Walla Walla Another housing option for low-income seniors comes at the price of fewer property tax dollars for Walla Walla County.
Affinity at Walla Walla, the community's newest 55-and-older apartment complex, is offering a fifth of its units to lower-income residents, opening the door to a significant tax break in the process.
The state Department of Revenue granted the exemption to Affinity, a 120-unit development at 1706 Fairway Drive, along State Route 125. The development, which had its grand opening just a few months ago, was designed for the active 55-and-older demographic with a mix of studio, one- and two-bedroom apartments starting at $935.
The project, owned by Spokane-based Inland Group, was financed through multifamily revenue bonds issued by the Washington State Housing Finance Commission. Conditions of that financing mechanism require the development to reserve a percentage of units for low-income residents, owners say.
Walla Walla County Assessor Debra Antes and county commissioners expressed dismay at the exemption this week. The county has had to refund $17,585 for the first half of 2012 taxes and won't be able to collect a total of about $56,000 it had expected to collect from the development this year.
Antes said it particularly hurts because the county won't be able to collect the amount it would normally gather in the one-time levy on the millions spent for new construction. With less construction value due to the economy, Antes said news of the exemption was a disappointment. She said property taxes on the facility for 2013 were expected to be $64,000.
Inland Group President Darin Davidson said the exemption may have caught local officials off guard because it might not be a financing mechanism utilized much in the community.
"For some jurisdictions it may be a matter of them feeling incredibly offended because they may be losing tax dollars," he said. "Others are in front of it saying, 'Come, do a bond finance community within my jurisdiction and use these benefits to make it all feasible because we want the development.'"
Affinity is not the only tax-exempt facility of its kind in the community. Antes said the Washington Odd Fellows Home on Boyer Avenue is also exempt under the bond financing statute.
Davidson said there are still other revenue benefits to the development, including the construction jobs created, sales tax revenue to nearby businesses accessed by residents and a potential for other development sparked by Affinity's new community.
He pointed out that without the financing mechanism that makes Affinity eligible for the exemption, the facility would never have been constructed. Yes, the community misses out on the property tax, but it wouldn't have collected that amount if the facility hadn't been constructed either, he said.
What was equaling concerning to commissioners who discussed the matter at their regular Monday meeting was whether the requirement to set aside low-income housing will mean the units are actually filled with low-income residents. To that, Davidson said not only will it happen in the future, but it already has been taking place.
Twenty-five of the units have been designated for low-income residents, defined as single households with an annual income of $20,350; or two-person households with an annual income of $23,250.
Davidson said the units are filled proportionally. That means if 10 percent of the units are occupied, then 2 percent of the units need to be occupied by income-qualified residents. The units are a mix, including two studios, 14 one-bedroom and nine two-bedroom homes.
The units are filled in partnership with Hearthstone Housing Foundation, a nonprofit provider of low-income housing. It was through Hearthstone's application through the Department of Revenue that Affinity received its exempt status.
Davidson said the units will be set aside for lower income residents for 15 years.
"We're certainly giving something up," he said. "And we're also filling a need."