Tag: social housing

City Council, housing

Tax For Social Housing Brought In Twice the Original Estimate, Mirroring Early JumpStart Results
Mayor Katie Wilson speaks to the crowd at Tuesday’s “State of Social Housing” town hall.

With $115 million (almost) in hand, the social housing developer says it’s ready to start buying up apartments.

By Erica C. Barnett

Funding for Seattle’s new social housing developer, which the City Council approved in a 7-0 vote yesterday, is coming in significantly higher than anticipated: In its first year, the developer will receive an estimated $115 million to acquire existing apartment buildings and develop new ones. That’s more than twice the $53 million the campaign for last year’s ballot initiative, House Our Neighbors, estimated for first-year revenues last year.

On Tuesday, the City Council unanimously approved an interlocal agreement that will allow the Seattle Social Housing Developer to start spending the money to purchase and develop social housing—mixed-income apartment buildings with permanently affordable rent, governed by a board consisting primarily of renters.

“We continue to have one of the most regressive tax systems in the country in this state,” Mayor Katie Wilson said at a “State of Social Housing” event at El Centro de la Raza Tuesday night, “and it is very gratifying to know that we’re going to be able to use a little bit of that wealth and put it to work building housing and operating housing.”

The higher-than-expected early revenues, Wilson noted, mirror what happened with the JumpStart tax, a tax Seattle’s largest businesses pay on employee compensation above a threshold that grows with inflation every year. (This year, the tax will apply to employees wages above $194,000 a year). “This city is filthy rich,” Wilson said. “We just kind of, like, tapped into a vein and opened a little spigot, and $400 million a year” came out. 

Social housing is funded through a similarly structured tax; employers pay 5 percent of annual compensation to any employee above $1 million; for instance, if an Amazon worker makes $1,100,000 a year in wages and other compensation, such as stocks, Amazon would pay $5,000 for the portion above $1 million.

Tiffany McCoy, the interim director of the social housing developer, said that because of the funding, “hundreds of people this year will benefit from housing that remains permanently affordable, housing that is publicly owned and passed down through generations, housing that works for people that are a variety of income levels and helps prevent them from falling into homelessness.”

McCoy was previously co-director of House Our Neighbors, the group that proposed and passed two social housing initiatives, I-137 and Proposition 1A. She became interim CEO after the developer’s board fired its original CEO, Roberto Jimenez, an affordable housing developer from California. Among other issues, HON and some board members were frustrated that Jimenez never moved to Seattle from California. 

On Tuesday, McCoy noted that “naysayers” will continue to oppose the developer’s model and question whether social housing, including the developer’s model of resident governance, can work in Seattle. “But let them critique us. We will continue to build, and whether we’re opening our first, second, tenth building, our doors will remain open to all,” McCoy said.

The comparison Wilson made to the JumpStart tax is instructive—and could serve as a cautionary tale. While JumpStart continues to bring in more money each year than originally forecast, it never actually brought in $400 million in a single year; that number was an estimate for 2024 that turned out to be optimistic to the tune of $47 million.

Because the city has staked so much of its general-fund budget on the tax, which was originally earmarked for housing and small business support, big revenue fluctuations have the potential to create shortfalls that impact basic city services.

Although former mayor Bruce Harrell’s budget assumed revenues from JumpStart would quickly bounce back, it seems just as possible that they’ll keep declining: Because fewer than 500 companies pay the tax (and fewer than 10 provide the bulk of JumpStart revenues), the funding is volatile and heavily dependent on corporate decisions by companies like Amazon, which just cut thousands of employees in the Seattle area. The money coming in is still higher than the city anticipated when the council approved the tax, however.

The social housing tax applies to a much smaller number of companies (and a smaller number of employees at those companies): About 170, according to McCoy. Taxing the richest of the rich in this way makes sense from a political perspective—it’s easy to get voters to support taxes that will only affect a relative handful of the biggest corporations with the wealthiest workers—but the tax could prove even more variable than JumpStart, and the developer could see diminishing returns if companies fire workers or move them out of the city.

