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Home » Archives » April 2006 » LETTERS IN SUPPORT OF AN EXCISE TAX

[Previous entry: "The Republican's Grand Plan"] [Next entry: "Tom, Can You Say "Independent"?"]


In May, we will vote to authorize a 0.5% sales tax (99% to be paid by the buyer) on every real estate sale to provide funds for a San Juan County Affordable Housing Program.

The ballot language follows: "The excise tax will be collected for ten years in the amount of one-half of one percent of the selling price on the sale of real property. Ninety-nine percent will be paid by the buyer and one percent by the seller. Revenue will be used exclusively for competitive grants and loans to eligible entities for the development of affordable housing for very low, low and moderate income persons and those with special needs."

Chasm Between Workers Wages & House Prices

Dear Editor,

I came here over 2 years ago to get an apartment in town for myself and
Guide Dog Rinda. I had no interest in buying a house; been there, done that.

But, like every visitor to this island, I was soon made aware of the real
estate pictures and prices in the windows of Spring St.

As a 'Townie', I am involved every day with people who work and provide
service - always with a generous and interested manner - and I've often
wondered how they match up with the Spring St. pictures and prices.

We cannot keep a real 'community' here without working hard to provide an
alternative to this ever growing chasm between the Spring St. workers and
the Spring St. pictures and prices.

Jim Stegall,
Friday Harbor

Is John Evans STILL confused about affordable housing?

Those of us who have been working over the past several years to find a viable solution to the growing gap between the cost of housing and the typical wages earned in the islands have pursued solutions wherever they might exist including both private and public sector solutions. We know with certainty that the Housing Bank will need to bring together many solutions, the most important of which are enabled by the proposed real estate excise tax. Now, a few individuals, including John Evans, are attempting to discredit this effort by casting doubt on the work that has been done without having done sufficient research themselves.

Let's examine John's latest letter (Against the Tax -3rd let down) to the Guardian:

The local affordable housing organizations will NOT have to change their requirements. The local affordable housing organizations require a certain period of residency in San Juan County as part of their homeownership programs. This requirement has stood the test of both state and federal funding for over a decade, and the same policies are in place in many locations around the country. There is NO new element of the proposed local real estate excise tax that will change this. John's argument is simply a tactic to cast doubt and it has no basis in fact.

Many communities across the country use tax funds to provide housing for essential workers. Will we need to make these tough decisions about how to allocate the funds? Definitely! And we believe it is better to have these decisions made locally. We are not proposing government housing as John likes to characterize it. We are proposing local decisions, made by local citizens to meet local needs.

There is a clear procedure for how the money will be spent. We may not know exactly where the housing will be built, but we do have a very clear and strong procedure in place for the county to follow in awarding the funds based on a rigorous application and review process. The competitive process is, in fact, a major strength of the Housing Bank.

The County Council has overall program approval for all aspects of county government. In this case, the County Council cannot cherry pick favored projects, but must approve the overall program or reject it in its entirety. This is done purposely to remove the element of political favoritism and micromanagement from the process.

Information is widely available. Voter pamphlets with pro and con statements are only provided in general elections, however, the text of the ordinance and our analysis is easily accessible. It is posted on the Housing Bank website and we have participated in public discourse on every opportunity including a five part debate in the pages of the Guardian. We have carefully noted concerns expressed by citizens and have published them with our response.

Our Land Bank makes the difference. San Juan County does have the highest real estate excise tax in Washington State, because we voted—with 73% of the population in favor—an additional 1% for land conservation. This is an expression of our collective values—we believe that conserving our natural resources is imperative. Otherwise, there are many counties that charge the state mandated limit of 1.78%, a full quarter percent higher than the current tax in San Juan County. These include our neighbor counties of Whatcom, Skagit and Island Counties.

Down payment assistance programs are available. If working families attempting to purchase their first home cannot afford it already, how will the tax cause them further hardship? While county programs already exist to assist low income first time home buyers, it is not down payment and closing costs that prevent home ownership but the high cost of real estate which is inflating at a rate of nearly 10 times that of salaries. Working families simply cannot qualify for mortgages at today's prices.

