I often hear people complain that the Housing Authority doesn’t pay property taxes and is somehow harming the community by taking land “off the tax rolls.” While it’s true that the properties we own are tax-exempt, that doesn’t mean the community loses. In fact, the opposite is true.
In California, local housing authority properties are exempt from all property taxes and local assessments by state law. This isn’t a loophole or an oversight. The Legislature made this decision deliberately, recognizing that affordable housing serves a public purpose and performs an essential government function. State law explicitly declares that housing authority properties — and even their bonds — “shall be exempt from taxation.”
Why? Because decades ago, lawmakers saw what poor housing conditions were doing to our communities: higher crime, increased health and safety costs, and neighborhood decline. Substandard housing didn’t just hurt the people living in it — it drove up costs for everyone. Their solution was to create local housing authorities and free them from tax burdens so they could focus on building and maintaining safe, decent homes for families who can’t afford market rents. The tax exemption isn’t an accident of bureaucracy; it’s a policy designed to strengthen communities.
A housing authority is not a private developer. It’s a public entity, much like a school district or fire department. Our work — developing and operating affordable housing — is considered by law a “public use and purpose.” Just as schools or libraries don’t pay property taxes, housing authorities are exempt because they provide a public service. Taxing one public agency to fund another is simply inefficient government accounting — money shuffling from one pocket to another instead of being used directly to help people.
And that’s the key: every dollar not spent on taxes is a dollar spent on housing. Those funds go to maintaining apartments, keeping rents affordable, and supporting residents. Unlike private landlords, housing authorities don’t distribute profits. Any surplus goes back into the mission — reinvested in property upkeep, resident services, or building new affordable housing.
If we were required to pay property taxes, those dollars would leave the affordable housing ecosystem entirely, flowing into a general fund where the impact would be diluted. Instead, the tax exemption ensures that resources stay focused on their original purpose: housing people and stabilizing communities. It’s an efficient, targeted use of public funds that avoids the waste of taxing one public agency only to subsidize it again later.
The results speak for themselves. Because of this exemption, our Housing Authority has been able to develop and preserve hundreds of quality, affordable homes — housing that would not have been financially feasible otherwise. These developments strengthen neighborhoods, provide stability for families, and help employers retain workers who can actually afford to live here.
It’s also worth remembering that the benefits ripple outward. When families have stable, affordable housing, children do better in school, health outcomes improve, and emergency service costs decline. That’s not just social policy — that’s fiscal responsibility. Every study on homelessness and housing instability shows that providing affordable housing costs taxpayers far less than dealing with the consequences of not doing so.
The property tax exemption is one of the quiet tools that makes this possible. It ensures that limited public dollars are used for housing, not bureaucracy. The same logic applies to fee waivers on new affordable developments, such as school impact fees. Those waivers aren’t giveaways; they’re strategic investments that make projects financially viable. When affordable homes are built, local schools benefit in the long run from more stable students and families.
In economic terms, the exemption is a return on public investment. It trades short-term tax revenue for long-term savings and community strength. Affordable housing reduces pressure on social services, improves neighborhood safety, and helps sustain the local workforce — the people who teach in our schools, serve in our hospitals, and keep our city running.
So yes, our housing authority is rightfully tax-exempt — by law and by design. That status isn’t about avoiding responsibility; it’s about fulfilling it. We’re entrusted with a public mission: to ensure everyone, regardless of income, has a safe and affordable place to call home. Taxing us would only undermine that mission and, ultimately, cost the community more.
I know I won’t convince every skeptic. But California’s policy of exempting housing authorities from property tax is grounded in a simple truth: strong communities are built when everyone has a decent, safe, and affordable home. Every dollar we save through this exemption is a dollar that stays in Santa Barbara, working to make that vision real.
