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Politics

Raising Taxes One Way San Diegans Can Pay For Better Roads, Affordable Housing

Cost for deferred maintenance on city storm drains, streets and sidewalks estimated at $2 billion

Report From Independent Budget Analyst
Report entitled "Revenue Options to Address Critical Infrastructure and Affordable Housing Needs" from the Office of the Independent Budget Analyst.
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The City Council's Smart Growth and Land Use Committee Thursday requested staff to find ways to increase revenues that would pay for future affordable housing projects in San Diego.

Part of a deal brokered between the business community and the San Diego Housing Commission, which runs affordable housing programs for the city, was for officials to look for other funding streams. The two sides had been at odds over hiking a fee on commercial development to pay for such projects.

Officials in San Diego and other cities in California have been looking for ways to pay for affordable housing since the state abolished redevelopment.

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According to the Housing Commission, around 47,000 names are on an affordable housing waiting list in San Diego.

The committee's request to the city's Independent Budget Analyst came during a truncated discussion over a recently released IBA report on how to pay for San Diego's $2 billion of infrastructure needs.

The IBA's suggestions for revenue increases focused more on infrastructure and not so much on affordable housing, so it was redirected to the Infrastructure Committee, which has a special meeting set for Dec. 11.

The report says the city needs to consider raising taxes, instituting new levies, changing the type of bond that is taken out dumping an ordinance that requires free curbside garbage collection.

IBA Andrea Tevlin said her office could begin working on a revenue study tailored more to affordable housing early next year.

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The budget analyst said the mayor and City Council could:

  • Raise sales taxes, which are relatively low compared to other cities in San Diego County and around the western U.S.
  • Increase transient occupancy taxes, which are paid by hotel guests, and also has room to grow.
  • Impose a levy on parking in paid lots or using valet services.
  • Begin taxing utility consumption.
  • Eliminate the 1919 People's Ordinance, which requires free curbside garbage collection, to free up money for infrastructure.
  • Raise residential storm water fees, which are low compared to other cities.
  • Issue general obligation bonds, which are different from the lease-revenue bonds generally used by the city.
  • Take advantage of a new state law that allows for the creation of financing districts to pay for major capital improvements.

Regarding the taxes that already exist, the budget analyst said no other city in the county has a sales tax rate lower than San Diego's 8 percent. Raising it by a quarter-cent would bring in an estimated $64 million, the report estimates.

The hotel room tax is currently 10.5 percent, with a 2 percent surcharge added to pay for tourism promotion. Current City Council policy says that the rate should be no higher than the average of 15 specified major cities — which is 15 percent.