Jackson housing advocates betting on real estate transfer tax as a long-term solution
Jackson Hole's housing problem has worsened over the past couple of years with the coronavirus pandemic compounding the issue. And while the community is working on short-term solutions, some advocates are banking on a real estate transfer tax as the best long-term solution to create funding.
Wes Gardner is the owner of Teton Toys located right across the town square in Jackson Hole. He's been aware of the housing problem in Jackson for a while but didn't personally feel it until this past year.
"What's happening in our housing market right now over the last 18-24 months is unbelievable," Gardner.
This summer, when his employees didn't have anywhere to live in Jackson, he rotated workers between his stores in Utah and Jackson.
"They live with me and my family for a week or two," said Gardner. "But is that sustainable? Like, absolutely not, ask my wife, it is not sustainable."
That's not ideal for the employees either who have to live with their boss for two weeks at a time.
The pandemic has exploded the housing market in Jackson Hole. While the community is working on short-term solutions, some advocates are banking on a real estate transfer tax as the best long-term solution to create funding.
A real estate transfer tax is essentially a sales tax on property. When someone buys a home, a certain percentage of the home value is taken by the state or county. That will create funds that Teton County can use for solutions like building more affordable housing. Gardner wasn't a fan before.
"It is a tool. And to have access to that tool, in some kind of form, would make a huge difference for a community like ours, where the real estate is worth billions of dollars every year, and that transfer tax could generate millions that we could then appropriate for our workforce housing needs," said Gardner. "That's what moved the needle for me to the point where it's like, 'Yeah, duh. Let's use it.'"
"It's hitting visitors, it's hitting second homeowners, it's hitting locals. It's more of an impact, which allows us to kind of take advantage of that crisis, and look for ways to meaningfully address the challenge."Christine Walker, Shelter JH policy chair
Clare Stumpf, the coordinator for the housing advocacy group Shelter JH, said it could act as a long-term solution because there are limited funds for housing. The tax could leverage some of the second home properties being bought for millions of dollars.
"There's $3 billion of real estate sales in the last year in this county alone. That is a lot of revenue that's not taxed, that could be taxed," she said. "And then those funds could go into different coffers, on the county level. So it could go to our affordable housing department, it could go to purchase deed restrictions to make more and more homes available exclusively to locals."
This isn't the first time the real estate transfer tax has been brought up as a possible solution to housing problems. Teton County Representative Andy Schwartz has introduced a bill to the legislature a couple of times but it has failed each time.
Christine Walker, Shelter JH policy chair, said it is different now because more people are feeling the impact, not just low-income who have struggled to find places to live in the valley for many years.
"It's hitting visitors, it's hitting second homeowners, it's hitting locals," said Walker. "It's more of an impact, which allows us to kind of take advantage of that crisis, and look for ways to meaningfully address the challenge."
It's true that businesses are more open to the potential real estate transfer tax. A survey by the Jackson Hole Chamber of Commerce this summer showed that 59 percent of the respondents thought a real estate transfer tax should be implemented to fund the Teton Housing Department.
Plus Walker said as the state is facing a revenue crisis other communities may be more favorable to a real estate transfer tax.
"There's other communities that are also facing housing affordability challenges, and I think it's an opportunity for them to also raise revenue to address the challenge," said Walker. "I'm thinking Sheridan, I'm thinking Laramie County, I'm thinking Lincoln, Sublette County, Park County."
Whether other communities around the state would be onboard is still up in the air. No other community in Wyoming has such high real estate values. Jackson Representative Mike Yin agrees that more communities in the state are dealing with housing issues. He is currently working on making the bill more attractive for the whole state.
"I'm trying to have that team effort to try to get other communities that would also be interested in this type of solution and trying to see what it looks like in Teton County first, as well as having that state support as well."
He's still working out the details but another portion of the sales tax revenue would have to be used for affordable housing or whatever the community decides they would like it to go to. Yin is optimistic that housing is important enough for the state that it will be debated this coming session.