House passes Muñoz' subdivisions bill

New housing could get tax deferrals while being built
Rep. Cathy Muñoz, R-Juneau, speaks at the House Majority press conference Monday about her bill to defer property tax for new subdivisions.

The Alaska House of Representatives Monday approved and sent to the Senate a bill aimed a reducing the cost to develop new housing.


Sponsored by Rep. Cathy Muñoz, R-Juneau, and others, House Bill 264 would allow cities to defer collection of increased property taxes on new subdivisions until the homes are built and sold.

As it is now, subdividing significantly increases land values and the accompanying property taxes for developers.

“As soon as that process is initiated and finalized, the tax burden goes through the roof, sometimes five times — sometimes 10 times — the pre-filing rate,” Muñoz said.

Muñoz said local homebuilders and the Alaska State Home Building Association brought the bill to her hoping to lower the cost of development.

“In communities like Juneau that are experiencing a limited land base and high housing cost, that extra carrying cost is a huge deterrent to new subdivisions and new housing development,” Muñoz said, speaking at a press conference before the bill passed overwhelmingly on the House floor.

Helping out the bill were its co-sponsors, including House Speaker Mike Chenault, R-Nikiski, and Minority Leader Beth Kerttula, D-Juneau.

“This helps us have more development in Juneau, and we need it — we need more housing,” Kerttula said.

It is difficult for developers to pay the ongoing higher costs during the development process, but, when the houses are later sold, the money to pay the deferred taxes is then available.

Developer Hugh Grant, as well the Juneau Affordable Housing Commission, endorsed the bill.

Commission Chairman Alan Wilson said the bill removes a disincentive for real estate development and offers a new tool to help make housing more affordable.

Sen. Dennis Egan, D-Juneau, said he thinks the bill has a good chance to pass the Senate as well, despite the short time left in the legislative session.

“It’s a good idea,” he said, but it took some changes to get municipal endorsement. There’s now a deadline of five years for the deferred taxes to be paid.

“There were concerns, but with the cities’ endorsement I think it has a good chance of action this year,” he said.

It would be up to cities to decide whether to offer the property tax deferral, according to the bill. Muñoz said the cities will not only get all the deferred taxes, they’ll also get the additional taxes from any development the bill spurs.

The session ends April 15, and the House will stop committee action on its own bills next week and consider only Senate bills after that, said House Majority Leader Alan Austerman, R-Kodiak. The Senate is expected to take reciprocal action.

• Contact reporter Pat Forgey at 523-2250 or at


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