A legislative committee has resurrected a many-times-failed real estate transfer tax, a levy that proponents say could help turn the corner on a workforce housing crisis that’s fraying the community fabric of Wyoming’s costliest locale.
The idea behind the county-optional 1% tax, which has been repeatedly introduced by Teton County’s delegates, is to assess a sales tax on real estate transactions above a certain threshold. In its current form, the bill being carried forward by the Wyoming Legislature’s Joint Revenue Committee could generate perhaps $20 million annually for subsidized, deed-restricted housing or for other community needs, Rep. Mike Yin (D-Jackson) estimated.
“It could do a lot, it could really do a lot,” Yin said.
Real estate sales in Teton County are projected to top $3 billion in 2021, roughly doubling taxable retail sales in the tourist-swarmed community.
“Real estate is to Teton County what coal is to Campbell County, except that we get to sell it again and again and at a higher price each time,” Wyoming Association of Municipalities lobbyist Bob McLaurin said, testifying in support of the bill.
The tax structure being considered would allow counties to exempt up to the first $1.5 million of any real estate transaction. So if a home sold for $3 million, only half of that total might be taxed at the 1% levy if the county sought the full exempted amount. But the proposed legislation also allows counties to set the threshold lower, making the tax a viable option for counties where home prices aren’t so exorbitant.
Counties could pursue the optional tax if half the incorporated municipalities plus county commissioners agree to it, or if 5% of the electorate petitions for it. If that happened, the real estate tax would be put to voters in the county. How the funds would be used would be spelled out on the ballot “in a clear and appropriate manner,” according to the draft bill.
People whose jobs involve housing Jackson Hole’s workforce say the infusion of funds a real estate tax could return could dwarf public dollars currently going toward the cause. Over the past five years, the Teton County government has put $37 million in public funds toward housing, an investment that resulted in 241 new units and leveraged about $100 million in additional private capital, according to Jackson/Teton County Housing Director April Norton.
“That’s about all we can do, because we don’t have a funding source,” Norton said. “We are constantly vetting new potential projects, and our major limitation is funding. We have four [affordable housing projects] in front of us right now, but we won’t be able to afford four. We might be able to afford one.”
In the meantime, hourly wage laborers and salaried professionals who provide Jackson Hole’s most basic services are increasingly being priced out of the place where they work. That’s been an issue for decades, and it has been exacerbated by an aging workforce that’s retiring, cashing out on their high-dollar homes and leaving. Wealthy newcomers with location-neutral jobs are often taking their place.
“We are losing our employees,” Jackson Hole Chamber of Commerce President/CEO Anna Olson told revenue committee members. “My No. 1 issue for employers is the lack of employee housing here, and it’s getting worse by the day.”
New support
Olson urged the committee members to advance the proposed tax so it could be considered in the Legislature’s February budget session, and they did. The committee advanced the 18-page draft bill Dec. 15 by a 8-to-4 vote. A year ago, the Legislature’s Joint Revenue Committee killed a statewide 0.5% real estate tax 7-to-6. More than half that committee’s membership turned over, but there was also one vote that flipped: that of Rep. Tim Hallinan (R-Gillette).
Hallinan was swayed by a new provision in the bill that sweetens the pot for the state of Wyoming, he told WyoFile. Specifically, the Office of State Lands and Investments distributions to local governments exercising the real estate tax would be reduced by 50% — and those funds deflected to the general fund.
Hallinan is also not certain he’ll vote in favor of the real estate tax bill once the entire House convenes in February, he said. Because it’s a budget session, bills require two-thirds majority support to be considered in that chamber.
Two-thirds support is a “high bar” in Wyoming’s tax-averse Legislature, said Rep. Andy Schwartz (D-Jackson), who has introduced a real estate transfer tax several times without committee support.
“My hope will be that, even if it dies in this session, that it will come back as a committee bill in the general session,” Schwartz said.
Simple majority support is needed during the general session, a “huge difference,” he said.
