PORT TOWNSEND — A divided Port Townsend City Council has agreed to adopt a 12-year multi-family tax exemption program.
The program designates specific residential target areas for multi-family housing and adds a new chapter to the municipal code allowing for the exemptions.
The vote Monday night was 4-2. Mayor Deborah Stinson and Council member Michelle Sandoval, who also is on the council’s ad hoc committee on housing, voted against the measure. Council member Amy Howard was not present.
The resolution provides the exemption from property taxes to qualified new multi-unit housing located in seven designated areas of the city which include uptown; downtown; the waterfront; the historic district; the area from San Juan Avenue to Discovery Road; upper Sims Way to Sheridan Street; and the new Rainier Street area.
The applicant must rent or sell at least 20 percent of the housing units to households that are low-income — 80 percent or less of median income — or moderate-income — 120 percent or less of median income. The project must include a minimum of four units. The exemption applies to only the value of the building, not to the land.
Council member Bob Gray amended the original resolution proposed by Sandoval that included an 8-year exemption for multi-family housing but did not include the 20 percent stipulation. Gray’s amendment eliminated the 8-year provision altogether and included all seven target areas. It was seconded by Pamela Adams.
Gray argued that builders would be attracted to the exemption but would not satisfy the 20 percent rule and that did not ensure affordable housing would be constructed.
Discussion on the topic lasted an hour and 45 minutes.
Council member David Faber was conflicted about the choice.
“We don’t have any developers beating down our doors at the moment, so any builder increases our supply of housing,” he said.
He eventually supported the amendment.
Stinson disagreed with the majority.
“We should go with all the doors open, and close them as we need to,” she said.
Sandoval also wanted both types of tax exemptions.
“I wanted the broadest possible efforts for housing,” she said. “This was a narrower motion as amended by Bob Gray. My motion was for two types of tax exemptions.”
Lance Bailey, director of development services, said other cites have instituted similar programs and that Bellevue, in particular, has been successful at building affordable housing.
Stinson said Port Townsend should attract all kinds of developers.
“We desperately need affordable housing. We need two-bedroom apartments. No one is doing that here. Providing that eight-year option would help us,” she said.
“Any building frees up a place for others. I know a woman living in a small lower cost ADU [accessory dwelling unit] who can afford a larger place, but there are none for her. If we had some built, she would move up and that ADU would become available as affordable housing.
“I’m just frustrated that we are limiting our options,” Stinson continued. “It’s really philosophical. If we throw open the possibilities, we can bring in development. If we don’t want that, we can close that window. We don’t really think million-dollar condos are the answer here.”
Stinson said that Port Townsend lacks big commercial builders.
“They aren’t our local builders who aren’t bonded and insured for large-scale projects. Our local builders are single-family home builders. We need commercial grade builders who required different types of financing and insurance. We need to attract them to build our workforce housing.
“If the tax break will give us another 25 units, that’s great, ” she said.
Stinson admitted that the vote can be revisited.
“Last night didn’t feel thoughtful,” she said Tuesday. “People are anxious. The problems we have are the same ones all communities across the country are experiencing.”
City Manager David Timmons said after the meeting that staff will redo the ordinance and map as approved and put it on the next consent agenda for review.
“We want to make sure this is what the council intended,” he said.
Jefferson County Editor/Reporter Jeannie McMacken can be reached at 360-385-2335 or at [email protected]