Housing bond, sales tax make November ballot in Santa Rosa

Santa Rosa voters will get to decide in November whether they want to float a $124 million housing bond to increase the supply of affordable housing in the city.

They’ll also be asked to pass a quarter-cent sales increase for six years that would raise $9 million to help close a dire city budget gap opened in large part by costs stemming from the October wildfires.

But City Council members decided the two tax measures on the upcoming ballot were enough. They rejected a proposal that would have asked voters to raise hotel bed taxes in Santa Rosa by 3 percent, a move that would have boosted city revenue by $1.5 million annually but which business groups warned might backfire by making the city less competitive for business travelers.

The decision by the City Council to place two different tax measures on the Nov. 6 ballot represented just how stretched the city finds itself as it battles both an acute housing crisis and a bleak budget picture, both of which have deepened by the October wildfires.

“It is clear to me that not only is housing desperately important in our community,” Councilman John Sawyer said. “We also need to help the community understand the desperate financial times we find ourselves in.”

The decision also reflected a deep concern that asking residents to pass three different tax measures might be a bridge too far, and result in voters rejecting all three requests. Several speakers pointed out that this year’s ballot was going to be a lengthy, complex one, and there was only so much ability to educate voters on the issues.

A few council members, including Tom Schwedhelm, had been so concerned about undermining the prospects of the housing bond that they’d previously indicated an interest in making it the only measure the city placed on the ballot this year.

But following a meeting with senior staff last week, Schwedhelm said he said was “surprised and disappointed” to see the city’s budget outlook worsen since just two months ago. If voters don’t pass the sales tax increase, he warned of “significant cuts” to the city, leading him to “very reluctantly” support the proposed tax increase,

City finance staff have said that, after using $14.3 million in reserves to bridge this year’s budget gap, city reserves have fallen so low that it will run out of money next year if revenues are boosted or cuts made.

The decision to give voters the chance to pass a housing bond, however, took center stage for most of the evening.

Jacqueline Ortiz Meza, 17, sobbed as she told the council that securing an affordable unit had been life-changing for her family.

She described how her mother and three siblings were previously forced live in a shelter after their father left them. Now, thanks to having a stable home, she’s a nursing student and her mom is learning English.

“Low-income housing can change people’s lives,” Ortiz said.

Chris Grabill, a community activist who had pushed for a countywide housing bond measure that supervisors have shelved, urged the council to support the bond, citing the “economic displacement” that so many people are facing due to the regional housing crisis.

“It’s would just be so critically important for us to have this tool at our disposal,” Grabill said.

Not everyone was thrilled with the idea of tax increases. Homeowner Joe Holcomb said he and others were “tired of seeing this stuff.” He also questioned how the government was going to be able to help people afford down payments for a house - one of the stated uses of the money - when the county’s median home price has now exceeded $700,000.

“How much money are you going to give away to help them buy a home? $100,000? $200,000? Where does it end?” he asked.

The proposed bond, which would be repaid through property taxes over 30 years, would spur new construction, set aside money to preserve and refurbish existing housing stock and help fire survivors rebuild their homes, among other measures.

The vast majority of speakers and all council members expressed strong support for the bond.

Mayor Chris Coursey said he knew that the “polling was all over the map,” but he felt confident voters would support it.

“There is no ambiguity about what people in Santa Rosa feel is the most pressing issue, and that is housing,” he said. “It’s our biggest problem. It’s our biggest need. And we need to address it.”

He said the housing bond would levy a new charge of $29 per $100,000 of a property’s assessed value, raising about $124 million.

That much money, when leveraged with other state and federal funds, would allow the city to build about 1,200 affordable units, which he said was less than half of the 2,500 the city needed.

Santa Rosa lost more than 3,000 homes in the October fires.

The cost of the bond for a typical Santa Rosa home would pencil out to about $110 per year, or about 30 cents per day, Coursey said, adding that he felt property owners would shoulder that amount for such a pressing need.

“We’re going to need more than this, but this is a start,” Coursey said.

The sales tax and housing bond both passed with votes of 6-0. Councilman Jack Tibbetts, who racing a sailboat to Hawaii, sent his support through a friend - in what Coursey joked was a “message in a bottle.”

The housing bond presented the council with one high-profile sticking point: whether projects funded through the measure would be required to set wages for some workers under union rules and support union apprenticeship programs.

Jack Buckhorn, executive director of the North Bay Labor Council, said his group’s support of the bond was contingent on that provision. Keith Woods, chief executive officer of North Coast Builders Exchange, said his group would not support a “tricked up” bond that included a “political favor” to union interests.

The council stripped the provision to allow negotiations to continue between the two sides.

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