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DoubleTree Hotel American Canyon 2018

Measure H, a 1 percent hotel tax increase to help fund more workforce housing, was winning on election night in American Canyon following the first set of election results released by the Napa County Elections Division.  

A series of measures designed to boost affordable and workforce housing in Napa County and its municipalities appeared headed for victory Tuesday night based on preliminary results.

Countywide, Measure I was just barely at the threshold for the required two-thirds vote, with 66 percent approval. Similar measures in each of the municipalities were ahead by more comfortable margins, except in American Canyon, where voters were behind the measure 63 percent, though only 18 percent of the votes had been counted there by 8 p.m.

If the tax measures end up passing by the required two-thirds majority in the final tallies, due later this month, they would raise the “Transient Occupancy Tax,” a levy paid by tourists on every night in a hotel room, from 12 percent to 13 percent. That extra percentage point would go to fund affordable and workforce housing projects, similar to the “impact fees” paid by developers before building large projects.

The effort to raise the TOT was complicated, however, by the administrative structure of the county. Since the tax is set individually by each jurisdiction, a uniform, county-wide hike required six separate measures: one voted on by all county residents (but applying only to hotels in unincorporated county), plus one in each of the five incorporated municipalities (Calistoga, St. Helena, Yountville, Napa, and American Canyon).

Because it is considered a “special tax” under state law, the money must be put in a dedicated fund and may not be used for any purpose other than housing programs, though the county would be allowed to use its money to fund projects in the incorporated cities, since there is relatively little unincorporated land available for residential development.

Backers estimate that the increase will raise about $5 million per year. The funding could be used to help build units directly or as seed money to apply for state and federal grants. Several related affordable housing initiatives were on the statewide ballot on Tuesday, for example, and the local money could be used as leverage to get a share of that, if they pass.

This is the first time local government has agreed to direct a portion of the TOT, an increasingly large percentage of local budgets, to a specific purpose. It’s also the first time that the hospitality industry has been enthusiastic about taxing itself to support housing.

Both elected officials and hospitality businesses say, however, that the housing crisis is now so acute that it is making it difficult for existing businesses to stay open or expand or for new businesses to open. Several prominent restaurants, including Redd in Yountville and Terra in St. Helena, have closed recently, citing in part the difficulty of finding and keeping workers.

The rising cost of homes and rental units, meanwhile, is putting increasing pressure on the roads as lower- and middle-income workers are squeezed out of the housing market but continue to commute into Napa to take advantage of the robust economy and good wages.

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You can reach Sean Scully at 256-2246 or sscully@napanews.com.

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Editor

Sean has been editor of the Napa Valley Register since April of 2014. His previous credits include the Press Democrat, The Weekly Calistogan, The Washington Times and Time and People magazines.