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News / Clark County News

Is Vancouver tax part of affordable housing solution?

On Feb. 14, voters will decide whether to sustain fund for 10 more years

By Kelsey Turner, Columbian staff reporter
Published: January 26, 2023, 6:00am
3 Photos
Cars pass by continuing construction on Fourth Plain Community Commons in Vancouver. The mixed-use housing complex has 106 affordable units developed by the Vancouver Housing Authority, using $1.5 million from the city's Affordable Housing Fund.
Cars pass by continuing construction on Fourth Plain Community Commons in Vancouver. The mixed-use housing complex has 106 affordable units developed by the Vancouver Housing Authority, using $1.5 million from the city's Affordable Housing Fund. (Taylor Balkom/The Columbian) Photo Gallery

In Vancouver’s special election on Feb. 14, residents will determine the future of the city’s Affordable Housing Fund by voting on Proposition 3, a property tax increase that would sustain the fund for 10 more years. As voters consider their positions, The Columbian answered 10 common questions that community members have been asking.

What is Vancouver’s Affordable Housing Fund?

The Affordable Housing Fund is Vancouver’s primary community resource for providing affordable housing to low- and very low-income households. It was created in 2016 by a voter-approved property tax levy that raises $42 million over seven years from 2017 to 2023.

In its first six years, the levy has funded the development or preservation of 1,061 affordable units and 405 shelter beds and has assisted 1,654 households with services, according to city data. The city has already awarded $35.8 million and plans to have awarded the total $42 million by the end of 2023.

What is the Proposition No. 3 Affordable Housing Levy Replacement?

If approved, Proposition 3 would replace the current property tax levy. It would raise $100 million over 10 years starting in 2024, to be used for affordable housing development and preservation, temporary shelters, homelessness prevention, and rental and homeownership assistance.

If the levy replacement passes, how much will taxes increase for property owners?

The main difference between the levy replacement and the current levy is the amount of money it raises for the city’s Affordable Housing Fund — and its cost for property owners.

The proposed levy would raise the tax from 18 to about 30 cents per $1,000 in assessed property value. This will cost Vancouver households an estimated $150 per year for a home with a $500,000 assessed value, with the cost per household going down as the city’s population grows. This is about $60 more per household per year than the current levy.

How will the city use this additional tax money?

The extra $4 million raised per year by the levy replacement would primarily go to construction and preservation of affordable homes, similar to the current levy, according to Alishia Topper, Clark County treasurer and volunteer for the Bring Vancouver Home campaign in support of the levy.

The proposed levy also includes a new homeownership piece, with 5 percent of funds set aside to help very low-income people buy homes. Applicants for homeownership funds would need to earn 50 percent or less of the area median income to qualify, Topper said. The program’s details would be worked out after the levy’s passage.

Additionally, rising inflation, rent and development costs since 2016 when the levy first passed means the city needs more money to keep building affordable units, Topper said.

“If the City Council were to have kept it at $6 million a year, they would have less power in being able to do the work,” she said. “So increasing it will allow them to sustain the impact.”

How does taxpayer money help Vancouver meet its affordable housing goals?

An ECONorthwest study conducted for the city last year found a 5,670-unit housing shortage, proving that Vancouver doesn’t have enough homes for everyone.

One of the levy’s primary strengths is its ability to leverage other funding sources, as the local investment makes projects more competitive for grants. Every dollar spent by the city fund is matched by about eight dollars in state or federal funding, enabling projects that have cost a total of $284.4 million.

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Affordable for whom?

What’s affordable for one person might be too expensive for someone else, making “affordable housing” a confusing term.

Vancouver’s fund is aimed at low-income and very low-income residents, such as people with disabilities, veterans, seniors and families with children.

“This fund targets the most vulnerable: our seniors, our service workers who are making a little over minimum wage … (whose) income doesn’t necessarily translate over to our rental costs,” Topper said.

The fund, therefore, doesn’t target middle-class households that may also be struggling to make ends meet due to rising living costs.

“Does it help for reducing rents for a small segment of our population? Yes, it does,” said Terry Wollam, managing broker at Wollam and Associates. “Does it help with housing affordability for people that are looking to purchase a home? There literally will be a few examples.”

For those who envision “affordable housing” as the American Dream of homeownership and the generational wealth-building opportunity provided by it, Vancouver’s fund generally is not made for that purpose, Wollam said.

The Vancouver Housing Authority, which has received more than a third of the awarded funding, does a “very good job” of maximizing the funds, Wollam said, “but they provide subsidized rents. They do not provide an opportunity for people to purchase homes.”

The Affordable Housing Fund, however, can be a stepping stone to homeownership, said Noelle Lovern, government affairs director for the Building Industry Association of Clark County, which represents more than 750 member companies. The new homeownership funding proposed in the levy replacement would provide families more opportunities, she added.