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At a presentation to the council’s housing committee on Wednesday, the developer’s Chief Real Estate Development Officer, Ginger Segal, said the developer plans to issue bonds this year and again in 2028, when the developer will run out of money and need to issue more. Bonds are a type of loan that a developer pays back with revenues, such as rent or public funding. The social housing developer plans to pay the bonds back at a rate of about $20 million a year, Segal said. ”

Segal said market conditions are favorable right now for the developer to focus on buying up buildings. By 2028, Segal said, the organization plans to acquire more than 800 existing units and convert them into social housing; by 2031, they plan to have constructed more than 600 new units.

Initially, the developer plans to encourage existing tenants to stay and rent units to lower-income people as they become vacant in order to meet a planned balance between lower- and higher-income residents; eventually, Segal said, units will become vacant and the developer will maintain a mix by renting to renters at all income levels, from 0 to 120 percent of the Seattle median income.

During that presentation, McCoy said one issue the developer could face soon is a section of the social housing developer’s charter that says the housing it creates “must be permanently protected from being sold or transferred to a private entity or public-private partnership.”

“We are finding, with some banks, that they don’t feel we could put the buildings up as collateral if we wanted to take out big debt to fund our mission,” McCoy said.

“After the next few years, I think we’ll have to reevaluate and see if we want to encumber more of that tax revenue,  or if we want to start encumbering the buildings” by putting them up as collateral for loans, Segal said. “But I think we need the flexibility to encumber the buildings, because otherwise we might have financing tools that we can’t use.”

Courts, Elections, housing, Police

Social Housing Crushes It, City Workers Sue Over Workday, Court Says Jan. 6 Cops Can’t Hide Identities
A billboard for Workday in Atlanta says, “Be a rockstar of business”

1. The latest batch of ballots overwhelmingly affirmed the election night victory for social housing, as Proposition 1A increased its winning margin to 60 percent over a competing proposition that would have directed the city to use existing housing funds to fund traditional low-income housing.

The winning measure, which will impose a 5 percent business tax on employee compensation above $1 million a year, will fund the acquisition and construction of buildings for permanently affordable mixed-income housing, in which higher-income renters (making up to 120 percent of Seattle’s median household income, or about $121,000) will subsidize lower rents for those who make less.

Businesses (including Microsoft, Alaska Airlines, and Amazon), along with the Seattle Metro Chamber of Commerce, poured nearly half a million dollars into the Proposition 1B campaign. The measure, which would have used existing JumpStart payroll tax revenues to fund traditional subsidized housing for five years, was also endorsed by Mayor Bruce Harrell (who appeared on campaign mailers) and supported by a majority of the city council, who voted to put the competing measure on the ballot last year.

2. Three city employees have filed a class-action lawsuit over ongoing problems with Workday, the city’s new payroll and HR management system, which—as PubliCola has been documenting since last year—has resulted in missing or inaccurate paychecks, improper vacation accruals, vanishing retirement funds, and many other major issues since the implementation of the new system last September.

According to a statement from seven city unions whose workers were impacted by Workday snafus, “for the past five months, the City has routinely issued paychecks and pay statements that are inaccurate and have resulted in thousands of employees being underpaid or, at times, not paid at all.” The legal bases for the lawsuit are Seattle’s law prohibiting wage theft and the city’s sick and safe leave ordinance, which requires the city to keep (accurate) track of how much leave employees have.

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“These failures of the new payroll system have resulted in frustration and significant financial hardship, as workers are left to resolve paycheck errors themselves and deal with late or incomplete payments,” AFSCME Council 2 President Michael Rainey said in a statement. “The City of Seattle is responsible for ensuring their payroll systems function for their employees—not against them.” AFSCME 2 represents Seattle Public Library employees.

According to the lawsuit, “The City of Seattle implemented Workday despite the repeated issues that Workday has caused to other governmental entities and without first testing and verifying that all employees would receive accurate paychecks and pay statements under the new system.”

