Tag: regionalism

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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