Displacement Coalition Bulletin:                                                                                                        March 15, 2004

Multi-Family Tax Breaks Approved Today in Full Council - See How Each Councilmember Voted

Councilmembers Licata, McIver and Della Vote Against Tax Giveaways to Market Rate Housing Developers

Conlin, Compton, Rasmussen, Drago, Steinbrueck and Godden Vote for the Tax Breaks

Today, by a 6-3 vote, the City Council voted to give away 20-30 million dollars in tax breaks to market rate housing developers. As Councilmember Licata pointed out, the public will get little or no benefit out of the deal because developers will only be required to set aside 20-30 percent of their units at rent levels affordable to those earning between 60-70 percent of median. These rent levels are above average rents for most of the 17 areas where developers will be allowed to use the mechanism. Given how high the median is in this town, it means that developers will get these tax breaks when they set aside a handful of their new units at rent levels between $850-$1100 a month or more. The price on these set-asides are also above what over 60 percent of all of Seattle tenants can afford. When there is literally a surplus of units right now serving people at 60-70 percent of median, the Council's majority turned its back every one of Licata's, McIver, and Della's amendments designed to bring the price of the set-asides down to truly affordable levels.

Note that Steinbrueck did give support to one proposal made by Licata and Della (and backed by McIver) that would have capped the set-asides at 65% rather than at 70 percent. Rents at 65% are still well above what low and moderate income tenants can truly afford so it's questionable whether if passed this change would have meant much. Steinbrueck did also join Licata in an effort to require developers to maintain these set-asides at these "relatively lower" rents for a minimum of 15 years instead of only ten years. But not even Della or McIver joined them and this measure failed.

The Council also agreed to allow developers to take advantage of this tax break in as many as 17 neighborhoods including South Lake Union, the U-District, and Capitol Hill. In areas like South Lake Union, Capitol Hill, and the U-District, we are already seeing considerable residential growth and meeting or exceeding our residential growth targets. Even though the mechanism was ostensibly created by the State Legislature for use exclusively in neighborhoods and communities where residential development was not now occurring - to give a modest boost for a few limited lower income areas, our Council has generously extended use of this to virtually every neighborhood in Seattle - even to areas that are seeing record levels or near record levels of new construction.

As Licata pointed out, we simply are giving away tax breaks to a bunch of developers to build expensive housing in areas throughout the City - we're subsidizing them for doing what they were going to do anyway. To top it off, we're not even requiring them to set-aside even a fraction of their units at rent levels that are below the going rate in these areas nor are they below what most tenants can afford. Only McIver and Licata voted in favoring of limiting the number of areas where this tax break could be used and to only those areas like SE Seattle and SW Seattle that truly needed to boost.

All in all it was not one of the Council's finest hours. In fact, I cannot remember when the Council had a "fine hour". But this was particularly egregious because the action - to hand these tax breaks over to market and above market rate developers - will have the direct affect of shifting as much as 30 million of the property tax burden over ten years onto homeowners and lower priced apartment buildings (meaning they'll pass it on to truly low income tenants in the form of higher rents). We'll get no tangible public benefit and foot the bill while developers reap the returns.

Throughout the discussion today, supporters of the measure on the Council kept throwing around words like affordability and workforce housing. Do they really believe that a rental unit between $850-$1100 a month is affordable to our "workforce".  There are 133,000 renters in this City. At least 60% of them cannot afford the price of units at these so called set-aside "affordable" levels. Census data and other demographic information show that most tenants need units at or below $750 a month - which is at or below 50-55% of median. Why give tax breaks away to developers when we serve no discernable purpose for doing so.

This vote - how it went down with each Councilmember - It was clearly the result of political considerations for a number of them. Developers from northend neighborhoods - and especially the Vulcan/Paul Allen lobbying team launched a full court press to make sure that developers could have the advantage of these tax breaks in areas that were already growing and they fought to make sure the set-aside rent levels were as high as possible. Heck...I'm sure they would have loved to move 'em up to 80 percent or just do away with 'em altogether. They squeezed as much as they could get out of the Council and they got a lot.

A few more highlights or lowlights of the Council's performance:
1. On more than one occasion, Richard Conlin suggested that this measure is good just because it encourages more housing development, ignoring the costs and impacts of uncontrolled growth on our comunities and essentially pooh poohing the impact of the property tax shift on homeowners and lower income tenants. At some point, Conlin is going to have to be clear - which side is he on....he'll give support on the one hand to neighborhood planning and in other ways pay even more than lip service to neighborhood planning goals, but then turn around and push market rate solutions that pose enormous environmental and fiscal challenges for all our city's communities. Today...Conlin was as pro-runaway growth and anyone can be.

