1. Sitting at the year’s first meeting of the Progressive Revenue task force Thursday morning, it was hard not to flash back to a press conference the previous day, when Mayor Jenny Durkan announced that the city would spend some of the $11 million it expects to receive from the sale of a city-owned property in South Lake Union (a different property than the “teardrop” site council members discussed as part of their budget deliberations last year). At that briefing, held in front of two “tiny houses” under construction at the Seattle Vocational Institute, Durkan said it would take time to build all the housing that will ultimately be funded by the $290 million 2016 housing levy, and that in the meantime, a $5.5 million investment in “bridge housing”—or, in the clunky title Durkan chose for the initiative, “building a bridge to housing for all”—would give people living on the street slightly better options. “In an ideal world, we would not need to be building tiny houses,” Durkan said. Then she acknowledged that state and federal support for affordable housing is about to fall off a cliff.
The rest of the money would pay for rental assistance for people on SHA’s Section 8 voucher waiting list—”we’re going to focus on the people who need that assistance the most,” Durkan said— design of a new fire station, and city expenses related to the land sale. The developer buying the property would also provide $2 million of a total $7.7 million payment toward affordable housing projects elsewhere, required as part of the city’s Mandatory Housing Affordability program, to build actual affordable housing.
The reason I was thinking about Durkan’s announcement Thursday morning is that it was basically a rounding error—what government staffers sometimes call “budget dust”— in the funding needed to actually address the city’s homelessness problem, which has been growing every year since at least 2013. According to task force co-chair Kirsten Harris-Talley, if every unit of affordable housing requires $160,000 in capital expenditures from the city (more on how advocates for a higher employee hours tax arrived at that number in a minute), and the city will need around 20,000 new units for very low-income people in the next 10 years, that means the city will need to spend around $3.2 billion over that time. As you can probably imagine, the city isn’t spending anywhere close to that right now—according to the presentation, the city spent just under $95 million from all sources on capital housing investments last year. At that rate, it would take more than 33 years to come up with $3.2 billion (and that’s assuming housing costs stayed flat).
Obviously, none of this is an exact science. The $160,000 figure is an estimate provided by council member Kshama Sawant’s office, of what the city would need to contribute if it ramped up its affordable housing production and was unable to find a significant amount of new funding from other sources to help pay for all the new units. (Currently, each new unit costs the city about $93,000 in capital costs, but the programs that pay for the difference between the city’s contribution and the total cost to build a new unit, about $311,000, are only committed to a certain number of units, requiring the city—theoretically—to pay more for each additional unit out of its own pockets.)
If Harris-Talley and Sawant’s figures are correct, that provides a ready-made argument for the employee hours tax (effectively a flat annual tax for each full-time employee on every business over a certain revenue threshold) that they’ve wanted to pass all along. Today, the task force looked at potential revenues from the so-called head tax at different levels and with different sizes of business exempt from the tax, which I’ve copied below. (Last year’s proposed head tax would have exempted businesses with less than $10 million in gross revenues, up from $5 million in the initial proposal; some businesses argued that basing the tax on gross revenues was unfair because it didn’t take into account thin profit margins in certain industries, like restaurants.)
If the city goes through a recession, of course, the amount it can expect to collect will shrink. However, recessions tend to actually lower rents; Downtown Emergency Service Center director and task force member Daniel Malone pointed out that during the last recession, the county’s annual point in time count of people living outdoors tends to stagnate or even decrease, as it did between 2010 and 2011, and between 2011 and 2012. That’s one of the paradoxes of a weakening economy: Although revenues from taxes that are less stable, like direct taxes on businesses, tend to decline, so do rents, making it possible for some people forced onto the street by an impossible housing market to actually find a place to live.
2. In a King County Board of Health discussion about the possibility of a Hepatitis A outbreak in Seattle yesterday (a nationwide outbreak, ongoing now, began in California and was widely blamed on lack of access to handwashing facilities for the state’s homeless population), King County Health Department Director Patty Hayes expressed concern about the city’s decision last year to cut funding for three downtown hygiene centers that provide restrooms, showers, and handwashing and laundry facilities for homeless people living and moving through downtown.
City council and Board of Health member Sally Bagshaw—a vocal proponent for cutting funding to the facilities as part of the city’s new “performance-based” approach to homeless service contracts—objected to Hayes’ characterization of the problem.
“I think that [problem with the closure of the hygiene centers] is more apparent than real,” Bagshaw said. “We’re putting huge investments into new 24/7 shelters … I’m working with those 24-hours shelters to say, ‘Can you open these up for people who aren’t [staying] here tonight” to take showers, she said. “We opened up community centers [for people to shower]. There are more facilities open now than before. It’s just that the money’s being shifted. I don’t want that rumor to be perpetuated. There were some organizations that didn’t get funded” because the city went to a competitive process, Bagshaw said.
I covered the cuts to funding for hygiene centers, and the reason some advocates believe community centers and shelters are not an adequate substitute for public restrooms and dedicated hygiene facilities, here.
3. The Sightline Institute, a progressive think tank that researches and covers of housing, transportation, and environmental policy from a green, pro-transit, pro-housing perspective, just brought on a new (unpaid) fellow to cover “issues of infrastructure, technology and energy with a view towards sustainability.” His name: Daniel Malarkey.
If that name sounds familiar, it should. (If it doesn’t, you weren’t following Seattle politics in the early 2000s.) He was the finance director for the Seattle Monorail Project, the transportation agency that was going to build a monorail line from Ballard to downtown to West Seattle. That project was doomed to failure after Malarkey’s revenue projections overshot the mark by about 50 percent, and after the agency compounded the problem by trying to paper over the error. (The error Malarkey made was counting revenues from taxes on every single car in Seattle, when in reality, thanks to heavy lobbying from the auto industry, all new cars and cars brought to the city by people moving here from out of state were exempt from the monorail tax. The result was that Malarkey overestimated the monorail’s tax base by a third) When he resigned at the end of 2003, I wrote this. Interestingly, it looks like his three years consulting or working directly for the monorail agency aren’t on his official Sightline bio.
Anyway, it looks like he’ll be writing about autonomous cars.
Full disclosure: I have written several pieces for Sightline and often use their research in my reporting.
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4 thoughts on “Morning Crank: I Don’t Want That Rumor to Be Perpetuated”
Do you have any information on how CM Sawants office came up with the $160,000 per unit?
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