Fresno’s dire housing expansion crisis still awaits a permanent solution, but one major local developer got a big win to build rental housing on a piece of land already in city limits.
Thursday, the Fresno City Council narrowly ruled on how a piece of land in southeast Fresno will be taxed to cover public safety expenses, clearing a path for Granville Homes and developer Darius Assemi.
The backstory: The underlying issue for Fresno’s housing expansion trouble lies in the expired tax sharing agreement that it had with Fresno County for newly annexed land. The city received $0.38 of every property tax dollar as part of that deal.
- But the deal expired three years ago. The city desires a greater share of the tax revenue, but both sides have failed to come to the negotiating table to hammer out a deal.
- Last week the issue came to the forefront of the council as Assemi sought a tax break on a planned development of rental housing in southeast Fresno, which is part of Community Facilities District 18.
- Rental units in CFD 18 would have paid an additional $112 every year in property taxes each, something Assemi balked at and said would discourage further rental housing development. Regular housing units would see an extra $164 annually in property taxes.
The big picture: With the Assemi issue before the council again on Thursday, the council passed a resolution redefining how CFD 18 is applied.
- Moving forward, CFD 18 will only be applied to new annexations that occurred after Aug. 29, 2020 – when the tax sharing agreement with the city and county expired.
- That means Assemi’s project will be shepherded in under the old rules, keeping his development from having to pay extra per CFD 18.
- The decision passed on a 4-3 vote, with Councilmemnbers Luis Chavez, Nelson Esparza, Mike Karbassi and Tyler Maxwell supporting it.
What they’re saying: Similar to last week, part of the discussion at City Hall turned to whether or not older parts of Fresno are subsidizing new developments with this type of deal.
- “It puts in a very tough predicament that I have to tell my neighbors and my residents we can’t fix the street because the only funding source after we failed to receive federal and state funding is taken from police and fire,” said Councilman Miguel Arias. “But now I have to turn to them and say, ‘But don’t worry, if you want to move to Clovis Unified, we’ll give you a discounted rate there. Because you won’t have to pay the fee that everyone else pays in the fringes.’ This cure is far worse than the disease that was proposed just a week ago.”
- Karbassi responded, “A false choice is an old political trick. ‘If we don’t do this this is going to happen. If you do this your trees aren’t going to be trimmed.’ That’s not true. We’re talking about $11,000 a year. If we can’t trim your trees because we’re spending $11,000 a year encouraging housing and not passing on taxes to new homeowners, then we’re in a lot of fiscal trouble. That’s not what’s happening, folks. The fact of the matter is there is no special tax on your property taxes like was just said, that you’re paying for public safety. We collect property taxes. If you pay rent, you pay rent – that money goes to the property owner and they pay property taxes. That makes up the general fund.”