After months of debate over a controversial construction tax bill, Mayor Jim Kenney and City Council members reached an agreement this week, planning to put $70 million toward affordable housing over the next five years.
The agreement replaces the controversial construction impact tax bill, which would have required property owners to pay a one percent tax on new construction and major renovations. The money from the tax would have gone to the Housing Trust Fund (HTF) to fund affordable housing. Despite protest from unions and some affordable housing advocates, the bill was passed by council members in June. Kenney was expected to veto or approve it ahead of Thursday’s City Council meeting.
But instead, Kenney proposed an alternative solution Wednesday, suggesting that the city could use the money generated by expiring 10-year tax abatements for affordable housing. Several council members opposed Kenney’s last minute plan, prompting council and the mayor’s office to enter negotiations Thursday morning.
The new $70 million affordable housing funding that the two groups agreed on would come from both money in the general fund as well as money generated by an inclusionary housing bill. The inclusionary housing bill would offer bonuses to developers who pay more money into the HTF.
It seems the mayor’s office and council still disagree on some aspects of what the number means. The mayor’s office calls $70 million a “ceiling,” while City Council President Darrell Clarke has referred to it as a “floor.”
The construction impact tax bill has been such an important topic of debate since it was introduced in April, and now we want your thoughts on its outcome. Is the $70 million agreement a preferable solution? Should any aspects of the original construction tax bill remain? Did you prefer the mayor’s original proposal?
Tell us your thoughts below.