Working families priced out of the market will be helped by this program. If working families cannot afford homes in today's market, how will expanding the availability of perpetually affordable homes price them out of a market that they are already denied? At most, it will use land that might otherwise be used for expensive homes that are beyond the reach of working families. Personally, I would prefer that our scarce land be used to provide affordable housing for working families.

What are the alternatives? To be fair, John has advanced alternatives in the flier that he distributed under the name, "Citizens for Responsible Government." He also raised these points at the League of Women Voters debate on Orcas two weeks ago. There was general agreement at that meeting that the Housing Bank needs to pursue many alternatives including some that John proposed. But, John advocates that these should be adopted INSTEAD of the real estate excise tax. All I can conclude is that since John is now a paid lobbyist for a local special interest group, the "approved negative campaign" must go on, regardless of any attempts at compromise or conciliation. That is seriously disappointing.

John pretends to support working families and the efforts of the local affordable housing organizations, but his record indicates otherwise. Over the twelve years that he was Commissioner he consistently opposed affordable housing including his vote opposing the Affordable Housing Fund Commission. Tilting at all the past windmills of John's favorite battles will not solve the immediacy of the problems facing us today. When one is dealing with real estate prices appreciating at more than 27% per year, we must act today, and not simply wish for the past.

I urge John and all San Juan County voters to vote YES for affordable housing.

Paul Losleben
Olga, WA

Response to Gordy Petersen's Guardian Column entitled: "A Dishonest and Divisive Debate"

Gordy, I've had enough of being called dishonest. Since we began researching the affordable housing problem and evaluating many potential solutions 3 years ago, we have been scrupulously honest in verifying our data and citing sources throughout this campaign. We have been very professional about this campaign and we hoped that you would aspire to the same standard. Unfortunately, you've chosen otherwise…now it's time to set the record straight.

• You claim the 0.5% real estate excise tax constitutes a 50% increase in real estate excise taxes…NOT TRUE…a 50% increase in the real estate excise taxes would be 1.265%. In San Juan County, in addition to the Land Bank tax of 1%, there are also the 1.28% K-12 education and public works tax and the .25% tax for local improvements, totaling 2.53%. Thus, the real estate excise tax is only a 20% increase, NOT a 50% increase as you would have us believe.

• You make light of "the working class will disappear…" Perhaps you should be aware that according to the 1990 US Census and information from the 2005 Washington State Databook, that during this 15 year span, the population of SJ County increased by 50%, yet the population of 25-44 year olds, the primary workforce, has declined from 30% (typical in the U.S.) to 20%...the working class IS disappearing.

• You state, "Everyone will pay for this tax." NOT TRUE. This 0.5% real estate excise tax will be paid once at the time of purchase and will be paid 99% by the purchaser of the real estate and 1% by the seller. According to the Washington Center for Real Estate Research, last year there were 480 existing home sales, add to that a smaller number of properties without homes that were sold and that's a far cry from, "everyone".

• You also stated that the real estate excise tax for support of affordable housing "…will increase the County payroll…" This time you're MISLEADING the readers. What you failed to say, is the soon-to-be-voted-on ordinance allocates up to 10% (and no more) of the annual proceeds from the affordable housing excise tax to be spent for administrative staff and expenses. Yes, the County payroll will increase, but it will be offset by the revenue generated by the tax. (See footnote)

• You refer to the homes to be built with these funds as "cheap housing" and "free houses"…again, NOT TRUE. These homes will be modest and durable, with preference given to quality construction allowing them to be perpetually affordable. The fortunate families that become owners of these homes will have a mortgage and pay property taxes, just like the rest of us.1

Hopefully, this will set the record straight.

