Public Housing Initiative: Something Doesn’t Add Up

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Signature gatherers are popping up like mushrooms after the rain. In Seattle, social-housing advocates will ask you to create a new $50 million-a-year tax to fund public housing, mostly for the middle class. My advice: Please, decline to sign. Seattle needs to house the homeless first. 

Initiative 137, sponsored by House Our Neighbors, would (if passed this November) levy a new tax on businesses that pay one or more employees $1 million annually. The money would go to the Seattle Social Housing Developer to build or acquire apartment buildings that would be mixed income, publicly owned, and collectively operated. Last year, Seattle voters approved another initiative from House Our Neighbors that created the necessary government framework to build social housing, but not to fund it. This year, they’re back for the money, and the petition-gathering would get the measure on the ballot. 

The biggest problem with social housing is that it would mostly help the middle and working class. According to House Our Neighbor’s own figures only 3 percent of social housing will serve the homeless. Over the next ten years, House Our Neighbors projects that (assuming Initiative 137 passes) social housing will spend $500 million in new taxes and will only build 60 apartments for homeless people. The other 1,940 apartments will be for people with higher incomes. 

Relatively prosperous people will occupy 46 percent of social housing’s apartments. As single households, these are individuals who make between $84,000 and $126,000 a year. They don’t need government housing. 

House Our Neighbors argues that by including so many middle-class residents in its social-housing buildings, the wealthier tenants will help subsidize the operating costs for poorer tenants. That doesn’t change the fact that I-137 will build hardly any apartments for the homeless. 

Social-housing advocates also argue that we can build public housing for both the middle class and the homeless. In theory, this is true. The reality, however, is that Seattle does not have the money needed for homeless housing. Seattle literally has thousands of people living unsheltered. The cost of housing needed for the homeless is astronomical—billions of dollars. Seattle City Hall doesn’t have that kind of money and there is no prospect of raising it in the future. 

That means Seattle must make tough choices. We must use housing money for the people with the greatest need. When the city can’t provide apartments for people living on the streets, it makes no sense to branch out into new types of public housing. If Seattle’s voters want to levy a new $50 million annual housing tax, it should be used to help the poorest of the poor get off Seattle’s streets. 

The initiative has lots of problems, one of which is the proposed financing. In the past, Seattle’s housing levies that build apartments for the homeless have a sunset date. For instance, last year, Seattle voters approved a housing levy that will mainly build apartments to house the homeless and will raise $970 million over the next seven years. At that point, in 2030, politicians will have to come back to the voters and ask for more money. This allows us to hold them accountable. If Seattle City Hall doesn’t do a good job with the $970 million, we can choose not to give them anymore money. 

In contrast, the approval of I-137 will establish $50 million in new taxes that will continue in perpetuity—in other words, forever. It doesn’t matter if the social housing folks crash and burn, the tax money just keeps on flowing to them. This is an unacceptable way to finance expensive, experimental housing projects. 

So, whether you’re in a ferry line, at a farmer’s market or attending a Mariner’s game, when the signature gatherers approach, please tell them, “I won’t sign Initiative 137.”

George Howland Jr.
George Howland Jr.http://www.GeorgeHowland.com
Since 1977, George Howland Jr. has lived in Seattle and written reportage, opinion pieces, memoirs, fiction and book and music reviews. He has worked at Real Change, Seattle Weekly and The Stranger.

16 COMMENTS

  1. I won’t sign simply because I don’t think Seattle should embark on new initiatives when it can’t follow through on its existing ones.

    I wish there was an alternative Republican Party to vote for if only as a counter-measure to the current local Democrats.

  2. This type of argument is called “false choice” argument. In other words, we shouldn’t do “A” because we should do “B”. The obvious answer is that we need to do both “A” and “B”. We need to house the homeless AND we need to build more affordable housing.

    The best way to address the housing crisis is to build more housing. I don’t care who builds it but it needs to be built.

  3. I wonder about the $84K lower income figure. What’s the latest income figure for ‘affordability’ for a house in Seattle? And how will anyone know that anyone with that income will find a house to purchase? Or that a developer will build such a house?

    • Hi Carolyn–Good questions. The social-housing initiative, and my essay, are not about home ownership. The median cost for buying a home in King County recently topped $1 million
      https://www.seattletimes.com/business/real-estate/king-county-home-prices-top-1m/.
      No one except the wealthy can afford to buy a home in King County. It’s heartbreaking. My own children will never be able to afford to live in King County.
      The social-housing initiative is about building or acquiring rental apartments. I want public housing money to go to the homeless first. The initiative will not effect the cost of private home ownership in any way.

