‘Blue-state’ play or affordable-housing ‘solution’? Idaho kills tax break bill

Most Idaho legislators agree: Housing in the Gem State is too expensive. 

They just don’t see eye-to-eye on what, if anything, state government should do about it. 

Twice in 24 hours a closely divided Senate considered a bill aimed at spurring affordable housing through tax breaks, and twice senators voted down, including a tie-breaking ‘nay’ from Lt. Gov. Scott Bedke. 

First on Tuesday, then again Wednesday, lawmakers debated a change designed to build new partnerships around rent-controlled construction— and give counties more leeway to waive taxes on certain new low-priced developments. 

The first vote ended in a tie, 17-17, with Sen. Carl Bjerke, R-Couer d’Alene, absent. In a rare opportunity, Bedke, who serves as the president of the Senate, cast the deciding vote.

On Wednesday morning, the bill’s Senate floor sponsor Treg Bernt, R-Meridian, asked for reconsideration before a full roster of senators in the chambers. That vote fared worse, with the bill failing 20-15.

This week makes four straight years the Legislature has declined to expand a 2002 law that allows counties to waive all or some property taxes on affordable projects from nonprofit developers. 

But the statute, which features stout guardrails and income requirements, is “so rigorous that it was not being used,” Bernt said. 

The proposal from East Idaho Rep. Jon O. Weber, R-Rexburg, would have made it easier for existing developers to access the county exemption — and, ideally, lure new firms into the affordable market. 

Failed bill an option, ‘not a mandate’

House Bill 760, which passed the House 39-28, aimed to: 

•Open the tax break to developments with average rents affordable at 60% of a county’s area median income or less, rather relying on strict, graduated rubric prescribing a range of income levels 

•Allow for-profit companies to receive the break, provided a nonprofit group is involved, and 

• Allow companies an approved partnership to “take advantage of other federal financial incentives.”

Taken together, the bill paved a path for businesses to access low-income tax-credit financing, a sought-after mechanism for bankrolling affordable housing already in annual use throughout Idaho. 

State law prohibits a project that uses federal tax-credit financing or other public incentives from applying for the local property tax break — another provision Weber’s change would wipe from code. 

H.B. 760 would have kept the ultimate decision on the tax break with county commissioners, a provision that aims to prevent new workforce construction from shifting too much tax burden to existing homeowners. Any project receiving the tax break would have to demonstrate annual compliance to the county assessor.

“The most important thing, I think, is that the bill offers a level of local control by allowing county commissioners to opt out,” Bernt said Tuesday. “There is nothing in this bill that requires local governments to grant this exemption. This is a tool for local governments to do as they choose, not a mandate.” 

Bernt: ‘This isn’t the projects’

The debate quickly veered from affordability to philosophy, with senators questioning the appropriateness of government interventions into housing and the fairness of shifting tax burdens from one resident to another. 

“You know who’s not paying for this? Developers. The Realtors. The Boise Chamber. The out-of-state investors who wrote and are pushing this bill,” Sen. Brian Lenney, R-Nampa, said Tuesday. “You know who is? The county assessor who is going to have to take the properties off their tax role.”

Lenney said he had 17 pages of prepared notes for Tuesday’s floor debate, but decided to “wing it” in his rebuttal to Bernt’s pitch. “This is straight out of the blue-state playbook,” he said. “We’re talking about rent control. We’re talking about the projects. This is what they do in Portland, Los Angeles, Chicago — pick your city. The good thing is, once they move in, maybe we can set someone up with a taxpayer funded daycare to run out of it.” 

Sen. Josh Kohl, R-Twin Falls, fought the bill before both votes, arguing that “middle-class families” will have to shoulder more of the tax burden with new developments off the books.

“We’ve seen a few tax-shift bills come through this chamber this session, and I’m not a fan of any of them,” Kohl said. “This comes down to this notion — this philosophy — that we keep seeing in American politics: ‘Socialism for me, austerity for thee.’” 

The hand in this case, he said Wednesday, would go to financial institutions and large developers in the form of a “nice tax write-off.” Nearly all the groups lobbying on the bill were Idaho based, but Dominium, a national affordable housing developer, also hired a lobbyist to testify in support of the bill at committee. 

“We couldn’t find an example of anyone using it because of the restrictions put on it,” Lobby Idaho President Jason Kreizenbeck, who was hired by Dominum, said of the Idaho law at the time.

But where Kohl saw a blow to Idaho’s middle class, Bernt saw an opportunity. Middle-class people are the sort he said he hoped the bill would help house.

“This isn’t the projects,” Bernt said.

“This is affordability — creating a solution for those who want what we have, and are willing to work for it.” 

Idaho affordable housing lags

Sen. Ali Rabe, D-Boise, served on the 2025 Interim Committee on Land Use and Housing, which helped launch this year’s version of the tax-exemption bill. She said that she has talked to developers all over Idaho. Housing for workers earning 60% of area median income “literally can’t get built” without tax breaks, she said. 

“They don’t pencil,” she said. “If we’re true free-market capitalists, we should be supporting this.” That line of argument hit a wall on Wednesday with senators opposed to the idea on principle. “It’s government’s role to secure our rights,” said Sen. Phil Hart, R-Kellogg. 

“I don’t think it’s government’s role to secure low-income housing.” Sen. Ben Adams, R-Nampa, went further, calling the sort of homes the tax break could bring the “definitional opposite of the American dream.” “No one,” he said, “wants a rental for their American dream.”