Newspaper archives show there have been discussions about a real estate transfer tax in Jackson Hole since the 1980s, and attempts at bringing the idea to the Capitol in Cheyenne for 30 years.
My No. 1 issue for employers is the lack of employee housing here, and it’s getting worse by the day.
Anna Olson, President/ceo jackson hole chamber of commerce
A similar Teton County-led effort spanning decades was employed to pass another county-option tax now commonplace in Wyoming.
Lodging tax bills were introduced as long ago as 1965, according to old editions of the Jackson Hole Guide, but they were contested by the likes of the Jackson Motel Association, and it wasn’t until 1986 that then-Gov. Ed Herschler’s signature enacted the tax. Today, there’s a 5% bed tax on all short-term lodging in Wyoming, and counties have the option of assessing an additional 2% tax.
Old foes
Likewise, there has been steady opposition to the prospect of a new real estate sales tax. Laurie Urbigkit, government affairs director for the Wyoming Association of Realtors, relayed her position to lawmakers bluntly.
“Obviously we are opposed to this bill,” she said. “We always have been, and probably always will be.”
The Teton Board of Realtors has not taken a position on the bill, according to the Jackson Hole News&Guide. Some individual real estate agents, however, have come out in support, including the owner of Jackson-based Prugh Real Estate.
“I am for a transfer tax,” Greg Prugh said, “or at least counties having the option to pursue.”
Urbigkit dubbed the real estate tax “unconstitutional.” The 1% surcharge imposed on speculative real estate investments is not fair, she said.
“Putting a sales tax on those investments is not equitable when we do not tax stocks or bonds,” she said.
The private sector, Urbigkit added, can come up with solutions to workforce housing shortages in Jackson Hole and beyond. That’s being attempted. Jackson Hole realtors recently conceived a “Community Housing Fund,” a nonprofit that funnels donated real estate agent commissions and home seller proceeds toward affordable housing. The effort raised some $200,000 in its first month, the News&Guide reported, most of which was gifted to the Jackson Hole Community Housing Trust.
Although a real estate tax is thought of as a Teton County tool, the idea has generated interest within other Wyoming communities struggling to house their workforces. Greater Cheyenne Chamber of Commerce President/CEO Dale Steenbergen, who testified in support of a county-option real estate tax, told WyoFile he believes the bill could benefit southeast Wyoming.
“We’ve got to set the bill up so that it can serve a larger percentage of Wyoming,” he said. “I bet I have a bigger housing problem in Laramie County. Jackson would have a stroke if they had to deal with the housing problem I have. I need 5,000 housing units today.”
Look through any Jackson real estate color glossy ads and you’ll see they are selling the fishing, the streams, and the proximity to wildlife, and of course, to a pristine environment. If you’ve ever rented an Airbnb there, you’ll always find a photo of a moose outside the window, boosting their prices. All these things boost these real estate prices dramatically, but they don’t belong to the landowner. The fish, the water, the wildlife belong to all the people of WY. It’s about time that the people who are benefiting from the public services of our state Game and Fish and Environmental Quality Departments – that enhance their property values – pay back to the state and local communities.
There is no sympathy for the tyrannical greedy elites who control most of the world’s wealth, period. Nothing will change in Jackson as the wealthy elites control the Democrat party, which controls the town.
The epitome of this farce of elitist Democrats calling for the “rich to pay their fair share” would be none other than Bernie Sanders during his “town hall” with Martha MacCallum. When he started his predictable fake pitch, she simply pointed out that Sanders was a multi-millionaire, and asked why he just didn’t lead by example, and voluntarily pay more income taxes: he had no answer, and simply scoffed at the idea.
Jackson should have dissuaded the invasion of part-time coastal elites evading taxes in the states where they obtained their wealth decades ago. Too late now. As Wilten points out, to answer their own needs, the elites will simply flood the labor market with foreign workers in dormitory housing for less pay, “affordable housing” be damned. It’s their plan.
