The Haines Borough Assembly introduced an ordinance this week that would exempt taxes on unsold or undeveloped lots in subdivisions for up to five years.

All six assembly members voted on Tuesday to follow the unanimous recommendation of the borough’s housing working group, which a week ago forwarded the tax idea to the assembly.

The temporary exemption would apply to each unsold, undeveloped property within a subdivision of at least five lots. It would be limited to five years and would end upon a lot’s sale or the construction of a residential or commercial building on the lot.

Taxes on unsold and undeveloped properties within the subdivision would continue to be exempted after other lots are sold or developed.

The proposed ordinance includes similar language to state statute, which allows a municipality to exempt property taxes on new subdivisions for no longer than five years.

Borough manager Annette Krei-tzer said at a Jan. 19 housing working group meeting that if the assembly adopts the ordinance, borough staff could work with the Alaska Municipal League to lobby state legislators to extend the exemption period, potentially strengthening an incentive for development.

Housing group member Rob Goldberg asked if multi-family residential properties could be included in the exemption, but Kreitzer and borough Mayor Douglas Olerud said the ordinance must be consistent with state law, which does not explicitly permit multi-family lots to be exempted from taxes in the same way.

Goldberg supported the subdivision tax exemption but noted, “We can put these incentives in place but it doesn’t really guarantee that anyone is going to put in a subdivision.”

Olerud called the tax incentive “one more tool” to incentivize housing development in the borough.

In other housing working group news, Long brought forward an idea at the Jan. 19 meeting to reform the borough’s land sales code.

The borough currently finances properties at 10% interest after a 5% down payment. Long said that’s high. Following state code would bring the borough’s interest rate down to 6.25%.

Borough clerk Alekka Fullerton advised against the revision, arguing that the rate is high so that the borough doesn’t compete with banks, which are more suited to be creditors.

Long said the proposal was geared to increase the affordability of land. At the current 10% interest rate, a buyer might never afford to pay off a loan, Long said.

Goldberg agreed that the borough needs to do more to lower the barrier of entry for first-time land buyers. “If we want to encourage young people to have property, I think we’re going to have to make some accommodations for them because a lot of them won’t qualify for a bank loan because they don’t have collateral,” he said.

Group member Tyler Huling was split over the idea. “I can see why the borough wouldn’t want to be a lending institution but it would be a transformative opportunity for young people in Haines,” she said.

The group ultimately didn’t make a decision about the land code revision.

At future meetings, members will discuss others ideas to improve housing, including strategies for selling affordable lots in the borough’s Mount Riley subdivision, weighing a community land trust model for home or cabin construction and developing multi-family residential housing.