A contentious and insightful debate between Tuesday killed an opportunity to raise affordable housing funds from new rental units.
Staff recommended that Council approve a rental housing impact fee of 3 percent of the appraised project value for any new rental developments, which would be analogous to the 3 percent currently required from new ownership developments for the City's below market rate (BMR) program.
Instead, in a 4 to 3 vote during the study session on Nov. 1, and Council members Tom Means, Margaret Abe-Koga and John Inks voted to study the feasibility of a parcel tax, which would generate steady funds from all property owners in the city and not just developers. The community was split too.
"I have been pushing for a parcel tax. I think it's a fair way to do what we want to do here," Siegel said and suggested that $60 a year could pass. "I think Mountain View has a big heart and will step up."
The dissenters however–Councilmembers Ronit Bryant, Mike Kasperzak and Laura Macias–couldn't believe what happened.
"It's not fair at all," a stunned Macias told Mountain View Patch after the vote. "If there's ever an argument for the 99 percent versus 1 percent, we just had it."
Macias felt "tired of feeling sorry for rich people," and added that developers could afford the fee for the privilege to do build in Mountain View. A parcel tax would be "regressive."
"We want diversity, we want affordability, we want a whole variety of people to be able to live here," she said. "And I don't want a regressive tax, like a parcel tax. They tax everybody equally whether or not you have a $200,000 condo or a $3 million dollar house."
Kasperzak agreed and emphasized that developers want to be in Mountain View and would pay to do so. He also noted that as a result of the majority's decision not to move forward on a rental housing impact fee, Merlone Geier––now has no BMR obligation related to its new rental units.
"It's beyond me what happened tonight," he said. "Low income people lost in terms of housing. The only way we have now is for the legislature to overturn the Palmer case."
Under the Palmer/Sixth Street Properties, L.P. v. City of Los Angeles, CalApp.4th 1396 (2009) decision, cities in California can no longer require inclusionary affordable housing units in new rental developements unless the city gives something in return. Prior to Palmer, Mountain View had a 10 percent unit requirement for new rental developments.
However, a fee could be assessed if a relationship or nexus can be established on the impact of the new rental or ownership development on the demand for of affordable housing.
Means didn't trust the independent report presented by staff and called the nexus study "circular" in its analysis and "lacking of information."
"Taxing one group to pay for these costs is inappropriate," he said.
Inks also preferred anything but a fee.
"It doesn’t mean that I won’t work harder to get overall cost of housing down," he said. "It's possible to look at different product types [of funding] to house low-income people."
Undecided until the council session, Abe-Koga felt that Mountain View was already "doing a good job." She didn't want to see more fees on developers because the costs do get passed on to owners. But if the community wanted a parcel tax, she's "open to support it" and "willing to work on it and make it pass."
City staff will now turn their attention toward creating a community survey that would include questions beyond just a parcel tax for affordable housing, according City Manager Dan Rich. The Council will likely see the issue before them again in January 2012.
But the parcel tax already has opponents.
"Money you pay on property tax is a big deal. When you think about retirement, the money you pay on property tax is really significant," said Bryant. "A parcel tax to be studied? I don’t think it stands a chance."