By David Earle
Last month, I wrote about Vashon and Washington State’s serious housing problem, offering solutions the King County permitting department could put in place to make it easier for lower-income individuals to buy land and construct housing.
This month, I return to my point: “Land hoarding is a thing.” For instance, the Reed family of Tacoma owns 770,000 acres of land in Washington State. There are many landowners in the U.S. who own more than 1,000,000 acres. Our property tax code encourages this by charging people like Bill Gates and Jeff Bezos the same 1% rate that other landowners pay. Without some constraints – especially in residential areas – the market is artificially deformed. Because a few individuals own so much real estate, property availability is lower, the prices are higher, and fewer people can live in a home of their own.
King County has an $8 billion dollar per-year operating budget. Most of us agree that we want the basic services this budget provides. However, our property taxes treat all homeowners the same, without respect to their financial positions.
Our regressive tax code further exacerbates the housing crisis by being a burden on the poor, disabled, and elderly. We need to overhaul our property tax system to reflect reality.
Presently, it is easy to hoard real estate if you are wealthy. What I propose looks more like a (much less expensive) version of our federal income tax code:
For those who own less than $1,000,000 in combined real estate, yearly property taxes shall be 0.5% of the value of the property owned (one-half the current rate). This will help to protect people who need a place to live and are currently paying more than $10,000 a year in taxes on top of their mortgages. For those owning property appraised between $1,000,000 and $1,500,000, the property tax rate shall be .75%. See the table for other proposed rates, which increase as property value increases.
| Property value | Property tax rate |
| < $1,000,000 | 0.5% |
| $1,000,001 – $1,500,000 | .75% |
| $1,500,001 – $2,000,000 | 1% |
| $2,000,001 – $2,500,000 | 1.5% |
| $2,500,001 – $3,000,000 | 2.0% |
| $3,000,001 – $4,000,000 | 2.25% |
| $4,000,001 – $10,000,000 | 2.5% |
| $10,000,001 – $50,000,000 | 2.75% |
| > $50,000,001 | 3.0% |
This will encourage building homes that are more modest in scale, whilst discouraging the construction of bloated homes. Overly large houses do not help anyone, as they are too expensive for most to afford and use more resources than needed to construct and maintain. By using more lumber, labor, electricity, and fuel, owners of homes greater than 3,000 square feet leave fewer resources for others.
Perhaps better than using tax brackets, we could simply plot a curve based on these intervals. Each landowner would have the value of their assets run through a simple calculation, arriving at their tax rate. To ensure this concept works, we’d need to create a database of all King County homes, their values, and a list of owners. This information is publicly available, but would take some time organize. It would probably need to be adjusted to some extent. Corporations would not be exempt from these rates.
This change would make financing a home easier, protect those with limited financial resources, and place more responsibility on the wealthy to fund King County’s annual budget. It would also protect our elderly population by reducing their tax load around the time they reach retirement age. It breaks my heart every time I see an older person sign up for a reverse mortgage or have to move out of a life-long home because property taxes have gone up in relation to their fixed income.
In addition to these changes, I propose the county offer a comprehensive manual and plans to build a composting toilet that works. Contrary to the typical experience, it is possible to build a composting toilet in a way that is pleasant to use (zero smell), looks nice, and saves thousands of gallons of water each year. Consequently, we also need plans for well-designed graywater systems.
I mention this because King County’s septic permitting process, septic construction, and sewer hookups are very expensive.
This year in King County, we will spend more than $1 billion dollars treating wastewater. Every year the U.S. $5 billion dollars to flush clean drinking water down the toilet. That’s just the water bill. We spend far more as a country to dispose of wastewater – pumping, trucking, and treating it.
Not being allowed to adopt composting toilets as a primary option for home construction is one more expensive component that holds people back from building a home. Even for those who would later like to add septic or sewer, avoiding having to finance that portion of their initial build would help more people create homes of their own.
Some will argue with me because flush toilets are all they’ve ever known. Obviously, composting toilets are not an appropriate option for high-density housing. Still, I believe this approach will protect our environment while helping more folks create a place of their own.
