Property Tax Increases Present Another Challenge for Housing Providers
This year, King County residents will face property tax increases of up to 4 percent on average – and some areas may see even greater increases into the double digits. While there are some opportunities for payment plans for those who qualify, most homeowners will have to make their first of only two payments on April 30.
This increase comes on the heels of dramatic year-over-year increases of 35% since 2013. The result is a property tax regime that is among the highest in the nation. Rents were steadily increasing in King County until COVID-19 hit. But this February, Seattle rents dropped by 20 percent compared to this time last year. While Seattle has seen the steepest decline, other locations are also seeing decreases during the pandemic. 91 cents of every dollar of rent goes to costs like property taxes, maintenance, and utilities. Just nine cents returns to the housing provider. As costs like taxes go up, so must rent.
For some rental housing providers, this deadline is looming– especially for those who have not received rent payments for several months during the pandemic. Unlike when COVID first hit, there is no option to defer payments this year. Housing providers are required to make property tax payments even if they are not receiving rental income, which can present a significant financial challenge. Many are not receiving true mortgage forbearance or flexibility on utility payments during this time, which further exacerbates the situation they face.
This is just another example of why we urgently need an influx of rental assistance in King County, and throughout Washington. It is the best solution to make sure that residents stay in their homes, while ensuring housing providers receive the funds they need to maintain their financial obligations.
As we continue to track towards gradual recovery and reopening in Washington, we know that housing is an integral part of the equation. We face a great risk of downstream effects of lost tax revenues to our county if housing providers find themselves unable to pay. And for those housing providers who have been struggling for nearly a year during the pandemic, even a slight increase in expenses may be the final straw. Increasing costs to housing providers with no recourse is unsustainable and increases the risk of viable rental housing units leaving the market permanently – further exacerbating our regional housing crisis for both housing providers and tenants.