After more than a year of debate, the Blaine County commissioners have passed an ordinance under authority of a revamped Idaho law giving them broad discretion to grant property-tax exemptions for commercial projects—including housing.
Approved last Tuesday and published Friday, the basic ordinance took effect just before Monday’s state-mandated April 15 deadline for the Assessor’s Office to receive applications.
The results were almost immediate. As of Monday morning, the county had received four applications for tax breaks, with “two or three more” in the works, according to Assessor Jim Williams.
By statute, the commissioners have a month from the deadline to approve or deny proposals in public hearings, Williams said.
The state law took effect Jan. 1, 2018, dropping the investment required to qualify for an exemption from $2.5 million to $500,000, while opening up the invitation beyond heavy industry to “non-retail” uses, including so-called “commercial housing” developments maintaining five or more rentals. Counties can implement the measure at their discretion, with the commissioners deciding which projects qualify, how much they’re exempt and for how long, up to five years.
On April 9, the Board of Commissioners expressed interest in pairing the new ordinance with a resolution to serve as a rubric for evaluating proposals. Though a draft resolution was presented alongside the ordinance drafted by board attorney Tim Graves, it did not receive a vote.
As with all property-tax exemptions, projects can be approved or denied as the board sees fit.
“The county has a lot of leeway,” Commissioner Jacob Greenberg said. “It could pinpoint a single square block it wants to [develop]. And, the commissioners have a lot flexibility in whether they want to accept an application.”
Flexibility was key—that’s why the board felt comfortable adopting a broad ordinance, knowing it still maintained control over how it would be used.
Advocates for business and real estate development urged haste, too.
“There’s a really high degree of interest in affordable housing,” said Sun Valley Board of Realtors Government Affairs Director Bob Crosby. “Almost every day, we hear about some property being conceptualized, especially in the north valley.”
But Crosby, echoed by Mike Higgs of the Carey/Picabo Chamber of Commerce, asked the commissioners to focus on more than just low-rent construction.
“I don’t want you to be painted into a corner by the language,” Crosby said.
With this new tool, the county adds another option to the deed-restricted approach to affordable housing taken by the Blaine County Housing Authority and its pool of units.
There’s risk there, Graves said. Though the county has the power to pull the exemption during the five-year window, it has no control thereafter. If an affordable unit can command higher rents, or easily be renovated into a luxury one, all the developer needs is patience.
“There’s only so far we can go, as far as legal restrictions,” Graves said. “The question I’m trying to get across is whether there are practical restrictions we can put in place.”
Graves suggested the commissioners weigh square footage, density, proposed amenities and even building materials when reviewing an application.
“Can you just change the flooring, and raise rent 40 percent?” he asked the board. “What’s it going to look like in 10 years’ time? If this is intended to be long term, that sort of thing to consider.”