Assembly encourages housing development with property tax deferral
In an effort to spur more housing development, the CBJ assembly adopted an ordinance that would allow the city to defer property taxes if land is subdivided into three or more lots.
City manager Kim Kiefer says the ordinance was a priority of the housing committee.
“Say you have a 10 acre parcel and you create five different 2-acre lots, you can ask the city to not pay that additional property tax that would be charged for those five lots and defer them for up to five years.”
Prior to the five years coming up, tax deferral for each lot would also end once ownership is transferred or when a certificate of occupancy is issued.
The hope, says Keifer, is to open up more properties for housing development
“What it allows developers to do that have big parcels is to subdivide it and they don’t have to have the funding right up front to pay for those additional properties and the improvements to, say, get water and sewer to those properties. It allows them to push it to the end of the project instead of the front end.”
During public hearing of the ordinance, Alaska Renovators owner Alan Wilson said the motivating rationale behind the concept is to get lots on the market.
“Developers that sit on large tracks of land have historically in Juneau – by the time you get a subdivision developed and lots ready to go on the market, the market conditions have changed. You can’t sell your lots. The next thing you know, those lots get foreclosed upon and you end up losing your subdivision. West Juneau is a prime example. So the deferral is an attempt to keep that scenario from happening and repeating itself,” Wilson explained.
The ordinance is based on state legislation which went into effect July 2012. Keifer says, so far, only Fairbanks has the ordinance in place.