Santa Rosa and Sonoma County mull separate housing bonds after unified proposal splinters

Plans for a $300 million housing bond to support the construction of affordable housing in Sonoma County appear to have fallen apart after influential agriculture and business groups opposed the idea.

Proponents who wanted to place a countywide housing recovery bond on the November ballot are instead now recommending that Santa Rosa pass its own smaller measure this fall - perhaps one raising $175 million - and leave the county free to pursue a separate tax measure for the unincorporated areas.

Supporters say the change is a savvy course correction in the face of concerns expressed by both the Sonoma County Farm Bureau and the Sonoma County Alliance about the cost of a countywide general obligation bond, which would be repaid through an increase in property taxes. Steve Dutton, president of the Sonoma County Farm Bureau, said his board voted to oppose the bond, viewing it as “another tax on agriculture.”

While disappointed the size of the funding pool might shrink, Santa Rosa City Councilman Jack Tibbetts said he was glad to have the feedback now because it allows housing bond advocates to craft a measure with the best chance of success this fall.

“Personally, I’m not disappointed that it’s going to the city,” said Tibbetts, one of the leaders of the effort. “The disappointing thing would be to get nothing.”

71% support bond idea

The idea for a housing bond to raise money for affordable housing developments has been actively pursued by a group of policymakers, housing advocates and environmental leaders for more than a year, but the effort gained momentum after the October fires.

The efforts have been approved by voters in San Francisco, Santa Clara and Alameda counties to support affordable housing development.

Polling conducted by the group showed 71 support for such a measure in Sonoma County, a strong showing given such a tax would need the support of two-thirds of voters to pass.

The Sonoma County Board of Supervisors advanced the idea in April, calling for staff to evaluate the resources needed to put it on the ballot and to return with a more detailed report. That report is expected Monday.

Since April, however, the idea for a countywide bond measure has run onto the rocks, as backers were unable to convince agriculture and business groups to back it.

“As much as we would like to support the intent of the housing bond, the financial burden is too great to our members,” Dutton, the Farm Bureau president, wrote in an open letter in May.

Dutton argued that the tax of $19.53 per $100,000 of assessed value on property for 26 years could add up for farmers, many large spreads of land - in Dutton’s case 1,400 acres. A farm valued at $5 million, for example, would be paying an additional $967 per year in property taxes, he noted.

Dutton also estimated that county farmers, especially vineyard owners, already provide 950 beds for their workers - though that is still a small fraction of the overall farm labor force.

He suggested loosening regulations to make it easier to build housing made more sense than raising taxes.

“Supply and demand economics seems to be the better path for Sonoma County’s affordable housing crisis, not another tax on agriculture,” Dutton wrote.

The Sonoma County Alliance, the county’s largest business group, also came out against the countywide measure. Brian Ling, the group’s executive director, said his members feel removing barriers to development is a smarter approach to boosting needed housing stock.

“If it’s going to take multiple years to get permits, it doesn’t matter how much money we have, it’s not going to be enough,” Ling said.

Santa Rosa bond backed

There is generally less opposition to a Santa Rosa-only measure, Ling said, in part because of the improvements in the city’s permitting process and because of the widely recognized benefit of having more housing downtown, he said.

Chris Grabill, a member of Santa Rosa’s Board of Public Utilities and a member of the steering committee supporting the bond, said the group’s consultants made it clear that other housing bonds passed recently by Bay Area voters faced no organized opposition. As the group tried to “thread the needle” of public support, it realized the challenge of getting over the two-thirds bar if influential groups opposed it, he said.

It was difficult to convince rural property owners to support housing projects that were most likely to be in cities, Grabill said.

“When you have large property owners in unincorporated areas and the housing not going to be built in that area, it’s hard to show them the direct benefit,” he said.

He defended the decision to aim high with a countywide measure, however, saying the committee “felt a responsibility to try to make it as big and as broad as possible.”

After hearing the feedback, last week the steering committee recommended asking the Santa Rosa City Council to place a city-only measure on the ballot, and exploring whether the supervisors should pursue a tax measure of their own.

On Monday, county staff will outline three options. They include the $300 million housing bond discussed in April, which now seems unlikely.

Another option is a parcel tax, which would raise an estimated $25 million per year. The tax could be either a flat rate of $140 per parcel, or different values for improved versus unimproved properties. This option, however, has gone into a bit of a “legal rabbit hole” around issues that include how to define “improved” versus “unimproved” property and how it would mesh with a city measure, said Supervisor Lynda Hopkins, who serves on the steering committee.

The third option involves a half-cent sales tax in the unincorporated areas, which would raise about $9.5 million annually for 10 years and could be used for a combination of housing recovery outside city limits, as well as boosting fire services.

Hopkins said this third option was the “most flexible” of the three.

Local funding vital

The analysis of the three options was not exhaustive because county staff needs to hear from the board which option it wants to pursue, if any, and time is running out, said Margaret Van Vliet, executive director of the county’s Community Development Commission.

“There’s a sense of if we’re gonna go this year, we need to go now,” she said.

Santa Rosa Mayor Chris Coursey said he wanted to see what his county colleagues did before weighing in on the issue.

The City Council is expected to take up the proposed Santa Rosa bond measure June 26, at which point the results of recent polling conducted by the city should be ready to share, Coursey said.

Tibbetts said he hopes the groups that opposed the countywide measure will support a Santa Rosa-only measure, which would also be repaid through property taxes. The local funding will be vital to leveraging other state and federal dollars, perhaps allowing the city to attract $8 for every $1 raised locally, Tibbetts said.

While he understands the Alliance’s focus on streamlining permitting, there is no getting around the fact that affordable housing requires subsidies, he said.

“We absolutely need to support affordable housing for low- and moderate-income people through subsidy,” Tibbetts said. “The market cost for housing is just too high for too many.”

You can reach Staff Writer Kevin McCallum at 707-521-5207 or kevin.mccallum@pressdemocrat.com.