This transfer of unfathomable wealth to the top 1% at the expense of the middle class is occurring everywhere. To all the liberals crying here about where to build their spec homes and/or gloating over the over-inflated equity of their surplus homes, know this . . . . The world is marching to the inevitable, whether you subscribe to Klaus Schwab and the elite’s “Great Reset”, or the spiritual “Great Awakening” of the masses, this cannot sustain, and Judgement Day is coming. Best to enjoy life with those you love while you can, and get right with God.
I will add a few more thoughts to the ones expressed below.
One of the biggest reasons for the shortage of employees in Teton County was COVID locking down borders to visa workers. The Feds just lifted in-person interviews for visa workers, and expanded the supply. Expect an easier summer season for employers who snap up those workers by the thousands in Teton County. The bunk beds will fill up once again.
Additionally, many front-line workers were wary about taking on jobs in a resort community with millions of tourists rotating through it. And COVID also exposed just how little employers actually cared about the health and welfare of their employees, especially their immigrant workers. It took wealthy residents to bail immigrants in Jackson Hole. Employers looked the other way. Upon coming out of lockdowns, employers who never really had an interest in hiring locals were forced to look for some. The Jackson Hole Mountain Resort raised wages twice in one year – after decades of stagnant wages.
Another issue is that too many businesses in Teton County are chasing the same dollar. Jackson doesn’t need 20 coffee shops, and all the associated employees.
Lastly, listening to employers complain about shortages they helped create is rich. For example, new hotels get built with the owners knowing beforehand that labor & housing are in short supply. They don’t care. At least they didn’t care until their crop of visa workers disappeared and the local labor pool didn’t rush to fill their low-wage offerings with the questionable working conditions.
Sympathy is hard to come by for many employers in Teton County.
The Chamber of Commerce in Jackson Hole helped create the housing shortage in Jackson Hole. Plenty of people warned the community about the over development of commercial properties like hotels, and excessive tourism promotion subsidized by taxpayers.
The Chamber’s supporters often censored and ostracized the opposition – led by the local newspaper.
Employers also shot themselves in the foot. They bet on housing for imported labor instead of locals. Flop houses, dorm rooms, bunk beds, RV pads, and car camping in parking lots were their priority. They got support from the local government which always saw employees as disposable cogs in their economy, not as people with more complex lives and needs like theirs.
Governments favored misguided zoning, land use policies, and regulations which made it extremely difficult to build affordable homes, or expand a home for a growing families. And, government funds were directed to non-essential services instead of essential needs of local workers – the very workers who made it possible to collect sales taxes, build homes, and service the local community.
A family with a single-story home surrounded by 2-story homes had to fight the County to add extra floor space to accommodate new children. Small homes on tiny lots were not allowed. Laws prevented the number of unrelated people living in the same home. Meanwhile, short-term rentals were approved by County Commissioners to enhance the value of investment properties for non-resident homeowners at places like the Shooting Star development next to Teton Village.
Even at the State and Federal level, the priority skews towards the wealthy. You are more likely to see Federal land developed for ski resorts that cater to trustfunders than federal land developed for workforce housing.
Real estate transfer taxes were always fought against by local realtors as they cashed in on booming markets for non-resident second homes. They fought for an expansion of short-term rentals. They aligned themselves with their wealthy out-of-town clients not local workers.
Decade after decade, Jackson/Teton County Housing directors pushed for affordable homes for the middle class instead of apartments for the majority of working-class locals – mostly unmarried – a nationwide trend seen growing decades ago. Much of Jackson’s middle class could already easily buy homes in bedroom communities. The majority of lower income workers could not, and were the least able to afford a commute. Even families live in apartments but single-family homes were the priority for workforce housing (quicker to flip, less of an eyesore/impact).
Nationwide, starter homes were not the priority of developers. Especially true in Jackson Hole. The very people who need labor have made it a priority to develop second homes instead of first homes for employees.
