By Opting Out, Suburban Cities Could Blow an $8 Million Annual Hole in Homeless Housing Plan

Image via King County.

By Erica C. Barnett

At least half a dozen cities have chosen to opt out of a proposed countywide “Health Through Housing” sales tax increase that would provide permanent supportive housing for an estimated 2,000 chronically homeless people.

The cities, which include Renton, Issaquah, Kent, and Covington, will use authority granted by the legislature this year to impose their own 0.1 percent sales tax for affordable housing, a category that includes not just housing for very low-income people but “workforce housing” for people making up to 60 percent of the Seattle-area median income.

The council’s committee of the whole voted 8-1 on Tuesday to approve the countywide tax measure, which would impose an additional 0.1 percent sales tax on purchases throughout King County, on Tuesday, and the full council will vote on the tax proposal next week. Assuming it passes, the county will have to come up with a plan to spend the money.

But how much money will there be? The county originally estimated that the tax would bring in a little under $68 million in 2021; bonding against half that revenue stream, the maximum allowed under state law, could give the county around $400 million to purchase sites and turn them into affordable housing. The cities that have opted out of the tax so far have taken more than $8 million off the table. That brings the county’s annual revenues down to just under $60 million.

Leo Flor, the director of the county’s Department of Community and Human Services, says the county needs between $27 million and $30 million a year (that is, half of $54 to $60 milliion) to purchase bonds worth $400 million. The county could hit that threshold, if retail sales don’t slip below forecasts and if no more cities pull out of the taxing district. “We’re still moving forward,” Flor said Thursday, but “every dollar counts. Even at the full size [with every city opting in], 2,000 people is less than half of the people experiencing chronic homelessness in King County right now.”

Issaquah’s tax, Flor notes, will expire if the city signs a memorandum of agreement with the county to allocate the revenues raised within Issaquah to projects in that city. If revenues prove too low to fund a $400 million housing measure, the county could opt to build less housing.

No matter how much money the county brings in, the plan will require a change in state law to allow the county to purchase distressed properties, such as hotels and nursing homes, and convert them into permanent supportive housing. 

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7 thoughts on “By Opting Out, Suburban Cities Could Blow an $8 Million Annual Hole in Homeless Housing Plan”

  1. what state law prohibits the county from buying distressed properties and turn them in to housing? seems like a law that really needs to be changed given our homeless/housing insecure issues in King County

    1. What is the evidence for that? If you are going say “prices have gone up even though some upzoning occurred”, the answer is that upzoning and thus the construction for enough housing to keep prices from rising has not been nearly equal to the numbers of people moving here. US Census website shows Seattle with a net gain of about 140,000 people from 2010 to 2018. During about the same period Seattle only added 46,000 housing units. Adding over 90,000 more people than housing units is going to drastically increase prices. There was grossly insufficient zoning changes for the number of people who moved here and are still moving here.

  2. The fundamental need, which seemingly no one in King County wants to address, is zoning reform to allow (not mandate) increased density so that workforce housing can be cheaper and at the same time would make purchase of properties for supported housing cost less which would make funds for this purpose go further.

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