State Representative Andrew Barkis recently gave a presentation at the Association of Washington Business Housing Forum, where he outlined five tools he believes will make it easier to develop new and affordable housing in the state.
Rep. Barkis represents Washington’s 2nd Legislative District, covering parts of Pierce and Thurston Counties. Within the legislature, he serves as a member of the Housing, Community Development & Veterans Committee, and outside of the legislature, Barkis has over 25 years of experience in the housing and property management field.
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Barkis joined U.S. Rep. Denny Heck and UW Professor James Young in offering opening remarks to kick off the AWB Housing Forum. During his presentation, Barkis focused his comments on ways the legislature can enact policies to increase the amount of housing available in the state, as well as find ways to make that housing affordable.
Barkis gave an example of building 65 housing units – along with the hard costs, fees, taxes, and soft costs that go into the business equation. He then posed a scenario of what it would take to make 28% of those units affordable. In his hypothetical situation, Barkis says he would need to cut costs by 20-25% in order to create those affordable units.
Finding ways to cut these building costs, is where Barkis says there is an opportunity to use incentivized housing solutions.
One solution to cut costs is to create a property tax exemption. Barkis notes that there is the existing 8-year and 12-year Multi-Family Property Tax Exemption, but that more needs to be done to make it effective.
“These are good programs. They’ve been in existence for a long time. But guess what, as a stand-alone, they may or may not work,” said Barkis. “We’ve got to start looking at it broader. We’ve got to look at more – 8 years, 12 years, maybe 15 years, maybe doing it for different kinds of projects.”
Barkis also explores the idea of developing a state sales tax credit equal to 50% of the state and local portion. He offers two responses to the idea that the state can’t afford this credit. One is that without it, many projects won’t be built.
“Every project that’s not built, guess what, you’re not collecting any tax. So, if you’re not building it, you’re not collecting tax. So, why don’t we build some stuff, collect a little bit less tax, but collect tax nonetheless,” said Barkis.
He also points to a financial multiplier effect as a result of building affordable housing.
“If you put more money in people’s pockets by getting more affordable units, they’re going to spend more money in that local jurisdiction. That’s sales tax money; that money comes back in. And over a period of time…you’re going to recoup that,” said Barkis.
“When you start to lower those tax burdens, you start to give the ability for the builders to build things at a less-expensive cost, again affecting the total cost that’s going into play.”
Barkis’s three other tools include expediting the state’s complicated permitting process, increasing zone density and flexibility, and finding ways to mitigate the many fees involved in constructing housing units.
“Crisis prompts action. When you have a crisis like a hurricane or a fire, what happens? Everybody joins together. We don’t care who we are or what party we’re from, we join together. We join together and put aside our ideologies and we help out who we need to help out. And in this situation, we have to do the same thing because we are in a crisis. We’re not building enough homes. Washington State is not going to stop growing …”
“… This can be achieved. It can be achieved as soon as this 2020 Legislative Session.”