Washington lawmakers are considering allowing local governments to create a new tax on the sale of property, known as a real estate excise tax, or REET, to fund new affordable housing projects.
The bill previously looked as if it were dead for the session, but many affordable housing and homeless service advocates, who support it, as well as Republicans, who have opposed it, expect the bill to re-appear in the final days of session.
Michele Thomas, policy and advocacy director for the Washington Low Income Housing Alliance, told reporters in a press conference Thursday that the state’s competitive housing market has pushed many low-income families into homelessness. She said a tax on larger property sales, instead of a sales tax, is a more equitable way to fund housing to the state’s most vulnerable residents.
“It’s really critical that local jurisdiction have a local fund source because local dollars are coupled with the state housing trust fund, and are coupled with federal investments,” she said. “When you build affordable housing, you need multiple subsidies. You need the state level, you need the local level, you need the Federal level, once you have all three, that's when you really start to see production of affordable homes and communities really takeoff.”
Spokane City Council president Breean Beggs said the city of Spokane has already adopted a similar tax to help fill the gaps in funding for low-income housing projects. He said if the bill passes, it will significantly increase the city’s capacity for similar projects.
“We have plenty of land in our city, but the market is not going to build low-income housing without government funding,” he said. “So this bill fills that gap.”
The tax will only apply to property sales of over $5 million dollars and local city councils must vote to collect it. Its strongly opposed by the Washington Association of Realtors, who has argued in a new ad campaign that it will add new costs to the state’s already volatile real estate market.