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Ketchum's local option tax for affordable housing falls short

While voters approved a local option tax in Bellevue for road repair, a local option tax increase for affordable housing fell short, by just 7 percent.

KETCHUM, Idaho — An important step towards alleviating some of the housing crisis crunch in Ketchum took a back seat Tuesday night.

While voters approved a local option tax in Bellevue for road repair, a local option tax increase for affordable housing fell short, by just 7 percent.

"This has been an issue for where we live for decades literally and one of the biggest problems has been the lack of funding in the state of Idaho,” said Michael David, President of Ketchum City Council.

The local option tax failed to meet the 60 percent bar it needed to meet in order to pass. The results were 53 percent of voters in favor, and 47 against.

"I wrote every registered voter a letter and put it in their mailbox at my expense and I took out ads in the newspaper for a month," said Ketchum resident, Mallory Walker. "Don't create another special fund that is restricted to only one thing, affordable housing, because ten years from now, that problem might be no longer the pressing need from the community."

But according to City Council President, Michael David, the problem isn't going away anytime soon, and this would have helped. 

“We have this one tool in the resort cities, the lot tax, but previously you couldn't use it for affordable housing, so there was a move to get this on the ballot to one, allow these funds to be used for affordable housing and two, increase the amount of the lot so we could have some consistent annual revenue to help with this crisis,” David said.

But now that the tax increase was not approved by residents, the city council is left to come up with a different solution.

“We are kind of back at square one and it's really disappointing, we had a lot of momentum," he said.

The additions to the local option tax would have resulted in raising the retail sales tax from 2 to 2.75 percent, increasing the tax on liquor by glass by 2 percent, adding 2 percent on lodging, and a one percent increase on building materials brought into the city.

"There is somewhere between a million and a half to two million dollars in surplus revenue in the existing lot tax, that is not being allocated for transportation, that is not being allocated for emergency services, where it's being allocated, who knows," said Walker. 

According to the City, there is a $1.6 million surplus, but it cannot be spent on housing and will be used to go towards significant infrastructure investments in the coming years. 

"I think there is a hesitancy by a lot of people who have been in this community for a while that if we give this money to the city council and county commissioners, are they going to do the right thing with it," David said.

"This isn't just a government body trying to dig into the pot of gold and get some more money out of people's pockets, this is a last-ditch effort to try to build houses and it’s all we have got really at this time don't he revenue side of things."

David said the estimated cost to fund housing projects and financial aid programs for locals is between 5.5 and $7,000,000 a year. He says the added tax would have provided about 3 million annually towards that cost.

David has been trying to find a solution to Ketchum’s housing crisis for almost 20 years and says this obstacle won't stop him.

"We are going to see more businesses closing their doors and more workers getting forced out in the months to come and it just makes that whole bigger for the community,” David said.

According to Walker, he would like to have the lot revenue restructured, and have housing added to a service, but some argue the current lot tax will not generate enough money for affordable housing projects. 

"Every citizen in Ketchum needs to put their thinking cap on, they need to become philanthropic, they need to basically work on solutions so we can house the people we need in Ketchum," Walker said. 

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