Spokane mulls extending housing incentives for Garland District, University District

The City of Spokane may extend tax incentives to developers of multi-family housing on part of the North Side and near downtown.

The city has proposed expanding the boundaries of its multi-family tax exemption zone to include parts of the Garland District and the University District just south of Spokane Falls Boulevard.

The proposal is intended to encourage residential development and offset the rising cost of housing in Spokane.

“We are doing this because there has been a strong desire to meet the housing need in the community, and these two areas seem to be ripe to move forward,” said Teri Stripes, economic development specialist at the city. Council earlier this month.

Multi-family tax exemption offers property developers tax exemption on the added value they add to the property.

For example, if a property is valued at $100,000 before development and $500,000 after, the tax incentive applies to the difference, or $400,000 in this case. The system is designed to ensure that the city does not actively lose existing tax revenue, but it does mean that it collects less than it otherwise would on new development.

The City of Spokane offers two levels of tax exemption under the program.

If at least 20% of the units are rented to people earning no more than 115% of the area’s median income, the developer may qualify for a 12-year tax holiday. Those who simply rent apartments at market price are entitled to an 8-year tax exemption.

Once the exemption period is over, the owner pays the full taxes.

The city’s proposed additions this month are just 45 acres in the Garland District and 26 acres in the University District, bringing the total area of ​​the multifamily tax-exempt zone to about 5,000 acres, slightly more 10% of the total land area. from the city.

The expansion would pale in comparison to that enacted in 2019, when the city expanded borders by almost 50%.

This expansion left out a small portion of the University District.

“This small update will fix that and add to the Garland District,” Stripes told the council.

The city is expected to review its multifamily tax exemption program this year following the passage of legislation to spur affordable housing development by the state legislature in 2021.

An affirmative vote on a city council resolution on Monday would kick off a week-long process to expand the boundaries.

A public hearing would take place on February 22, followed by a final vote by the city council.

The new limits would not take effect until 30 days after board approval.

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