Is Bellingham Home Fund Deeply Flawed

Jack Petree’s article is disingenuous.  Jack acts as if he cares about the level of property taxes paid by “the poorest among us.”  In reality, the property taxes paid by the poorest among us (and everyone else) are already inflated because every Bellingham property owner is already paying higher taxes to subsidize developers and homebuilders.
 
How is that so?  Because impact fees that are authorized under RCW 82.02.050 and intended to require “new growth and development pay a proportionate share of the cost of new facilities needed to serve new growth and development” are TOO LOW. 

For example, the Bellingham Park Impact Fee (PIF) collects only 35% of the cost associated with growth; taxpayers, including the poorest among us, pay the bulk of the remaining 65%.  School impact fees and transportation impact fees are designed to collect around half of the total cost, leaving existing property owners paying the balance.

In addition, under RCW 82.02.0690, the state legislature only allows counties, cities and towns to collect impact fees for “public streets and roads, publicly owned parks, open space and recreation facilities, school facilities, and fire protection facilities.”  Municipalities cannot collect impact fees for libraries, police protection facilities, jails, prisons, government buildings, museums, or any other public facility.  In other words, the development community receives a 100% subsidiary for each of these capital expenditures. 

And that’s just Bellingham.  Whatcom County, being out of compliance with the GMA, cannot collect any impact fees, so county taxpayers, including the poorest Bellingham homeowners – who also pay county taxes, subsidize 100% of all growth in the county.

If Jack Petree (and his ilk) were so concerned about the finances of the poorest among us, he would be fighting like hell to increase impact fees so that property taxes would not be inflated to subsidize those who profit from growth.

Does all this mean I support the Low-income Housing Levy?  If the decision were up to me, before I would support this levy, I would raise impact fees to the point where they accomplished the intent of the state legislature.  That is, I would first make sure that new growth and development paid the full proportionate share of the cost of new facilities needed to serve new growth and development. It has been estimated that Bellingham taxpayers are currently subsidizing each single family house by as much as $19,000 and each multi-family unit by as much as $11,000, an average of $15,000.  And that only considers the subsidies for roads, parks, schools and fire protection equipment.  Considering the future costs associated with a new jail and other facilities for which impact fees cannot be collected, the subsidy is much, much larger.

The most recent Bellingham comprehensive plan projected population growth of more 31,601 over the 20-year planning period.  Growth has slowed substantially since then.  The next 20-year projection may come in at less than half that; let’s say 15,000, or 750 people per year.  Assuming 2 people per home, that would require 375 units per year.  At an average subsidy of $15,000 per unit, taxpayers are paying $5.6 MILLION more in taxes than they would be if growth paid its own way. 

I repeat, if impact fees covered the true costs of expanding the transportation, park, school, and fire protection systems, as needed to accommodate growth, then Bellingham property taxes could be reduced by $5.6 MILLION per year.  And that’s based on less than 50% of the growth projected in 2006.  If the growth projection remains the same, the tax subsidy could be almost $12 MILLION per year.

What if we actually raised impact fees and used a portion of the tax savings to help those in our community who have lived here for awhile but have not been able to afford decent housing? 

Would I support that?  Yes, I would.

Would you?

The reference in paragraph four of my previous comment should read RCW 82.02.090(7) rather than 82.02.0690.

Well, as I asked Jack to allow me to post his article, then I must be of Jack’s “ilk” also.  Really?  Jack presents some arguments and I see no reason to personally insult him.

To the question of whether or not you, Larry, support the election issue levy, you are unable to answer your own question.  Any of us can construct a fantasy world and say then we would support something.  But the question is - given the reality of the world - do you support the levy?  Do you?  You asked the question, so we do deserve an answer.  And please justify the answer in one comprehensible paragraph.

John, in my opinion, Jack Petree is a promoter of growth at any cost who opposes impact fees that would require those who profit from growth to pay the costs of growth.  His ‘ilk’ are others who also promote growth at any cost and oppose adequate impact fees.  If that defines you, so be it.

Based on your comment about me responding “in one comprehensible paragraph,” I gather you do not comprehend my earlier comment.  If so, why don’t you simply ask me to clarify?

To answer your question in a single paragraph: No, I do not support the Low-income housing levy at this time.  It is premature.  By first raising impact fees, the city will have sufficient funds to accomplish all of the objectives of the levy.  If, after raising impact fees, additional funds are needed, then I would likely support a tax-paid housing subsidy.  Currently, because impact fees are too low, we are providing a housing subsidy indiscriminately.  Those who purchase million dollar homes receive the same subsidy as those who purchase $100,000 homes.  That is simply wrong.  Why are we subsidizing the construction, sale and purchase of million dollar homes?  Can you answer that?

