SUPPORTS

 The Seattle Housing Levy

2002 General Election

Summary of Measure

The proposed 2002 Housing Levy would be a successor to the $59 million 1995 levy that expires this year.  The new 7-year levy would raise $86 million, an amount calculated to maintain the average annual housing production taking into account rising real estate and building costs.  The $86 million is proposed to be leveraged with state, federal and private funds to produce an estimated 2,044 units of affordable and low-income housing.  Citizens of Seattle have voted to levy property taxes for housing in 1981, 1986, and 1995.  In over 20 years of housing levies, the city has preserved and created over 4,000 units of housing affordable to people below 80% of median income.

The 2002 housing levy would allocate 65% of its funds to rental preservation and production throughout the city, 9% to home ownership assistance, 8% to low income housing within mixed-use, mixed-income projects in targeted (primarily distressed) neighborhoods, 8% for operating and maintenance support for housing for very low income people (up to 30% of median income), and 3% for emergency rental assistance to prevent homelessness.  Five percent of levy funds are set aside for administration of the measure.

The housing levy proposal was developed through a lengthy process that began with a citizen and stakeholder advisory committee, and continued with debate and refining by the Mayor and City Council after significant public input, ultimately producing a smaller compromise package with proportionately more funding allocated to people with the lowest incomes.

Arguments FOR the measure:

• Seattle has very high housing costs making a home in the city unaffordable for many people of limited means.  The primary use of levy funds is preservation and production of rental units affordable to a wide range of people who would otherwise be unable to live in the city, although all levy programs are limited to housing assistance for low and very low income individuals and families.

• The levy is designed broadly to meet the needs of individuals, families with children and people with disabilities, as well as to assist low-wage first-time home buyers, to provide low income housing within community development projects and to assist people in preventing homelessness.

• Low income residents of Seattle have been receiving significant assistance from housing levies in the city of Seattle for the past 20 years.  The need for assistance is as great now as it has ever been.

• In its previous three levies, the city has built a good track record of accountability, prudently managing levy funds and exceeding production goals.

• The proposed levy has undergone a rigorous process of market research, stakeholder and citizen input, public debate and political compromise, resulting in a well thought out compromise package carefully designed to meet the most pressing housing needs of Seattle’s low income citizens.
  

Arguments AGAINST the measure:

• Described by proponents as a “renewal,” this measure is actually a tax increase from $0.11 to $0.15 per thousand of assessed value, or from $34 to $49 per year for the average Seattle homeowner.*

• In the present economic climate, many taxpayers are finding it hard to make ends meet and reducing the tax burden should be a goal for government at all levels.

• Levy proponents state that the new levy is sized as a continuation of current production levels taking inflation into account.  The 1995 levy was estimated to produce 1,300 units and will actually produce close to 2,000 units thanks to a strong economy and unanticipated state and federal matching funds.  The new proposed levy is calculated to create and preserve 2,044 units, raising the bar to a production level that was achieved during boom times.

• A portion of levy funds could benefit people at moderate income levels who could afford to rent in market rate housing in some Seattle neighborhoods.

• A portion of levy funds will benefit mixed-use community development projects, a laudable goal but not one that should be funded out of low-income housing monies.

• A significant portion of the City of Seattle Office of Housing's annual budget would be supported by this tax.  Opponents do not believe this is a good method for paying for annual operations.

Municipal League Position and Rationale:

The Municipal League of King County supports the 2002 Seattle Housing Levy.

While the Municipal League is a county-wide organization, it has chosen to support this Seattle-only ballot proposal because it believes that its passage would have positive effects on the region as a whole.  Further, trustees acknowledged that good work is happening throughout the region in the provision of low income housing, but this proposal is the only ballot measure currently before us on this topic.  As a county-wide body the Municipal League has historically analyzed and taken action on selected local ballot measures with regional impacts.

In deciding to support this measure, the trustees carefully weighed the pro’s and con’s of the measure.  In balance they believed the pro’s significantly outweighed the con’s.  The chief con’s—enlargement of production goals and a perception that levy programs stray from low income housing assistance, seemed to us to be misplaced concerns.

For example, the concern about levy funds going to community development projects does not reflect the fact that all funds in this program are specifically directed in the levy ordinance to be spent on low and very low income housing, regardless of the venue.

The concern about levy administration funds making up an inappropriately  large  portion of the Office of Housing’s budget misses the more significant point, which is that the administration of the Levy will be done for only 5% or less of overall levy funds.   This is a very low percentage (federal requirements for similar fund expenditures are 10%).  Seattle’s Office of Housing seems a reasonable body to implement a major housing program in the city of Seattle.  If not this entity with its 20 years of experience in successfully implementing housing levies, then someone else would have to be hired to carry out this complex project.

Regarding the increased size of the levy compared to the previous levy, there is no question that the costs of housing production in Seattle have risen dramatically during the past few years, with apartment acquisition costs and single family home prices both increasing over 8% annually.    The increase in production from amounts assumed in the 1995 levy was despite the rising costs of housing provision, not because of “boom times,” during which costs of land and construction exceed those in less prosperous times.  The amount of state and federal matching funds did indeed generally exceed expectations, but the costs of real estate and housing construction far exceeded average historical increases.  In fact the creativity and leveraging abilities of the Office of Housing and the various non-profit housing developers receiving the levy funds were largely responsible for the higher than anticipated production figures.

In balance, the Trustees believe that the need for low income housing assistance has become, if anything, more acute, previous levy administration has been  prudent and effective, the proposed levy was developed carefully with broad input, and that this important ballot measure is therefore worthy of support.

* Information provided by Housing Development Consortium of Seattle-King County.