PD Editorial: State must respect Congress' intent on fire assistance

After Hurricane Katrina devastated the Gulf Coast region, Congress created a special tax incentive to rebuild affordable housing in the disaster zone.

The mechanism is complicated, involving the sale of tax credits to raise the money needed to price housing at below-market rates for low- income renters and buyers.

Congress brought that mechanism back in a bill passed last month, this time to assist Sonoma County and a dozen other California counties recovering from wildfires in 2017 and 2018.

With the help of these tax incentives, local officials say, as many as 1,200 new housing units for low-income residents could be built and occupied by 2023. Unless the state diverts the money.

Despite the intent of Congress, state Treasurer Fiona Ma proposes to make the tax incentives available to communities impacted by homelessness.

Homelessness is, without question, a crisis in Sonoma County and statewide. More money is needed for shelters, transitional housing and social services, here and elsewhere. But that money must not come at the expense of wildfire victims.

Rep. Mike Thompson, who chairs the House revenue subcommittee, was instrumental in securing the tax incentives for fire recovery. As is often the case with federal legislation, the language is obscure. No county is mentioned by name, but the statute says California counties that qualified for assistance in 2017 or 2018 under a specific federal disaster law are eligible for a share of the tax incentives, which are worth about $1 billion over 10 years.

Thompson, D-St. Helena, and 16 other members of the California House delegation, Democrats and Republicans from all parts of the state, wrote a letter to Ma asserting that only Sonoma and 12 other counties qualify. “In advocating for the additional allocation of tax credits,” the letter says, “we were clear they were intended to provide relief to those who are struggling to recover from these tragic wildfire events.”

As an example, the letter cites the Journey's End Mobile Park in Santa Rosa, which was home to more than 150 senior citizens before being destroyed in the Tubbs fire in 2017. The tax credits could help ensure that an affordable housing project for seniors gets built on that site.

“We need the help,” Santa Rosa Mayor Tom Schwedhelm said, “and we've got a comprehensive strategy.”

Sonoma and Butte counties lost the most housing in the 2017 and 2018 fires, and they would receive the largest share of the tax incentives as envisioned by Congress. Schwedhelm and other officials told the editorial board that could add up to $300 million for affordable housing in Sonoma County.

But if the money is offered for homeless relief around the state, local officials warn that Sonoma and Butte counties could instead find themselves competing with one another - as well as Napa, Marin and Solano and Shasta counties - for a share of about $25 million. The bulk of the assistance could end up in Los Angeles, San Diego and other large counties.

A round of public hearings on the distribution plan opened Monday and continues through the end of the week. The panel reviewing the plan has heard from members of Congress, state legislators and local officials who understand that this money is intended to help low-income fire victims. We're waiting for their response.

You can send a letter to the editor at letters@pressdemocrat.com.