NEWARK, Calif. — Newark’s increasing cost of living is making it difficult for residents to afford, but it is benefiting the city’s tax revenue, according to Mayor Michael Hannon’s State of the City address.
The city’s largest sources of general fund revenue, property and sales taxes, have significantly increased this year, Hannon said during the Thursday night address at the Newark Civic Center. Sales tax revenue is projected to be $16.5 million, a 5% increase from the previous fiscal year, because of an increase in people dining at Newark establishments and an increase in sales for warehouse and construction equipment and vehicles, Hannon said. Property tax revenue is projected to be $26 million, which is more than double what it was a decade ago, because of increased construction and higher assessed valuations of city property.
“Our property taxes are going up because people want to come and live here in this community and so we certainly appreciate all the development that’s gone on in our community,” Hannon said.
The city has also seen revenue increases in its transient occupancy tax, utility users tax, and licenses, permits and fees. Newark also received $11.8 million in American Rescue Plan Act funds, with $7 million going to community projects such as a broadband master plan, $1.5 million in small business grants and $1.5 million to an affordable housing project.
However, Hannon said the soaring cost of living in the Bay Area has been leading to community displacement, with the annual inflation rate currently at 5% and the median home price in Newark at about $1 million. Only 18% of households can afford a median home price of $1.3 million in Alameda County
The city is addressing this issue by updating its housing element and funding affordable housing projects for seniors and families. Hannon described how the city’s development staff got creative to transform Newpark Mall into a mixed-use project with residential and commercial development. The former Burlington Coat Factory is also expected to be transformed into a 161,000-square-foot Costco with a 32-pump gas station.
“We’ve taken many steps to alleviating the affordable housing crisis here in Newark,” Hannon said, “but we’re not done.”
