Seattle spends plenty to help the homeless. Before we go and raise taxes again, the results of our spending need to be audited, outcomes quantified and evaluated, and the city needs to streamline its efforts.
WE are all interested in getting the homeless into housing, but the property tax initiative recently proposed by Mayor Murray and Nick Hanauer to address homelessness would make housing even more unaffordable for many renters and for low- and middle-income homeowners. And it would put some residents at risk of becoming homeless. That hardly seems a good strategy.
The proposed initiative would double the amount of money Seattle spends each year on homelessness — from the current $55 million to $110 million. A city consultant has said current expenditures might be adequate — if funds were better managed. Before we go further, current expenditures need to be audited, outcomes quantified and evaluated, and the city must streamline its efforts.
Another city consultant noted that “an increase in rent of $100 correlates with a 15 percent increase in metropolitan homelessness.” Higher property taxes push rents higher and will make the problem worse.
Instead, after current expenditures on homelessness are streamlined, if it is determined that Seattle needs to devote more money to addressing the crisis of homelessness, let’s focus on finding other fund sources.
Why not tap the city’s huge revenue stream from the construction and real estate boom? During our years on Seattle City Council, those streams ebbed and flowed with the building cycle. Now they are up, up, up with all the cranes on the skyline. They are: the real estate excise tax (REET); the retail sales tax on construction (typically about 25 percent of retail sales revenue); and the business and occupation tax (B&O) on construction.
How about an initiative to require Seattle to devote a percentage of the increased revenues from these taxes to address homelessness? The sequestration should continue until all tent encampments are cleared.
REET funds have tripled since 2010 and are forecast in the $70 million range in 2017. That’s a phenomenal increase. By law, REET tax revenues must be used for capital facilities and major maintenance. REET money directed to homelessness could build tiny-house villages, convert old motels into low income housing and clean up and restore public open space.
Retail sales tax and B&O tax are general fund moneys. The Seattle budget office tracks how much is attributable to construction, and the growth in construction revenues since 2010 has been impressive. Construction-related growth directed to homelessness could be used to expand mental-health and addiction services, hire counselors and case workers, care for homeless kids and support job training.
Once the current $55-million in expenditures have been audited, evaluated and streamlined, if it is determined that more money is needed to effectively address this important issue, we are happy to support such efforts. However, it is unlikely that a hike to the property tax will be deemed the appropriate vehicle.