A number of financial incentives have been used to fund transit-oriented development projects throughout the country. Many of these tools innovatively pool public resources for the purpose of funding projects that benefit communities. Some of these financial instruments have been adopted by the State of Washington while others are being proposed to the State Legislature. The following are a list of some of these incentives and their legislative status.
Tool: Tax Increment Financing "captures" the additional property taxes generated by private development projects to finance the up-front public development costs. These funds could provide the necessary amenities to help spur development in targeted locations.
Links to Word Documents:
Tool: Tax Incentive Zones for Transit would include tax breaks for mixed-use developments in targeted locations, such as areas around transit stations and along transit corridors. Fostering development in these areas would provide access to transit to a greater number of people, thereby reducing the need for automotive use.
Links to Word Documents:
Tool: Multi-Family Tax Abatement programs encourage new multi-family housing by forgiving the property tax payments for a period of time. Extending this program to all designated urban centers, and possibly transit station areas, could foster housing development in these areas.
Links to Word Documents:
Tool: Location Efficient Mortgages programs allow consumers to qualify for higher mortgages based on potential automotive cost savings realized through living in dense areas with transit service. Extending this program would allow a wider range of people to live in transit-supported neighborhoods, potentially increasing transit ridership.
Status: City of Seattle began a Location Efficient Mortgage program in 2000 in cooperation with Homestreet Bank. No other cities in the region are using the program yet.
Status: The 2001 Legislature adopted a Tax Increment Financing bill. This is the product of years of effort to reintroduce and pass a bill, after the 1982 version was found unconstitutional.
Next Steps: Cities will begin attempting to implement the new law, in cooperation with other taxing districts representing at least 75 percent of the regular property taxes.
State Legislature TIF Bill History and Digest
State Legislature TIF Legislation
Status: Senate Bill 5950 introduced in 2001 legislature providing for property tax deferrals for multifamily housing within transit corridors. SB 5950 passes State & Local Government committee, referred to the Ways & Means, where did not come for a vote.
Next Steps: Cities and others interested parties are working on legislation for the 2002 legislature. The Regional Council provides assistance to its members involved in this effort.
State Legislature 5950-Substitute Bill History and Digest
State Legislature 5950-Transit Tax Incentive Zones Legislation
Status: Legislation passed in 1996 authorizing use of Multi-Family Tax Abatement, and is being successfully used by larger cities.
Next Steps: Destination 2030 suggested extending Multi-Family Tax Abatement to all officially designated urban centers in the region, even in cities with population below required threshold. Cities and others interested parties can work on amendments in the 2002 legislature.
Chapter 84.14 RCW: New and Rehabilitated Multiple-Unit Dwelling in Urban Centers
Next Steps: Other cities could choose to implement their own programs.