Shewmake Bill to Support Self-Help Housing Passes Senate

OLYMPIA – More self-help housing could be coming to rural areas. Legislation to support low-income home ownership opportunities in rural areas passed the Senate yesterday. SB 6013 would expand the housing development nonprofit property tax exemption, an exemption used by groups that build low-income housing such as Habitat for Humanity, to cover groups using the self-help development model.

Under the self-help model, a collection of low-income households obtains land from a housing non-profit. They then work together, with the support of a nonprofit and a USDA self-help housing grant, to build the homes they will eventually own.

“This exemption helps create needed affordable housing and converts unimproved land into units that pay higher property taxes,” said Sen. Sharon Shewmake (D-Bellingham), sponsor of SB 6013. “We only recently discovered that these self-help nonprofits were ineligible for the exemption. This is a simple bill to ensure that self-help housing groups can continue their good work.”

The tax exemption, originally passed in 2016, helps reduce the cost of low-income housing built by nonprofits by defraying one of the larger costs of development, preparing the land. Organizations, such as Habitat for Humanity, use the exemption to not pay state or local property tax on land they’ve bought while they are developing the land and building homes. Once the new homeowner moves in, the exemption ends, and the homeowner begins paying the property tax.

However, nonprofits using the self-help model do not currently qualify for this exemption. This is because the USDA Rural Development self-help model requires that the nonprofit transfer the land to a group of homeowners, referred to as a cooperative association. This transfer triggers the expiration of the exemption.

Whatcom-Skagit Housing, which brought the idea for this bill, has built more than 700 self-help homes in Whatcom and Skagit Counties,” Shewmake said. “I’ve walked entire neighborhoods of self-help homes, and you can feel the pride of home ownership and the sense of comradery that comes from building homes with neighbors. We need affordable housing and having different rules for non-profits doing the same thing – getting people into housing – just doesn’t make sense.”

The bill now moves to the House for consideration. Its progress can be tracked here.