State to decide on affordable housing tax

The future of affordable housing in San Juan County now rests in Olympia, where state legislators will decide the fate of local legislation that could fund a county-sponsored program.

The proposed legislation, a one-half-of-one-percent tax on real estate sales, died in committee during last summer’s legislative session. County commissioners expect the local-option tax to come before the legislature for a vote during the 60-day session that began last week.

If approved in Olympia, it would go back to the commissioners, who would craft and ordinance and submit it to a vote. If voters endorsed the tax, which is modeled after the ordinance that established the county Land Bank, it would become law. The Land Bank, which is funded with a 1 percent tax on real estate sales, or double the amount proposed for affordable housing, earned $2.2 million in tax dollars in 2000.

But even before the legislature has its say, commissioners were expressing concern about how the fund would operate and who would manage its finances. The Land Bank is prohibited from spending more than 10 percent of its revenue on administration but typically tallies about 6 percent.

“To garner support in the county we need to be exceptionally careful that money is not — or at least minimally — used for administration of the fund,” said Lopez Island Commissioner Rhea Miller. “It’s amazing how fast a salary can eat up funds for a down payment.” Miller envisions the county securing property and holding leases, but leaving development to the private sector.

Commission Chairman John Evans also expressed some misgivings.

Currently, two county programs provide support for affordable housing. A Housing Advisory Board serves as consultant about state laws, progress of affordable housing efforts around the nation, and loan programs for first-time home-buyers.

There is also a Housing Trust Fund which has made 16 low-interest loans for down payments since the program began in 1999. The state originally supplied $450,000 of seed money for what is a revolving loan program.

The fund is available for applicants who meet income requirements, have lived in the county for two years without owning a home, and qualify for a conventional home-loan. They receive $25,000 toward a down payment.

“So far, as of this year, four loans have been repaid,” county Department of Public Health Director John Manning said.

County commissioners debated how to combine the two efforts if the legislature approves the local-option tax. Blending the two into a Housing Trust Commission, with authority over policy and administration of future funds, is an alternative the commission wants explored by the prosecutor attorney’s office.

But without the support of state legislators, funding any future program from county revenue appears doubtful, the commission conceded.

“What’s been done so far in San Juan County per capita is pretty remarkable without county involvement,” Evans said. “But we can’t afford (to use county funds) to create a $40,000 or $80,000 position” for an administrator.

— Scott Rasmussen reports on regional government and education for sanjuanjournal.com and The Journal of the San Juan Islands, sister publications of islandsweekly.net and The Islands’ Weekly. He can be reached at (360) 378-4191 ext. 13 or email.

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