    • Thanks for writing Toby. If the federal government started a Marshall plan for U.S. cities that built millions of units of public housing for the nation’s homeless, I believe that would have a huge impact on homelessness. This will, of course, not happen. I support inclusionary zoning if it is tough enough on for-profit developers. I also agree that the US’s free-market capitalism is the root cause of the housing crisis that renders homes so unaffordable. Although I think it is useful to advocate for replacing our free-market capitalism with a Nordic socialist housing policy, this will not happen in either of our lifetimes. In the present, public housing money should house the homeless.

      • I agree with most of your observations here. Especially your “root cause” statement and “if it is tough enough on for-profit developers.” The latter is the hard nut in Seattle since that’s the very group that has run this town from its founding. (Recall “Sons of the Profits”.)

        Hard to argue with “not… in our lifetimes” at my age, but things can change very fast, and we are clearly in an increasingly unsettled time that could easily outdo the 1930s very quickly.

  4. Hi Jeffry: Thanks for writing. I agree that it would be great to do both “A” and “B”. One of the points of my article is that the city of Seattle doesn’t, however, have enough money to do both. In this unfortunate situation, we have to make a choice. That’s why I choose housing the homeless first.

  5. An important criterion in assessing any potential action (and that goes for everyone anywhere) is whether the actor is capable of implementing the action.

    Seattle is not capable. Lots of plans, little follow-through.

  6. “That’s why I choose housing the homeless first.” — That’s clearly not happening; what’s your proposal to make it happen George Howland?

    We have little trouble building housing for upper income buyers and renters. Here’s one way to increase the percentage of new housing that is affordable to lower income levels: facilitate the construction of housing without significantly increasing the land value. Huge land value increases draw capital to the industry and block out access to capital and reduce space (neighborhoods) for construction of lower income affordable housing.

    One of the easiest way to solve this problem is to stop giving up zones to the development community (lenders and builders) without requiring that a major portion of the new housing allowed be for lower income households. This tool is called inclusionary housing (or zoning) and it has been proven to work in numerous cities.

    I also support “both/and” thinking: there is no reason not to allocate some of our resources to increasing social housing in Seattle. The higher the percentage of social housing, the less the private market drives the cost of housing. Numerous European cities have known this truth for decades. Why is it so difficult to do here? Oh, I forgot; we’re addicted to “free market” capitalism. That’s a “freedom” we can do with lots less of.

  7. I don’t have an answer to the housing crisis, but I have a few thoughts:

    1) If you build a development targeted just at the homeless, what the the odds it will collapse into a hell hole. All of our public housing underwent a major chain a while back to emphasize mixed housing because communities that concentrated poverty were unstable. Is that view no longer widely held?

    2) Are single households making $84,000 relatively prosperous? Housing access is not just a serious problem for the homeless, and I do not object to helping people who are working but still having a difficult time.

    3) Many who are homeless have serious problems beyond lacking a home, many brought on by the pressures of being homeless. To be successful, they need additional support beyond just a place. This makes housing that focuses just on the homeless more expensive. One way to do that is, in fact, is mixed developments where they are surround by working people who are more stable.

    4) Many argue that should prioritize the longest term homeless with the most serious problems first.

    But there is an argument that the same amount of money needed to house longterm homeless could stablize many more people that are on the verge of homelessness so they don’t have their conditions deteriorate.

    5) If we provide housing for working people who are not homeless, will that reduce the competition for existing cheap housing expensive housing?

    6) Will this program develop more housing or will it displace private developments? Clearly, it seems that buying existing housing and making it available to the homeless does not priovide new housing, it just suffles who get housed. If the main source of housing shortage is the shortage of land, will new homes built by this program remove land from the market that wjould have been built on anyway?

  8. George is correct. It’s not a “we can do both” scenario.  This is a zero-sum game. There are precious few local discretionary and progressive revenue sources available to provide housing for extremely poor and homeless folks and any dollars going to subsidize higher income groups means less for those truly in need. And it puts more pressure on the city to use what tax sources remain, nearly all of which are regressive revenue sources. 

    According to the City’s Comprehensive Plan, there are 42,000-45,000 households with incomes at or below 30 percent of median.  On any given day, another 12000 at minimum are homeless on city streets. The Comp Plan by contrast shows only about 12000-15000 nearly all subsidized units that are affordable to these folks – a gap of about 40,000 units. And the market isn’t producing units affordable to this group so every tax dollar we do spend should be going to make up this growing shortfall. By contrast, there are about 51,000 households in Seattle earning between 80-120 percent of median but more than two thirds of our city’s existing rental stock – over 120,000 rental units – are affordable to this group. That’s a surplus of about 70,000 units. Effectively, the market does provide a supply for these folks contrary to the myth of a missing middle. 