Since our most recent story on Workday, PubliCola has continued to receive updates from city employees. About 2,000 city workers had their pay adjusted downward to the bottom of their pay “bands,” meaning that their paychecks were significantly less than their actual salaries, sometimes by $20 an hour or more. People who have planned to take time off have discovered that, according to Workday, they no longer have enough vacation or sick days to do so. One staffer received less than 30 percent of their regular pay in January, after several months of inaccurate paychecks.

3. The Washington State Supreme Court ruled on Thursday that four Seattle police officers who attended the “stop the steal” rally on January 6, 2021 do not have the right to remain anonymous and can be identified in responses to public disclosure requests about the officers’ participation in the event.

Two married SPD officers, Caitlin and Alexander Everett, were fired for breaching barriers set up by US Capitol police during the insurrectionist riots.

After several people filed public disclosure requests about SPD officers’ presence at the Capitol on January 6, the officers sued SPD, arguing that it would violate their right to privacy for SPD to reveal their names. (Specifically, they claimed that their names are “personal information” exempt from the state Public Records Act, and that their names are also protected by the First Amendment.)

Although the state Court of Appeals agreed with this argument, the Supreme Court rejected it, noting that the officers had no expectation of privacy when they participated in the January 6 event alongside about 45,000 other people. “[T]hey have not shown they have a privacy right in public records about their attendance at a highly public event,” the court wrote. “Public employees generally do not have a privacy interest in activities that are widely attended and do not occur in private. ”

The X account DivestSPD posted a list of the officers’ names in 2021. But the ruling goes significantly further than requiring a list of names. According to the ruling, the records provided to requesters must include unredacted “photographs, video, text messages, and possibly other documentation relating to the officers’ activities on January 6, 2021,” according to the ruling.

City Council, Elections, housing, Uncategorized

Emails Reveal Last-Minute Lobbying Efforts to Keep Social Housing off the November Ballot

By Erica C. Barnett

House Our Neighbors, the social housing campaign, posted an email on Instagram Monday that Seattle Metro Chamber of Commerce president Rachel Smith sent to Council President Sara Nelson and Councilmember Maritza Rivera on August 5. In the email, which HON obtained through a records request, Smith urged the two councilmembers to “take the time to consider alternatives before taking action to place I-137″—the social housing initiative—”on the ballot.”‘

The following day, the council decided to block Initiative 137 from last year’s November ballot, giving themselves more time to come up with a competing alternative and relegating I-137 (now Prop. 1A) to the February special election that wraps up today.

The social housing measure would impose a 5 percent tax, paid by employers, on individual employee compensation above $1 million a year. The money would fund the construction and acquisition of mixed-income housing, with higher-income renters directly subsidizing the rents of their lower-income neighbors.

The timing of Smith’s email shows that the Chamber was lobbying until the last minute to keep the social housing proposal off last year’s high-turnout Presidential election ballot. In a separate email HON received in response to its records request, sent the Friday before the council voted to delay the measure, a council staffer told a King County Elections staffer they had just received “confirmation that Council will be approving this for the November ballot.” By the following Tuesday, that was no longer true.

In her August 5 email, Smith proposed two possible alternatives to the social housing measure. The first, which would make social housing an eligible use of existing Seattle Housing Levy property taxes, would have little impact unless the Office of Housing decided to redirect funds from existing programs. The second would raise property taxes by 10 cents per $1,000 of a property’s value, increasing city funding for traditional low-income housing.

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“I appreciate the thought the Chamber has put into this,” Nelson responded. “Given that both alternatives could impact the resources our affordable housing providers receive, I’d want to know what they think.”

Records also show that left-leaning opponents of the social housing measure also reached out to the council in the days leading up to their decision to delay, and that a staffer for Councilmember Maritza Rivera made sure their objections were fast-tracked to the attention of both Rivera and Councilmember Cathy Moore. Rivera would go on to propose the alternative to social housing that became Proposition 1B, which would fund traditional low-income housing using existing JumpStart payroll tax revenues.

In the August 1 letter to the council, Seattle Displacement Coalition founder John Fox and 24 other advocates urged councilmembers to pass the tax but use it exclusively to house people who are currently homeless or very low-income. Fox, along with former reporter and editor George Howland, would end up leading the campaign urging a “no” vote on both the social housing measure and the Chamber-backed alternative.

