Why is a new, larger Seattle housing levy projected to create fewer affordable homes than the existing levy has? Officials say there are several reasons.
The new housing levy on Seattle’s Aug. 2 ballot would raise $290 million, twice as much as the existing levy. So why is it projected to create fewer affordable homes?
That’s the question Glenn Singer has been asking for the past few months. And with no official opposition campaign working against the levy proposed by Mayor Ed Murray and the City Council, the Wallingford homeowner has somewhat begrudgingly found himself playing that role. He helped write the statement of opposition for the ballot.
“Sometimes I wish I hadn’t. I’m sure the levy will pass,” Singer said in an interview this week. “But I’ll be voting no. I want the city to go back to the drawing board.”
Seattle desperately needs more affordable housing — rent hikes, bidding wars and homeless encampments have made that clear, and the city’s voters have supported previous housing levies, approving four since 1986.
“We have a housing-affordability crisis in this nation and in this city. We also have a homelessness crisis,” Murray said recently during a pro-levy rally at Hirabayashi Place, a new 96-apartment project built with levy funds in Chinatown International District.
“The housing levy is something people see as a solution they can participate in,” the mayor added, introducing an elderly widow who’s been able to stay in the area because her Capitol Hill apartment is subsidized with money from the existing levy.
The new seven-year levy (Seattle Proposition No. 1 on the ballot) would cost the owner of a $480,000 home about $122 per year, a $61 increase over the existing one.
The bulk of the money — about $201 million of the $290 million — would go to build or renovate and preserve about 2,150 units of rent- and income-restricted housing for people earning 60 percent or less of the area’s median income, according to the city’s projections.
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That’s $37,980 for one person, $43,380 for a couple or $54,180 for a family of four. Much of that housing would be reserved for people earning only 30 percent or less of the area’s median income.
Land, labor costs rise
The existing levy, a $145 million measure approved by voters in 2009 during the depths of the Great Recession, has built or renovated about 2,500 units. Fewer units for twice the cost: “That just sounds crazy,” Singer said.
Officials insist it isn’t crazy. One reason for the difference is the price to build.
“The market has changed a lot since 2009,” said Todd Burley, spokesman for the Murray’s Office of Housing. “Land, construction material and labor costs are all higher and thus our cost per unit is up from when the goals were set for the 2009 levy.”
Singer concedes construction costs have increased. But they haven’t doubled, he says.
Less outside money to combine with levy funds is also a factor, Burley said.
“We leverage levy funds with other local, state and federal sources,” he said. “None of these … sources are doubling, so the leveraged impact can’t either.”
Federal funding sources for affordable housing in Seattle were cut 30 percent between 2010 and 2015, Burley said. In 2009, the city had better access to the tax credits Washington, D.C., issues for low-income housing development, he added.
During the recession, “Seattle was able to access housing tax credits for as many as five projects per year,” Burley said. The city now uses credits for two projects per year.
The original goal for the existing levy was 1,670 units — not 2,500, he noted, which means the Office of Housing underpromised or overdelivered.
According to Burley, the result demonstrates “the ability of the levy to respond to unanticipated opportunities to leverage funds, acquire sites for later development, and find other ways to stretch dollars to produce more housing.”
Subsidized rent for the homeless
Roughly $42 million raised by the new levy would help operate and maintain affordable housing. That’s about triple the amount set aside for the same purpose in the existing levy. And again, the feds are to blame, Burley said.
The main purpose of the money is to subsidize rents for vulnerable Seattle residents — formerly homeless people suffering from mental illnesses, for example.
The city also uses Section 8 vouchers issued by the Seattle Housing Authority and money from a federal homelessness program to subsidize rents for those people, but both of those programs are going to pull less weight this time around, Burley said.
For example, “after committing 500 vouchers to each of the past two housing levies, (the Seattle Housing Authority) was able to commit 300 to this levy,” he said.
Roughly $26 million of the money raised by the new levy would go to administration, including salaries for Office of Housing staff members. That’s double the $13 million for administration in the existing levy, an increase that made Singer raise his eyebrows.
In each case, administration accounts for 9 percent of the overall cost, Burley said, describing the new levy as consistent with the existing measure in that way.
The added administration money in the new levy would help cover Office of Housing staff members now being paid with other, less reliable funds, the spokesman said.
Human side of levy
The new levy would use $11.5 million to provide rent assistance and services to families at risk for becoming homeless and $9.5 million to help 280 families buy homes or keep homes they own. It would use up to $30 million to help buy and cap rents at buildings that might otherwise be gentrified or razed.
Wedgwood homeowner Brianna McDonald, who wrote the statement of opposition for the ballot with Singer, said she’ll be voting no on the levy because the existing levy hasn’t seemed to solve Seattle’s housing affordability and homelessness problems.
McDonald said she believes the city needs a more comprehensive, proactive approach that involves giving needy people “a hand up” rather than a handout.
“I just want to actually see my tax dollars at work with my own eyes,” she said.
But McDonald admitted she’s never visited a development built with housing-levy funds. If she did visit The Haines senior building on Capitol Hill, where Rose Gresser lives, she would meet residents who have potluck dinners together once a month.
That’s the human side of the housing levy that Interim Community Development Association Executive Director Pradeepta Upadhyay stressed at the pro-levy event.
“The need is great. Upwards of 20 percent of all Seattle households are identified as severely cost-burdened, defined as households spending more than 50 percent of their income on rent and utilities,” Upadhyay said, going on to talk about Chinatown ID.
“Rising rents and surging market-rate development replacing older, affordable housing has made it difficult for the most vulnerable and low-income populations to find housing here. If we are hoping to ensure that Seattle does not become a city where only the wealthy can afford to live, we need to pass Proposition 1.”
Besides the mayor and council, the measure is endorsed by Democratic Party groups, the Seattle Metropolitan Chamber of Commerce, the Martin Luther King County Labor Council, the Sierra Club and the Tenants Union of Washington State.