Council hears concerns about housing fund match as staff warns short‑term lodging revenue is limited

Residents and council members pressed staff on the citys housing fund and the use of short‑term lodging revenues during the budget study session.

Public commenter Jackie Schaefkin reminded the council that ongoing revenue to the local housing trust fund is a condition of the citys $2.5 million state matching grant and urged the city not to interrupt the revenue stream. She said the city should preserve allocations from short‑term lodging receipts so the match remains viable.

Staff responded that proposed revenue to the housing fund in the 2026–27 budget is roughly $110,000, consisting of newly permitted short‑term lodging units (post‑July 1, 2022), and that there is no appropriation proposed in the current draft. Staff said Assistant City Manager Jeremy Fremont will bring an agenda report to council on June 23 with recommendations for appropriating the housing‑fund balance and related housing initiatives.

Council and staff discussed enforcement and compliance with listing platforms. Staff acknowledged difficulties obtaining complete data from third‑party platforms (Airbnb/VRBO) and described a forthcoming software solution that will use automated tools to identify unlicensed short‑term listings to improve revenue collection and ordinance enforcement.

Council members flagged the tradeoffs of permanently directing short‑term lodging receipts to housing: doing so would lower general‑fund revenues by more than $1M in staff estimates unless the city offsets the shift by moving CIP funds or identifying other revenue sources. Staff and council agreed to return a funding strategy for the housing fund and possible programmatic options to secure the state match and sustain ongoing funding.

Next steps: staff to present a June 23 agenda report on how to appropriate housing fund balances and to propose a longer‑term funding strategy for the housing trust fund.