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Seattle’s other big 2016 decision: the new housing levy

Saturday, Washington took a big step toward helping define the nations’s most important political campaign of 2016. In August, Seattle’s largest political question will be answered. With Mayor Ed Murray’s proposal to renew and expand Seattle’s longstanding housing levy already rolled out, the campaign to get the measure on the August primary ballot is underway.

But first: legislative process. The levy first has to go through the City Council and get approved to get put before voters in the fall. The council committee on affordable housing, neighborhoods, and finance began to pick through the mayor’s levy proposal last week. The committee will, after debate and any wanted changes, send the package to full council for a vote on whether or not to put it on the ballot—ideally by late April or early May. A full presentation from Thursday’s session is embedded at the end of this post.

A steering committee will be formed in in late April or May after the council vote and fundraising and official campaign outreach efforts will start then.

Former council president and current chair of the housing committee, Tim Burgess said that—judging from conversations with his council colleagues—he doesn’t anticipate any major changes to be made to Murray’s proposal. “I would be very surprised if the council changed the core essence of the levy,” Burgess told CHS last week. “I think generally it has been well received.”

The levy itself is widely regarded as the backbone of affordable housing development in Seattle. When asked what would happen to the city’s efforts to house the bottom end of Seattle’s economic spectrum if the levy doesn’t get renewed, Marty Kooistra, executive director of the Housing Development Consortium, an association of nonprofit affordable housing developers and architects grimly said, “don’t even go there.”

Since 1981, Seattle voters have approved property tax levies (of increasing size and duration of time) dedicated to constructing and preserving affordable housing for seniors, low-wage workers, and homeless youth and adults, as well as providing low-income homebuyer assistance (the 1981 housing levy was also the first of its kind nationally). The city Office of Housing boasts that the levy has funded over 12,000 affordable units—by preservation and construction—over its lifetime. Local affordable housing projects such as 12th Ave Arts and the preserved Haines apartments for seniors on E Olive Way have received levy funding. The proposed Liberty Bank project will also likely be partially funded by levy funds. Back in December, the Office of Housing awarded its largest ever investment in new affordable housing projects, utilizing a combination of levy dollars and revenue from the city’s incentive zoning program.Screen Shot 2016-03-28 at 7.32.38 AM

Now, as per the Housing Affordability and Livability Agenda (HALA) committee’s recommendations, Murray’s wants to double the existing housing levy—which has collected $145 million since 2009—to $290 over the next seven years. This amounts to an annual increase by $122 for the median Seattle homeowner (up from $61 annually) as per city estimates. The blueprint for utilizing the revenue is essentially the same, with the majority of the funds going towards increased investment capacity in the development, preservation, and operating and maintenance of projects, as well as $11.5 million in rental assistance for families at risk of eviction and homeless and $9.5 million in financial assistance for low-income homeowners and prospective homebuyers.

Housing levy dollars also leverages other sources of affordable housing funding, the State Housing Trust Fund, tax credits from the Washington State Housing Finance Commission, and the Community Development Block Grant Program via the federal department of Housing and Urban Development. Office of Housing spokesperson Todd Burley estimated that every dollar of city funding leverages 30 three dollars from outside sources. (Correction: Sorry for the error!).

“The levy package is a thoughtful proposal and a good investment that builds on a proven track record of previous success,” said Kooistra. “[The mayor and HALA asked] that we reach 20,000 units in the next ten years in income and rent restricted homes. That’s a huge stretch. And the levy is a vital key part of that element.”

Steve Walker, director of the Office of Housing, said that while the council will likely not make any significant changes to Murray’s proposal, the prospect of including funding for temporary homeless housing may come up, given the current ideological standoff between Mayor Murray and homeless services providers on whether to focus on long-term housing or more flexible solutions including short-term shelter (the levy has traditionally only funded long-term housing for homeless populations). PubliCola reported last week that housing committee member Rob Johnson may be looking to bolster Murray’s original levy package.

