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Asheville council talks tourism, housing



3/12/2013 - Asheville council talks tourism, housing
by Mark Barrett - Asheville Citizen Times

ASHEVILLE -- City Council discussed getting a dedicated share of the local room tax, concentrating efforts to improve economic development and retooling affordable housing efforts during its annual retreat Monday.

Council supported adding more emphasis on food security and related issues to its strategic plan but did not change the plan's basic structure or goals.

There were worries about how the city can pay for services during a period of slow growth in its largest revenue source, property taxes.

The cost of things the city must pay for, like gasoline and electricity, has been going up faster than the city's revenue, said Lauren Bradley, head of finance and management services.

The city has cut some spending, but "There's only so much of that you can do before you start talking about these core services like public safety or development review," she said.

She suggested eliminating programs "with low returns or limited usage" and focusing some city spending on programs likely to grow the city's tax base and thus return revenue to city government.

Much of the opportunity for focused spending to spur development is in the River Arts District, Bradley said, where there is some city-owned property and some vacant private property.

The city could also look at ways to facilitate growth in downtown's South Slope area, which runs from about Aston Street downhill to Southside Avenue, she said.

Council members said they were interested in trying to see a share of the 4 percent tax on hotel and motel rooms levied in Buncombe County dedicated to flow into city coffers, although they acknowledged that selling tourism interests on the idea might be difficult.

Most of the tax goes to advertising and similar efforts to draw tourists here, but part is spent on bricks-and-mortar projects expected to attract visitors or keep them in the area longer.

A decision by the county Tourism Development Authority last year to award money to a zipline business in competition with other private companies in the same field spurred some criticism at the time.

The city has received room tax proceeds for several projects, including re venues to U.S. Cellular Center, but competes annually with other proposals.

Mayor Terry Bellamy said she would like Asheville to be able to count on a regular appropriation from room tax proceeds.

Councilman Cecil Bothwell said Asheville does not get the same benefits from the tax as some cities: "Other tourist towns have higher room taxes and maybe get some for their general funds."

Councilman Jan Davis said the issue must be approached carefully if the city hopes to get support from the tourism industry.

"That's a fragile thing," he said.

With the city's ability to annex areas outside its current limits significantly curtailed by the General Assembly, councilmen said the city will probably see denser development in its limits over the years as a way to provide affordable housing and grow its tax base.

"With increased density come increased livability challenges" the city will have to be sensitive to, Councilman Gordon Smith said.

Private companies have not used some incentives the city has set up to promote affordable housing construction, however, prompting suggestions from council members that they be reconsidered.

There was also support for looking at ways to break up large public housing projects around the city in favor of mixed-use developments that would incorporate housing at various price points.

Council members said changing public housing is a complicated issue that will require research and discussion with other stakeholders before the city could move forward.

The significant presence of tourism and attracting retirees in the local economy is likely to create challenges in making housing affordable for some time to come, Bothwell said.

People retiring here from places where housing is more expensive "tend to bid up the cost (of housing). At the same time, tourism tends to be a low-dollar employment industry," he said.

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