After checking State law and asking a former colleague in the non-profit housing profession, I confirmed that many if not most non-profit, subsidized affordable housing projects don’t pay property taxes. This is what makes the opposition by State Representative Frank Chopp, Speaker of the House, of legislation to expand the Multifamily Tax Exemption (MFTE) Program to allow its use for preserving existing multifamily housing so strange. The legislation is now essentially dead. Why is Chopp opposed? According to the Seattle Times

Because House Speaker Frank Chopp, D-Seattle, is against the proposal. Seattle and other cities shouldn’t be allowed to give tax breaks to for-profit property owners, according to the speaker, who says only nonprofit landlords should benefit.

Chopp has either entirely forgotten decades of experience in non-profit housing from his days before being a legislator or his reason is simply an excuse for playing to lefties in his home district. Or something else. Who knows?

What we do know is the bill had broad support in Seattle including from Smart Growth Seattle. We also know the legislation would allow the acquisition and improvement of older buildings with the tax exemption being used to help offset renovation costs so renters wouldn’t have to absorb them all. That would mean an end to many of the  sad stories about an older building being purchased and residents seeing their rents double when the building is improved. And we know that Chopp could have introduced an amendment to exempt non-profits completely from property taxes.

While we can’t know the Speaker’s motivation, we know the legislation would be positive. With the special session now underway, maybe the bill still has a chance.

And finally, our big ideological problem in our city and  state is that many people believe that for a housing program to be a good one, it has to somehow reduce private developer profits — or at least not be beneficial to them. That’s just nonsense.  Programs that incentivize private developers to create public benefits are good programs because they can be efficient, effective, and a fair use of tax payer dollars.

Part of why the City is proposing Mandatory Inclusionary Zoning (MIZ) is based on the ideological blinders worn by the Speaker and opponents of the legislation: It has to hurt. The idea is that tax payers shouldn’t foot the bill, builders and developers should. But that idea only leads to  higher priced housing when higher costs get paid by renters. It’s time to pass this bill. And it’s also time to take the blinders off.