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: $244,373 City’s share = $40,736 2006: $245,982 City’s share = $41,005 2007: $233,794 City’s share = $38,973 2008: $256,045 City’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.

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 Property Tax Exemption

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.

Fiscal Impacts of Residential Properties

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 ImpactsPILOT 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

a. Accept and review Administrative Report.

b. Provide staff direction, if any, for further consideration