Friends of the Waterfront
Olympia, Washington

Tax Breaks for the Rich

On its part of the land that it's asking the city to rezone, Triway wants to build 141 high-rise condos across from Bayview; it plans to sell them for an average of one million dollars each. The new owners will pay no property taxes for the next eight or twelve years, thanks to a city law to encourage housing downtown. (The exemption runs for twelve years if the project contains 20% or more affordable housing, which this apparently won't.) They will still use city and county services though, and everybody else will pay for their share of the bills for local and state schools, their city and county property taxes, and their tax bills for the library, Medic One, the port, and the PUD. Triway's slogan for its plan is "City Life — it's there for the taking!" In fact, the owners of these condos would get to take the best views in the city from the rest of us, plus about $76,000 each in tax breaks.

If the City Council granted the rezone request, the other property owners involved would be able to put up similar buildings on the isthmus, and their new high-rise condo owners would get eight or twelve year tax breaks too...

The details

The city publishes a flyer on the property tax exemption for new multi-family housing downtown, passed by the City Council as part of their efforts to encourage residential development there. (It's still written for the old ten year exemption, but the state just changed the time periods this year.)

The current property tax is $9.72 for each $1,000, so someone with a house assessed at $980,000 now pays $9,525.60 a year.

Over the eight years that each owner is excused from paying their property taxes, they'll save something like $76,204. (Not counting the interest they'll be earning.) Everybody else will pay the bills for supporting our local and state schools, for supporting all the services provided by our city and county property taxes, and for supporting the public library system, Medic One, the port, and the PUD.

Triway currently claims it will build 141 condos, and says it expects to sell them for $1 million each. They would start out assessed at their sales price; roughly 98% of that would be exempt from property taxes for the next eight years, since the value of each owner's share of the raw land under the building is still taxable.

Altogether, If Triway were to build the 141 units they've been talking about, the new condo owners would be excused from $10,744,876 in property taxes.