Rev & Tax kills three workforce housing proposals, sends one on 

The House Revenue and Taxation Committee agreed to introduce a proposed bill that would authorize cities to require developers to pay fees in lieu of developing workforce housing.

The proposed legislation, if it passes, would allow Sun Valley to reinstate a workforce housing ordinance that was ruled unconstitutional last year, or adopt a similar ordinance. The ordinance required residential developers to build a portion of a subdivision or other development as workforce housing, or, if that was inconvenient, to pay a fee into a workforce housing fund. It was a condition of receiving a building permit.

The court determined that Sun Valley’s ordinance was unconstitutional because for ordinary citizens building a single family home, generally their only option was to pay the in-lieu fee, which made it the equivalent of a tax. The Legislature has not authorized cities to assess fees or taxes for workforce housing, the judge determined.

The legislation, sponsored by Rep. Wendy Jaquet, D-Ketchum, would give cities that authorization. The proposed legislation now becomes a bill and would go back to the Revenue and Taxation Committee for further consideration. If the committee approves it again, it would go on to the full House and then to the Senate.

But the committee voted to return three other pieces of proposed workforce housing legislation to Jaquet.

One proposal would have given cities the right to hold elections for tax levies that would help pay for workforce housing. The levies would only be assessed against homes that were not owner-occupied – second homes or vacation homes. Members of the committee were concerned it would not pass constitutional muster because it would tax some homeowners at different rates than others. They also disliked language that would have allowed the levy to pass with just a majority vote, instead of a two-thirds supermajority.

Another proposal would have expanded the definition of impact fees to allow them to be used for workforce housing. Some committee members were concerned that the list of people eligible for workforce housing was arbitrary and that the bill could benefit some employers unfairly over others.

A fourth proposal would have expanded local option tax authority that the Legislature gave counties to allow them to retire debt on jails, allowing counties to use local option sales taxes for workforce housing. Some committee members were concerned this would penalize shoppers from surrounding areas, and others were concerned with extending a tax that is supposed to sunset at the end of 2009.

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