Homeless people in Wake County hotels are helping pay for PNC Arena, tourism upgrades

Homeless people staying in Wake County hotels are contributing to the pool of money that local leaders plan to use to renovate PNC Arena, the Raleigh Convention Center and other tourism drivers.

The exact amount they contribute is unknown. Nor is Wake County ensuring that hotels provide refunds to long-term hotel guests, as local rules require.

The Raleigh City Council and the Wake County Board of Commissioners both backed plans to spend $300 million on renovations in the coming decades to drive tourism to the area. That money comes from two places: taxes on hotel stays and prepared food and beverages.

The 1 percent food and beverage tax has been in effect since 1993, and there is no way to determine how much of that money comes from people visiting the area versus people who live in Wake County.

The 6 percent tax on hotel stays, called a room occupancy tax, applies whether people stay at luxury resorts, a low-budget motel or in a home rented on Airbnb. The tax doesn’t apply to rooms provided by “nonprofit charitable, educational, benevolent or religious organizations” as part of their nonprofit missions or to people who rent a room for at least 90 consecutive days.

Hotel operators are supposed to refund the occupancy taxes for people who rent hotels for at least 90 days, but Wake County doesn’t make sure that happens.

“If they fail to refund people properly, that’s not really anything we can control,” said Marcus Kinrade, Wake County’s tax administrator. “There’s no penalty in the statute for that.”

In the last 12 months there have been 320 instances of hotel providers reporting a 90-day stay or receipt, implying a refund to that occupant.

“In a perfect world, yes, we would try to make sure that happens,” Kinrade said. “But we don’t have the staffing or the time right now. We’re doing our best just to get all the facilities to file, which is a struggle every month just to get them to properly file the tax and pay the tax.

“So, yeah, if I had more compliance, if I had more time, yeah, it would be good if we could say audit every filing that said they held back a credit,” he said.

There are no exemptions or refunds for people who are homeless who rent a hotel room for less than 90 consecutive days.

‘A concern, absolutely’

There were more than 1,500 people reported homeless in Wake County last year, according to a federally required count.

Low-cost hotels can be an alternative for those living in their cars or on the street in Wake County and around the country. In 2021, the city of Raleigh bought an extended-stay hotel with federal money to house people needing a place to live.

“It’s a concern, absolutely,” said Wake County Commissioner Vickie Adamson, who co-chairs a city and county committee on homelessness. “But it’s hard to track. ... And for some of these hotels their occupancy tax collection is the least of the problems we have with them. We have ones where there are a lot of police calls and things like that. It is a concern.”

Wake County’s hotel tax is, on average, lower than many other places across the country, she said.

“We’re on the cheap side,” she said. “We’re lower than our national competitors. But it is absolutely a concern. And, unfortunately, folks who are staying in a hotel their whole lives are typically destabilized. So that occupancy tax is probably not on their radar. So we wouldn’t get complaints about it.”

City Council member Stormie Forte, who co-chair the homelessness committee with Adamson, said she needs to do more research on the topic.

“If money is coming from that population we need to work with the county to see if we can rectify that,” she said.