Category: Business

Business, Development, Economy, housing, Mayor Wilson

Greater Seattle: Inclusionary Zoning, Part 2; Amazon as a Percentage of the Budget; Permitted, but Struggling

By Josh Feit

Last week, I featured Seattle City Councilmember Dionne Foster in an item headlined “Inclusionary Zoning > No Inclusionary Zoning” to reflect her progressive affordable housing stance. However, according to a comprehensive new academic study, she has it backward.

No Inclusionary Zoning > Inclusionary Zoning

So says the study released this summer by an economist at UC Irvine about inclusionary zoning (IZ), a policy that requires builders to couple any market-rate housing they build with affordable housing. Seattle’s version of this—as in Foster’s resolution calling for inclusionary zoning requirements in residential areas where the policy doesn’t currently apply—uses a “fee in lieu” model where developers can pay into an affordable housing fund instead of including the affordable housing in their own projects.

Unlike other (inconclusive) research on IZ, the UC Irvine study had a clean before-and-after look at the policy, thanks to California’s unique history of going through a period when inclusionary zoning (including the fee-in-lieu model) was legal, illegal, and then legal again.

The study indicates inclusionary zoning does the opposite of what it’s intended to do, finding that IZ makes it more expensive to rent. California renters paid approximately $6.97 billion in additional rent in areas with IZ mandates. So, even as IZ funds some affordable units, it comes at a steep cost to renters, including low-income renters, who aren’t “lucky enough to get an IZ unit,” according to the study.

But the real zinger: The study then compared that rent increase to the number of affordable units created and found that it wasn’t worth the tradeoff. As the author bluntly states in the opening summary: “I estimate the cost of generating an affordable unit with inclusionary zoning to be approximately $800,000 [per the 8,990 units created] in ‘excess rents’ paid by market rate renters as a result of the policy’s constraint on supply. This exceeds the cost of directly incentivizing the creation of low-income housing [~$441,00 per unit] in California through existing programs.”

Seattle’s Budget = Amazon’s Stock Price

Speaking of being blunt, Erica didn’t hold back in her report on Mayor Wilson’s $2.5 billion budget proposal last week. And I quote: “JumpStart is Basically Just a Slush Fund Now.”

JumpStart, of course, is the 2020 tax on high-end salaries proposed and passed by former lefty city councilmember Teresa Mosqueda to pay for affordable housing and other progressive priorities. Now, according to a recent economic study commissioned by Seattle’s own Office of Economic Development, it increasingly covers the city’s regular budget shortfalls. Since 2024, when a newly elected city council majority changed the law to eliminate the original JumpStart spending plan, more than half of JumpStart revenues are used to cover the gap between city budget expenditures and general fund revenue.

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I’m not here to cry about that. True believers like me have lost that fight. But here’s a problem with  budgeting-by- JumpStart that everyone should note: The report found that “Seventy-five percent of JumpStart revenue comes from just 10 companies.”

This is emblematic of Seattle’s worrisome status as a one-crop town (big tech). “In summary,” the report states, “the city’s fiscal health now depends on the marginal location and compensation decisions of a handful of employers. It also depends, indirectly, on the stock prices of those employers.”

Zeroing in on the city’s largest company, the report continues: “When Amazon’s stock rises, Seattle’s tax base rises with it; when it falls, the base contracts. (Amazon’s stock price alone has ranged from roughly $85 to $245 over the past three years.) But it means that a fiscal base already concentrated in a few firms is further exposed to the single most volatile attribute of these firms—one the city has no ability to forecast or influence.”

Existing Third Places > New Startups

Wilson explicitly acknowledges the challenge by incorporating her recent “Resilient Economy” executive order  into her budget proposal. Seattle has “become increasingly concentrated on the tech sector,” the EO states. It commits the city to convene a task force “to develop and implement strategies for diversifying and growing Seattle’s economy.”

And while the specifics of the order focus on making it easier to permit and establish startups in tech-adjacent fields, that strikes me as being more top-down than middle-out. As I noted a few weeks ago, the thing that makes Seattle attractive to the talent needed for new startups are third spaces—i.e., existing businesses.

