Columbus motel-hotel tax revenues fall, slashing spending on affordable housing
But the amount of city money flowing to fund the “Columbus and Franklin County Affordable Housing Fund”, one of the city’s main efforts to directly support more affordable local housing, has fallen last year since the COVID-19 crisis devastated the tax revenues of the city’s hotel-motels.
At a Columbus city council meeting on Monday, an order on the agenda sets the city’s annual contribution to the nonprofit agency that funds construction of new affordable housing at $ 967,000. While this amount is up $ 240,000 from what it contributed in 2020, it’s just over half of the $ 1.9 million produced by the hotel-motel tax for affordable housing. in 2019.
Last year, the city used federal COVID relief funds to contribute approximately $ 730,000 to the fund, keeping the payment “in that range where we would normally be,” said Steven Gladman, chairman of the trust.
A financial statement released by the city’s auditor’s office on Friday shows hotel-motel revenues fell 57% last year, from $ 23.7 million in 2019 to $ 10.1 million in 2020 .
“The auditor’s current forecast for bed tax revenue remains declining,” said Lee Cole, city council spokesperson. “However, that has the potential to change as the year progresses.”
“We are optimistic that by following the appropriate COVID mitigation protocols and the vaccine, the spread of the virus will slow and there will be an increase in travel,” said Michael Stevens, city development director.
And while most people know the “American rescue plan”, As President Joe Biden’s $ 1.9 trillion stimulus is called, will provide individuals with checks of $ 1,400, about a fifth of that money is going to state and local governments. Some of that money could also be used for affordable housing programs later this year, Cole said.
Currently, the city is waiting to receive these funds and will then work under federal guidelines, which will likely differ from COVID relief funds in last year’s CARES Act “on how we can support the (trust) and d ‘other organizations,’ Cole said in an email.
The Affordable Housing Trust also receives annual contributions from Franklin County Real Estate Transfer Fees, and these payments were not as much as hotel-motel taxes, showing that the property was still changing hands despite the pandemic, Gladman said. The trust received just over $ 3 million from the county last year, down about 12% from 2019, he said.
Because the annual payments go into a generally steadily growing fund to make loans for housing projects – similar to an endowment – Gladman does not think the cut in government contributions will significantly reduce the amount of loans made this year, this year. which is expected to remain around $ 25 million.
The trust ended 2015 with total assets of $ 45.2 million, an amount that had risen to $ 67.6 million by the end of 2019, according to its federal Form 990 which it filed as as a tax-exempt organization.
In 2019, voters in the city approved a bond issue that included the city’s very first capital funds, totaling $ 50 million, entirely dedicated to financing affordable housing. This is in addition to the trust fund.
The Dispatch reported in November that only $ 11.5 million of that bond authorization is being used in Mayor Andrew J. Ginther’s 2021 capital budget proposal. City officials said it takes time to find viable projects to fund.
“We are going to put a plan in place to activate as much of this (remaining) $ 38.5 million as possible, given the current economic environment we are in,” Stevens said at a budget hearing. Last year.
But even with $ 50 million available, the amount spent on affordable housing was less than the $ 28.2 million proposed investment budget for “public-private partnership” agreements with developers, including to support offices. and high-priced housing, including millions for developments. in the new North Market Tower, the Gravity development in Franklinton and the White Castle headquarters west of downtown.