The business community dragged their heels on paying wages commensurate with the cost of housing as their profits exploded. Instead, employers fought for cheaper imported labor which they could house in bunk beds, flop houses, RV’s, dorm rooms, cars in their parking lots, or the national forest. J1 visa workers were cheaper to hire than Americans thanks to Federal laws which limited payroll taxes employers paid if they hired imported labor. H2-b wages were calculated using average wages from 5 counties instead of local wages. Employers like the Jackson Hole Mountain Resort favored, and catered to, young employees not mature adults. They offered dorm rooms to employees. A nice tool to attract young workers and discourage older ones.
When the community favors housing for tourists, and imported labor, over housing for locals, you end up in the situation Jackson Hole finds itself in. When regulations, policies, and laws harm the working class, you end up with the problems you see in Jackson Hole.
The real estate transfer tax is just another tool as are Town property taxes, sales taxes. The problems go beyond not enough taxes.
My husband and I are a few years shy of retirement, and we’ve been “testing the waters” on real estate prices, and they are insane! And now a real estate tax is on the agenda?? Does the State of Wyoming not want people to move into their State and add to the existing growth or is it just for the elite? Or maybe the State Officials aren’t content with the income of two major State Parks, and are looking to earn even more?? It’s even mentioned above in this article, that even the folks who work hourly are finding it difficult to find affordable…and suitable…housing – which results in people eventually leaving, and I don’t think that is what the State Officials want.
Thank you, and Merry Christmas to each and all!
Other communities and states have utilized a RETT successfully for decades. To ignore it in Teton County is to neglect that county’s largest industry. It makes no sense.
Ah ha, So Wyoming tourist towns are having the same problem as we have in Colorado– working people in the mountains, and even in Denver, do not have affordable places to live. (Some are leaving for other states.) In Co. some of the mountain towns , many, in fact, have adopted a real estate transfer tax , mostly 1 percent, but some a good deal higher. In Leadville, where I have a home, I have been pushing for this as we have lost a major amenity– the aquatic center– because all funds must go to affordable housing for working people and a new jail. In general, the amount you pay in a transfer tax is deductible from Federal and state taxes on the profits from a sale. I think most people would want to help a community with the beauty and culture that enabled their home to be worth much more. In Co. a lot of available mountain homes were getting snapped up by investors as vacation rentals, so many towns are restricting licences to prevent that and talking about taxing vacation rentals at the rate they do businesses, which they actually are. My house, a prefab fake Victorian, which I bought with the proceeds from my Wyoming cabin, is now worth at least double what I paid for it. I wouldn’t mind a transfer tax. But then I am a practicing liberal.
The proposal for a real estate transfer tax is founded on a principle of equity, i.e. everyone pays their fair share to live in a particular community. We all know people moving in who sold their previous homes for multi-million dollar windfalls and move to ‘cheap’ Wyoming. They arrive with funds to pay top dollar for a new residence which gins up the real estate market, and prices out the home folks.
Even better for them, they receive an increase in income, by no longer having to pay state income taxes. Further, most agricultural properties are situated on official county roads, that is, snow removal, borrow ditch and road maintenance costs are paid through local property taxes. Purchasing property on a county road means someone else pays a portion of your cost to live here, whether you need that financial boost or not. As an example, look at Jackson Fork Ranch, owned by a professional sports team owner, which straddles Sublette County Road, 23-174. Other non-billionaire Sublette taxpayers subsidize the cost for miles of road maintenance, which the ranch budget would otherwise have to pay. This scenario exists throughout Wyoming.
Legislators could open their eyes to the influx of wealthy investors who “live” here to claim residency and avoid state income taxes, and reap the benefits of a low crime state, existing and costly infrastructure and world class wildlife, without having to pony up their fair share. In the meantime, Wyomingites pay and pay and pay without complaint.