Though no formal endorsements have been announced as the campaign has yet to officially get going, the levy renewal will seek support from Seattle’s business community, social and economic justice groups, homelessness advocates, and, of course, the developer and non-profit housing community (representatives from the Seattle King County Coalition on Homelessness, the Downtown Seattle Association, and Puget Sound Sage were reportedly at Murray’s press conference when he rolled out his proposal). This would be the same broad-based, Murray-style coalition that backed both the HALA recommendations and the $930 million dollar Move Seattle Levy that passed with good margins last year.

But the proposal’s backers aren’t expecting no fight at all. “The housing levy coming after a string of hotly debated (yet successful) local levies. “This is Seattle so I will not be surprised if there’s opposition,” said Burgess. “If there is it will probably come from the anti-tax folks who believe that our taxes are too high.”

Move Seattle faced vocal and feisty opposition from some Seattle property owners and the well financed anti-tax activist Faye Garneau, along with the League of Women Voters, who said the levy would raise property taxes to “unmanageable levels.” A ‘for’ or ‘against’ endorsement from The Seattle Times Editorial Board, which opposed Move Seattle, won’t come out for awhile, but the paper has already run a letter to the editor decrying the tax increase under the 2016 housing levy (both the Times and the league opposed 2014’s successful measure to create the Seattle Parks District, citing concerns with accountability and the potential property tax increases). Adding to the levy pile, the eventual—and very large—Sound Transit 3 package is also coming down the pipeline to voters in the fall.

Amanda Clark, president of the Seattle League of Women Voters, told CHS that the league has yet to thoroughly vet Murray’s proposal, but they are keeping their usual levy skepticism in mind. “We’ll be very concerned about accountability and the [tax] increase,” Clark said. “It’s just a matter of concern. Not that we don’t need it, but with all the levies these days and the property taxes it’s getting difficult for some people.”

Last Monday, the Sightline Institute published a defense of Murray’s housing levy package, noting the small size of the housing levy as a share of all the city’s property tax revenue, as well as how Seattle’s property tax rates stack up with other cities (in short: they’re comparatively pretty low).

“We’ve gone to the voters 5 times in the last 35 years and each time we’ve been successful,” said Walker confidently. “The track record of the levy is very strong.”

Even with face-level optimism, there’s a sense of urgency and necessity of getting the levy renewed among proponents.

“Some folks in the past have described this [the housing levy renewal] as a cliff event; as it relates to HALA, as it relates to the health of a vibrant community, what we know we need to do in this time of urgency and crisis, the levy is a critical part in all that,” said Kooistra.

Katie Porter, Capitol Hill Housing’s senior housing Developer, said that her organization is “in initial conversations” about possible additional affordable housing projects in Capitol Hill and the Central District that would likely need housing levy dollars (but nothing is set in stone so no details on those potential projects yet).

“[Not renewing the levy] would severely reduce our ability to provide new projects, to provide new housing for people with low incomes. It would make it exceedingly difficult to continue to develop affordable housing in Seattle without the housing levy,” said Porter.

A public hearing on the proposed levy will take place at City Hall on April 4, 2016 at 5:30 PM.

Presentation (1)

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27 thoughts on “Seattle’s other big 2016 decision: the new housing levy

  1. Perhaps we can have a running total of the years property tax increases to fund these schemes. Transit. + housing = $600 so far.

    This is after last years 20% increase. And we wonder why seattle is unaffordable…

    • $120/yr for the median Seattle home. ST3, as best as I can estimate from recent coverage, adds another $200/yr. With recent levies my property tax is up $900 since last year, so here’s another ~$320. Sure, just keep ’em coming. It never stops till they chase every middle-income homeowner out of Seattle. Then we can pass more “affordable housing” levies to help homeowners who have been driven out by property taxes.

      Why don’t we have a different rate for owner-occupied homes, compared to rentals, like other cities do?

    • Are some people forced to sell their homes or get foreclosed on due to property tax increases?