I wish Wilson’s proposal did more for the bars and restaurants and coffeeshops that are already permitted, but increasingly struggling: 67 percent of brick-and-mortar, small, independent businesses told OED they are under more financial stress than during the pandemic. “[Seventy-one] percent reported lower foot traffic than a year earlier, and only 12 percent said customer demand was sufficient to cover their cost structure.”

Josh@Publicola.com

Business, Economy, Urbanism

Greater Seattle: Third Places

By Josh Feit

5,250 > 778

Here’s a rejoinder to those who complain that Seattle’s taxes on big business are going to send major companies fleeing to Bellevue: Seattle has nearly 40 percent more cafes, retail shops, bars, arts and cultural spaces, community centers and food spots per capita than Bellevue.

Known as “third places,” these kinds of public living rooms are considered essential for attracting uniquely mobile high-tech workers away from competing cities.

Last week, the Seattle Department of Economic Development published a new, comprehensive report  about the need for Seattle to foolproof its economy by fostering a more varied set of businesses that participate on the national and international scale. The report, which was written by local economic consultants, cites Seattle’s impressive map of third places as a must-have. “Seattle offers a remarkably rich environment for these connections due to its high concentration of third places mixed into its built environment,” the report states as part of its thesis that third places are an asset for drawing the creative class that’s necessary to resuscitate our flagging startup culture.

The report’s comparison point for what we don’t want to be? Bellevue.

“The difference between Seattle and a less third place-rich region like Bellevue is stark. Seattle has substantially more third places than Bellevue (5,250 vs. 778). Part of this, of course, is a matter of population. But Seattle also has more third places per square mile (63 vs. 23) and per capita than Bellevue (71 vs. 52 per 10,000 residents).”

“Stark” is not hyperbole. When you look at the specifics of Seattle’s 40 percent per-capita advantage over our neighbor across Lake Washington, you can see why young workers would be miserable in Bellevue. While Seattle has more third spaces overall—libraries, community centers, cafes, and gyms, for example—the advantage is stunning when you look at spots that you traditionally associate with “going out.” More than three times as many bars. One-hundred sixty percent more cultural arts venues. Sixty-five percent more shops. Forty-nine percent more dining options.

And, upending stereotypes, Seattle also has more places of worship—by a reverent 42 percent.

Bellevue does beat Seattle in an important category, though. And it’d be good for policy makers at city hall to take note of this. When it comes to parks, Bellevue beats Seattle by 14 percent—7.1 to 6.1 per every 10,000 people.

10 pm > 6 pm

The report doesn’t say how late Seattle’s third spaces stay open on average. That’s important. While people want to move to a city where there’s places to hang out, they likely don’t want to move to a city where there’s a stopwatch ticking on how long they can.  And anecdotally, I can tell you: Shops close too early. This is true in Bellevue as well, but Seattle’s lackluster evening economy is a noteworthy problem in its own right.

From coffee shops to corner stores, from retail to social services, Seattle needs a more energetic nighttime ecosystem. I wrote about this problem decades ago, and I wrote about it again a few years ago, because it’s a defining and persistent shortcoming here. Seattle is too soporific. Newsflash to the rest of country: Seattle is not woke!

A sleepy city undermines equity. The nighttime isn’t just about socializing. If it was easier to take care of business after 5 pm by having greater access to the practical stuff that’s traditionally closed or diminished at night—government services, retail, drug stores, administrative offices, buses, rental visits—people, particularly working-class people, would face fewer barriers to the economic opportunities here.

38 percent > 30 percent

Another thing missing from the report: The evidence to support the consultant’s contention that the creative class workers we need actually gravitate toward third places. I’m not saying I disagree with the report’s thesis. I want it to be true. And it’s certainly logical to assume that creative, young techies like to be out and about.

But is it?

According to a dispiriting essay titled “America is Becoming a Nation of Homebodies,” which urbanist Diana Lind wrote last year, “Americans now spend an average of 99 more minutes at home each day than they did in 2003, while this generation of 15- to 24-year-olds spends 124 more minutes at home than their counterparts two decades ago. Meanwhile, just 30 percent of Americans spent time socializing and communicating in person on an average day, down from 38 percent in 2014, according to [an] American Time Use Survey.”  And another recent report found that Americans are also speaking less—and that the issue is especially pronounced among people younger than 25.

