I recently attended a get-together where everyone was in the “senior” age group. Surprisingly, the conversation had two divergent topics – travel now that COVID is “over” and property taxes. Many in the group were very upset by the increase this year in their property tax bill. And, not without reason, those engaged in the tax conversation were wondering just how someone on fixed income is supposed to keep affording these increases. Food prices rise, utility bills rise, energy prices rise, entertainment prices rise but returns on investments are down and the annual COLA for Social Security does not match the inflation rate. Several of those in the conversation on taxes commented they were one or two more increases away from having to sell their homes. But, the conundrum this poses is – move to where? Out of Western Washington? Out of Washington? Someone said, “Why should I have to move away from my doctor, my friends, my family?” It was a disturbing finale to the conversation with a sense of pure frustration emanating from the group. They did not have kind words or thoughts to voice about those raising the taxes directly or indirectly.
This conversation stunned me for several reasons. I know that those of us who live on fixed but comfortable incomes watch outflow of dollars closely. But, I had to stop and think what the current housing bills being considered by the legislature might mean to the folks in the group conversation I had just heard. As I thought about the impact, I realized that even financially secure seniors are at great risk of displacement by E2SHB 1110, ESHB 1245, EHB 1337/ SSB 5235, and ESSB 5466 as drafted. I talked with someone who understands how property taxes are set to help me sort this question through in my mind. I wanted to make certain I was not seeing a snake in the grass when it really was just a twig. I discovered that, indeed, these bills create a very real risk of displacement for our valued senior citizens secondary to these land use changes being considered by the legislature.
Let me share how this will happen. One or more of the above bills pass and are signed into law. There are developers out there waiting to buy property that can be built more densely as these proposed laws allow. I know because I am getting weekly calls already! And their prices are very tempting! So, the developers come to someone and offer to buy their home for the market rate or just above market value, let’s say $1.1 million. The developer tears down the home and proposes to build 4 townhomes [middle housing]. In doing so, that changes the value of the underlying land on which the home existed. While it may have been worth $ 450,000 on the last assessment, the assessor may now value the land in total at $ 1.0 million because it can be developed for 4 houses rather than one. However, the change for that one lot may also trigger an increase in the valuation of the land for other homes in that given area because they can also be developed with middle housing of some type, a concept called “highest and best use”[ term definition, page 4]. When the city or taxing authority for the land decides to increase their property tax by the allowed yearly 1%, those new valuations trigger increases in the property taxes for all those whose land valuations were increased.
Senior citizens are critical members of any community. Their attention to things political, environmental, social, and spiritual enrich the well-being of all. If a senior wants to sell his/her home and find a small residence in which to live, they should be able to do that without fear of a capital gains tax penalty. But, if a senior wants to stay in her/his home and can do so, their independence should be cheered. They should not be run out of their homes because of skyrocketing property tax valuations triggered by legislation that created an unintended adverse impact. Each senior resident has invested years of tax dollars for the good of the community – their welfare, including their ability to keep their home, should be part of the consideration of any housing legislation. Displacing seniors or residents of modest means of any age or background from homes they worked hard to acquire and maintain while raising families and improving their community in many ways is not the right thing to do.
The bills mentioned above are cumulative in nature so it is possible than one lot could be split, middle housing built and ADU/DADU’s added to create 6 homes of unknown cost to build and buy where one home at an affordable cost used to exist. Each of those changes hold the potential to trigger land valuation increases and subsequent property tax increases that displace seniors or any person of modest means.
The displacement concern discussed in this view is not the only reason to not like these bills. However, it has received very little notice despite the rather broad impact it could have. Given the discussions on property taxes I heard recently, I felt it was a concern that needed a little “light of day” airing in a public space. You may want to share this unintended consequence of the housing bills with your friends and family across Washington state.
— By Karen Haase Herrick
Karen Haase Herrick lives in Edmonds
Well said, Karen! We have to weigh the un-intented consequences of legislation. We can end up creating bigger problems than the ones we supposedly are addressing.
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