      Would it drive some people to become renters?

      And is there a way for homeowners on this blog to not come off as insensitive and selfish to a regional housing affordability crisis?

      Is there a middle ground?

    • Well, this city is going the way of SF – well to do people and folks that require public assistance. So if you aren’t one of those two, this city is getting less affordable and frankly less attractive.

    • Max, these increases impact renters too. Those who own rentals pass on their increases to tenants driving up YOUR rent.

      And not all people who own homes are wealthy. Some are on fixed incomes (they never get a pay raise) and these increases mean they have to choose between paying for heat or property taxes. And not all of these folks qualify for subsidies.

      Please try and show some level of sensitivity towards these folks as they should not have to make these choices because our city can’t appropriately fund itself without taxing its residents out.

    • “Are some people forced to sell their homes or get foreclosed on due to property tax increases?”

      What do you think? Of course. What do you think elderly people on fixed incomes do every time taxes go up?

      “Would it drive some people to become renters?”

      No, it would cause them to have to sell their homes and move out of Seattle or out of WA to somewhere less expensive. Is that what we’re moving towards here? Forcing every middle-income homeowner out of Seattle?

      “And is there a way for homeowners on this blog to not come off as insensitive and selfish to a regional housing affordability crisis?”

      Is there a way for those with seemingly limitless pockets to realize that not everyone who owns a home is even remotely rich? That homes aren’t ATMs that pay you dividends every month to supplement your cash flow to help you get by? And that the endless succession of levies is squeezing budgets for middle-income homeowners too? And that many of these so-called “median homes” are owned by investors who snatched them up in the 2008 bust, and now rent them out paying property taxes no higher than owner-occupied homes, thus causing middle-income homeowners to subsidize their investment properties? And that the endless succession of levies makes housing affordability an issue not just for low income people, but even to modest-income homeowners, who are not all techies making 6-figure+ incomes, and whose salaries haven’t budged in years? And that wondering where you’re supposed to get this ever-increasing property tax money from doesn’t mean you’re selfish?

    • Do you remember Initiative 1098? Washingtonians were asked whether they’d want a progressive income tax to obtain money from the rich. They said no by an enormous margin. “Tax the poor,” said the voters, and sales taxes are now as high as 9.6% (going up to 10.1% after SoundTransit 3 passes). “Tax the middle-income,” said the voters, and property taxes keep rising.

      Washington’s voters, most of whom are poor and middle-income, were asked to tax the rich. An enormous number of them said no. If you’d like to live in a place where taxation is more progressive, 43 states have a state income tax.

  2. @Max – well, I hope you win the housing lottery and get a subsidized unit. Because for the rest of the renters, it’s going up. These fees and taxes don’t pay themselves and your landlord isn’t going to eat the cost indefinitely. Renters pay too.

  3. They always say that this will “cost” homeowners ____ for a median priced home. But frequently they don’t tell you what they are calling “median.” I couldn’t find it in this article. Frequently the figure they use is significantly less, like over $100,000 less than the actual rate that property taxes will be based on. To me this is false and misleading.

  4. Why is no one fighting for income tax? The only reason the city is taxing property is because there’s nothing left to tax.

    I’ve always wondered- can it be donation based in the short term? I know a lot of my techie friends want to be taxed more- where can they put a pile of money for the benefit of the city? If it’s a movement, what can the city do with it? Wishful thinking…

    • Six years ago, Washington Initiative 1098 would have imposed an income tax on Washingtonians making over $200,000. Sixty-four percent of Washingtonians voted no on it, preferring instead to excessively tax the poor and the middle-income. Washington has the most regressive tax structure in the nation and its voters are directly responsible for perpetuating it.

    • It’s silly we don’t have an income tax. That said, I bet the people that voted no on the initiative figured (and probably correctly) that we’d continue to have a high sales tax, and just add in another 4-8% for income tax.

