Senate passes Sheldon bill extending tax break for low-income housing in Mason County

OLYMPIA – A measure extending a tax break for low-income housing in Mason County passed the Senate last week, clearing the way for construction in the Belfair area.

Senate Bill 5739, sponsored by Sen. Tim Sheldon, D-Potlatch, would extend until 2027 a property-tax exemption for low-income housing in Mason County. Without legislation, the tax break for new projects will expire next year. The measure passed the Senate 48-0 and has been sent to the House for further consideration.

Sen. Tim Sheldon, D-Potlatch, said the measure would spur new construction in the Belfair area, where employment in Bremerton and at Kitsap County military facilities has put pressure on housing. “There is a terrific need for low-income housing in our area, but a tax break for Mason County is expiring just when we need it the most,” Sheldon said. “We need this tax break to provide an incentive for private construction. This bill will keep the tax break in place long enough for us to see results.”

The Legislature approved the property tax exemption for Mason County in 2014, but major reconstruction of Highway 3 through Belfair delayed new residential construction. Now that improvements to the highway through Belfair are complete, Sheldon said the unincorporated Belfair area is poised to grow.

The tax break, designed for cities wishing to spur construction of low-income housing, exempts the first eight years of property taxes when projects are built in “residential targeted areas” that meet federal guidelines for economic distress. The incentive is extended to 12 years when the owner commits to renting or selling at least 20 percent of the units to persons of low or moderate income. The property tax exemption applies to new construction and rehabilitation projects, but not the underlying property. The 2014 legislation extended the same tax break to Mason County, which designated an RTA in the unincorporated Belfair area.

“We need to recognize rural counties have the same needs for low-income as urban areas,” Sheldon said. “By some measures, Mason County is the most rural county in the state. We have only one incorporated city, the city of Shelton. Yet growth in the Bremerton area is spilling over the county line, and pressure for low-income housing is only going to increase in the future.”

The bill would revive the Mason County tax break from 2022 to 2027. No tax break would be available for a one-year period between 2021 and 2022, so as not to interfere with a school-related property-tax overhaul approved by the Legislature in 2017. Sheldon said that would not be a problem, because no projects are expected to be ready to apply for exemptions during the one-year gap.