Numbers detailing Seattle’s penchant for being out and about—and how those numbers are trending—would be helpful to have if urbanists want to backup the OED consultant’s third-place advocacy for “face-to-face communication” and “connections.”

The World Cup social scene may have been an aberration. But compared to the crowds I’m seeing at art walks, game days, Saturday night on Capitol Hill, lines at popups, music and cultural events, and crowded coffee shops these days, it wasn’t a huge aberration. Seattle seems like it’s hopping. It’d be nice to know if that’s true.

Josh@PubliCola.com

Business, City Council, housing, Mayor Wilson, Police

This Week on PubliCola: February 21, 2026

Mayor Wilson walks back opposition to surveillance cameras, Councilmember Lin wants to repeal stadium district housing law, state commission deals a blow to public defense, and more.

By Erica C. Barnett

Tuesday, February 17

State Ruling Represents a Blow to Public Defense

A state commission ruled that King County was not required to bargain with unionized staff for the county’s Department of Public Defense (DPD) before moving inmates from the King County jail in downtown Seattle to the South Correctional Entity (SCORE), a decision with potentially serious implications for caseloads and staffing levels at DPD and other public defense agencies.

Settlement In SPD Killing of 23-Year-Old Will Cost Taxpayers Millions

A $29,011,000 settlement in the 2023 killing of pedestrian Jaahnavi Kandula, who was struck in a crosswalk by a Seattle police officer driving 74 miles an hour in a 25-mile-an-hour zone, maxed out the city’s insurance policy, which has a $10 million deductible and a maximum of $20 million. Rising insurance claims, including from settlements with SPD, are putting a strain on the city’s budget.

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Wednesday, February 18

In State of the City, Wilson Punts on Key Issues—Including Sweeps and Police Surveillance

In her first State of the City speech, Mayor Katie Wilson outlined a policy agenda that was still short on details—and punted on major issues, such as how she plans to add 1,000 new shelter beds this year and whether she will expand police surveillance cameras into more Seattle neighborhoods.

Seattle Nice Interviews Progressive Legislator-Turned-Chamber Leader Joe Nguyen

Our first guest on Seattle Nice this week was former Democratic state legislator-turned-Seattle Chamber leader Joe Nguyen, who told us he sees no contradiction between his past as an pro-tax progressive legislator and his present job as the head of the city’s anti-tax business lobby group.

Thursday, February 19

City Council Proposal Would Repeal Law That Allowed Housing Near Stadiums

Seattle City Councilmember Eddie Lin is introducing legislation to repeal a law that would have allowed apartments in the Stadium District just south of downtown, undoing a longstanding priority of housing developers and handing a significant win to the Port of Seattle and unions representing port workers.

Friday, February 20

Mayor Katie Wilson: “If We Turned Off the Cameras, It Would Become More Difficult to Solve Many Crimes”

In an exclusive interview, Mayor Katie Wilson elaborated on her plans for her first year, telling us how her position has changed on police cameras since taking office and how she plans to balance her campaign commitment to add 1,000 new shelter beds by the end of the year with a budget deficit and the need to build permanent housing.

Business, podcasts

Seattle Nice Interviews Progressive Legislator-Turned-Chamber Leader Joe Nguyen

By Erica C. Barnett

Our guest on Seattle Nice this week isn’t a politician—he’s a former politician-turned-Seattle Chamber leader, and he says he sees no contradiction between his past as an pro-tax progressive legislator and his present job as the head of the city’s anti-tax business lobby group.

Joe Nguyen, the former state senator from West Seattle, defeated his opponent Shannon Braddock in 2019 by emphasizing his progressive bona fides, exemplified by a commitment to take no corporate contributions. Elected on that anti-corporate agenda, Nguyen went on to propose or support a payroll expense tax on big businesses, an excise fee on businesses that pay executives more than $1 million a year, and the statewide capital gains tax. “Tax the rich,” he wrote in the Stranger, which lauded him (pretty excessively, even at the time) as the “AOC of Washington state.”