“You can’t really disconnect the cost of a rental from the cost of buying a home,” Lovern said. “It’s that domino effect. As homes become more costly, so does rent.”

The levy has been in place for six years, and housing affordability has only gotten worse. Is Vancouver just throwing money at the problem?

Since the levy was enacted in 2017, fair market rent for a one-bedroom apartment in Clark County has risen 53 percent, from $1,053 to $1,610. Homelessness, meanwhile, has more than doubled. Clark County’s annual Point in Time Count found 749 people experiencing homelessness in 2017, versus 1,197 in February 2022.

“This new levy expands upon that same failed approach with even higher taxes over longer periods,” wrote Sandra Kim, Kris Michael and Ed Walawender in an opposition statement printed in the Clark County Voters’ Pamphlet for the special election.

Steve Smith, a retired business owner who helped lead the opposition to the first levy vote, continues opposing the levy today. “I’m not against help. I’m against doing it this way, through taxes,” Smith said. “They continue to make the same mistakes, continue to throw money at it, and money is not the solution.”

Topper said she recognizes that the problem has gotten worse, but in her opinion, the fund is critical to meet the needs of very low-income residents whom the private market doesn’t reach.

“It is preventing people from falling into homelessness. That is just a fact,” Topper said. “Yes, our homeless numbers are going up, but there are a lot of extraneous variables that go into the reason that we’re seeing increases in homelessness. And this is part of the solution.”

To make housing more affordable, the city is proposing a property tax increase; isn’t that counterproductive?

Some Vancouver voters are pointing out the irony that a property tax — which raises expenses for homeowners — is being used to address the city’s housing costs. Though renters do not pay property taxes, they might also foot the bill indirectly, as landlords factor the additional cost into rent prices.

“This tax increase will create additional risks for more people to become homeless, as all these property taxes are passed down to only homeowners and renters not city owned or government abated private developments,” wrote Kim, Michael and Walawender in their Voters’ Pamphlet statement.

Topper disagrees, arguing that this property tax doesn’t substantially impact housing costs. “Property taxes are such a tiny part of the overall expense of operating multifamily or any other housing that it isn’t a direct correlation,” she said. “I think people conflate that — the impact of a property tax increase to rent increases.”

For Building Industry Association members, an increased tax “is a little hard to palate” given the high fees developers already need to pay, Lovern said. But she thinks taxes, though not ideal, are sometimes necessary if their benefit outweighs their cost.

“When you balance it with some of the benefits of how the Affordable Housing Fund has done in the past and what they’re attempting to do in the future, I think that there’s enough balance there that it makes sense for our community at this time,” Lovern said.

If not the levy, what are some alternative ways to improve housing affordability in Vancouver?

While Vancouver’s Affordable Housing Fund has helped many residents avoid homelessness, “it’s just one small piece of what needs to be the holistic solution,” Lovern said.

To make housing more affordable for all, Wollam thinks Washington should cut some of the red tape deterring developers from building. Fees for environmental testing, inspections and permits all increase expenses for developers — and, in turn, push up housing costs.

“It would require easing the development process to be more predictable and faster,” Wollam said.

Impact fees, permitting and regulations total about 25 percent of the cost of a new home, Lovern noted. “A lot of times, we see codes and regulations passed that have very little positive impact on the issue that they’re trying to solve,” she said. “I really think that it has to be looked at through the lens of ‘How is this affecting housing affordability?’”

Topper agrees that reducing red tape is important to incentivize development. “There are regulations for a reason, if it’s for health, safety … but I think there are some codes, especially on zoning to make lands available, that will help make it less expensive and more affordable,” she said.

But for Topper, the need for policy change doesn’t take away from the Affordable Housing Fund’s importance.

“We need to build more single-family homeownership housing. We need to build more multifamily housing. We need to have more condo conversions into homeownership. All of those things are true,” she said. “But it doesn’t get to the fact that the market cannot build housing for our most vulnerable. And that’s what this levy does.”

How do I vote?

Registered voters who live within Vancouver’s city limits are eligible to vote on Proposition 3. Ballots will be mailed out and available in the Clark County Elections Office on Friday, arriving in voters’ mailboxes no later than Feb. 2.

Voters must mail their ballots with a postmark no later than Feb. 14, or drop their ballots at an official ballot deposit location or the Elections Office, 1408 Franklin St., Vancouver, by 8 p.m. on Election Day.

To check your voter registration or register to vote, go to the Clark County Elections Office website at https://clark.wa.gov/elections/registering-vote.

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This story was made possible by Community Funded Journalism, a project from The Columbian and the Local Media Foundation. Top donors include the Ed and Dollie Lynch Fund, Patricia, David and Jacob Nierenberg, Connie and Lee Kearney, Steve and Jan Oliva, The Cowlitz Tribal Foundation and the Mason E. Nolan Charitable Fund. The Columbian controls all content. For more information, visit columbian.com/cfj.

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Columbian staff reporter