If you’re registered to vote in Seattle, you can still cast your ballot until 8:00 tonight by depositing it in any ballot drop box.

Elections, housing

Misleading Mailers Inaccurately Imply Social Housing Is for the Rich

By Erica C. Barnett

Voters across the city received multiple mailers opposing Initiative 1A—the social housing initiative—and encouraging them to support an alternative, Initiative 1B, that would take funding out of existing JumpStart payroll tax revenues to fund traditional affordable housing.

The election is on February 11, and ballots started hitting Seattle mailboxes last week.

Initiative 1A would impose a tax on employers—5 percent on employee compensation above $1 million a year—to fund the construction and purchase of buildings for permanently affordable mixed-income housing. Renters making more money—up to 12o percent of Seattle’s median income—would pay higher rents, directly subsidizing lower rents for people who make less. The campaign estimates the tax would raise about $50 million a year.

Initiative 1B, the business-backed alternative, would take $10 million a year out of the city’s existing JumpStart payroll tax fund to pay for traditional, subsidized affordable housing for people making up to 80 percent of the Seattle median. The city has already used JumpStart’s unexpectedly high revenues, which were supposed to be dedicated to affordable housing, small business support, and other progressive priorities, to pay for general city functions, so this would be another instance of moving funds around without providing any additional resources for housing.

The mailers, which feature Mayor Bruce Harrell on the flip side, contain some extremely misleading numbers, buried inside a confusing math problem. (If 12 percent is reserved for people making up to $144,000 and 3 percent is reserved for people making up to “low-income,” how much is reserved for people between very low-income and $144,000?)

First, it’s important to note that the social housing campaign doesn’t have a detailed spending plan for future dollars, because that’s one of the things the social housing developer—created through a separate initiative passed last year—is seeking funds to develop. What they do have is a  “hypothetical business plan” created by Ben Maritz, a local housing developer, that assumes half the apartments provided at social housing buildings would be two- and three-bedroom “family-size” units, which private developers rarely build because it’s more profitable to build studios and one-bedroom units.

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In the scenario Maritz laid out, 3 percent of units would be studios serving people at the very lowest income level—between 0 and 30 percent of the Seattle median, or about $30,000 a year. That isn’t many, but it’s also worth noting that social housing backers never presented themselves as providers of housing for formerly homeless people. And overall, the hypothetical plan sets aside half of the units for people who currently qualify for low-income rent assistance because they make less than 60 or 80 percent of Seattle’s median income. That’s a total of 53 percent—not 3 percent.

As for the 12 percent of units that, according to the “no” camapign, “will be set aside for people making up to $144,000 a year”? That number appears to refer to the 12 percent of apartments that, in the hypothetical business plan, will be available to households making between 100 and 120 percent of median income. The $144,000 figure, however, doesn’t represent just one person’s income. It’s actually 120 percent of the median income for a family of two, which, for a two-income household, averages out to $72,000 a year.

Under the proposal, higher-income renters won’t be receiving subsidies; they’ll be paying around 30 percent of their income on rent, which works out to roughly $4,000 a month for a $144,000 household. (Since that’s higher than market-rate in Seattle, the actual rent would probably be less). That rent, in turn, will subsidize rents for people in the same building who earn less—a feature of social housing Prop. 1B, which uses existing city money to build traditional low-income housing, does not include.

Whether all this will work out in practice remains to be seen—these are, as the campaign acknowledges, plausible but still hypothetical numbers on a ledger. The claims opponents are making, though, assume voters won’t dig into the numbers or source materials; they’ll just see that big “3%” (and Harrell’s smiling face) and vote for the measure that would do very little and cost nothing.

According to campaign finance records, the group that sent out the misleading mailers, People for Responsible Social Housing, has spent more than half a million dollars on the anti-social housing campaign so far, and raised just over $430,000. The majority of that has come from just three entities—Microsoft ($100,000), Amazon ($100,000), and the Greater Seattle Metro Chamber of Commerce ($35,000).