Rollie Sauer
Housing Bank Campaign Committee

1 (An Ordinance Adding a New Chapter to Title 3 of the County Code Establishing the Collection and Disbursement of One-Half of One Percent Real Estate Excise Tax For the Development of Affordable Housing. )

Young Families Cannot Afford To Buy A Home

Dear Editor,

It's unfortunate that the mailing sent from "Citizens for Responsible
Government" only confuses the Housing Bank issue. The headline implies that
voting "no" would support existing nonprofit community land trusts, when in
fact, the new tax could be an important and much needed source of support
for these organizations.

Also troubling is the assertion that the new tax would harm young working

Young families can almost certainly no longer afford to buy a home in San
Juan County with working wages alone. They are the ones this program is
aimed to help most, particularly as it could be used to extend the dwindling
support of the federal government for low income persons, to those earning a
"moderate" income. The whole purpose of a locally controlled source of funds
is to create the possibility that working families will be able to stay in
our community, and have the security of a home.

San Juan County voters are known to be well educated, politically savvy and
community minded. Let's hope they'll question these misleading, last minute
statements made on a flyer that does not have any persons name on it.

A viable solution for the housing crisis is now before the voters. Please
vote "Yes" to support our existing efforts.


Nancy DeVaux
San Juan Island


Housing Bank Cherishes Idea Of Island Community

Dear Island Guardian Editor:

It's too bad that Gordy Peterson finds his honors degree in Philosophy "useless." If he rose above the "just the facts ma'm" rhetoric he might find some worthwhile philosophical terrain to explore regarding the upcoming vote on the Housing Bank. Life in our islands is at a philosophical turning point,. We need thoughtful reflection, not paint-by-the-numbers theorizing. Although now being "discovered" to death, the deeper truth is that these islands have been a sustainable home to Native Americans to begin with and in more recent history, farmers and artists and others who chose to live here because they loved the place first of all, not because they could afford to most of all. And love is a word that defies economic analysis and the diatribe of debate. It is a feeling. It is the feeling we have when we gaze upon a landscape that still reflects the integrity of an island. We have the Land Bank to thank for the preservation of so much of what we love about our islands. The deeper truth is that we have the generous spirit of those who voted for the Land Bank and those who buy real estate here to thank for participating in the ongoing cherishing of this place. The Housing Bank, in turn, cherishes the idea of island community. It will help preserve people who live here year-round. People who contribute year-round. People who love it here year-round. Our county has shown great vision and leadership in protecting it's geographic integrity as an island. Let's show the same vision and leadership in protecting the integrity of our community. We all need each other. It's this, not divisive debate, that's at the heart of the Housing Bank.

Thank you.

Janet Thomas
Friday Harbor


I will gladly pay the Real Estate Excise Tax

To the Editor:

In my 28 years as a resident of San Juan Island, I have bought two homes,
built two homes, and remodeled another. If I buy another home here in the
future, I will gladly pay the Real Estate Excise Tax (REET) and the Land
Bank tax. They both enhance the way of life on these islands. I will vote
yes for the REET, and these are my reasons:
Of the concrete workers, carpenters, drywallers, and painters who all
participated in building my present house, all but one have been unable to
afford a home on the island. The one exception is a person who purchased
land here nearly 20 years ago. These days, most can't even afford to rent
a home. The inability of skilled builders to live here will affect
construction costs, due to the cost of flying in off-island workers and
renting temporary space for them while they are working here.

I look at this tax to support the Housing Bank as a personal investment in
the capable people who make good things happen here -- construction and
utility workers, teachers, County employees, those who keep private
business running, etc. If we are to attract capable people, they need to
have a vested interest in the community; they need to be homeowners.
A healthy community adds economic value to my own property. If the
community structure fails, so do we all. The REET is a win-win situation:
our property values remain healthy and those who contribute so much to us
can afford to live here. A yes vote is a vote for us all.

Jeff Brash
San Juan Island

We'll vote yes for the REET because it makes sense.

