Truckee eyes 2% TOT increase to help fund affordable housing
TRUCKEE, Calif. — In an attempt to find a secure funding source for affordable housing projects, the town of Truckee is looking at an increase in Transient Occupancy Taxes, which would require approval from voters.
In May, True North Research, a firm specializing in research studies for public agencies, surveyed 616 Truckee voters who were likely to participate in the November 2020 election. In an open-ended survey question, voters were asked what they would want to change about Truckee to make the town a better place.
The most popular request by 20 percent of the voters was to provide affordable housing, particularly for permanent residents.
“The more they value the things you’re proposing to address with a tax measure, relative to the issue of preventing local tax increases, the better position you are to move forward with some type of tax measure,” said Tim Mclarney of True North Research.
The results showed that 80 percent of the voters favored the increase. The option of a $50 parcel tax in place of a TOT increase was also offered to the voters. Only 28% were in favor of a higher parcel tax, less than two-thirds of the votes it would need to pass.
“When you stack up a TOT next to a parcel tax there’s not much contest,” said Mclarney, as the tax is paid by guests of hotels, motels and short term rentals, not local residents.
If passed, the measure would increase the tax by 2%, generating $620,000 annually for town services. However, there is no guarantee TOT revenue would go directly toward affordable housing. Voters in the survey also favored using the funds to prepare the town for emergencies such as wildfires.
One of the first survey questions asked about the quality of life of participants, which 90% said was either excellent or good.
“What you tend to find is the better people tend to feel about the quality of life in their community the more they are interested in investing and keeping it that way,” said Mclarney. “I get to do this work all over the state and 90% is a great number to have.”
At the end of the survey they asked if voters were pleased with the town’s performance. About 77% said they were.
“The better voters think you’re doing, the more likely they are to reward that performance by supporting a revenue measure,” he said.
While the study showed that it was feasible to move forward with a ballot measure McIarney warned “a poll is a snapshot in time, not a crystal ball.”
“What determines what happens on election day isn’t what the poll says today, it’s everything that happen from this point forward,” said Mclarney.
IMPACT ON INDUSTRY?
While council members were in support of the idea, they agreed to move slowly and look at how it would affect local hospitality industry.
“We believe a 2% increase in TOT taxes could take the goodwill and collaborative spirit of the hospitality industry and move them into a defensive position,” said John Manocchio, vice chair of the Truckee Chamber of Commerce, reading from a prepared statement from the chamber.
Currently, lodging businesses collect a 2% assessment from their guests which goes to the Truckee Tourism Business Improvement District for destination marketing. This makes the total assessment 12% including the 10% in Transient Occupancy Tax.
Manocchio said increasing the tax anymore could jeopardize the renewal of their funding source, as voters can decide to discontinue the tax.
“This is one of the things in the tool box,” said Council Member David Polivy. “We are going to do as much as we can to continue to tackle the housing problem.”
Hannah Jones is a reporter for the Sierra Sun. She can be reached at email@example.com or 530-550-2652.
Transient Occupancy Tax collection from April to June totalled $3.8 million, up 15% from the same period last year, an increase of $519,000. Tax collection from January through March was up 12% from that period last year, a $773,000 increase, totalling $6.8 million.