Elections, Guest Contributor, homelessness, housing

Social Housing Is a Homelessness Solution
Image via House Our Neighbors! website

By SHARE and WHEEL

Homelessness is a housing problem.

More affordable housing means less homelessness. It’s really that simple.

SHARE and WHEEL are grassroots organizing efforts of homeless and formerly homeless people. Social housing is in alignment with our values: Caring for each other, creating relationships across divisions, and self-governance.

Ending homelessness requires addressing the needs of our whole community. Working people become homeless every day, priced out of their housing by arbitrary rent hikes. Even middle-income people can become homeless after a major car accident or a catastrophic illness. A New York Times article showed that the housing crisis is impacting working people at all income levels, everywhere in the United States. As housing inaccessibility moves up the income ladder, more and more people at all income levels will become homeless—and homeless deaths will continue to rise.

Social housing is public housing for all income levels. It would remain affordable in perpetuity, with no risk of your building being sold off to market development and no penalty for success if your income becomes “too high to live here” while being still too low to live anywhere else. It will also be governed by the tenants. From our self-managed shelters and projects, we know that governing and making decisions together builds community.

Housing people with a range of incomes together builds community. A city segregated by income and class is a fractured community. We like building relationships across divisions like rich/poor, housed/homeless—in fact, we recommend it. Housing that includes a range of income levels facilitates that. It also stabilizes neighborhoods to prevent further displacement of low-income residents.

In February 2023, Seattle voters expressed their overwhelming support for social housing: 57 percent of Seattle—a majority in every district—supported Initiative 136, which created the social housing developer.  In 2024, 38,000 voters signed an initiative to fund that project with a progressive tax. Instead of increased property taxes, as most of Seattle’s affordable housing is financed, I-137 proposes a tax on businesses that pay any employee over a million dollars a year: 5 percent on every dollar over $1,000,000. The Seattle Social Housing Development Board (SHDB) can use this income as collateral for bonds that will fund housing construction and building acquisition.

A small faction is challenging this initiative, pushing for an alternative that narrowly focuses on low-income and homeless populations. Last year, the Seattle City Council refused to put the initiative on the November ballot, later voting to put Initiative 137, now Prop 1A, on the ballot in February, along with the council’s own alternative proposal, Prop 1B. The council proposal raids the JumpStart tax proceeds for $10 million a year and restricts the funded housing to 80 percent or less of Area Median Income.

We, actual homeless people, oppose raiding the JumpStart tax, which is intended for traditional low-income housing. We oppose strangling the new social housing developer by funding one fifth of what’s requested. And, most strongly, we oppose canceling the will of the voters who support mixed-income housing in which the rents from higher-income tenants will subsidize the rents of lower-income tenants.

We need solutions, not obstruction. Delay means higher rents, increased homelessness, displacement of marginalized communities, and pricing out low- and middle-income workers.

We are appalled that the Seattle City Council refused the will of Seattle voters by not putting I-137 on the November ballot. We need solutions, not obstruction. Delay means higher rents, increased homelessness, displacement of marginalized communities, and pricing out low- and middle-income workers.

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Who are we?

SHARE (Seattle Housing and Resource Effort) is a grassroots organizing effort of homeless and formerly homeless men and women. We facilitate six indoor shelters, two Tent Cities, lockers, a hygiene center, and a housing for work program, all self-managed by participants.

WHEEL (Women’s Housing, Equality and Enhancement League) is a grassroots organizing effort of homeless and formerly homeless women. We facilitate two staffed, low-barrier women’s shelters and we do Women in Black vigils whenever somebody homeless dies outside or by violence in King County.

Both of our organizations are homeless-led. Self governance and self-management are essential values to us. Participants, not staff, maintain and manage SHARE shelters and Tent Cities.

We advocate for systemic changes to end homelessness. It isn’t enough to get people out of homelessness. We want to stop people from becoming homeless.

Opponents say the Social Housing Development Board is too inexperienced to be in charge of a housing developer. But housing boards do not draw architectural designs. Boards set policy and practices. Existing low-income housing developers lack lived experience with poverty and homelessness, and their policies and practices are sometimes bad for their tenants. The SHDB includes seven members with lived experience, providing a real voice, which can complement existing efforts and provide valuable new perspectives on housing development.

