Napa County supervisors want to further explore increasing the hotel tax by 1 percent to raise money for what they call “workforce” housing, with the idea of possibly going to voters this November.
The county could bring in $1.3 million annually through such a transient occupancy tax increase for lodging in the unincorporated area, a county report said. If all five cities joined in, the total amount of money netted countywide for housing could be $5 million.
A special tax that legally could be spent only to ease the area’s housing cost challenge would have to pass by a two-thirds vote in an election. Tourists pay the transient occupancy tax as part of their lodging bills.
“I want to go for November,” Supervisor Alfredo Pedroza said, though county officials noted that means developing a measure by July 31 to place on the ballot.
The Board appointed Pedroza and Supervisor Ryan Gregory to a committee that is to include representatives from the cities and Visit Napa Valley. Similar presentations are to be made to each city council.
Money from a tax could be used for such things as making loans to create affordable housing, buying land for housing and helping people make down payments on houses.
Joelle Gallagher of the Napa Housing Coalition talked of making certain money from a housing tax creates housing that local workers can afford. She had thought the Register Square development in the city of Napa would be for workforce housing, but prices are in the $800,000 range.
“We don’t want to see $800,000 condos going in and claiming those are for people who make $16 an hour cleaning hotel rooms,” Gallagher said. “Because that’s what people cleaning hotel rooms make in the Napa Valley.”
Gregory wants to look at different types of housing. He talked of single room occupancy, a dense development where residents live in single rooms and share such things as the kitchen and common space. He compared it to dormitory living.
“Would our young folks coming here to work in the hospitality business and sort of get a start in the wine business, would they be really excited about that kind of living?” Gregory asked.
Supervisor Diane Dillon said she wants housing created by a new tax to go to people who work in Napa County. She doesn’t want tax money going to housing for the thousands of people who lost Santa Rosa-area homes in last year’s fires – even though her heart goes out to them – and who would commute to work elsewhere.
“I think that local-jobs-to-local housing is a really important piece of this,” Dillon said.
Supervisor Belia Ramos said American Canyon creates most of the county’s workforce housing. The problem there is traffic. She wants jurisdictions to be able to weigh in on their own particular needs when exploring a possible tax hike.
Ramos is an American Canyon resident and sees firsthand the traffic situation driving to the city of Napa for work.
“It should not take me 47 minutes to go 12.2 miles in the morning,” she said. “But it does.”
The transient occupancy tax is 12 percent and goes into the general funds of the county and its cities for daily operating costs. Lodging guests also pay another 2 percent assessment on their bills for the Tourism Improvement District that promotes tourism, for a total of 14 percent.
Residents James Hinton and Gary Margadant talked about using some of the tourism promotion money to help with affordable housing.
“We have a lot more tourists coming into the county,” Margadant told supervisors during public comments. “You’re seeing all the effects of it ... have you reached the point yet where you think you have enough tourists in this valley?”
The county and its cities in 2010 created the 2 percent Tourism Improvement District assessment at the request of the lodging industry. Dillon said the Board of Supervisors doesn’t control this income.
“We can’t do what James and Gary are suggesting, as in legally can’t,” Dillon said.
Napa County’s hospitality industry in 2017 provided 11,690 jobs with an average annual salary of $37,994, according to a report made to supervisors. The manufacturing industry that includes wine production provided 12,175 jobs with an average annual salary of $86,900.
Local rents are in the $1,700-to-$3,000 a month range. A typical mortgage is $3,641 a month, the report said.
Clay Gregory, CEO and president of Visit Napa Valley, praised the lodging industry for its willingness to support a 1 percent transient occupancy tax hike.
“Lodging needs to get the credit for this because they’re the ones who are taking the risk of raising their rates. And I think that’s a rare thing,” Clay Gregory said.