Six Seattle City Council members said Monday they want to use the city’s bonding capacity to create more affordable housing. They haven’t agreed on a funding source for the debt service yet, however.
ISix of the City Council’s nine members said Monday they want to use the city’s bonding capacity to create affordable housing, a strategy Seattle hasn’t used in years.
Council members Lisa Herbold, Sally Bagshaw, M. Lorena González, Rob Johnson, Mike O’Brien and Kshama Sawant said issuing about $30 million in limited tax general obligation bonds could help create hundreds of new units of affordable housing in 2017 — as many as 500, according to an expert that Herbold asked.
Under the proposal, the bonds would be paid off over 30 years.
They said the council’s budget committee would discuss the idea Wednesday. To carry out the proposal, the council would need to pass an ordinance raising the city’s cap on limited tax general obligation bonds from about $108 million to $138 million, Herbold’s office said.
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Seattle hasn’t sold such bonds for housing since the 1980s, according to Herbold’s office. That’s when voters began approving property-tax levies to pay for housing.
To replace the $145 million housing levy from 2009 that expires this year, voters in August passed a new seven-year measure that will yield a record $290 million.
Even at that sum, the council members pushing the bonding strategy say the levy alone won’t adequately address Seattle’s housing crunch. For the last few years, the city has been grappling with rising rents, soaring home prices and low vacancy rates.
What the six council members didn’t cover in their news release announcing their proposal Monday was how they plan to pay down the debt service on the bonds.
Earlier this year, Herbold talked about starting a “growth fund” to support bonds for housing. The city would dedicate some property-tax revenue from new construction.
Sawant has argued recently that the city should repurpose money that’s currently set aside to pay the debt service on bonds for a new North Precinct police station.
Either or both of those ideas could ultimately become part of the proposal. But other council members may not be comfortable with what Herbold and Sawant want to do.
“There are several details yet to work through, but with this proposal we are signaling our common desire to create solutions in this year’s budget deliberations,” the six council members, minus Sawant, said in their joint news release. “This proposal does not pit Seattle’s housing needs against other citywide priorities, such as public safety needs.”
Seattle Mayor Ed Murray’s office didn’t immediately return a request for comment Monday. Last year, the mayor’s Housing Affordability and Livability Advisory (HALA) Committee discussed both doubling the housing levy and issuing bonds.