Few would argue that the rising cost of buying or renting a home in the metro area has triggered a dizzying array of red flashing lights on the dashboard of regional and state economies.
There is, however, no convincing argument that Proposition 120 would do anything meaningful to address the problem of unaffordable housing.
The measure, put before voters by a right-wing activist group, Colorado Rising Action, seeks to reduce property tax assessment rates for apartments and hotels, by 0.65%, resulting in lower taxes.
For a commercial property with a $50,000 annual property tax bill, the owner would save about $3,300 in taxes.
Proponents say that savings could or should be passed on to renters. If the property had about 30 units, the savings would be less than $10 a month, if it was passed directly onto renters.
There’s nothing in Prop 120, however, that ensures renters reap the benefit of shrinking annual commercial tax bills.
In fact, there’s nothing that prevents landlords from holding down rents now in the metro area. And given that landlords are willing to jack up rents because they can, it makes no sense to think that multi-family property owners won’t just pocket this free money, too.
To be clear, the measure as written also applied to single-family property owners as well. Changes made by state lawmakers this year after this proposal was approved for the 2021 ballot ended that possibility.
So proponents are left peddling a measure that can do little but enrich landlords, already on the gravy train, and hotel owners, also in an enviable position relative to numerous other struggling industries across the state.
Not only does Prop 120 help businesses that arguably don’t need a tax break these days, it comes at the expense of dipping into budgets of local schools governments funded by property taxes, especially commercial property taxes.
In a Sentinel Colorado story explaining Prop 120, estimates reveal that Arapahoe County schools and governments would lose about $17 million a year in revenue, $13 million in Adams County and $7 million in Douglas County.
The losses aren’t staggering, but the gains, even to commercial property owners, aren’t compelling.
The only selling point to the measure is that some of the money would be used to shore up local programs that provide some property tax relief to select seniors and veterans. Even then, the backfill goes only to counties that provide such programs and don’t guarantee them.
We won’t argue that ensuring housing remains affordable for all Colorado residents is a serious problem, but Prop 120 would do nothing to address the issue and would gouge already struggling schools and local governments at the same time. Vote no on Prop 120.
Spot on Sentinel. Prop 120 shouldn’t be on the ballot and should (needs to be) soundly voted down.