Columbus hotel-motel tax receipts fall, slashing affordable housing spending
“Affordable housing” has been the mantra at Columbus City Hall in recent years, the words mentioned at everything from unveiling a new Downtown stadium to debates on tax abatements and zoning changes.
But the amount of city money flowing to fund the “Affordable Housing Trust of Columbus and Franklin County,” one of the city’s main efforts at directly supporting more affordable local housing, has plummeted in the last year since the COVID-19 crisis devastated the city’s hotel-motel tax receipts.
At a Columbus City Council meeting Monday, an ordinance on the agenda sets the city’s annual contribution to the nonprofit agency that funds new affordable housing construction at $967,000. While that’s up $240,000 over what it contributed in 2020, it’s just a little over half 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 another about $730,000 into the fund, keeping the payment “within that range with where we normally would be,” said Steven Gladman, president of the trust.
A financial statement released Friday by the city auditor’s office shows that the hotel-motel receipts plummeted 57% last year, from 23.7 million in 2019 to $10.1 million in 2020.
“The auditor’s current predictions for bed tax revenue remain down,” said Lee Cole, a spokeswoman for the city council. “However, this has the potential to change as the year moves forward.”
“We are optimistic that with following the proper COVID-mitigation protocols and the vaccine, the spread of the virus will slow and there will be an increase in travel,” jumpstarting the hotel-motel receipts, said city Development Director Michael Stevens.
And while most people know the “American Rescue Plan,” as President Joe Biden’s $1.9 trillion stimulus is called, will provide individuals with $1,400 checks, about a fifth of that money is for state and local governments. Some of that money potentially could also be used for affordable housing programs later this year, Cole said.
Currently the city is awaiting receiving these funds and will then work through the federal guidance, which likely will differ from those of the CARES Act COVID-relief funds from last year “on how we can support the (trust) and other organizations,” Cole said in an email.
The Affordable Housing Trust also gets annual contributions from Franklin County’s real estate transfer fees, and those payments weren’t off nearly as much as hotel-motel taxes, showing that property was still changing hands despite the pandemic, Gladman said. The trust got just over $3 million from the county last year, down about 12% from 2019, he said.
Because the annual installments go into a typically ever-growing fund to make loans for housing projects — similar to an endowment — Gladman doesn’t believe the reduced public contributions will put much of a dent in the dollar amount of loans made this year, which should remain around $25 million.
The trust ended 2015 with $45.2 million in total assets, an amount that had grown to $67.6 million by the end of 2019, according to its federal Form 990s it filed as a tax-exempt organization.
In 2019, city voters approved a bond issue that included the city’s first-ever capital funds, totaling $50 million, dedicated entirely to financing affordable housing. That’s in addition to the trust fund.
The Dispatch reported in November that only $11.5 million of that bonding authority is used in Mayor Andrew J. Ginther’s 2021 capital budget proposal. City officials said it takes time to find viable projects to fund.
More:Proposed $1.4 billion Columbus capital budget for 2020 finally unveiled
“We’re going to put a plan together to activate as much of that (remaining) $38.5 million as feasible, considering the current economic environment that we’re in,” Stevens said during a budget hearing last year.
But even with $50 million available, the amount going to affordable housing was less than the $28.2 million the capital budget proposed for “public-private partnership” deals with developers, including to support high-priced office space and housing, including millions for the developments at the new North Market Tower high-rise, Gravity development in Franklinton and the White Castle corporate headquarters west of Downtown.
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