The College Park City Council Tuesday discussed increasing the tax rate for non-single-family properties in the city — such as apartments, condos and commercial estates — to pay for rental subsidies and business retention grants.
The council could increase the tax rate by three cents to 33.18 cents per $100 of assessed value annually. For each cent the tax rate is raised, the city could receive around $170,000 in additional revenue, according to city documents.
Single-family properties would remain at 30.18 cents and would not be eligible for rental subsidies and business grants.
Every council member except Mayor Pro Tem Denise Mitchell supported the plan. Mitchell was still unsure.
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District 3 council member Stuart Adams, who proposed the budget changes, said for each three cents, one cent would go toward business retention grants and two would go toward rental assistance grants. Under the increase, the city could provide around 200 rental grants valued at $1,500 each. The grants would likely be for student renters.
The College Park Housing Authority would administer the grants. It would likely receive input from the University of Maryland’s SGA and GSG, Adams said.
Adams said part of his goal for the rental assistance grants is making the cost of living in one of the city’s large apartment buildings about equal to renting a single-family home. Currently, it’s more affordable to live in a home in College Park, Adams said.
“There is a goal to find housing affordability for everyone in College Park, but we do believe that includes students living in apartments,” Adams said. “This is something we can do in the interim as we continue to get new supply in new units built to help with affordability.”
The funds for business retention would go toward existing business grants that mainly subsidize small businesses.
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The city’s tax rate was 33.5 cents for fiscal year 2018. City Manager Kenny Young said College Park is the only nearby city that has consistently decreased its tax rate in recent years.
Young said the city has not kept revenue from property taxes on pace with the assessed value of local properties, especially when compared to nearby cities like Bowie, Greenbelt and Hyattsville.
“Look at our other comparator cities have done,” Young said. “We’re the only ones that have continued to lower our rates.”
District 1 council member Fazlul Kabir said he would be more comfortable with only increasing taxes on apartments to avoid hurting small businesses.
According to Adams, the tax increase would primarily impact larger businesses that would be the only ones paying extra tens of thousands of dollars.
The council will vote on the tax increase after a public hearing.