To the Editor:

Those who oppose the half-percent Real Estate Excise Tax (REET) in support of a new SJC Housing Bank sometimes express these concerns: 1) Government can't solve anything. Let the free enterprise system take care of it. 2) You can't protect working people from the effects of the marketplace, and if only the very wealthy can live here so be it.

These statements ignore some facts about this community that have kept our family here for over 30 years, and others for far longer than that. This place is filled with sophisticated voters who work to keep local government tuned in to local solutions. Hating the government (and all taxes) has not been a popular island tradition.

The islands are also filled with caring people who don't want to live in a monoculture of only the very rich. Many have worked long years in support of programs like the Home Trust, Opal, Homes for Islanders, and the Lopez Community Land Trust. These are programs I believe the Housing Bank can strengthen. It can also work with local builders and architects, local banks and mortgage companies to help alleviate the growing island housing crisis.

We'll vote yes for the REET when we receive our ballots because it offers an island solution that makes sense.

John & Louise Dustrude
Friday Harbor

Support the REET –Invest in Our Community

To the Editor:

There are many reasons to support making affordable housing available in San Juan County but I would like to emphasize that this is an investment with real and immediate economic benefits that far exceed its modest costs. Begin with a fact: the percentage of our population between the ages of 25 and 44 has fallen by one-third since 1990. These are the people who are raising families, working in stores, volunteering at our schools, coaching soccer, serving as volunteer fire fighters and providing essential services such as emergency medical assistance, and repairing roads. Thus despite a 50% increase in our total population, there are actually fewer people to perform these duties now than there were fifteen years ago!

What does this mean in real terms?

1. Increased prices for things we buy. Because housing costs are so much higher here, employers must pay a premium to retain a workforce. Prices must be increased to pay for these costs.

2. Unavailability of services and products. As this crisis deepens, employers can no longer compensate workers enough without raising prices to an unacceptable level. Then we are all forced to purchase goods and services off-island, incurring increasing ferry costs and inconvenience. This is a self-reinforcing cycle. As more people spend money off-island, more stores and services providers close. Also sales tax revenues decrease and must be replaced by higher property taxes, another added cost. People in this age group are the ones who start new businesses and the fact that there are less of them means the business that closes won't be replaced.

3. Paid workers must replace volunteers. Our volunteer fire departments are having a difficult time recruiting new members. Soon we will have to hire professional firefighters. This has hidden as well as obvious cost implications. Clearly taxes will increase. Last year, our insurance company refused to extend fire insurance on our island home after the fire chief informed them of these recruiting difficulties. We were able to secure coverage but only after agreeing to pay substantially increased premiums.

4. Increased Educational Costs. The State of Washington provides funding to school districts based on the number of students enrolled. As our school population decreases, income falls but fixed costs remain unaffected. To make up this difference we will have to increase our M&O levies, another added cost. Also 50% of the current teachers on San Juan Island will retire within the next five years. These individuals have lived here for a long time and secured housing when costs were low. Their replacements will not be as fortunate. Either we prepare to pay significantly higher salaries or find a way to subsidize their housing.

I have focused on economic factors but the less tangible factors should not be forgotten. How much "richer" are we from having farmers' markets here on the islands? And what about live theatre, musical performances and wonderful restaurants? These depend on the energy of young people and the San Juan Islands would be sterile indeed without them. Please consider your own self-interest and what having a diverse population here means for you and vote for the REET.

Dr. Larry Soll
San Juan Island.

Response to One of Albert Hall's Myths

To the Editor:

Is Albert Hall a big meanie? Despite his seemingly mean spirited views I don't think so. I'm sure he thinks of himself as a good person who wants the best for all of us. The problem is he's locked into rigid ideologies. Taxes Bad, Government Bad, Welfare Bad. Hey, I don't like paying taxes either. I want efficient, effective and limited government just like he does. We must have some government and our system where electeds decide on what and how much we spend is a good one. Where the system is failing is the citizen's responsibility to monitor what government does, demand competence and vote intelligently. Democracy will not run on automatic pilot. I know everyone is busy but I fear we've become very complacent and yet complaining.

