Impacts of Affordable Housing Policies • Payment In Lieu Of Taxes (PILOT) • Fee Waivers
Council Actions: Affordable Housing Policies & Housing Authority • January 20, 1975: Fees waived for Westview and future Housing Authority projects. • January 9, 1979: Payment In Lieu Of Taxes (PILOT) established. • February 28, 2005: Waived administrative fees up to $25,000. • August 4, 2008: PILOT Agreement amended to allow Housing Authority to use funds for new affordable housing projects. • April 26, 2010: In considering fees, deferred fiscal impacts of policies related to Housing Authority to FAB Committee. • May 4, 2010: FAB Committee directed staff to do further research. • August 2, 2010: Council considers fiscal impacts findings.
PILOT Cooperation Agreement • PILOT = offset to property taxes that Housing Authority is exempt from paying. • PILOT based on 10% of Authority’s public housing units; PHAs allowed to use federal funds for PILOT payments. • 1979-2004 – Housing Authority pays PILOT; distributed amongst taxing entities (incl. County, School District, City). • 2004-2008 – Housing Authority requests waiver of PILOT; stops making payments, establishes Housing Trust Fund. • August 2008 – Council amends Agreement, allowing Authority to stop PILOT payments & use for HTF.
Fiscal Impacts of PILOT • PILOTs calculated for 2005-2008*: • 2005: $244,373City’s share = $40,736 • 2006: $245,982City’s share = $41,005 • 2007: $233,794City’s share = $38,973 • 2008: $256,045City’s share = $42,683 • City’s 4-Year total = $163,397 • 2005-2008 PILOT ($980,194) monies not paid to taxing entity were directed to Housing Trust Fund for development of new affordable housing units. * Calculations are approximate; City share calculations based on a 16.67% share.
Fiscal Impacts of Property Tax Exemption Property Tax Exemption = No Property Taxes paid to County, no property tax funds dispersed to taxing entities. • As Public Housing Authority, all units owned & operated by HACSB exempt from property tax. • State Law allows non-profit affordable housing owners/ operators a “welfare exemption,” exempting from property tax.
Fiscal Impacts of Residential Properties Cost of Providing Services to Residential Properties: • Regardless of property taxes collection, there is a cost to taxing entities to serve residential properties. • Estimated cost for general City services = $2.09/person/day.* • Estimated annual cost for City services for 4-person household = $3,000. • PILOT designed to offset costs of providing services to tax-exempt residential properties. * Does not include costs to other agencies such as school district, county, etc.
Housing Authority – Fee Waivers • 1975: Council granted Housing Authority request to waive permit fees for Westview and future contracts. • 2004: Housing Authority requests waiver of fees for Chapel Lane Apartment project; City Attorney concluded 1975 Resolution was outdated (30 years of court decisions and changes in laws). • 2004-2005: Housing Authority requests City reimburse $252,191 already paid in fees for Chapel Lane. • 2005: Council approved waiver of certain administrative fees up to $25,000 for Chapel Lane and other Housing Authority residential housing projects.
Housing Authority – Fee Waivers • April 2010: Housing Authority requested waiver of all development fees for Soho Apartment project. • Based on 2005 Chapel Lane action: • Waiver of $25,000 in administrative fees for Soho project granted. • Waiver of up to $25,000 in administrative fees for Encanto del Mar project available.
Fiscal Impacts PILOT Waiver • $40,000+ per year loss of general fund revenue. Fee Waivers • $25,000 Waiver = Loss of $25,000 general fund revenue. • Additional Waiver = Dollar-for-Dollar loss to general fund revenue.
Recommended Action Accept and review Administrative Report. Provide staff direction, if any, for further consideration