Dori: Local apartment developers get 95% tax relief, landlords pay all freight
When property tax bills started arriving in the mail last week, “most” taxpayers screamed at the steep increases they face. Most, that is to say, with the exception of developers who benefit from a reduction of almost 95% 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 homeowners being hit so hard while some property owners in several million dollars receive a huge tax break?
“Keep in mind: it’s not the assessor that sets your tax rate – it’s the legislature,” Dori told listeners.
But in Washington state, other factors come into play.
One example is that developers of some multimillion-dollar properties in Seattle enjoy tax exemptions of up to 95%, while middle-income earners foot their own full tax bill.
Inspired by a tipster, Dori cited the Rooster Apartments in Seattle’s Roosevelt neighborhood. The 194-unit apartment building — valued at $77 million, with a market value of around $100 million — is taxed on just $3.3 million, Dori told listeners. By comparison, Dori pointed out, owners of a pair of homes near Laurelhurst pay more property taxes than many MFTE developers.
Rooster qualifies for the City of Seattle Office of Housing’s Multifamily Tax Exemption Program, Wilson explained, because it reserves 20% of its units — 40 apartments — for low-income renters.
And it’s not just in Seattle. There are also 421 MFTE buildings in King County.
“It’s another one of those ‘don’t blame me, I’m just the messenger’ cases,” Wilson continued.
The MFTE was to encourage urban villages and infilling, Wilson said. In exchange for offering at least 20% of their units as “income or rent-limited” options, developers receive significant 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 would probably have been built anyway?” Wilson posed. “A lot of these developments have happened in fast-growing areas.”
Apartments along South Lake Union have also qualified for the MFTE — “as if we should incentivize it,” he added.
Less than two blocks from a nearby Sound Transit station, Rooster offers a rooftop terrace with views of Mount Rainier, fire pit and barbecue areas, and a dog wash.
Wilson told Dori he was also frustrated with current property tax structures in his King County jurisdiction and statewide.
“Without a doubt, I think people — especially with inflation hitting them on every other front — are more sensitive this time around than they have been in the last couple of years,” Wilson said. .
“People are hurting,” Dori said, while criticizing this session of the state legislature for “sitting on a $7 billion surplus, and 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 failure of the Legislative Assembly to pass his rent relief bill. This would provide tax breaks to owners of older buildings and, therefore, to the tenant – if the units remain affordable – Wilson explained. He predicts this proposal could impact nearly 140,000 units in 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 people from paycheck to paycheck, they have to pay 100% of their assessment while someone wealthy enough to own a 200-unit apartment building gets 95% of their property taxes ripped off.
Listen to the full interview with King County Assessor John Arthur Wilson:
Listen to Dori Monson weekday afternoons from noon to 3 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.