After weeks of beating around the bush, Council Members Maritza Rivera, Cathy Moore, Bob Kettle, and Tanya Woo proposed a competing measure to the citizen-run initiative, I-137, which would fund social housing with a new tax on businesses that pay any employee more than $1 million. Instead, the council wants to avoid imposing new taxes on big business, the interest group that paid for their seats on the council, by raiding the City’s JumpStart payroll expense tax.
The move marks the latest example of the new council disregarding the priorities the City legally obligated JumpStart revenue to pay for—affordable housing, Green New Deal initiatives, and equitable development. Not only would their alternative pit different kinds of non-market-rate housing against each other on the February ballot during a housing crisis, it foreshadows the council’s intent to balance the looming $260 million budget shortfall by attacking programs that benefit the working class rather than by further taxing corporations or the wealthy.
House Our Neighbors! (HON) gathered more than 26,000 verified signatures in favor of I-137, which would impose a 5 percent tax on companies for every dollar over a million they pay to a Seattle employee annually. The revenue, a projected $50 million per year, would fund the Public Development Authority (PDA) that 57 percent of voters approved in HON’s 2023 campaign. According to affordable housing developer Ben Maritz’s math, the PDA could pay for 2,000 units of housing over 10 years with such a tax.
The council considered I-137 on Aug 6, hours before the deadline to put the measure on the November ballot, which would likely see a larger, more progressive turnout. The council had three options: Pass the initiative outright, put it on the ballot, or put it on the ballot with a competing measure. Citing unspecified legal concerns, the council voted 7 to 1 to delay action, dooming the initiative to a lower-turnout election in February.
For weeks, advocates speculated that the council may cook up an alternative at the request of the Seattle Metropolitan Chamber of Commerce, the Seattle Times Editorial Board, and the Mayor. But no one fessed up—Woo even denied her intention to do so.
Finally, on Monday the council unveiled an alternative that would use $10 million in annual revenue from JumpStart–a volatile pot of $230 to $300 million a year–to fund the PDA for a five-year pilot period. Maritz estimated the alternative would pay for 250 to 375 units in its five-year lifetime.
In a press release Monday night, supporters of the alternative presented their measure as the pragmatic choice. Kettle said the council alternative would provide “safeguards for taxpayer funds.”
But the alternative actually reveals the council’s intent to strip existing safeguards that stipulate how the City must use JumpStart, turning it into a slush fund for the general fund. These safeguards came about in part to protect the intention of the tax and to appease corporate interests that criticized the City for not mapping out a plan for the revenue. Additionally, the “taxpayer” who Kettle and his colleagues advocated for in the press release is not the same taxpayer that shoulders the disproportionate burden of Washington’s regressive tax code.
“The City Council would rather take money from low-income programs than from millionaires and billionaires,” says HON Policy and Advocacy Director Tiffani McCoy.
In the press release, Rivera said the alternative forces the development authority to “demonstrate proof of concept, rather than the City simply handing over a blank check to yet another new agency with no track record of creating housing.”
McCoy blamed the PDA’s “track record” on the City for delaying its start-up funds. Limiting funding with the new alternative may similarly destine the PDA for failure.
“Pilot programs with shoestring budgets don't work when you're in a housing crisis of this magnitude,” McCoy says. “And if they want to see a proof of concept, they should look out their damn windows at Montgomery County, Maryland. They should look at Chattanooga, Atlanta, Chicago, Denver, California, Hawaii… [Social housing] is not radical. This is all over the world, and this idea that we need to do a ‘proof of concept’ just shows an inability to do math.”
Besides, the alternative would not prove the concept of social housing. The council’s alternative would lower the cap on renters’ incomes from 120% of the area median income (AMI) to 80% AMI, undermining the cross-subsidization model of social housing that voters approved in 2023. This move makes the program yet another affordable housing developer, McCoy said.
In fact, according to HON’s lawyers’ analysis, the alternative may not fit the standard of an appropriate competing measure because the city council could theoretically enact both initiatives.
That’s not the only legal trouble that could head the council’s way.
Former City Attorney Pete Holmes says that the City Charter, which is analogous to the US Constitution for Seattle, requires the council’s consideration of initiatives to take precedence over everything other than appropriations and emergencies.
“With polling suggesting strong voter support for I-137, Council's failure to submit it to a vote in the high-turnout General Election begs the question whether the delay constitutes a voter suppression tactic in violation of the Charter,” Holmes said in a message to The Stranger. “Council should at least explain what has prevented timely consideration of this citizen initiative.”
If HON can’t fight the alternative on its legality, McCoy says she’s confident they can organize against it. Tonight, HON will hold a Q&A session about the alternative, they’ll voice their dissent at the council’s vote on Thursday, and they’ll ultimately make their case to the voters that their initiative brings about the vision of social housing that Seattle already approved. The council’s version, they’ll argue, does little more than protect the wallets of the ultra-wealthy.