Wash. tax revenues to be used to battle housing crisis

OLYMPIA — Rural counties could soon use local tax revenue to address the affordable housing crisis under legislation considered by a House committee on Thursday.

Senate Bill 5868 would expand the use of public facilities sales and use taxes in rural counties to provide more affordable workforce housing options. Currently, counties can use the tax revenue to fund infrastructure projects in multiple sectors, including energy and transportation.

Sen. Brad Hawkins, R-East Wenatchee, forwarded the legislation in response to the peaking housing market in his district. Cities such as Leavenworth bring in tourists year-round, driving up the market and pushing out the essential workforce.

"You can't have economic development in an area if you don't have a workforce," Hawkins said during the bill’s public hearing on Monday.

Senate Bill 5868 allows rural counties to utilize sales and use tax revenue to finance affordable housing for their permanent workforce; qualifying households must maintain an income level of 60 to 120 percent of the county's median.

Since 2009, the legislature has allowed rural counties to impose a sales and use tax of up to 0.09%. The rural tax supplements a portion of the state's premium rather than adding to the current 6.5% sales and use tax.

"This bill is not a new tax," Hawkins said, "and it doesn't expand a tax."

Finding a solution that works for specific communities, while at the same time satisfying the rest of the state, is challenging in a partisan legislature. Hawkins said he's thankful for the support SB 5868 has received across the state thus far.

He said the legislation is one more tool in the box for rural counties. The revenue focused on workforce housing is not intended to take away from other public facilities projects.

When a city or county focuses on certain public facilities projects, driving up the housing market, it loses the workforce that makes these efforts possible, Hawkins said. SB 5868 could create new jobs with these housing projects while simultaneously fueling the area's economic growth, he added.

Leavenworth Mayor Carl Florea said his town is losing the soul of its community because of the lack of workforce housing. The majority of the town's workforce has to commute, which strains operations, sometimes causing businesses to close for days in times of emergency.

"We're losing the sense of a community," Florea said. "You have to be able to house them here."

Leavenworth prides itself on its diverse community, but now city officials are scrambling to stop its workforce from receding, he said. SB 5868 might not be the whole solution, but it is one more tool that can help address the problem at hand.

The House Finance Committee voted 14-2 to move SB 5868 out of committee and onto the chamber floor soon.