Reporter
Belmont is exploring increasing taxes on new developments to offset increased development costs that would cause projected financial deficits by creating a Community Facilities District.
“This is a way of ensuring we can continue to provide the service that folks have come to rely on Belmont for,” Councilmember Charles Stone said at a Feb. 8 council study session.
A recent study recommended establishing a new funding source through a Community Facilities District to offset potential general fund decreases from developments. The study found housing developments like single-family and multifamily residential buildings, affordable housing developments and townhomes will decrease the city’s general fund and create fiscal deficits.
Affordable housing will also affect funding for the Belmont Fire and Police departments. The study found total city revenue generated to be around $11 million and total city expenditures to be approximately $13.3 million.
The projected $2.3 million deficit has prompted the city to explore financial options to break even. Expenditures for services for most housing developments would be lower than expenditures. General fund development revenue would total around $5.9 million, with about $10.7 million in costs.
“We don’t want to erode existing services as new demand is put on the system,” City Manager Afshin Oskoui said.
A Mello-Roos Community Facilities District is a tool that helps generate locally-controlled revenue to support essential city services to new developments like police, fire, EMS, libraries and schools. Under the proposed structure, new developments would pay taxes to mitigate the impacts on city services. The city has said the district fee is a way to ensure new projects pay a fair share of the cost of city services that will increase as more people use housing or other services. City staff said the tax increase targets new developments that intensify housing demand and create more development than before. For example, new development affected would be those who create a duplex out of a single-family residence but not those who tore down a single-family home and built another one, city staff said. Existing residential dwellings or affordable housing units developed would not be affected.
“This is a common mechanism to get this work done and meet the resources needs. As the city grows, we want to maintain our critical city services, and we want to keep them high,” Councilmember Davina Hurt said.
The proposed tax rate for new developments would have a combined tax rate ranging from 1.3% for single-family residences to 1.57% for multifamily homes. The rates would fall below the 2% average standard and give flexibility to the city to adjust rates.
Belmont has made identifying new revenue sources and securing funding for infrastructure maintenance needs a priority in its strategic plan. The city has approved several development projects recently and expects increased development in the future to meet housing needs. The council in September started discussing a CFD as a possibility to raise revenue to support new development costs. Forming a CFD would require three public meetings and a future annexation process. While developers do not have to agree to annexation, the city wants to make the CFD the easiest and most convenient option for developers to meet the mitigation obligations required.
(650) 344-5200 ext. 102
(650) 344-5200 ext. 102
Reporter
{{description}}
Email notifications are only sent once a day, and only if there are new matching items.
Please purchase a Premium Subscription to continue reading.
To continue, please log in, or sign up for a new account.
We offer one free story view per month. If you register for an account, you will get two additional story views. After those three total views, we ask that you support us with a subscription.
A subscription to our digital content is so much more than just access to our valuable content. It means you’re helping to support a local community institution that has, from its very start, supported the betterment of our society. Thank you very much!
Only subscribers can view and post comments on articles.
Already a subscriber? Login Here
CA Is Burning said:
Success! An email has been sent to with a link to confirm list signup.
Error! There was an error processing your request.
Sorry, an error occurred.
Already Subscribed!
Cancel anytime
Thank you .
Your account has been registered, and you are now logged in.
Check your email for details.
Submitting this form below will send a message to your email with a link to change your password.
An email message containing instructions on how to reset your password has been sent to the email address listed on your account.
No promotional rates found.
Secure & Encrypted
Thank you.
Your gift purchase was successful! Your purchase was successful, and you are now logged in.
| Rate: | |
| Begins: | |
| Transaction ID: |
A receipt was sent to your email.
(2) comments
I wrote to the Belmont City Council before the last two meetings where they discussed this subject, and explained why this proposed "special tax" is unfair and unneeded. They ignored me and didn't respond, which is usually the case with residents who disagree with them. I believe it is unfair to charge new developments more in property taxes than existing properties pay. While new developments may require more City services, they are usually more densely populated multi-family buildings, so are actually less costly to service per unit than most existing properties. So, regular property taxes should be sufficient to pay for those services. Also, this "special tax" seems to run contrary to the Council's goal of creating more affordable housing, because it will make housing for residents in these new developments less affordable. This extra tax will be about $4K per unit per year for a $1.5 million unit. Finally, it has been a top priority of the Council to raise taxes on residents for many years, but there is no reason to do so now as City finances are very healthy, suffering little harm from the pandemic and receiving a major boost from the American Rescue Plan Act. There is no need for this unfair two-tier tax system in Belmont.
And you wonder why “affordable” housing is not being built. Maybe because it’s not “affordable” to build housing with all these extra fees tacked on. It sounds like Belmont isn’t really interested in affordable homes.
Welcome to the discussion.
Log In
Keep the discussion civilized. Absolutely NO personal attacks or insults directed toward writers, nor others who make comments.
Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't threaten. Threats of harming another person will not be tolerated.
Be truthful. Don't knowingly lie about anyone or anything.
Be proactive. Use the 'Report' link on each comment to let us know of abusive posts.
PLEASE TURN OFF YOUR CAPS LOCK.
Anyone violating these rules will be issued a warning. After the warning, comment privileges can be revoked.