It’s time for the worm to turn. Instituting a real estate transfer tax will NOT deter investors looking for a safe and clean environment. If you think Wyoming’s real estate agents, mortgage brokers and title companies haven’t been overwhelmed with property sales the past few years, you’re not paying attention. Asking newcomers to our state to assist with the burden of ever increasing costs to maintain the Wyoming life is both fair and equitable.
The article should have explained the financial implications of: “Specifically, the Office of State Lands and Investments distributions to local governments exercising the real estate tax would be reduced by 50% — and those funds deflected to the general fund.” For instance, what would have been the dollar impact on Teton County last year or this year?
You’re right, Charles. I should have tracked that down and included the detail. I’ll do that and share it in this comment thread.
Charles, I just heard back from the Teton County treasurer about this. Teton County typically receives $156K to $191K per year from the Office of State Lands and Investments, she told me.
#1 – The best thing about Jackson is that it is so close to Wyoming. Rapidly becoming the only good thing. Beside the views, but we have good pictures of those available online.
#2 – This story is a breath of stale air.
Just a brief Sidebar to this. The rest of Wyoming already knows that Teton County is not like the other 22 counties. It would be comparing Lichtenstein to Lusk, Niobrara County. The greed epidemic has long plagued Jackson and other western wealth havens. Property values have no real correlation to actual material value.
In my Park County and Cody another phenomenon is chruning. Having spent my entire life here—70 years — I’m seeing something rather alarming now. The availability of common rentals is rapidly drying up. All the classic little Cody houses, cottages, studio apartments and additions that were on the renter carousel since forever are no longer offered. They have been converted over to VRBO’s. I recently helped an out of towner try to find a winter offseason rental in Cody , and it was sobering.
Never mind that the sale price of homes has gone up by 20-50 percent since Covid came to town, rentals have all but vanished as well but for a different reason. Same little cabins or bungalows; different business model. Go to the main VRBO website and search for availables in Cody Wyoming and you will find almost 200 of them. Prices are listed, too. It’s obvious that properties formerly generating maybe $ 800 a month in rent can beat that in five days as a VRBO, or other vacation / short term rental. The wholly local Cody Lodging Association lists about 133 properties around town as well. I don’t even know what AirBnB is up to here.
I was saddened to see the Cody Country Chamber of Commerce actually endorsing the Vacation Rental Management Association which is an umbrella nonprofit that encourages this sort of thing.
Wha I also see is this being driven by bald faced GREED. Again , property values these days are not based on material value. We cannot tax the greed nor easily regulate it. But we can pass a state sanctioned countywide Real Estate Transfer Fee and promise to use the proceeds to foster some low income or otherwise affordable housing for the less than wealthy class. That’s 90 percent of us in Buffalo Bill’s Dreamworld.
I’m pretty sure my local lawmakers will go ballistic with their hue and cry over a potential real estate transfer fee. Let’s hold their feet to the fire till they squeal anyway , just to get them on the record. Wyoming seems to be losing control of its own destiny these days.
P.S. if that One Percent fee on that $ 3 billion gross annual sales of real estate in Teton County were already in effect , it would have provided $ 30 million— best if disbursed as funding for actual affordable housing and the infrastructure to support it.
Can anyone argue Jackson Hole would not benefit from that ? — the prevalent high real estate pricing causes the very real affordable housing crunch, forcing the vital service industry employees to scrounge up a place to stay at ever increasing distances. Why shouldn’t the real estate community and moreso their clients pay for the huge socioeconomic impact they are directly causing ?
Answer me this: has Sotheby’s et al contributed anything towards mitigating the affordable housing deficit ?
These taxes start with the “wealthy” and eventually hit everybody. Filling government coffers so they can spend other people’s money to buy votes. Using public money to subsidize the employee costs of private business is unethical. Using public money to subsidize individuals who aren’t disabled is unethical. People should pay for their own stuff. Using public money to subsidize housing and business expansion in Jackson Hole is to contribute to the overdevelopment and overpopulation of a national treasure.