So, Larry, you are also against the levy.  You have your reasons and Jack has his.  There was no use in asking you to “clarify” as you never stated whether you were for or against the levy. 

You know, you said Jack did not care about the poor and that he was with others of that ilk.  The “ilk’ you wrote of in that sentence was not about impact fees.  A simple parsing of the sentence shows that.  Jack can be anything in your opinion, but the subject here is the Home Fund levy.  My concern - and comment - were about your insult of Jack.  The issues of impact fees, taxes, growth, etc are all legitimate topics. 

John, I disagree with your parsing of my statement.  I wrote:

“If Jack Petree (and his ilk) were so concerned about the finances of the poorest among us, he would be fighting like hell to increase impact fees so that property taxes would not be inflated to subsidize those who profit from growth.”

To say it would be a gigantic leap to interpret my comment as stating that Petree does not care about the poor would be an understatement.  Petree emphasizes the impact of the proposed levy on the property taxes paid by the poorest among us.  If he really is so concerned about the property taxes paid by the poor, then he would do everything he could to make sure the poor were not paying property taxes to subsidize those who profit from growth.  Why hasn’t Petree expressed his concern about property taxes paid by the poor before?  Why has Petree shown no concern about the tax subsidy the poor pay to subsidize the construction of million dollar homes?

I don’t believe it’s because Jack doesn’t care about the poor.  In fact, I’m sure he does.  Instead, I believe he cares more about making sure his developer clients continue to receive their growth subsidy and keep impact fees artificially low.  That being said, he has every opportunity to prove me wrong by supporting higher impact fees that would reduce the taxes paid by the poor.

I won’t point out Larry’s many errors except to say I do not believe I have ever opposed impact fees though, I have opposed fee levels that can be demonstrated to be excessive.

But the column is about the Prop. 1 levy and I have a couple of interesting personal things to say that may illuminate the discussion.

I am a senior (67) and a Veteran (Viet Nam) and I live in an old (75 years plus) house my wife and I purchased when she was preggers with our first child.  I am well below median income but, probably, just a bit above the formally designated low income level.  We’ve got 30 year old carpet on the floor because it costs too much to put down new…  kinda average.

It takes an entire social security check plus a part of another to pay the property taxes on our home each year. 

Property taxes have risen to be so high, in fact, that my ten year total for property taxes exceeds what we paid for the home.

Maybe I’m being a little selfish but, as a senior and a veteran, both groups the proponents of the tax say they want to help, I ask that you please stop trying to help me… I can’t afford your help anymore and that goes to the point of the column.  The tax and fee increases we are seeing now have a serious, and negative, impact on those of us in the below median wage segment of society.

It ta

Yes, the column is about the Prop 1 levy, a tax designed to subsidize low income housing.  We can continue to wallow in that vacuum, or we can focus our energies on the problem holistically.

The fact is: those who profit from growth are already being subsidized.  Instead of our tax dollars being used to effectively subsidize low income housing, they are used to subsidize every unit of new construction indiscriminately, including the most expensive million dollar houses and condos.  Rather than subsidizing EVERY unit - by collecting impact fees that recover less than 50% of the true costs - why not collect impact fees that cover the full proportionate share of these costs and laser-focus a portion of the additional revenue to really help those who need it?  Those who have lived in our community for a long time but, for one reason or another, cannot afford decent housing.

Collecting impact fees that cover the true costs of growth for roads, parks, schools and fire protection facilities would reduce Jack Petree’s tax burden – and yours – and provide the revenue needed to accomplish the goals of the Prop 1 levy without the burden of approving a new levy.

(And, Jack, while I feel for your situation, the fact that my property taxes are almost $3800 a year more than yours, the pain over here is really intense.)

Though I usually disagree with Jack, in this case I agree with his conclusion, if not his entire argument. 

First off - mostly disagreeing with Jack doesn’t mean I don’t appreciate him.  I do.  I appreciate Jack because he isn’t afraid to put his opinions down in writing, and put his name to them.  That’s what we are all about here at NWCitizen.  The fact that Jack sometimes gets paid for his work doesn’t particularly bother me either.  That’s just the difference between Jack’s folks and mine. The folks supporting issues I champion won’t squeeze off a nickel for a cause unless it is going to improve their backyard. I have forty years of public interest advocacy and nothing to show for it except for several impressive community achievements and the impossibility of getting offered a decent job in my own town.  At least Jack can get work. He’s obviously smarter than I am.

