FINAL BILL REPORT
3SSB 5550
C 168 L 90
BYSenate Committee on Ways & Means (originally sponsored by Senators Lee, Williams and Fleming)
Providing a procedure for the classification and valuation of property devoted primarily to low-income housing.
Senate Committee on Economic Development & Labor and Committee on Ways & Means
House Committe on Housing
Rereferred House Committee on Revenue
SYNOPSIS AS ENACTED
BACKGROUND:
A proposed constitutional amendment, SJR 8212, would allow property with dwelling units that is devoted to low-income housing and contains at least five low-income dwelling units to be valued at current use value rather than true and fair market value for property tax purposes. Current use taxation reduces redevelopment pressure.
SUMMARY:
Valuation of property with buildings, and valuation of mobile home parks, that are primarily devoted to low-income housing and contain at least five low-income dwelling units, or low-income mobile home spaces in respect to mobile home parks, may be based on current use value rather than market value for property tax purposes.
In the event that property or a mobile home park is not entirely devoted to use as low-income housing, only the portion that is devoted to such use is to be assessed at its current use valuation. The remaining portion of the property is to be valued at its highest and best use.
A low-income person is defined as one whose annual family or household income does not exceed 50 percent of the median income in the area in which the qualifying property is located.
A dwelling unit is defined as a structure that is used as a home, residence, or sleeping area by one or more persons maintaining a common household, including but not limited to units of multiplexes and apartment buildings.
For property tax purposes, current use valuation is authorized for the property, including areas used for parking and landscaping required by local building and zoning ordinances, if it meets all of the following criteria: (a) at least 50 percent of the rentable floor area of the building or 50 percent of the mobile home spaces in the mobile home park must be dedicated to housing for low-income households; (b) at least five dwelling units or mobile home spaces are occupied by persons of low-income; (c) the rents charged to low-income persons are at or below market rates established by the federal government or a local housing authority, or at or below 15 percent of the area median income; and (d) the property complies with local health and safety standards.
Current use valuation is not authorized for: (a) substandard buildings; (b) institutional housing, except housing under contract to a governmental organization or private health care organization; (c) employee housing, including contract workers, employees, or relatives of the owner; and (d) any property beyond five acres, excluding mobile home parks.
In computing the current use value, the county assessor is to disregard: (a) potential uses that might return a higher income; (b) rents that might be charged were the owner to maximize returns; and (c) the value of the property if either the land or the improvements were unencumbered by their current commitment to low-income housing. The assessed value is to be the lesser of the property's value based on current use or its value if it were assessed without regard to this classification.
Property classified as "devoted to low-income housing" must remain in that use for at least ten years. After eight years, the owner of the property may choose to change its use. Two years' notice of a change in classification must be given to the assessor of the county in which the property is located. Upon removal from classification, the property is subject to the same taxes, interest and penalties that apply to agricultural lands, timber lands, and other property under Chapter 84.34 RCW, the Open Space Act.
VOTES ON FINAL PASSAGE:
Senate 45 4
House 92 3 (House amended)
Senate 44 4 (Senate concurred)
EFFECTIVE:Upon approval by the voters at November 1990 general election