RCW. 82.46.075 allows counties with a full 1% Conservation Area real estate excise tax (REET) to collect a 0.5% REET for affordable housing. San Juan County voters adopted the Affordable Housing REET in 2018, and it’s since raised $13M for the Home Fund, preserving and providing for 132 homes across 10 affordable housing projects.

Affordable housing groups have used the Home Fund to leverage grants and donations, raising an additional $34M — that’s $47M total going to affordable housing! 

If the 1% Conservation Area REET fails to be reauthorized by voters and it sunsets in 2026, the 0.5% Affordable Housing REET will also end in 2026.

By tying the Affordable Housing REET to the Conservation Area REET, the WA State legislature recognized that conservation balances development. As development increases and home prices continue to rise, the two REETs work to conserve the best land as well as support the continued supply of affordable housing.

The Land Bank can partner in projects that achieve both conservation and affordable housing goals and has already helped facilitate several affordable housing projects. 

The law dictates that monies raised from the Conservation Area REET are used exclusively for the acquisition and maintenance of conservation areas. Compatible residential uses could be caretaker or farmworker housing, depending on restrictions imposed by grants and partners.

With few exceptions, the Land Bank conserves land in rural areas where high-density housing isn’t allowed, and the cost of new infrastructure is high.

Buyers pay the 1% Conservation Area REET at closing so there’s an upfront investment, i.e. $5,000 for a $500,000 home. But over the long term, conserving land rather than developing it lowers property taxes for all of us because, unlike residential uses, forests, farmlands, and open space properties contribute more tax revenue than they require in public services. In turn, the Open Space Taxation Act provides tax breaks for these beneficial land uses.

A Cost of Community Services Study (COCS) completed in in San Juan County in the early 2000’s concluded what hundreds of similar studies across the nation have shown: “While building more homes increases the County’s total tax collections, the added revenues don’t cover the cost of additional required services… the effect is to increase taxes, or reduce services, for existing taxpayers.” 

75% of Land Bank properties purchased were already in low tax programs such as Designated Forest land. For example, prior owners of 1575-acre Turtleback Mountain paid less than $1,000 per year in property taxes.

There are currently 7,650 undeveloped parcels in the county, with the potential of 2,000 more by subdivision. The Land Bank purchases at most a few properties a year. Some of those are larger properties that could be subdivided for development, however as explained above, new residential development costs all of us in the community.

If the 1% Conservation Area REET fails to be reauthorized by voters, and it sunsets in 2026, the 0.5% Affordable Housing REET that funds the Home Fund will also end in 2026, which will have a negative impact on availability of affordable housing.

A healthy community provides both places for people to live and places to experience nature. Natural areas, wildlife habitat, clean water and affordable housing are all important to our quality of life in the islands. Beautiful vistas, beaches and quiet walks in the woods should be available to people of all means and are especially important to those living in apartments or on small lots.

No. RCW 82.46.070 dictates that monies raised from the Conservation Area REET are used exclusively for the acquisition and maintenance of conservation areas. So if the Conservation Area REET is used to purchase a conservation property that’s later resold, the proceeds from that sale shall be used exclusively for the acquisition and maintenance of conservation areas.

The current REET allocation is dictated by state law: Counties may adopt up to a 1% a Conservation REET and may adopt a fixed 0.5% Housing REET, but only those counties with a full 1% Conservation REET imposed by January 1, 2003, are eligible for the Housing REET.

Allowing the Conservation REET to sunset (and with it, the Housing REET) with the hope that the state legislature will raise the limit for a Housing REET and remove the requirement for a 1% Conservation REET imposed by January 1, 2003, is risky. More than 100 housing bills were proposed in the 2024 WA State legislative session and only a few made it to the governor’s desk.

Despite the Housing REET being half the Conservation REET, the Housing REET is raising more funds than the Conservation REET. This is because that there are a lot more matching opportunities for affordable housing than there are for conservation: The conservation REET is generating about 1:1 in matching funds, whereas the Housing REET is generating more than 3:1 in outside funding!

Our local housing groups are counting on the continuation of the Housing REET through 2030and are supporting the continuation of the Conservation REET. Read the letter