(Editor’s note: Steve Buck gave this presentation to a League of Woman Voters meeting on affordable housing last September.)
By Steve Buck
Coldwell Banker CEO and Owner
A crucial challenge for the San Juan Islands is how to maintain a housing balance to continue having diversity and character. It still can be done with a well thought out plan.
The local real estate excise tax proposal to fund affordable housing would help some but could make it difficult for others. We have to decide if it’s worth it or not. This tax alone will not solve our housing challenge. We have to do a variety of things. There should be more community involvement, seeking out all options, making choices, designing a long-term plan and then implementing it.
The San Juan Community Home Trust, Homes For Islanders and similar programs on Orcas and Lopez are all very good organizations that have greatly helped us. If it wasn’t for them, things would already be much different.
The Community Home Trust develops perpetually affordable housing. Homes for Islanders helps people acquire homes with their own work. When a Community Home Trust home is sold, the profit is restricted so that the home continues to be perpetually affordable. A Homes For Islanders home can be sold at market value. The federal loan is repaid, helping that program continue, and the seller can use the profit to buy something else.
People must qualify for those housing programs though. Many either don’t qualify or don’t want restrictions. The biggest challenge for some buyers is not having enough money for the down payment, closing costs and 1 percent land bank tax. A 0.5 percent tax on a $450,000 home would be about $2,250 more.
Homes for Islanders says this tax does not help them. They have funding. They need land. (Editor’s note: Homes for Islanders told the Journal their board hasn’t completed their review of the proposed REET and cannot comment on whether it would benefit them.)
Another realtor told me this would put more burden on already struggling buyers.
A contractor said he is against the tax as there is already nearly $100,000 in costs for a mid-level home, not including the land or construction costs. He said if someone builds apartments, costs are going to be passed on to renters.
The county is working on a buildable land analysis. That is vital. The county is considering incentives for guest houses as long-term rentals. That’s good.
I’m still undecided about the tax.
I’m all for the Community Home Trust – my brother Sam was on their board for many years – but they’re the only organization on San Juan that currently would qualify to receive funds. (Editor’s note: The home trust could not confirm that they are the only San Juan organization that would qualify to receive housing fund monies. One qualification is for projects to restrict affordability for at least 30 years. County staff stated projects that create perpetually affordable housing would be given the highest preference.)
The county is hoping other organizations might want to apply, but what land is available for them for projects if they did?
The housing tax proposal says it’s not a property tax, it’s a 0.5 percent excise tax on property buyers. Why not a property tax since a balanced community is of benefit to all? Is it right to put the burden on buyers? Some suggested putting the tax on sellers, but would that lead to higher prices?
What other communities have been looked at that have similar affordable housing challenges? What other options are there?
Could the tax be used to help get a new nursing home?