Others have done a great job describing here the need for the Housing Bank. What about Albert's argument: Why should we give anyone a break at taxpayer's expense? Political outrage at ‘welfare moms' has been popular enough to get presidents elected, example Reagan. While I don't want to see welfare cheats either I wish there was similar outrage at ‘corporate welfare' taking gargantuan sums compared to all welfare scammers combined. Look at just the recent major legislation written by the corporations like the Energy Bill, Medicaid Drug Bill, Bankruptcy Bill, and all the no-bid war and Katrina contracts. Do you hear a peep of protest from Mr. Hall? I think we all agree we don't want anybody cheating us. OK, so what about our Housing Bank?

Yes, it's a new tax burden paid by homebuyers: 0.5% off the real estate transaction. Yes, you could say that it raises the cost of entry for all. That is a cost. But the benefit is ‘perpetually' affordable homes and apartments which we desperately need. The problem is way bigger than the ability of private funding to deal with and the private groups, so far, are unable to do the ‘perpetually affordable' homes we need. Those who get to own these homes sacrifice price appreciation. It's a reasonable and fair trade off. And our community will be richer for the teachers, County workers, etc. who will be able to live here. To reject it just because it's ‘government and taxes' is rigid shortsightedness which will make our community a poorer place to live.

Howard ‘Howie' Rosenfeld
Friday Harbor

Vote yes on May 16th

To the Editor:

A hearty thanks to Island Guardian for posting these different sides to the ‘island affordable housing' issue as we move towards the May 16th vote on funding the new San Juan County Housing Bank.

To me, Hall's arguments represent the typical conservative ideologue's view of the world:

The Free Market Takes Care of Everything. Just Let It Be.

Losleben and the Orcas Research Group have instead come up with something designed for our special circumstances in the San Juan Islands.

Here we sit in a county that usually has the highest home prices in the state – along with some of lowest salaries in the whole state. A free market slam dunk?

As Hall says, this has brought all island home-owners a far higher personal net worth. Indeed it has. Yet living on these islands, we can't expect our nurses and school teachers to move 40 miles inland to find cheaper housing – as most other rich coastal communities on the mainland do. Increasingly these needed members of our community cannot afford to buy homes in the islands where they work. And half of our teachers are retiring in the next few years. Ooops. A little piece of free market banana peel maybe?

Losleben says, put both public and private funds to work here with a small tax (1/2 of one percent) on new home purchases. That can help fund a community-directed affordable housing effort that fits our specific island circumstances and population.

We can keep a fully functioning, diverse community on the islands with home financing that fits a broader island population than most federal and state funds can do.
No free market jingo – no depending on government-only solutions. An island designed, tightly targeted San Juan Islands- specific solution sounds right to me. Vote yes on May 16th.

Lee Sturdivant
Friday Harbor

Healthy Communities Cannot Exist Without Essential Workers

To the Editor:

In May we will have a chance to decide whether San Juan County will adopt a Real Estate Excise Tax (REET). This levy of one-half of one percent on new real estate purchases in the County would boost the funds available for truly affordable housing here. At a time of declining federal and state support, organizations such as the Home Trust on San Juan Island, OPAL on Orcas, and the Land Trust on Lopez would receive direct support for their work. The new Salal Neighborhood in Friday Harbor is just one example of what these groups can accomplish. This Carter Avenue community recently completed by the Home Trust provides homes for fifteen families already resident in the islands that otherwise could not own a place to live here. Other organizations boast similar recent achievements.

Everyone has seen the figures about home ownership in the San Juans–low median income and high real estate prices. The numbers tell us that if you are a construction worker, schoolteacher, secretary, or grocery clerk, your family cannot afford to buy into housing in San Juan County. This situation is very unlikely to improve. In fact, it is getting worse all the time, as housing prices continue to spiral upward, and median income remains stagnant. Young people hoping to start families see that they must leave the islands in order to move ahead. As they leave, the population grows older and less varied. Without the diverse populace required for smoothly running communities, those who stay behind will find themselves in an increasingly barren society, one with fewer young people and fewer people to perform necessary jobs. Our situation should be a matter of concern for everyone who values residing in these islands.