2. With the exception of Della - the new councilmembers did not distinguish themselves. Godden didn't open her mouth during the whole proceeding but, right down the line, voted against everyone of Licata/McIver/Della amendments that would have extended the public benefits of the program and limited its use only to lower income areas that genuinely needed a boost in development.

3. Tom Rasmussen was very thoughtful on this and I felt truly believed he was doing the right thing on this. He just happened to be wrong. On several occasions, he mentioned that, if the program wasn't performing as intended and we weren't getting any affordable units out of the deal, then we could always come back to this and later amend the program (especially given the fact that it will be subject to yearly evaluations). But in my 27 years or so of hanging around City Hall, I cannot remember one occasion where the council ever reversed a bad housing public policy decision - at least not without a court order or an initiative drive. We did see an extraordinary reversal of the teen dance hall ordinance by a Council vote and perhaps we'll get around to reversing a few of Sidran laws (I sure hope so and starting with the Car Impound Law.) but I ain't seen it ever happen on a housing issue.

3. Drago and Compton were strictly pro-developer- pro market rate solutions - pro-giveaway the farm, give developers everything they want bla bla bla. There wasn't an ounce of thought or concern for the larger community going into their comments.

4. Also, on more than one occasion, In defense of their position, Conlin and Rasmussen referred to the fact that some environmental, labor, and non-profit housing developers supported this tax abatement program as written. Not once did Conlin and Rasmussen refer or acknowledge the many residents, landlords, tenants, neighborhood groups, non-profits, and advocacy groups that called in or testified in opposition to this program as it was drawn up.

5. It certainly must be acknowledged that some enviro, labor-related, and non-profit groups (by no means all of them) did get up and give support to the tax abatement program as written when the public hearing was held two weeks ago before Rasmussen's Committee But what I found especially interesting is that these same groups also made a point of getting up and calling explicitly for extension of these tax breaks into South Lake Union.

Why did some enviro, labor-related, and non-profit housing developers single out only South Lake Union when the proposal would extend the program to 17 areas all over the City? The answer is that several of these groups have chosen to negotiate behind closed doors directly with Vulcan and the Mayor's office about what will happen or not happen in South Lake Union. Operating under the banner of "The Coalition for Healthy Communities", we know that a few of these groups have entered into or they are trying to enter into some kind of quid pro quo with Vulcan and Mayor's office. In return for something - who knows what - these groups have decided to cast their lot with Paul Allen's agenda in South Lake Union. That's why they explicitly got up and spoke publicly in support of extension of these tax breaks down there. It had nothing or little do principles.

We know that some of the non-profits are hoping for a housing fund for that area and some contribution, however small, from Vulcan to that fund. At least one union is seeking added benefits for their workers who may work in South Lake Union.  Some enviro groups are seeking more pedestrian amenities in that area. These are goals all of us can support, but instead of joining forces with the larger community seeking more accountability from Vulcan and the Mayor across a broad range of concerns about South Lake Union...these folks have chosen to cut a deal that benefits only them. The taxpayers could get left holding the tab for 800 million in infrastructure Allen is demanding in South Lake Union, hundreds of low income housing units are at risk due to direct and indirect displacement. Unless tough measures and difficult political decisions are made to ensure Allen and Vulcan foot the bill, we'll be left holding the bag. Only a large coalition working together is going to be able to address these larger issues and reign in the Paul Allen freight train in South Lake Union. Groups going behind closed doors cutting deals that benefit only themselves - In the end that can only undercut everyone's efforts including their own longer term agendas.

Just this morning before the vote, I know that a Vulcan representative e-mailed members of the Coalition for Healthy Communities and urged them to lobby councilmembers one more time for these tax breaks - urging them to do Vulcan's bidding. It will be interesting to see what these groups are getting out of all this...so far I'm not sure they've gotten anything but promises..... What we get is higher taxes, upzones in South Lake Union, and goodness knows what else.

There will be other more important votes coming down the pike soon and it remains to be seen whether or not this new Council will be more or less responsive to the community especially when it comes to issues affecting low income people and our neighborhoods. Their vote on this measure certainly can't help their popularity with the average voter. It was down as low as 25 percent favorable last Sept. Time will tell but more importantly, what we do or don't do out in the community to hold them accountable will ultimately make the difference.

- John V. Fox
for the Coalition

return to top                            return to main page