The Only Problem With The Proposed Seattle Housing Levy Is That It Isn’t Big Enough

On June 15 Seattle City Council approved the Mayor’s $145 million Housing Levy proposal, which will now be subject to voter approval this November.  The current levy (3 mb pdf) has been a popular and successful program, and has been a key tool for enabling affordable housing projects all over the city (6 mb pdf).

Broadway Crossing on Capitol Hill—shown above—is a prime example of the kind of affordable project that addresses the housing needs of the City.  Replacing a gas station, it brings affordable housing to a area that has been rapidly gentrifying, and also happens to be Seattle’s most pedestrian-oriented neighborhood.   The building is  LEED Silver certified, demonstrating that with smart design, even affordable projects on tight budgets can be green.

But in all likelihood, Broadway Crossing would not have been feasible without levy funds, and instead the neighborhood would have got a single-story Walgreen’s store surrounded by surface parking.  And even though levy funds typically make a relatively small portion of the project’s total budget—on the order of 10 to 15 percent—the levy is key for establishing the legitimacy of a planned project, which then helps secure other sources of funding.  The City of Seattle estimates that every levy dollar spent leverages $3.25 of other public or private funding.

The proposed levy would assess $17 on every $100,000 of property value, up from the current levy’s $15.  The owner of a $400,000 home would pay $68 per year, or $5.67 a month—barely enough for two lattes, without tip.   (It says a lot about Jan Drago that she felt the need to posture about reducing the levy before voting for it anyway.)

Meanwhile, in the post-housing bubble economy, funding sources for affordable housing are shrinking, even as the need for that housing grows.   With corporate profits down, the value of tax credits have dropped precipitously.  And Washington State recently cut the Housing Trust Fund in half, from $200 to $100 million.

It is widely recognized that affordable housing is an essential ingredient of balanced, diverse, and sustainable cities.  Lack of affordable housing not only frays the social fabric of local communities, but also compromises regional sustainability via the “drive ’til you qualify” effect, which exacerbates sprawl and long commutes.  Historically, the demand for housing levy funds has outstripped supply.   So then, would it really be too much if we were to, say for example, double the proposed levy rate and ask the average Seattle homeowner to donate about a latte a week to help promote long-term local and regional sustainability?

But so be it, the levy we will vote on is set.  Hopefully the fact that the housing levy is modest relative to its importance will lead to strong voter approval come November, as has been the case with the City’s previous housing levies.

The Yes for Homes levy campaign kickoff event is next Wednesday July 15, 5 – 7pm, at the Swedish Cultural Center, 1920 Dexter Avenue North.

17 Responses to “The Only Problem With The Proposed Seattle Housing Levy Is That It Isn’t Big Enough”

  1. David Sucher

    “It is widely recognized that affordable housing is an essential ingredient of balanced, diverse, and sustainable cities.”

    By whom is that recognized?

    Personally I have no problem with subsidizing vulnerable populations — poor elderly, handicapped. mentally ill, children etc etc — but insofar as this levy supports (does it?) housing for able-bodied young and middle-aged people, I am against it.

    “Affordable housing” is one of those Seattle feel-good myths. The reality is that no one — especially now with declining housing prices — wants “affordable” housing except the social-service agencies which build it.

    http://citycomfortsblog.typepad.com/cities/2005/01/old_article_on_.html

  2. ktstine

    @1 The 60% of the Levy’s rental production funding is targeted at folks making below about $20,000 a year (30% of area median income). These are the most vulnerable in our City, especially now.

    Broadway Crossing is the perfect example of this. And, by the way, affordable housing is no “feel good myth” in Capitol Hill. More people came to the Walgreen’s design review meeting (that proposed surface parking around a single story building) than ever before in the neighborhood. At this meeting they demanded better use of the site and affordable housing above the store! And Capitol Hill Housing made sure this is what the neighborhood got.

    Broadway Crossing serves a mix of people – two-thirds of the units are for folks making below 40% of median income (about 25k a year depending on family size) many of which are disabled and/or formerly homeless) and the remainder of the units are affordable for folks earning up to 60% of median income (about 34k a year for). These units are largely rented by those working in the service industry making $10-15/hour. Ever wonder where your grocery store clerk or barista lives? Capitol Hill has gentrified so quickly that it is becoming increasingly difficult for folks who work here to live here.

