What is a Housing Bank and Why Do We Need One?
How Would a Housing Bank Be Funded?
How Will It Work?
How Will It Work?
The
Housing Bank will establish an application process through which it will
consider proposals from private and nonprofit organizations. It will work
with financial institutions, private builders and non-profit community
organizations to assemble teams around specific projects. It will then
respond to proposals by these teams and will apply capstone funding to
provide the essential last element of funding needed. The Housing Bank
Commission will recommend to the County Council and the county will then
award contracts to the most viable projects that meet the Housing Bank’s
criteria. The Housing Bank will be responsible to the public for managing
those contracts to assure that they perform as proposed. In addition,
The Commission will monitor supply and demand for housing and will establish
policies and funding or financing products designed to meet the need.
Why is a Real Estate Excise Tax needed?
While the Housing Bank is legally able to accept tax deductible donations,
issue tax exempt bonds, and use other mechanisms for raising money, we
need to be realistic about the amount of money that is needed and how
it can be raised. We have carefully looked at all possible sources and
have concluded that the tax is a critical part of the solution. Accordingly,
we will bring this to the voters for their approval in early 2006.
Purchasers
of property are already paying a 1% tax for the Land Bank. Why can't some
of that money be diverted to the Housing Bank?
The purpose of the San Juan County citizens
conservation Land Bank is to preserve in perpetuity areas in the County
that have environmental, agricultural, aesthetic, cultural, scientific,
historic, scenic or low-intensity recreational value, and to protect existing
and future sources of potable water. Proceeds of this tax are restricted
to be used exclusively for this purpose. It would take a change in the
state legislation that made the Land Bank possible to redirect any of
this money. Since the renewal of the Land Bank passed with a 73% public
vote in 1999, it is unlikely that any change is possible.
Since this benefits everyone, why only tax
a few?
From an economics point of view, the cause of the problem is the demand
for real estate in San Juan County and it makes sense to tax the demand
rather than those who, through no fault of their own, suffer the consequences
of increasing prices. Even so, other destination communities have used
not only real estate excise taxes and impact fees, but approaches such
as increases in general sales tax and property tax. Few would
argue that this can be done entirely with private funding, so this is
really an issue of what kind of tax is most fair. Since the need
is urgent and since the legal framework is already in place for the excise
tax, we will proceed with that approach but include a “sunset clause”
where it would have to go back to the voters to continue beyond a certain
date. For those who would advocate some other approach, this will allow
us to meet the current need and also allow time for others to build advocacy
for an alternate approach.
Why tax people who already cannot afford a
home?
The enabling legislation allows the County Council latitude in how the
tax is applied. While the amount of the tax is one half of one percent
of the sale price, we are recommending that it be mitigated in one of
several ways for those who might suffer unfairly as a consequence.