On ballots that went out last week, voters have two choices to make to determine the future of Seattle’s newest plan for housing.
The first is whether the developer should be funded at all. The next choice — regardless of the previous answer — is how.
Option 1A is with a new employer tax on all salaries over $1 million a year. Backers hope the 5% tax would raise as much as $50 million a year to be spent on buying and, eventually, developing housing that would be cost-controlled and owned by taxpayers.
Option 1B is to fund the developer with $10 million a year in existing city funding — specifically the city’s JumpStart tax on large corporations in Seattle.
Ah, your sentence makes a lot more sense now that you’ve added a subject.
Unfortunately your subject is ‘they’.
Presumably you mean lawmakers.
Presumably you’re talking about MHA / MFTE apartments.
No, they have not closed the ‘loophole’, it isn’t a loophole, its very clearly designed as a program with 2 options, its not some kind of accidental flaw in the law that allows exploitation via clever manipulation.
Option 1: Pay the city some amount in taxes, which the city then uses to pay for low income housing.
Option 2: Offer a certain amount of your rental units at MFTE price levels (ie, a volunatry for the landlord, rent control scheme), and then you functionally get a tax break by not having to pay the extra sum to the city from Option 1.
The problem with this whole approach is that it isn’t working to actually alleviate rental costs, rental prices are still out of control.
Breakdown of MFTE data
https://www.seattle.gov/documents/Departments/Housing/Reports/MFTEReports/2023_OH_MFTEAnnualReport.pdf
There are a grand total of 9,325 MFTE units in all of Seattle.
About 40% are studios, set to 60% AMI rent guidelines, or about $2000 mnth rent.
About 50% are one bedrooms, set to 70% AMI rent guidelines, or about $2333 mnth rent.
About 10% are two bedrooms, set to 85% AMI rent guidelines, or about $2833 mnth rent.
So, maxxed out in terms of legal occupancy, that’s about 20,515 people.
… renting for a weighted, household average of $2250 a month.
20k people max at $2250 rent.
This is considered ‘affordable’ pricing.
Reminder that there are 380k ish people in need of actually affordable pricing, 380k ish people are currently paying over 30% of their income toward rent.
20% of households, or about 80k people, live off of about $55k or less a year.
Thats an actual affordable rent that tops out at about $1530 mnth rent.
Basically, the MFTE program is very, very far from a solution as is.
The ‘affordable’ prices it generates are completely unaffordable to something around the bottom 30% of the population, and there are at max only enough ‘affordable’ units to even house about 9% of that bottom 30%, who can’t even afford them anyway.
…
Maybe this framework could work, but you’d have to enforce both a much more severe optional rent control schema, and have the other option be a much larger tax on landlords… and make the whole thing apply to far more than the measely 9k ish apartment units it currently applies to.
Is that happening? Are you adding those into your previous thoughts on housing?
Yes it is happening.
Yes, the fact that this is happening is considered in my comments thus far.
https://www.seattle.gov/documents/Departments/Housing/Reports/2023_MHA-IZAnnualReport-a_157808.pdf
Rough numbers:
2023, MHA payments from the payment option totalled $63 million.
$8 million of which went toward helping to build 230 new units, which is roughly 1/10th the total cost of actually building 230 new units.
The rest went toward maintenance of existing low income units/properties.
So… yeah, woo, $50 million from this new tax basically doubles that.
We need 100x, 1000x, not 2x.