    According to the I-137’s website, only 3 percent of 52 million a year the tax would generate in perpetuity would go towards serving those earning  at or below 30 percent of median and 16 percent for those earning 30-60 percent of median. Quite frankly this is obscene, in light of what I reference above. Further the bulk of their dollars initially raised would go toward acquisition of existing apartment buildings already serving the poor, but they make no promise, zero, to maintain buildings they acquire for very low income groups..quite the opposite – their intent is to replace over time these households with wealthier ones. Also, the city already is spending far too much of its housing tax dollars on serving higher income groups – over 40 percent of what Seattle spends is already serving higher income groups.

    If I sat down with a sampling of Seattle’s most progressive and left leaning communities – folks near and dear to my heart – and out of the blue told them I was interested in launching a new entity to build housing for middle and high income groups and furthermore I wanted their help in securing tax revenues to build the stuff, and …oh by the way…we may have to displace a few low income tenants along the way…I’d be laughed out of the room.  Simply slapping the word “social” or “socialist” on I-137’s model and likening it to what they’re doing in “Vienna” has only concealed this reality and cloulded the otherwise clear vision of some of my friends.

    I’ve a better idea – let’s go ahead and raise 52 million a year from this progressive tax source but instead of handing it to any one entity, least of all a totally inexperienced one serving higher income groups. And then, let’s dedicate these dollars to creating housing reaching down and serving the poorest of the poor. Invite any and all of the 30 plus existing non-profit and PDA and PHA entities and the new social housing entity to apply for these funds allocating them to entities that do the best job serving the most very low income people and homeless and for the longest period to time. Prioritize only these projects.  

    • THE HIGHER INCOME/MARKET RATE RENTAL GROUPS SUBSIDIZE EVERYONE ELSE! There is no subsidizing them. $52M will not go far to buy up housing for the highest need. I am hearing figures that high needs apartment cost in the ballpark of $500k each plus require ongoing operating costs, so you are looking at housing about 100 of the neediest. Buuut, put $52M into an organization that can leverage the revenue streams of market rent, you can house many more including folks at risk of homelessness. The current model you speak of has gotten play over the last half century or so and can continue in that path. We desperately need to try something new.

      • Hi Sarah: Thanks for writing. The higher income rate rental groups subsidy is for operating costs of these apartments. Most of the people in these buildings will not be formerly homeless.

        The public money that I-137 would raise helps build the apartments for all the units—from the neediest to the wealthiest of the tenants. That is a direct subsidy.

        House Our Neighbors’, I-137 sponsors, own figures do not show that it will house “many more including folks at risk of homelessness.” The direct investment of $52 million year into housing for the homeless or those at risk of homelessness would provide much more housing for the poorest among us.

        There’s no magic to social housing, it just houses a different group of people than public dollars are currently housing–those with higher incomes.

  9. Hello,

    Nothing mentioned about the mentally ill and drug addiction population who are most in need of treatment and recovery housing. This population is the most in need and in grave danger to themselves and stripping other safe access to sidewalks, parks and busses. This population is in crisis. I am ALL IN for a payroll tax of this nature if it went to funding existing and building new centers of this nature. A good private funded model to mirror is Battlefield Addiction.

    Amazon’s Housing Equity Fund is providing more than $2 billion in below-market loans and grants to preserve and create more than 20,000 affordable homes for individuals and families earning moderate to low incomes in our hometown communities. The Housing Equity Fund is in addition to $100 million in cash and in-kind donations to their nonprofit partner, Mary’s Place, to build the largest family shelter in Washington state inside an Amazon office building.

    My Non-Profit, We Heart Seattle can access hundreds of already available and built apartments weekly through my favorite NPO, Housing Connector and for people making less than $75K. These are not micro-units but nice 1 and 2 bedroom apartments with all the amenities you could want.

    Andrea Suarez

  10. Unfortunately, everyone is approaching this problem like the blind men and elephant fable – they each see different facets of the affordable housing beast. Social housing stands to play a part in alleviating all them – the working poor, the homeless. The folks paying market rate will have some very marginal financial benefit, but provide the actual funding (via rent) to make the whole thing work and shouldn’t be counted as “recipients” of any special services. $50M a year is a pittance in the scheme of things, the City spends several times that over every year on homeless services alone. I would like to see this experiment play out.

    • Last year, the city of Seattle passed a housing levy that will focus on the homeless and the working poor. It will raise $100 million a year. So, $50 million annually for social housing is not a pittance of what the city raises in its main housing levy for the homeless.

      Market-rate renters will have their apartments built with public money. That’s pretty darn special. Their contribution to operating costs in the form of rent is “marginal”.

      This experiment makes no sense to me. It will do very little for the working poor and the homeless. Put the $52 million into public housing for the homeless and working poor and it would accomplish way way more.

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