Dori: Local apartment developers get 95% property tax break, homeowners pay full freight
Feb 25, 2022, 11:32 PM | Updated: Feb 28, 2022, 6:38 am
When property tax bills began arriving in the mail this past week, “most” taxpayers yowled at the steep increases they are facing. Most, that is, except for developers who are enjoying a nearly 95% discount on their property tax bills.
To get to the bottom of this disparity, the Dori Monson Show reached out to King County Assessor John Arthur Wilson to ask: Why are middle-class property owners are being hit so hard while some owners of multi-million-dollar properties are getting a huge tax break?
“Keep in mind: It’s not the assessor who sets your tax rate – it’s the Legislature,” Dori told listeners.
But in Washington state, there are other factors in play.
One example is that developers of some multi-million-dollar Seattle properties receive tax exemptions of up to 95%, while middle-income folks pay their own full tax bill.
Clued in by a tipster, Dori cited the Rooster apartments in Seattle’s Roosevelt neighborhood. This 194-unit building — appraised at $77 million, with a street value of about $100 million – is taxed on just $3.3 million, Dori told listeners. In comparison, Dori pointed out, owners of a pair of homes in nearby Laurelhurst pay more in property taxes than many MFTE developers.
Rooster qualifies for the City of Seattle’s Office of Housing’s Multifamily Tax Exemption Program, Wilson explained, because it reserves 20% of its units — 40 apartments — for low-income tenants.
And it’s not just in Seattle. There are 421 MFTE buildings in King County, too.
“This is another one of those ‘don’t-blame-me-I’m-just-the messenger’ cases,” Wilson continued.
The MFTE was to encourage urban villages and infill, Wilson said. In exchange for offering at least 20% of their units as “income- or rent-restricted” options, developers qualify for large tax breaks.
“We have to ask ourselves: Is there a better way to provide affordable housing than a huge tax giveaway for a property that probably would have gotten built anyway?” Wilson posed. “A lot of these developments were in rapidly growing areas.”
Apartments along South Lake Union also qualified for MFTE – “as if we needed to incentivize there,” he added.
Less than two blocks away from a nearby Sound Transit station, Rooster offers a rooftop deck with Mount Rainier views, a fire pit and barbecue areas, and a dog wash.
Wilson told Dori he is equally frustrated at current property tax structures in his King County jurisdiction, and statewide.
“No doubt about it, I think folks — especially with inflation hitting them on all other fronts — are more sensitive this time than they’ve been in the last couple years,” Wilson said.
“People are hurting,” Dori said, while criticizing this session of the state Legislature for “sitting on a $7 billion surplus, and the Democrats want to spend every penny of it and impose new taxes.”
Long concerned about imbalances in property and rental tax structures, Wilson shared his own frustration with the Legislature’s failure to adopt his proposal for a Rental Relief Act. It would provide property tax breaks for owners of older buildings, and in turn, the tenant – if units remain affordable – Wilson explained. He projects this proposal could impact nearly 140,000 units across King County, and many more statewide.
Meanwhile, Dori lamented: “All the working-class people listening to you and me, all the middle class, all the paycheck-to-paycheck people, they have to pay 100% of their appraised while someone rich enough to own a 200-unit apartment building gets 95% of their property taxes whacked off.”
Listen to the entire interview with King County Assessor John Arthur Wilson:
Listen to Dori Monson weekday afternoons from noon – 3 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.