Seattle Condos – Tax Breaks for Greater Density

City officials will be reviewing a new proposal soon that extends greater tax breaks for developers building condos in Seattle.  This plan includes apartment developers as well.  Like many other cities Seattle is struggling with issues of affordable housing in various areas of the greater metropolitan area.  The overall goal of the tax exemption would be designed to give condo developers the incentive to build more affordable units in the pricier neighborhoods. 

Basically, the change in state law will lengthen the period of time when developers and Seattle condo owners wouldn't pay taxes from 10 to 12 years for buildings where at least 20 percent of units are under the income cap and cut it to eight for buildings where fewer units are affordable.  The new proposal, would allow condo developers to charge a bit more but still qualify for the tax exemption by raising the “affordability threshold” to people earning up to 120 percent  of the median income.    The current affordable housing plan only allows an affordability threshold of 80% of the median income for Seattle condo owners.Many builders in Seattle argue that the new incentive the way it is currently structured isn’t an incentive at all.  Other external factors must be looked at for developers to earn a profit on these developments such as construction costs.  The overall goal however, when it is tweaked properly, will encourage higher density development and urban centers with a percentage of affordable units.  This will achieve the goals of providing more housing in a given area, as well as providing the affordability component…with a higher quality of home.