Beware of institutionalizing anything.  Institutions always serve themselves before their ostensible purpose.  Conjoining institutionalized aims and taxes usually results in the ratebase getting milked like a bunch of cows.  As for the poor, there are ways to really help them without stuffing a bunch of bureaucratic shirts. 

Some may recall my initiative for a winter shelter when the old Sears building was lying vacant.  I had to threaten to open the front door of City Hall on cold nights to make it happen, but happen it did.  And it was a disaster.  I won’t go into details, but some kinds of shelter can be a problem.

From that experience, I realized that for the most abjectly poor - typically homeless men with substance abuse or mental health problems - more good could be done for much less by loading 2x4s, plastic sheet and tin stoves into a pickup truck and dumping them at the curb in a few key locations.  Of course, society should do much more and would thereby save many other costs, but we aren’t and won’t so….

Mom’s with kids are a separate issue. For these folk, the best we can now offer are Walmart parking lots and live-in automobiles.  We ought to be ashamed of that.  However, most of these families will not be helped by the types of programs contemplated under the levy.  They lack sufficient income to qualify for equity incubator programs, must often wait for Section 8 housing and often can’t conform with rules and regulations of agencies like the Housing Authority.  Working single moms ought to be the prime focus of any community homelessness initiative, but I doubt the levy will produce much service provision addressing this need.

Finally, there are the wholesome young families, with or without children, who have one or two jobs and are trying to get a start in the housing market.  Or the elders with or without pets who have some guaranteed, if minimal income.  The Housing Authority can handle a lot of these.  Also, there are programs that subsidize home buying and then sharecrop any appreciation.  It works, but is arguably a better deal for the shirts than the clients.

So what can we do that will really help the poor?  It’s based upon supply and demand.  Jack’s right, build enough units and prices will go down.  But following the industry’s market perception, most “affordable units” built aren’t really affordable enough to help the poor.  Builders fear that truly affordable units won’t sell profitably to qualified buyers and that government programs are onerous or will be unreliable.  Neighbors rightly fear that toolkit density giveaways will only line developers pockets at the neighborhood’s expense.

Whole cultures live comfortably in yurts, but yurts do not comply with building codes.  The truth is that we have zoned and regulated affordable housing out of existence. Efforts are underway to extend that even further, by enforcing who can live with whom, in what kind of family, or by imposing measures designed eliminate the most affordable housing stock available through inspection and remediation. I’m not arguing against safe standards, but state law already affords opportunity for tenants and landlords to address those issues.

The single most important thing we could do to improve our stock of affordable housing is to approve liberalized accessory dwelling unit provisions.  This is the best way to meet infill targets, add diversity to the housing stock, help homeowners meet their mortgage obligations, give tenants affordable housing and a chance to save toward a downpayment, keep rental housing well supervised, and add eyes-on-the-street security for everyone.

Give property owners the green light for cottages and cabins that the toolkit gives developers.  This could really help our less fortunate neighbors and costs government and taxpayers nothing. Yet we oppose, ignore, or table it time and again.  If we are serious about sheltering the poor, we don’t need to soak the ratebase.  Just make it legal for homeowners to help.

For John and Larry - The word “ilk” is not necessarily pejorative and has a long history:  “When one uses ilk, as in the phrase men of his ilk, one is using a word with an ancient pedigree even though the sense of ilk, “kind or sort,” is actually quite recent, having been first recorded at the end of the 18th century. This sense grew out of an older use of ilk in the phrase of that ilk, meaning “of the same place, territorial designation, or name.” This phrase was used chiefly in names of landed families, Guthrie of that ilk meaning “Guthrie of Guthrie.” “Same” is the fundamental meaning of the word. The ancestors of ilk, Old English ilca and Middle English ilke, were common words, usually appearing with such words as the or that, but the word hardly survived the Middle Ages in those uses.”  See + Link Any pejorative inference may be due to the pronunciation of the word - not far from “ick”.  The user of ilk need not necessarily imply a derogatory meaning.

For Jack,

I would like to get some source information regarding the figures quoted in your piece” The proposition will increase the tax load on nearly 1/3 of Bellingham’s homeowners who are also low income, as well as on the 13,000 low income householders who rent and will see the tax applied to their apartments.”  What defines “low income” for the purposes stated here?  What is the source of the 13,000 number as applied to renters?  We have over 10,000 student renters whom I would not classify necessarily as being high income residents. So is the 13,000 in addition to the student population?  That would surely change the givens.

