SENATE BILL REPORT

SB 5365

BYSenators Bender, Warnke, Vognild, Murray, Gaspard and von Reichbauer

Establishing standards for deferral of property tax on mobile home parks serving low-income persons.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 1, 1989; February 6, 1989; January 22, 1990; February 2, 1990

Majority Report:  That Substitute Senate Bill No. 5365 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways & Means.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McMullen, Murray, Smitherman, Williams.

Senate Staff:David Cheal (786-7576)

                  February 6, 1990

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 2, 1990

BACKGROUND:

Mobile homes and mobile home parks are a significant source of affordable housing.  However, during the past ten years park space rental rates have risen at a significantly higher rate than general inflation. 

During the past two years, several mobile home parks have closed due to redevelopment.  These have generally been parks which accommodate older more modest mobile homes owned by low income tenants. 

Park owners cite rapidly escalating property tax as one of the costs they must pass on to tenants, and one of the prime causes of rent increases in recent years.

Many of the problems faced by mobile home tenants relate to instability of both the rent level and the question of whether the park will remain open.

SUMMARY:

Mobile home park owners will be allowed to defer 50 percent of the real property tax obligations of the park if two conditions are met:  (1) 50 percent or more of the rental spaces are reserved for tenants at or below 50 percent of the median income for the county where the park is located; and (2) all tenants in the park are offered a 60-month lease instead of the current minimum of 12-months.

The real property tax which has been deferred becomes payable with interest upon the failure of either condition described above or when the real property is no longer used as a mobile home park.  If less than 95 percent of the spaces available for rent at the time of the first deferral are available, or if the mobile home park is not in substantial compliance with state or local health, safety or land use codes, the deferred taxes become due and payable. 

EFFECT OF PROPOSED SUBSTITUTE:

A limitation is placed on the amount of property tax deferrable of 80 percent of the assessed value of the property.

Park owners must file a written application in order to participate in the program.

One of the conditions for participating in the program is changed.  Instead of substantial compliance with the entire Mobile Home Landlord-Tenant Act, compliance with two health and safety sections is required.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Mike Ryherd, Low Income Housing Congress; John Woodring, Teresa Boslor, Paul McWerten, Washington Mobile Home Park Owners Association; Fred Saeger, Washington Association of County Officials