’s account, but the City Council informally agreed during this year’s budget process to increase the rate to 25 percent. Tuesday’s 6-0 vote approved the change.

“This is so sensible. Please do it,” urged Anne Seeley, chairwoman of Concerned Citizens for Santa Rosa.

Councilwoman Julie Combs asked the percentage to be increased to 40 percent, but her colleagues did not support the idea.

The new policy will add about $185,000 to the $736,000 that was already going to be set aside this year from the tax for such services.

In total, the city is planning to spend $4.5 million from all sources on housing and homeless services.

Futrell, an affordable housing developer, had said that anything less than 90 percent of the money being used for affordable housing was “a breach of faith.” He was not present for the council’s decision.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.

This story has been updated to reflect the city’s total current budget for homeless services and affordable housing production.