    CHHIP is not a social service agency. It builds housing units using the Seattle Housing Levy so that our neighborhoods remain healthy, vibrant, diverse places where people want to live and shop.

  3. philw

    That’s also a very nice looking building.

    Thanks for answering @1, ktstine. I was wavering on this vote, but will now vote Yes.

  4. Michael

    Without proper transit, more housing puts the cart before the horse.

    (i.e., where WILL all those low-income renters park the cars they go to work in? Or will all the housing be on major transpo hubs? And if the latter, won’t that foil the city’s plans to have people of all income levels using transit?)

  5. Keith

    Thanks, ktstine, for the information. That’s more than I’ve ever known about affordable housing and I’ll certainly vote for the levy.

    @1 Even though it frustrates me to no end, and reminds me of my dad and every boss I’ve had in my short career, I appreciate your willingness to take the completely realistic point of view. I wonder, though, how you react to the 1/3 of Broadway Crossing going to “abled-bodied young and middle-aged people” that work in the service industry and otherwise couldn’t afford to live near the neighborhood in which they work and play.

    At the risk of objectifying and sorting people into categories, isn’t it worth saying that these folks need to be in the neighborhood to keep it diverse? If developers are only interested in building faux-luxury condos that run these people out, isn’t it worth sticking homeowners with a slightly elevated property tax to help keep the service-industry folks around? My dad thinks “redistribution of wealth” is socialism but I wonder, what other choices do we have when trying to build better cities in the current (or maybe it’s dead now?) economic paradigm?

  6. ktstine

    @4 This is a very good question. Up here in Capitol Hill we are lucky enough to be transit “rich” (i.e. there are about 10 different bus lines that pick-up right outside of Broadway Crossing) As a result, we find that most of our renters don’t need to have a car, because they are able to live in the neighborhood where they work and/or have appointments (doctors, case workers, etc.) This is very important to every one of our developments at Capitol Hill Housing – that it be accessible to transit. We currently have two projects in the pipeline on 12th Avenue – one a few blocks from the future light rail station on Cap Hill and one further south right on a bus line and near the future streetcar line. The tricky part is that this land tends to be more expensive, so it is not always realistic to expect nonprofits to be able to afford this proximity to light rail especially, without direct City subsidy or reduced cost of land (if the City is selling).

  7. Finishtag

    @1 “The reality is that no one — especially now with declining housing prices — wants “affordable” housing except the social-service agencies which build it.”

    Your essay that you link to is about home-ownership and subsidizing home ownership. The 2009 Housing Levy has only 6% of its funds allocated for home ownership programs. Home ownership programs are not built by “social-service agencies.”

    I support the Levy because shelter is a basic human right and I think City financial support of subsidized rental housing makes this a better city.

  8. Joshua Daniel Franklin

    I have very mixed feelings about supporting an economic system that denies workers a living wage, but this is not the fault of the housing levy! We need to provide places for people making $10/hr to live while we work for structural change.

    I will say that I think “drive ’til you qualify” is more of a middle-income phenomenon, and I’m glad that quality market-rate apartments are providing an alternative to that segment of the population, too. For example, according to estimates at Redfin most of the population growth in SLU since 2000 has been middle-income renters under 40, many with children. (Veer is currently the only condo building in SLU, the rest are apartments.)

    Oh, and by the way the housing levy does also support the poor elderly and mentally ill, etc.

  9. ktstine

    And these projects actually save taxpayer money. Here is a link to DESC’s 1811 project, which recently published a study on having saved the City over $4 million in emergency services during its first year of operation alone! The $2m in Levy investment up front pays us all back in the long run (over and over every year).

    http://www.seattlepi.com/local/404451_alcoholic01ww.html

  10. Chris

    This levy is good because it targets (for the most part) vulnerable populations who have no prayer of housing otherwise. or it should…At some point (maybe $145 million) the leverage decreases on each dollar raised locally as the 9% LIHTC allocation and State HTFs are exhausted. I hope the levy was sized to maximize this levy.

    as for broader affordability goals, a levy of this size, or double or triple this size will have almost 0 effect on affordability due to the size of the housing market.

    The popping of the housing bubble is doing more for affordability than any levy ever could. time for some cross-pollination of my favorite blogs:

    http://globaleconomicanalysis.blogspot.com/2009/07/housing-update-how-far-to-bottom.html

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