In the East, daily commuters, sometimes travelling by air, work in island retreats where workers have been priced out of the housing market. This expensive solution is not one that we should plan to adopt in solving the problem. It is also mistaken to imagine that healthy communities can exist without these essential workers. The residents of this county deserve stable diverse communities as much as anyone elsewhere. The entire county will benefit from the affordable housing that the REET will help support.

William and Karin Agosta
San Juan Island

Advice From 1888 Is Current Today

To the Editor:

Thinking about the Housing Bank vote coming up in May - one where a "yes" vote is essential to the well-being of these islands, in my opinion - an old saying comes to mind: sometimes we have to look at where we've been to better see where we're going. Where are we going as human beings? The words of my great-grandfather, Theodore Bliss Cunningham, seem to speak directly to our happiness as a community: "Look about you," he wrote in 1888, "and see who are the happiest people you know.

If you can get below the surface, probably the happiest of all will be those who can feel at the end of each day that they have in some way made the hours brighter for some one of their fellows. "Would those who can afford $475,000 (the median home price) to live in the San Juan Islands really begrudge the one half of one percent Real Estate Excise Tax to help make home ownership possible for those less financially fortunate than they are? Looking below the surface, I would guess not, for in their hearts people love to give. After all, we "spend" our lives on Earth, we don't hoard them.

As a senior citizen, many of my friends and family have died or are close to death, and not one has ever said that they wish they had been less generous. Where are we going as human beings? It would make sense to evolve toward our greatest happiness - which, my great-grandfather suggests, resides in an ever-increasing generosity of spirit.

This May, let's vote yes for the Housing Bank and make the days brighter for many of our fellows - and watch our own happiness grow.

Wendy E. Shepard
San Juan Island

A Response To Albert Hall's Myth #2 (Hall Article)

To the Editor:

Whoah, Albert! Are we in San Juan County or Beverly Hills? "Why do we want to encourage the presence of people that cannot afford to live here?" Well, let's see:

Wages earned in-county (1999, not including investment income, which makes up 49% of the county's total personal income), average $19,548 and rank 38th among Washington's 39 counties. According to the Northwest Multiple Listing Service, the average price of a home in San Juan County last year was $465,000. (Please visit for the entire article.) You do the math!

Those "people" you don't want to encourage are the very ones that teach your children, bag your groceries, cut your hair, put out your fires, clean your teeth, help you in times of medical need, load your ferry, service your car, process your garbage, clean your house, serve you your meal out: the list is endless. When the volunteer fire service is staffed by a cadre of wealthy retired executives, I'll gladly get down off my soapbox, and have a little more time to spend with my family! When someone buying that $465,00 house volunteers their time (and obtains the education) so that a teacher can be paid a living wage, I'll lay off on my worrying.

Those "people", Albert, are my people, and I daresay they're yours, too. They are as fiercely invested in what being an "islander" means -the pride of community, the beauty and grace of our home, and the vision of belonging to such a special place- as you are. In fact, they're so invested they are willing to struggle tooth and nail to grow (or sustain) their roots here. "They" are a vastly silent majority, and "they" deserve more than a cursory let-them-eat-cake dismissal.

The affordable housing issue is about so much more than putting a roof over a teacher or volunteer firefighter's head. At the very least, it's a wake up call for the people of San Juan County -ALL the people, to look our own increasingly classist reality in the face, and work proactively for a future that preserves the value and integrity of this community.

Thank you, Albert, for giving me an absolute affirmation of why I'll be voting FOR the housing bank.

Dacia Youngren

Tom Bauschke
John Evans
Mary Kalbert
Ron Keeshan
Gordy Petersen
Janice Peterson
Bruce Sallan
Terra Tamai
Amy Wynn
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