Washington State Weighs Housing Benefit Districts

A proposed bill in the Washington state legislature would create a new financing mechanism known as Housing Benefit Districts (HBDs) that would allow local jurisdictions to "tap into property price growth on publicly owned land and add more public land in the process."

As Ron Davis explains in The Urbanist, "HBDs take their cue from a battle-tested policy, called 'Transportation Benefit Districts' ('TBD'). Like TBDs, HBDs give local jurisdictions access to expanded taxing options to fund transportation projects. To date, there are over 100 TBDs in Washington State."

Cities and counties can form HBDs that will allow them to raise additional tax money, which can then be invested into areas around rapid transit. They can put that money toward infrastructure improvements and buying up land, which they can develop, sell, or lease at a later date. At least a third of the land has to go to low income housing, at least a third to middle-income housing, and whatever is left can go to market rate housing. In addition, any profits from the sale or lease of land must go to subsidies for permanently affordable housing and permanently affordable homeownership, to promote community land trusts, or to infrastructure costs. Thus the profits from the increased land prices can fund enormous amounts of affordable housing.

The article details how HBDs would work and the potential they hold for making a significant impact on the affordable housing market.