After discussing this issue with current and former city of Lompoc employees I found out why low-income housing is a burden on smaller communities like Lompoc.
Most California cities derive funding for police/fire protection, library, parks and recreation, commonly called General Fund or GF services, in large measure from property Transient Occupancy Tax (TOT), and sales tax revenue.
Many property owners in any city or county don’t pay property taxes, but still get all the services, such as churches, public schools, state, and federal agencies, and various types of subsidized/affordable housing.
While churches, public schools, state and federal agencies provide a service to the public no matter what their income level is, affordable housing occupants use those services, but the owners of those properties don’t pay for them like the rest of us.
Equally important is the fact that low-income families have less disposable income, thus sales tax revenue suffers if a community like Lompoc has a large low-income population.
In a 2018 letter to the California Tax Credit Allocation Committee (TCAC) the city of Lompoc notified them that 30 percent of the multi-family housing units are designated as “low income” subsidized, affordable units, and most qualify for a TCAC during development, as well as being exempt from paying their fair share of property taxes for the 55-year life of the development.
The number of TCAC projects has increased since then. According to the 2020 U.S. Census, the city of Santa Barbara had 88,676 inhabitants; the city of Santa Maria had 109,447, and Lompoc 44,449 in 2023.
Who do you think has the most per citizen low-income housing?
A map, available on the TCAC website shows there are 18 of those projects in Lompoc, which compares to 15 in the city of Santa Barbara, and just 11 in Santa Maria.
This out-of-balance allocation has placed a significant strain on the ability of Lompoc to provide needed General Fund services to all city residents.
Why is it out-of-balance? Because Lompoc has more projects than Santa Barbara and Santa Maria on a per capita basis. The impact of the lost property and sales tax revenue is greater in smaller cities where General Fund services must be provided by fewer tax paying residents.
How much revenue is lost? I am told the Santa Barbara County Housing Authority, with only nine of the 18 projects in Lompoc, has 390 units with a value of about $300,000 per unit, and an assessed value of $117,000,000.
If this was market rate housing, Lompoc would get about $195,039 in property tax revenue annually.
As it is, Lompoc gets nothing. The county’s Housing Authority projects cost the city of Lompoc an estimated $2.3 million per year to provide General Fund services (Police, Fire, Parks, Recreation, and Library) over and above the taxes received.
Another source of revenue for the GF is the Transient Occupancy Tax (TOT) for short term stays in hotels/motels.
Supervisor Joan Hartmann recently floated the idea of converting one of the motels in Lompoc for use as a homeless shelter. This would not only remove the property from the tax rolls, but the city would also lose potential TOT revenue.
The GF property tax “leakage” is being exacerbated by the recent state mandated General Plan Housing Element update.
The mandated language stipulates that “Immediately upon identification of units at-risk of conversion to market rate, the city shall identify and engage local public agencies, public or private nonprofit corporations, and for-profit organizations with the legal and managerial capacity to acquire and manage at-risk projects; and identify any potential funding sources to assist in the retention of existing affordable units through acquisition or other means.”
This means that this unfunded state mandate could remove even more parcels from the property tax rolls.
In her continuing effort to insert herself into “managing the City of Lompoc” Hartmann has suggested that a service hub for the homeless be placed on a main thoroughfare in town.
Maybe she doesn’t know that Lompoc officials have vigorously reached out to the homeless by putting them in contact with resources, and thus reduced the numbers of people on the street by 20 percent since the last point-in-time count.
Hartmann also proposes to try adding more sobering centers in the city in addition to the four that already exist.
Each of these actions would not only remove these parcels from the property tax rolls, but also attract more indigent folks to Lompoc.
Why? Because once folks needing these services coming from other places in the county are treated and released, they will be on the streets of Lompoc and not returned to their place of origin.
Continuing to place more pressure on the city of Lompoc by forcing in more of the California Tax Credit Committee and other property tax-exempt projects impacts all the residents of our city in a negative way at all income levels.
Lompoc has been more than generous to show care for low-income residents and unhoused in the past several decades.
It is someone else’s turn now.
References:
CTAC map: CTCAC Project Mapping zoom to Lompoc.
