Community housing development organization, reallocation TOT tax dollars among the ideas proposed
The city of Healdsburg is considering exploring a different way of funding affordable housing projects.The city is looking at creating a community housing development organization (CHDO), which would operate as a nonprofit and be established by the city or in partnership with a local housing organization.
The idea of creating a CHDO was a favorite among various affordable housing funding ideas presented by the city’s housing administrator, Steven Sotomayor, during a Dec. 2 Healdsburg City Council meeting.
Sotomayor presented various short and long-term funding options for the city to consider. While the CHDO was the favorite among councilmembers, the idea of reallocating transit occupancy tax (TOT) dollars from community services to housing was also an idea that councilmembers seemed to like.
Councilmembers did not vote on pursuing one idea over the other, rather they gave direction to city staff on which ideas they thought staff should research and explore and bring back to the table.
Short-term funding options
Short-term funding options to create housing include developing an ordinance that would include a hotel affordable housing fee and/or a CHDO.
“Some of the short-term recommendations are establishing a hotel affordable housing fee which would increase revenues through a base funding source,” Sotomayor explained.
According to Sotomayor, the city consulting economic planning systems has already started exploring what the fee could be.
“It has made preliminary estimates of the fee ranging between $75,000 and $100,000 per unit that would be available,” Sotomayor said, noting that the numbers would be solidified if council were to move forward on the item.
“Establishing this type of nexus between hotel development and affordable housing really would solidify that process and establish a price to it and over the lifetime of this, depending on the amount of hotels that are developed within the city, this could be a large funding source,” Sotomayor said.
In terms of the CHDO, Sotomayor said the CHDO nonprofit would need to have a specific geographic region in which it provides housing. A CHDO would also be required to be run by a board with appointed community members or interested parties “One of the benefits that it (CHDO) brings to cities, and this is something that I have implemented before in Fresno, is that these types of nonprofits give you the flexibility to go after the dollars that we hear about in Silicon Valley through foundations,” Sotomayor said.
With a CHDO, the city would also be able to partner with organizations like Burbank and Eden Housing in order to work on creating more affordable housing options.
Mid to long-term funding options
“There are several caveats to these items and they require a lot more staff research,” Sotomayor said.
These include reallocating TOT tax dollars from community services to be made available for city housing, putting forth a special parcel tax, or a general obligation bond, all three of which would require voter approval.
A general obligation bond would require voter approval and would also need legal analysis on how bond proceeds could be used for housing.
“They would have to be vetted for potential vote approval,” Sotomayor said.
Councilmember and public feedback
Councilmember Evelyn Mitchell asked what funding direction the city should go in — there are so many options, she pointed out.
“I wouldn’t get stuck on that as much as these are some options to really replenish our affordable housing and homeless funding mechanisms. Some of those could be used for homeless services, it could be used for a number of things,” said Healdsburg City Manager David Mickaelian.
He added that the CHDO wouldn’t take as long to create as the other items, although it may take time to find passionate people to be on the board.
“I think this would be a vehicle that would really excite them,” Mickaelian said.
Mayor David Hagele touched on the fact that while it is good to have this discussion, the city should discuss what could be built first, then return to the funding discussion.
“We need the vision first,” he said.
During public comment, Healdsburg resident Richard Burg shared similar thoughts.
“Do we have a vision of how much affordable housing we need?,” Burg asked. “We don’t have a clear vision of what Healdsburg would look like built out, and what percentage of that we’d like to be multi-family housing that is deed restricted and what percentage of construction might be private homes for the missing middle ... If we talked about what Healdsburg could look like 20 years down the road we’d have a better idea of filling out those numbers.”
Overall, residents and councilmembers seemed excited about the thought of creating a CHDO.
“I’m really excited about the community organization approach,” Councilmember Joe Naujokas said. “I think there is a lot of energy in the community whether it be from a private investor or some sort of institution or local business … I think there is some real passion in the community for pursuing that kind of approach. I would like to see it.”
In regard to the long-term options, Hagele said they should all “stay on the horizon.”
Healdsburg Vice Mayor Leah Gold supported the idea of putting the TOT tax reallocation idea on the front-burner and exploring the option.
“As you know I favor evaluating reallocating some of the TOT to affordable housing as something we should do sooner and I don’t think there is any problem having it on the ballot at the same time as Measure V — I think it is pretty easy to tell the difference between a sales tax and a TOT tax for the voters. I would like to put that more a front-runner item because I would like to see what it would look like,” Gold said.