 

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As head of the Chamber, Nguyen leads an institution historically opposed to business and capital gains taxes, and he talks like it, too—telling Seattle Nice that while he thinks “we need to have a more equitable tax structure in the United States, in Washington State, I worry that we’re putting all of our eggs in one basket” by taxing big tech businesses over and over. Already, Nguyen said, businesses have started to move jobs from Seattle to Bellevue because of the JumpStart tax, a payroll tax on Seattle’s biggest companies that the city now relies on to backfill its annual general fund shortfalls.

“Politically, it is very popular to say, ‘Tax the rich.’ Politically is very popular to say, ‘Go after the large companies.’ But the hard part that we’re going to put ourselves in is: If you want to tax the rich, you got to have rich people to tax,” Nguyen said.

“I was the architect and then sponsor of a lot of these policies,” Nguyen continued. “However, you’re concentrating a lot of that [taxation] into one specific area. And when you start to get some of this volatility, like you mentioned in your in your post [about social housing revenues] the other day, that’s the worry that I have.”

Listen to a preview of our conversation‚ in which David and I rant about the money pit that is the new downtown Convention Center, and subscribe to Seattle Nice to hear the full episode.

Editor’s note: During our interview, I said the Chamber has supported moving oversight of some parts of the homelessness system to the city’s Human Services Department. The Chamber has not taken a position on this issue. 

 

Business, Elections, LGBTQ+, Mayor Harrell, Police

Chamber CEO Leaves, Mayor’s Office Contradicts SPD Explanation for Police Chief’s Bonus, Progressives Prevail in Burien, and More

1. Rachel Smith, the longtime CEO of the Seattle Metropolitan Chamber of Commerce, is moving on to become director of the Washington Roundtable, a statewide group that represents large employers.

According to a press release, Smith will leave the Chamber as of October 1; Gabriella Buono, the Chamber’s Chief Impact Officer, will be interim president and CEO until the Chamber’s board picks a permanent replacement.

Smith became head of the Chamber in January 2020, just as the group was reeling from a 2019 election in which the Chamber’s political action committee, Civic Alliance for a Sound Economy, spent unprecedented millions to defeat City Council incumbents. That flood of money appeared to spark a backlash against big-business spending, and the Chamber’s candidates mostly flopped. In 2021, the Chamber decided not to endorse any candidates—and, in that election, the more conservative candidates prevailed.

Under Smith’s nearly five years as its leader, the Chamber  has thrown its weight behind internal and public-facing campaigns to defeat social housing (the Chamber urged the council to delay the election and backed a ballot alternative that would have directed the city to spend existing funds on traditional affordable housing), as well as a number of efforts to squelch progressive tax proposals.

They’ve opposed the business and occupation tax reform proposal, which—if voters approve it—will pay for critical programs at risk for budget cuts; supported Mayor Bruce Harrell’s efforts to sweep homeless encampments, particularly downtown; and backed a proposed city charter amendment, “Compassion Seattle,” that would have required the city to keep all public spaces clear of encampments while imposing an unfunded mandate for homeless services on the city.

Under Smith, the Chamber also backed the Seattle Transportation Levy and connected the dots between the housing crisis and Seattle’s need to upzone, supporting efforts to build “middle housing” across the city.

2. As we reported earlier this week, Seattle Police Chief Shon Barnes received a $50,000 hiring bonus when he was hired, as did a new deputy chief and assistant chief he hired from Beloit, Wisconsin, and New Orleans, respectively. According to SPD, all three chiefs were eligible for the bonuses under legislation, passed in 2022 and amended two years later, that authorized $50,000 “lateral” hiring bonuses for police officers with existing job experience.

As we also reported, the sponsors of the legislation never intended for the bonuses to go to command staff, and the legislation itself says it applies only to police officers in the civil service, not management or executive-level staff.

SPD told us the city “offered as part of [Barnes’] compensation a ‘hiring incentive’ of $50,000 under the City’s 2024 legislation, which is related to the recruitment and retention of police officers at the understaffed Seattle Police Department. Asked about this, Mayor Bruce Harrell’s office gave a somewhat contradictory response.

“Chief Barnes is a nationally recognized leader in the field and the inclusion of the $50,000 was negotiated as part of his offer letter,” a spokesperson said, adding that the mayor was “not involved” in the other two $50,000 bonuses. This suggests that Barnes’ bonus was not actually a standard “lateral” incentive—as SPD has said—but was something the mayor’s office offered him on top of his $360,000 salary and other perks. The two contradictory explanations for Barnes’ hiring bonus leave the true origin of this unusual hiring bonus unclear.