For Tip:

You say: “Efforts are underway to extend that even further, by enforcing who can live with whom, in what kind of family, or by imposing measures designed eliminate the most affordable housing stock available through inspection and remediation.”  Just what efforts are you speaking of?  The council has not looked at the issue of the number of people in a rental for years.  Work on ensuring the health and safety of renters regardless of their relationships is long overdue.  Moreover, overcrowding by illegally modifying rental structures has nothing to do with affordable housing.  It is just plain dangerous for a variety of reasons.  As for ADUs, we have been down this path before. If the city were serious about offering this as a workable alternative for increasing affordable housing, it would give guarantees to the citizenry that these places would be habitable and conform to codes.  Instead, the current laws on ADUs are ignored as you are well aware, enforcement being a four letter word in these here parts.  The point was brought home a few years ago by a city staffer who indicated that there were only 71 registered ADUs in all of Bellingham.  This caused a spontaneous burst of laughter among all those in the council chambers that evening.  Need I say more?

Furthermore, Washington state laws on standards for rentals are quite useless as they depend on action by individuals and not the state.  This gives the landlords distinct advantages over tenants whose recourse is most often a legal one that requires attorneys, courts and attendant costs.  Let’s not kid ourselves that such passive statutes are helpful in any meaningful fashion.  One glimmer of possibility is the recent enactment of a state statute that actually speaks to rental inspections but the action is left to the individual cities and there the new law sits while the citizens wait for the next fire (remember the last four in town since 2011?) or some similar disaster to endanger our tenants.

Dick,

Go to cob.org and then to neighborhood planning then to consolidated plan then to draft for new plan… I know it is a draft and that is one of the problems because the proposition was put on the ballot before the document (new consolidated plan) meant to show need is even done… it will not be done until after the ballot.  Neither will the plan to show how the money will really be spent.

Anyway, go to chapter 2, table 15, page 46 and add up the figures…

Good question… 32% in my mind is “nearly 1/3” and, you can add the renters for yourself…

Thanks for asking,

Jack

@DC - I was referring in part to your efforts, but not singling you out.  Many of the sentiments your blog addresses have been recurrent themes in city planning - and not just here - over the more than three decades of my involvement in local government.

We will probably just have to disagree on the utility of the Landlord/Tenants Act. During junior high and high school, I worked for a landlord with usually around twenty rental houses in a university district.  Later I worked for a real estate investor with both residential and commercial rental properties.  I learned that being a landlord isn’t all it’s cracked up to be, that good tenants are hard to find, and that a percentage of tenants will use the law to take advantage of you.  One of the last things I would choose to do is manage rental properties.

Jack,

Contrary to your assertion, the draft Admin & Financing Plan is available now, a month before the voters will decide. And, no surprise, it is pretty much what has always been intended and spoken of.  Your attempt to raise suspicion and mistrust was uncalled for. You also tried to introduce unjustified doubt in several other ways, none of them particularly helpful. Indeed, doubt seems to be your primary tool for persuasion.

Now, I have some concerns and reservations with the draft A & F plan, and it can be modified and hopefully improved based on input. So let’s get involved in a constructive discussion.

Michael,

My deadline on the Herald piece was Sept 20.  The DRAFT A&E plan was first seen in a public venue Monday, Oct, 8 when presented to the City Council as a discussion item only.  There has been no public comment nor Council action on that plan.  Ballots go out in one week (ok,one week and one day)  CDAB, a committee no more than a couple of dozen people in the entire have ever even heard of, will get its first shot at the plan tonight after a public hearing on the Consolidated Plan.  Aside from its introduction as a discussion item Monday, the public has yet to see the A & F Plan.

Now, how can a plan be called “available now” when it was just presented to Council 4 days ago and has not undergone either public comment nor Council process?

So far as that goes, the Consolidated Plan is also not completed.  There is a public hearing only a few people have heard about in front of CDAB tonight and then, at some time in the future, David will finish the plan, presumably based on input tonight, and bring it forward to the Council for possible public hearings and Council Action.

jack is off on his knowledge of CDAB.It has been around for many years and was designed to divy up Federal block grant funds.Many have served on it over the years and I resent your comment.

We do not need “impact” fees, as a young person growing in Bellingham I had a lot more “services” before impact fees.

Impact fees directly hurt lower middle class and poor people this is basic economics. You make building a house cost more and the price to buy or rent it costs more, that simple.

Why all this demonizing of profit? Profit is what motivates people to provide services at an affordable rate which then raises everyone’s standard of living. I don’t hear anybody using the term “wageateer” as a perjoritive. Many of our politicians make more money off of our taxes than most self owned business struggling to make a living. No body condmening rich sport stars or hollywood actors for their enormous wages.