A growing number of local hotels jobs and high prices for local housing continued creating an unwanted dynamic in 2018.
The situation in a nutshell: a boom in new hotels is creating jobs that pay too little for employees to comfortably afford Napa County housing prices. Civic leaders and housing advocates expressed concern.
A study done for the city of Napa in 2018 said that building 60 percent of the 2,112 new hotel rooms proposed in the city would create 630 jobs. City hotel-based businesses would then employ 3,700 workers and produce $456 million in annual economic output.
But the median housing value in the county is more than $650,000 and monthly rents in 2017 averaged about $1,700 for a one-bedroom apartment. More hotel workers raised the specter of a bigger influx of people commuting from counties with cheaper living costs, adding to traffic woes.
“Any new hotels, in my view, will have to show how they deal with housing for the workforce they bring in,” Napa Mayor Jill Techel said in May.
In July, the City Council approved a new Marriott in the southern part of town. The developers agree to build 12 rental dwellings with affordable rents on a ¾-acre property along Old Sonoma Road.
“We’re committed to this path because it’s the right thing to do,” developer representative and attorney Anthony Zand told the City Council.
Another idea bubbled up in early 2018 – ask voters to raise the transient occupancy tax by 1 percent, from 12 to 13 percent. That would bring in an estimated $5 million annually countywide to spend on affordable and workforce housing.
“My intention is to jump-start the conversation, working with Visit Napa Valley and the cities to look at the possibilities of creating a regional solution to this,” Supervisor Alfredo Pedroza said.
A higher tax would mean prices at hotels and lodges would rise, possibly putting Napa Valley at a disadvantage with other tourist magnets. The local hotel and tourism industry decided it could weather the change.
“There are other destinations in California that have higher rates than we do right now,” Clay Gregory, CEO of Visit Napa Valley, said in May. “We wouldn’t want to go up any further than 1 percent, but we’re comfortable with that number.”
Joelle Gallagher of the Napa Housing Coalition said the results need to be housing that local workers can afford, not something like the new Register Square development in downtown Napa with units at around $800,000.
“I don’t want to see $800,000 condos going in and claiming those are for people who make $16 an hour cleaning hotel rooms,” she told county supervisors in May.
Supervisor Diane Dillon said she wants to make certain the tax money creates housing for Napa County residents, not people who lost Santa Rosa homes in last year’s wildfires, as much as her heart goes out to them.
“I think that local-jobs-to-local-housing is a really important piece of this,” Dillon said.
The city of Napa would receive an estimated $2.1 million from the tax, city Housing Manager Lark Ferrell said in May. It could use the money to buy land for future developments or bolster a down-payment assistance fund for first-time home buyers.
Ferrell saw a chance to help families who have incomes between 60 and 120 percent of the median and often miss out on housing assistance.
A potential difficulty involved the mechanics of the election. To achieve a countywide increase, each city and the unincorporated county would have to pass its own measure.
Debate arose in American Canyon. That City Council wanted to explore using the extra transient occupancy tax money for traffic solutions. It opted for housing after hearing that local hotels would oppose any other path.
The matter was settled – Napa County, American Canyon, Calistoga, Napa, St. Helena and Yountville each created ballot measures for the Nov. 6 election. Because they sought a special tax dedicated to housing, the measures each needed a two-thirds vote to pass.
On Nov. 6, the voters spoke. Measures passed for the unincorporated county and every city except American Canyon, where Measure H garnered 66.4 percent of the vote, just short of the 66.6 percent needed.
That means the county, Calistoga, Napa, St. Helena and Yountville will receive the new tax money for housing and American Canyon will not. Each jurisdiction will decide how to spend its own revenue.
Next comes the challenge of spending the money in ways that will at least make a dent in the local housing affordability problem. That’s a story for 2019 and beyond.