City and County opt in for Substitute Housing Bill 1406

DAYTON–Both the City and County have opted in to adopt legislation at a future date for sale/use tax allocation for affordable and supportive housing in response to Washington State Substitute Bill 1406.

Dena Martin, Associate Planner for Columbia County, reported that the opt in choice is to allocate a portion of sales and use tax already collected to be used locally for affordable or supportive housing. She stressed it will not increase current sales/use taxes because this will come from sales/use tax already collected. The County would receive 0.0146% of all sales/use tax collections in the unincorporated areas. If the city opts in, the city would receive .0073% of sales/use tax collections in the incorporated areas. It will last for 20 years after the first year it is collected.

Martin stressed that a unique feature of the bill is that the taxing jurisdiction does not have to specify right now how the tax money will be used. There is a list of ways the tax can be used. The County is small enough to qualify to use the revenue for supportive housing (rental assistance, power assistance, for example). She said it can be used against bond revenues. Further, it can be used for rental assistance and down payment assistance. She further mentioned acquiring or rehabilitating affordable housing, or constructing new units of affordable housing. Supportive housing would be rental assistance.

The way this works is the state collects it, but then gives it back to the local jurisdictions (cities or counties) as a credit. A report will be required once a year in October showing how the funds were spent. Martin said that it can be collected for 20 years and there does not appear to be a deadline at this point for when it has to be used. Plus, being able to join collaboratively with other jurisdictions or local housing authorities is a plus. To qualify for the services, applicants must have income at or below 60% of the county Area Median Income (AMI).

Martin explained that there is a cap. The cap is applied in years subsequent to 2019, and is limited to what was collected for 2019. If in subsequent years, jurisdictions collect less tax, then jurisdictions are limited to what was collected that year, but if more is collected, the 2019 cap is applied. It is hoped for a high amount for 2019.

Based on this, the County Commissioners passed resolution 2019-50 to declare the intent of the county to adopt legislation to authorize the sales and use tax for affordable and supportive housing to be used in accordance with Substitute House Bill 1406.

In a separate interview, Meagan Bailey, Director of Planning and Community Development for City of Dayton, reported that the city declared their opt in by passing Resolution 1398 at the City Council Meeting held November 13, 2019. Public hearings are a significant part of the process. Both the city and county will hold separate public hearings at a later date.