Why not put a tax on real estate sales that sellers pay into a separate, dedicated fund to develop affordable housing?
We were glad to see the Seattle City Council scrap its ill-advised head tax on jobs to address the growing homelessness and housing crisis. But now that the dust has settled, it is clear action is still needed.
Our state is not alone in facing this crisis, but we are at the forefront. A 2017 federal study found more than 21,000 people in Washington lack stable housing. More than half of all renters in the state spend more than 30 percent of their income on housing, crippling their ability to meet other needs.
This is not an issue any one city can tackle on its own. We need to do more at regional and state levels, and the best path is to play to our strengths and leverage economic growth to invest back in our communities.
We already have started. Reflecting strong economic growth, the Legislature passed a construction budget this year investing $106.7 million in the Housing Trust Fund to help build and preserve affordable housing statewide. Our improving economic forecast projects Washington to take in $298 million more in revenue than expected, including some $96 million from the Real Estate Excise Tax — notwithstanding Trump administration trade policies that could hurt our state economy, which is the most trade-dependent in the nation.
Much of the revenue from the excise tax, a tax on real estate sales that sellers pay, previously went into the state’s Public Works Trust Fund but now goes mostly into the general fund. Amid a booming real estate market, why not put that extraordinary tax growth into a separate, dedicated rainy day fund to develop affordable housing?
Similarly, why not expand the construction budget commitment and add a public-private matching grant program to rapidly develop affordable housing and job-training options for homeless individuals? We already have a successful model in the State Opportunity Scholarship, a unique partnership between the state and businesses that matches public and private funds to help lower-income students earn bachelors’ degrees in high-demand fields.
During the head-tax debate, many Seattle businesses said they wanted to step up and be part of the solution to the current crisis but objected to the City Council’s approach. A matching program for housing and job training would give local businesses an incentive to help fund homeless programs that have been proven to be successful and to play an active role in improving their communities.
We also can expand on measures the Legislature passed this year, which included barring source-of-income discrimination, expanding housing assistance for seniors and people with disabilities, and increasing the document recording fee to generate some $49 million annually for new anti-homelessness services.
Notably, none of these proposals, or the increased investment in the Housing Trust Fund, raised taxes.
One proposal that did not pass this year but which may deserve a second look would let local governments keep some state sales tax revenue if they pledge to use it to create permanent supportive housing. A county that keeps $10 million annually could potentially bond that to secure $100 million toward creating affordable housing.
We need to think creatively to find results-driven solutions. We also need to work collaboratively with the business community to ensure that whatever solutions we pursue work for all concerned.
Above all, one thing is clear: Doing nothing and allowing this crisis to worsen is not an option.