The SHDB also has more members experienced in construction than the biggest existing low-income housing developer does. Its inaugural Chief Executive Officer, Roberto Jiménez, has an impressive background in affordable housing and community development.

Opponents also say we should only concentrate efforts on people who are currently homeless. “Prioritize those most in need” sounds sensible, even virtuous. What it means in practice is “Sacrifice vulnerable people for other vulnerable people, so that we don’t have to raise taxes on wealthy people.” Opponents are acting as if this is a zero-sum game. We need to both work upstream to STOP people from becoming homeless and also work to get those who are currently homeless back into housing.

Some opponents object to the tax not having an expiration date, after which it would have to be renewed. To be useful for ongoing construction, or as collateral for bonds, the funding stream has to be dependable, not subject to changes in political administrations. This is why property tax levies do not have an expiration date.

The alternative funding proposal, taking $10 million from the JumpStart fund, raids money set up by a progressive tax to avoid creating a new progressive tax.

In the midst of an escalating homelessness crisis, skyrocketing rents, and growing income inequality, social housing is more crucial than ever. SHARE and WHEEL stand firmly behind social housing initiatives, recognizing them as a vital tool in fostering equity, stability, and thriving communities.

Vote YES on Prop 1A.

 

 

Elections, housing, podcasts

Seattle Nice Debate: Should The City Go All-In on Social Housing?
An image from the Prop 1A campaign website. We would give equal time by featuring an image from the pro-Prop. 1B campaign, but “Responsible Social Housing” doesn’t have a website!

By Erica C. Barnett

This week on Seattle Nice, we asked the questions and proponents for two dueling social housing ballot measures answered them, in a debate that we hope will our listeners (including all of you PubliCola readers who vote in Seattle) decide whether to fund the social-housing developer voters approved at this time last year. Because of a state law limiting initiatives to a single subject, House Our Neighbors—the group that backed last year’s Initiative 135— had to bring forward a separate initiative to actually fund it.

As PubliCola readers know, HON wanted to put their measure, Proposition 1, on the ballot last November, during the high-turnout Presidential election, but the Seattle City Council prevented that from happening, citing unspecified legal concerns. The delay gave the council time to draft an alternative proposal that amounts to a “no” vote on the original social housing measure. Voters will also have the option of saying no to both measures, now known as Proposition 1A and IB.

Proposition 1A, the original proposal to fund social housing, would impose new a 5% payroll tax, to be paid by employers, on employee compensation above $1 million a year. If someone made $1,200,000 a year, for example, their employer would have to pay $10,000 business tax on the $200,000 in compensation above $1 million. The campaign estimates that the tax, which would be ongoing, would raise around $50 million a year to  build or purchase housing affordable to people at a wide range of income level, all the way up to 120 percent of Seattle’s area median income. Residents who earn more would pay higher rents, subsidizing the rents of people who make less.

Proposition 1B, in contrast, would not raise taxes or fund the kind of mixed-income social housing as Prop1A. Instead, it would take $10 million a year, for five years, out of existing revenues from the JumpStart business tax—nearly two-thirds of which were originally earmarked for affordable housing—and spend it on low-income housing for people making less than 80 percent of the Seattle median income. The housing Proposition 1B would build wouldn’t be “social housing” in the same sense as Prop. 1A, because it wouldn’t include people paying market-rate rents; in this housing, the highest-income residents would still qualify as low-income and be eligible for publicly funded rent subsidies.

Tiffani McCoy of House Our Neighbors made the case for Proposition 1A, and Jessica Clawson, a land-use attorney at McCullough Hill, argued in favor of Proposition B. There’s also a “no on both” campaign, but in the interest of equal time, we limited our debate to the two main propositions.

If you’re on the fence about social housing or just want to understand more about what can be a really confusing issue, I highly encourage you to listen to this lively but very substantive debate about taxes and housing, with a brief discussion about neoliberalism for those of you who are still mad at Bill Clinton.

Listen now—ballots drop next week!