Harrell’s office said Barnes’ “negotiated compensation makes his package consistent with the West Coast Seven (Long Beach, Portland, Sacramento, San Francisco, San Diego, San Jose, and Seattle), where in 2023 the median salary for police chiefs was $476,454 and the average salary was $424,712.” the spokesperson said.

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3. The Burien City Council, which in recent years has adopted a series of increasingly onerous laws targeting homeless people, could soon take a more progressive turn. Progressives (including incumbents Sarah Moore and Hugo Garcia, plus Sam Méndez, a progressive running to replace Jimmy Matta, who’s leaving the council) hold commanding leads in all three council races on the August primary ballot.

That bodes poorly for Stephanie Mora, the council’s most conservative member, who’s being challenged by progressive Rocco DeVito; their race wasn’t on the August ballot because they were the only two candidates. Mora, a staunch opponent of allowing homeless shelters or authorized encampments anywhere in Burien, has argued that the government has no role to play in addressing homelessness.

Kevin Schilling, the council member who currently serves as mayor of Burien, isn’t doing so well in his own race to defeat 33rd District state Rep. Edwin Obras, either. With the election certified, Obras has 48.2 percent of the vote to Schilling’s 34.6 percent. Schilling lost by the highest margin in the city where he’s mayor, trailing Obras by 15 points in Burien.

4. PubliCola obtained a copy of the permit for a controversial “Revive in ’25” rally in Gas Works Park. As PubliCola was first to report, the contentious event was relocated from Cal Anderson Park on Capitol Hill after negotiations between its anti-LGBTQ organizers and city officials, including City Councilmember Joy Hollingsworth and Mayor Harrell.

The permit reveals few details about the event, except that the group, led by Christian nationalist minister Sean Feucht, expects 350 people to attend—less than a similar “Mayday USA” rally at Cal Anderson earlier this year.

Although the permit goes from 9 am to 9 pm, the rally and concert is scheduled for 5 pm—leaving organizers plenty of time to hold a planned “Jesus March” in the streets around Cal Anderson before heading over to Fremont for the main event. Organizers have removed references to this march from their Facebook page, but have not publicly said they won’t be marching. According to city officials, Feucht’s group did not apply for a street use or special event permit for a march.

Business, City Council, Elections, Mayor Harrell, Taxes

Seattle Nice: What’s Behind the Proposed New Business Tax?

By Erica C. Barnett

This week, we’re talking taxes—specifically, the new business and occupation (B&O) tax proposal that City Councilmember Alexis Mercedes Rinck and Mayor Bruce Harrell dropped, seemingly out of the blue, last week. The tax includes a big exemption that the business community has been seeking for a long time; however, above that threshold—$2 million in gross receipts—the tax will go up substantially.

Because B&O taxes are based on gross receipts, they hit high-grossing, low-margin businesses like restaurants and grocery stores hardest, often leading to higher prices—which is one reason they aren’t generally considered progressive. In fact, neither of the groups the city set up to come up with new progressive revenue sources recommended a higher B&O tax.

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On Monday, as I was posting the podcast, I received a poll testing messages for and against the tax measure. The Seattle Metro Chamber of Commerce is pushing the message that higher B&O taxes will drive up prices and drive larger businesses out of Seattle. “If the City continues to drive away large employers, it will create a domino effect hurting the small businesses this plan is supposed to help while also causing unemployment to rise, office vacancies to increase, and tax revenue to shrink,” one of the test messages claimed. The Chamber is also using some  dodgy math to claim that the city has more than $500 million just sitting around, up for grabs, so expect to hear that message when this thing goes to the ballot.

So what’s really behind the new proposal? The mayor’s up for reelection, facing a progressive challenge from Katie Wilson. Seattle’s facing a budget hole of $250 million even without federal cuts. And supporters of the tax measure may be gambling the Chamber won’t fight too hard against the tax, because it includes a big tax exemption that small- and medium-size businesses have been seeking for years.

With David still away gamboling in parts unnamed, Sandeep and Erica take up these questions and more on this week’s episode of Seattle Nice.