    • Too bad they didn’t stop to think that the vast majority of people, including themselves, who make way less than $200k/yr, wouldn’t be paying the income tax. And that without it, they’ll continue disproportionately taxing themselves more heavily, with sales taxes.

    • Even though I currently earn a good salary, I have the misfortune to live in a house that is rapidly going up in property tax value. Thus I am now paying >10% of my after tax income in property tax ($10k +).

      The delight with which we add yet more taxes (and yet ignore funding for schools etc) is amazing.

      Perhaps we need to move to a model where everyone (inc those renting) pays a uniform tax. That way we can all appreciate the costs..

    • “Perhaps we need to move to a model where everyone (inc those renting) pays a uniform tax. That way we can all appreciate the costs.”

      Yup. An income tax. Exactly.

    • “Nope,” why are you putting that $10,000 a year property tax number out there like it’s supposed to scare us? You live in a million-dollar home for only about $833 a month in taxes. That figure is tax-deductible so you’re only paying net $7,200 a year ($600 a month) to live in a big house in a nice part of the neighborhood.

      By contrast, people living in mediocre new apartments are paying as much as $3,000 a month, or $36,000 a year, or 36% of your after-tax income, in rent. Don’t be bitter. Be grateful that you live in such a great place. If you don’t want to live here anymore, there’s a million bucks to be had if you sell your place and move to a state with an income tax.

    • Forgetting something, Jason? That’s just the property tax. He also has a mortgage, as well as fees for water, sewer, and garbage that are usually included in apt rent.

  5. Is there any money in this levy to add some publicly-financed buildings for really low-income folks? This is badly needed, as the waiting lists for such housing (Seattle Housing Authority) is very long. Most of what is labelled as “affordable housing” is really for middle-income people. If we are going to make any kind of impact on homelessness, we need more publicly-subsidized units for those at the bottom of the economic scale.

  6. To whomever complained about schools being underfunded. According to the King county thing we got with our property tax bill, 20.57% of the tax goes to state schools and 32.34% to local schools. Two school levies just passed in the Feb vote.
    17.6% goes to the city, 3.04% for fire, 2.78% for library, 1.61% for the port, and 18.56% for king county.

    Don’t shoot me, please, but my sense is that no matter how much money is put into the schools, we’ll be told that it’s not enough. This is a bottomless cup.

    Part of the difficulty here is that pretty much everything that the property tax supports makes sense. And Seattle voters very rarely vote down a levy–the only one I can recall is the latte tax one. So…this is the price we pay for living here.

    I do wish, though, that instead of claiming that it will “only” cost the average home tens to hundreds of dollars a year, or that it’s “only” an increase of a few bucks a month, advocates would be more honest and look at the total tax burden on people. At some point we might have to become more selective — by not keep doubling the cost of a given levy for a starter.

  7. I support the intention, but I’ll probably be voting no.

    We just approved Move Seattle, which wasn’t cheap. I’d like to see the Mayor show some big (or a lot of little) achievements on that one, first.

    I’m not quite ready to pony up a few thousand dollars more yet.

  8. I say no . How about if you can not afford to live in the area you simply need to live wear you can afford it. I’m tired of paying my living cost and yours too.
    We need to look for ground for a trailer park !

  9. I’m on the fence on this one. I support affordable housing and I do think rent is getting too expensive for Seattle. But, I also bought a condo during the downturn in order to have some control over my housing cost. My mortgage is very affordable (much less than the average rent for new condos). However, ever increasing property taxes are making it challenging for lower income property owners like myself. If I ever have to rent my condo, I will definitely charge market rate rent to cover all the taxes. I wish the city could find another way to fund affordable housing because it is necessary, especially since property is no longer affordable in Seattle like it was in the downturn.

  10. I’m a homeowner (well, a mortgage owner) and the endless and huge increase in my property taxes is forcing me to move out of town to an apartment in the sticks and to rent out my house in order to make the mortgage payment plus the $500+ per month property tax bill. Do you think these increases are being passed along to the folks who compete to rent my house? OF COURSE they are!