Tax Break For Housing Developers Could Be Eliminated In Wenatchee

The Wenatchee City Council will likely do away with tax breaks for housing developers who don't commit to offering any low-income housing. 

The city has been awarding an eight-year tax exemption for all new housing construction for about a decade in an effort to offset a chronic housing shortage. 

Wenatchee Mayor Frank Kuntz says the result has been heavy development of market value housing, but councilors are frustrated with a resistance to offering low-income options. 

"I think the council is considering getting rid of the eight year tax exemption, and saying, 'no, it did what it was supposed to do, it got a lot of units built, (now) we're not going to give you any tax exemptions unless you provide some percentage of low income housing.'" said Kuntz. 

The rules could be changed to eliminate the eight-year tax exemption before the end of the year, according to Kuntz. 

He says it's not known how builders will react to the change. 

"That'll be interesting because we still need more apartments and we still have developers looking," Kuntz said. "And whether developers will leave and say, 'no, I'm not going to do that project because I'm not getting my eight-year tax exemption. I don't know, we'll see what happens." 

Developers get an even larger 12-year tax break if they commit to providing a percentage of units for low-income housing. 

Some councilors were angered recently when one developer backtracked from an affordable housing agreement, but still wanted the eight-year tax break. 

They held a lengthy debate before deciding that Eider Properties could be released from its commitment to build 84 units on Red Apple Road as affordable housing. 

Council member Mike Poirier agreed to let the builder out of its commitment but did not think it was fair that Eider would still get a major tax break to build higher rent market value housing.  

"It drives me nuts that this happened, nuts!" said Poirier. "We’re disappointed here. We’re sad."