Reparation Through Taxation?

By Cindy Alia 

February 21, 2023

What is the difference between a fee and a tax?  Few seem to know, especially the sponsors of HB 1474 

SHB 1474 

Creating the covenant homeownership account and program to address the history of housing discrimination due to racially restrictive real estate covenants in Washington state.

Sponsors: TaylorChoppBergPetersonReedStonierGregersonBronoskeCortesMenaStreetRamelFosseFeyGoodmanDuerrBatemanMorganAlvaradoMacriSennBerryKlobaHackneySpringerSlatterCallanOrwallFarivarSimmonsOrtiz-SelfThaiRyuStearnsWylieRamosDoglioRiccelliChapmanSantosDavisOrmsbyBergquistPollet  

In order to create an account to fund "the Covenant Homeownership Program"  you will provide reparations via recording fees to the tune of an additional $100.00 each time you record a document.  This scheme to create a pass-through tax collected by county recorders worked last year as a bill was passed to provide for the homeless, the above sponsors thought to reprise the scheme again.  This means the cost to record a document will be at a minimum:

There is a $5 fee for recording the first page of a document and an additional $1 fee for recording each additional page of a document. 

Additionally, county auditors collect and distribute the following fees and surcharges: 

a $13 Affordable Housing for All surcharge;

a $62 Local Homeless Housing and Assistance surcharge;

an $8 additional Local Homeless Housing and Assistance surcharge;

a $100 housing surcharge enacted in 2021. 

For a two page document, the recording cost is presently $189.00.  If this bill passes the recording cost would jump to $289.00 for a two page document to be recorded by the county.

Now to the problem, we have heard there were in past covenants created and a practice called "red-lining" to prevent what the legislators term BIPOC to be able to achieve home ownership.  While most people have never seen such a document we accept at face value they existed.  Since that time where such documents existed, there have been many well intentioned laws passed, some with unintended results, and some with very positive results. 

The bill sponsors do not think that is enough, and believe random people wanting to record legal documents should contribute to a fund which in total funds more governance, more commissions, and the down payments and closing costs for home purchases as described here: "As part of the CHP, Commerce must contract with the Commission to create one or more SPCPs to provide, beginning July 1, 2024, down-payment and closing-cost assistance to one or more economically disadvantaged classes of persons identified in a CHP study."

This practice is called reparations as defined in Merriam Webster as:

a: the act of making amends, offering expiation, or giving satisfaction for a wrong or injury

b: something done or given as amends or satisfaction

Legislators, if the shoe fits then wear it, but do not continue the practice of stitching bits and pieces of your ideology into various bills that will become parts of what you consider a whole.  The idea of creating a program for a tax funded hand up might well be something the public would support, so be up front and ask the public, maybe even work with the public to craft an acceptable path toward the means. The methods used in this bill will come as a shock and unwelcome surpise to people recording documents just as it was in 2021.  Angering many and as often happens creating yet another divisive situation.





February 21, 2023