Hotel-Tax Supporters Want Housing Bond Backers to Stand Down Until 2020

This piece was originally written by Lisa Halverstadt for the Voice of San Diego

Supporters of a hotel-tax hike to expand the Convention Center, bankroll homeless services and road repairs have been quietly urging backers of a separate $900 million housing bond to stand down.

The coalition behind the tourism tax fears voters could reject both measures if each makes the November ballot.

Both would aim to win the support of two-thirds of voters, though Convention Center boosters have pursued a citizens’ initiative in hopes that a recent state Supreme Court decision means those types of measures only need a simple majority to pass.

Concerns that both measures could lose have led supporters of the hotel-tax measure to encourage the San Diego Housing Federation, the affordable housing advocacy group pushing the bond measure, to consider a 2020 bid instead.

“There are people who care a lot about seeing the Convention Center measure move forward who think if there are too many things on the ballot about housing they would all go down,” said Stephen Russell of the San Diego Housing Federation.

Supporters of the $900 million affordable housing bond, which would be funded through a property tax hike, estimate it could fund 7,500 new homes for homeless and low-income San Diegans. Now that measure in peril. It’s set to be discussed at a City Council committee hearing Wednesday but appears unlikely to garner the support necessary to make the November ballot.

The Housing Federation opted to let the City Council decide whether to place the measure on the ballot. While affordable housing advocates have cheered the proposal, prominent politicians haven’t championed the effort through the process.

The business and labor coalition behind the tourism tax measure, meanwhile, is gathering signatures and has benefited from substantial support from power-brokers, including Mayor Kevin Faulconer. Their hotel-tax increase would raise an estimated $6.4 billion over 42 years, including $147 million for yet-to-be-detailed homelessness programs in its first five years.

When both proposals were separately unveiled at the beginning of the year, backers publicly discussed whether the hotel-tax and the property-tax hike might complement each other. Some suggested the hotel-tax hike might provide money for homeless services while the bond could produce housing for thousands and help San Diego make the most of state resources that require matching local cash.

A spring poll financed by both the Housing Federation and the hotel-tax coalition changed the conversation.

The two sides characterize the April poll differently. All declined to provide it to Voice of San Diego.

Labor Council chief Keith Maddox, who’s part of the coalition behind the hotel-tax measure, would only address it broadly in a statement to VOSD.

“The polling clearly shows voters do not currently support an increase in their property taxes, but they do support increasing (transient-occupancy taxes) because San Diegans benefit and visitors pay,” Maddox wrote.

Russell said the poll conducted by Oakland-based EMC Research separately gauged support for each measure, and then whether prospective voters would back one or both measures.

Russell and veteran political consultant Tom Shepard, who’s worked on the Housing Federation measure, said the hotel-tax measure lost 1 to 3 percentage points of support when prospective voters were also asked to consider the property-tax measure.

“There was no statistically significant impact the way I read the research that was done,” Russell said.

Shepard and Russell said the minor difference stirred hotel-tax supporters. Every percentage point matters in the quest for a two-thirds vote.

In April, the same month the poll was released, the process to get the property-tax measure on the ballot began to stall.

City Council President Myrtle Cole abruptly pulled it from the April agenda of the rules committee she chairs hours after the agenda was posted online.

At the time, Cole’s chief of staff told KPBS the councilwoman’s office was dissatisfied with the information that had been provided.

The next month, the Housing Federation itself postponed a planned discussion on the measure, furthering narrowing the time for the committee to take action and for the city attorney’s office to draft it. The full City Council must decide by early August which measures will go on the ballot.

Since April, the conversation surrounding the bond has changed.

Business leader Mel Katz and other local power players say they heard the Housing Federation measure was being postponed until 2020, though the Housing Federation has yet to make that commitment.

Katz, who supports both measures, said backers of the hotel-tax hike are making a common argument: “Two years goes by very quickly, and why go on the same ballot when there’s this big Convention Center-housing measure?”

Katz agreed with them. In two years, he said, the Housing Federation can pull in more support for a housing bond and more easily raise money.

Others say they just want to ensure the city gets some new money to address homelessness, and the initial crush of funding in the initial years of the hotel-tax measure could help pull in up to $750 million if the city goes to the bond market.

“I would rather see things get done incrementally than nothing get done at all,” said Guy Asaro, a developer and a Building Industry Association board member who has talked with the Housing Federation.

But housing and homeless advocates fear a missed opportunity.

Two years ago, several other California communities passed major housing measures that positioned them to make the most of state money expected to soon flow to cities and counties.

San Diego didn’t, and a deadly hepatitis A outbreak amplified local concerns about the region’s homelessness problem. Multiple polls have also shown voters are open to a tax hike aimed at addressing the crisis.Greg Anglea, who leads North County-based Interfaith Community Services and participates in regional homelessness conversations, said several homeless service providers have concluded San Diego needs both the bond and hotel-tax measures. They took note when Los Angeles voters supported a $1.2 billion bond measure in November 2016, and then a quarter-cent sales tax for services a few months later.

Anglea said he wished the leaders behind San Diego’s hotel-tax and bond measures had teamed up too.

“We need funding for services and also for housing,” Anglea said. “We need the maximum funding we can get, and I’m not seeing those two measures being coordinated together, which is a disappointment.”

In separate statements, Maddox and Faulconer’s office each said they have met with the Housing Federation to discuss ways to increase affordable housing production.

Russell said he’s come away dissatisfied. He wants to better understand spending plans for the hotel-tax money and to see if the city can make more immediate investments in low-income housing.

For now, Russell said, the Housing Federation is committed to continue pushing its ballot measure. He doesn’t want to give up without a fight.

“From a technocratic standpoint, waiting two years might be a logical response to this, but how do I square that with a deepening crisis and an increasing number of homeless people and an increasing number of people in fear of being homeless?” Russell said.