Hot Topics in Asheville – Hotel Tax and Housing

Taxes and housing are on the tip of everyone’s tongue, whether they are visiting or living here. Asheville is seeing significant growth that is impacting both the occupancy tax rate and the housing situation. Let’s investigate both just a little further so that we can understand the financial makeup of Asheville.

 

Occupancy Tax is Still Affordable

Occupancy tax belongs to Buncombe County, the home of Asheville. This tax covers all hotels, motels, inns, and short term rentals (cabins, AirBnB, etc). The last increase took place in 2015 when it increased to 6% from 4%. Currently that is exactly the tax rate one pays when they stay here. It may seem a bit higher once you factor in our 7% sales tax, but for the sake of discussion we are solely focusing in on the occupancy tax. As of now, there are no plans for the county government to raise taxes. We are certainly hearing the rumors, but to date there is no reliable source that would back those rumors up. However, we must factor in the incredible boom Asheville is seeing right now in tourism. It wouldn’t be of any surprise if the county government took measures to increase in order to make the most out of the financial benefit of a tourism boom. Despite the consideration, the occupancy tax is relatively low when compared to other counties in the state of North Carolina and the majority of the country.

Many people often wonder if Asheville will impose a city wide occupancy tax for the hotels and AirBnB’s situated in the city limits. The short answer is “No”.  The longer answer is that they are simply not allowed to by the state of North Carolina. It isn’t technically a law but in order for any local government to impose a special tax within city limits, they must make a request to the state and receive approval. So far, no one on City Council has discussed that as their focus has been strongly on housing issues.

 

Bond Referendum Focuses on Affordable Housing

The bond referendum was approved in August 2016 and was most recently amended for the City Council’s approval. The bond itself is worth $74 million and means that there is a 4.15 cent increase on property taxes in order to pay off the debt. While the bond covers several key issues in the area, affordable housing is the one that everyone is watching closely. It is proposed that there will be 2,800 new units of affordable housing made available by June, 2021. It also includes the expansion of permanent place-based affordable housing, so that many can have a home that they can reside in for much longer than a rental. Additionally, there is a focus on location and energy efficiency considered as key factors for the affordable housing. Lastly, the bond has ambitious plans to eliminate the homeless crisis that Asheville is currently facing. Location is probably one of Asheville’s largest challenges when it comes to affordable housing. The city has three properties that are referenced in the bond as key places to transform into usable and affordable space. Two of them are in the heart of downtown and all three are on the bus lines, making it attractive for folks who rely on mass transit for work and errands. Those three properties contribute a total of approximately 14 acres to develop, which is why it will take about 4 years to complete those developments.

 

What does this mean for the visitor or potential new resident? For the visitor, there is still a relatively low tax in place that won’t break your travel budget and allows you to spend more on meals and entertainment. For the potential new resident, you will see more growth in the city and new opportunities arise. Growth in the city will be a huge benefit as we support local businesses and add to our eclectic lifestyle!

 

Planning on Moving to West Asheville? Here’s 5 things You Need to Know

1.) The average cost of a home: $348,298 according to a review of recent listings. Investment properties start around $150,000, but houses up to the $600,000 range are available in W. Asheville.

2.) The average cost of a restaurant meal: $13-15 is the Asheville average for a single entree according to this Mountain Xpress article from last fall. Offerings range from tacos (Zia Taqueria and White Duck come to mind) to finer dining establishments like The Admiral. West Asheville residents also have a number of walkable chain groceries and local markets along Haywood Road for home-cooking supplies and ingredients.

3.) Parking availability/car necessity: Unless you manage to work remotely or actually in West Asheville, you’ll probably need a car. Many West Asheville homes have room to park at least one car in the drive, but car collectors beware; multi-car households may struggle.

4.) Schools: West Asheville is part of both the city of Asheville school system and the Buncombe county system. Residents benefit from access to both of these

5.) Culture:  The people and places of West Asheville have their own history. It’s not just charmingly aged window-dressing. Moving to West Asheville means putting down roots next to folks that have become local institutions. If you’re moving to West Asheville, you’re getting ready to become part of a real neighborhood.

*Bonus TipGet to Sunny Point early. Or consider drastically changing your eating schedule. Lunch at 3? Sounds perfect.

 

Want more? Check out this amazing time-lapse video of Asheville for a breathtaking look at our beautiful city.

Understanding the Connect NC Bond Measure

NC voters approved the state’s plan to use bond funds to pay for improvements and infrastructure in parks, schools, and neighborhoods last year, but it’s easy to be confused about the hows and whys of how the plan will work. Following is a quick rundown of what a bond is, a little history of the NC bond measure and how the money is to be divided and spent at the state, county, and city levels, and some ways to keep up with future developments.

What is a bond?

Essentially, a bond is a loan where you are the bank. You give an amount to someone (usually a government or company) with the expectation that they will be able to pay you back, plus a little for the use of your money.

So investors are loaning money to North Carolina against its history of growth and debt repayment. NC enjoys a triple-A credit rating, part of the justification for adding new debt to the state budget.

We voted on the decision because the bonds are being issued against North Carolina’s General Fund, the name for the pool of money that largely comes from our taxes. Investors expect that if something goes awry, they will be repaid from the General Fund. This type of bond is referred to as a general obligation or GO bond. Voters have a say in GO bonds in many states.

The Connect NC Bond Bill

Here’s the full-text of the bill proposing the recent bond measure. The title states that the act will “…further economic development…consistent with the Connect NC plan.”

Connect NC was originally a transportation infrastructure plan enacted by then-Governor McCrory in the early aughts. It was criticized for going back on its promise that no tax increases would be required to pay for it in the very next year after its enactment. Since then, gas taxes and various vehicle-related fees go back into highway and transportation funding. So highway projects were cut from projects in the new bond bill.

Governor McCrory habitually made cuts to education in order to balance tax cuts elsewhere. The Connect NC plan was seemingly intended to address some of the problems colleges and universities have faced in implementing slashed budgets over the years. Critics of the bond measure from the left point out that the measure won’t be a replacement for this funding and could obscure the real need occurring on campuses and in departments across the state. Opponents from both sides remain unconvinced that the plan will function as intended, recalling the previous Connect NC measure.

The Connect NC plan addresses more than education infrastructure, however, and proponents expect that projects will have a real, measurable positive effect on North Carolina’s economy.

Allocating Bond Funds

The next few meetings about the future and timeline of the Connect NC bond at the City and County levels here in Asheville/Buncombe county will focus on the budget.

Instead of trying to untangle county versus city versus state budgets on large-scale undertakings that involve every level of government, the bond will move forward on a project basis. Schools, parks, and other entities will work with all relevant parties to put together plans that, once approved, use funds to achieve specific ends.

Ongoing

News about the Connect NC bond will continue to emerge as projects get approved, denied, or modified. Keep an eye on your favorite parks and local college websites; many have been posting regularly about their plans, like this from UNCA about building renovations.

Read more about the first presentation of bond projects on HiAltaRealEstate.com

Check out Connect.NC.gov for ongoing information about projects.