Morning Fizz

Murray's Affordable Housing Bill Faces Criticism in Olympia

Critics call Murray bill a developer giveaway, critics call Peterson firing an ideological temper tantrum.

By Josh Feit February 9, 2016

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1. It’s cutoff day in Olympia (the last day for bills to pass out of the senate ways and means committee) and legislation that’s key to Mayor Ed Murray’s affordable housing plan is facing problems. Murray’s plan to build 20,000 affordable units over the next decade includes legislation he’s pushing in this year’s legislative session to induce property owners to preserve affordable housing by giving them a property tax break if they make 25 percent of their buildings affordable (at 60 percent of the area median income, or $43,000 a year for a family of two.)

The mayor’s office believes the legislation will put 3,000 affordable housing units on the market.

It seemed smooth sailing at first. The bill, supported in Seattle by an unprecedented coalition of social justice groups, affordable housing groups, and developers—and cosponsored in Olympia by progressive Seattle state senator David Frockt (D-46, North Seattle) and conservative state Senator Joe Fain (R-47, Auburn)—made it into ways and means where it's cued up for a vote this afternoon.

However, critics have emerged. Affordable housing advocate John Fox is circulating a memo that says the legislation will have the opposite effect than is intended by inducing landowners to spike rents in the remaining 75 percent of their buildings, which will outweigh the affordable housing mandate.

Fox, saying the legislation will create a speculative market bonanza, reasons:

The bill is intentionally designed to 'incentivize' the renovation/rehab of older lower priced apartment buildings. Bank financing would be required to renovate these units. To cover these costs and the cost of restricting 25 percent of the units at below market rates, an owner who long ago had paid off their mortgage—[currently] content [to] afford to keep rents low on 100 percent of their units —would need to substantially raise rents on the 75 percent that are not restricted. This could displace many low-income households and more than those served in the 25 percent that are restricted.

Noting that there are about 45,000 affordable units across the city in private buildings now, Fox concludes: “To the extent the bill induces long term owners of these older buildings to buy into the program, we could wind up saving 25 percent of these units but potentially accelerating loss of the other 75 percent.”

Fox also flags the “millions in a property tax shift” to regular folks. The total assessed value that determines property tax revenues does not change even when property owners get tax breaks. So that means, as property values go up—in this case, from the accelerated upgrade of 75 percent of the city’s currently affordable stock—poorer households would disproportionately foot the bill.

City lobbying chief Nick Harper dismissed Fox’s criticism as “anecdotal,” saying city staff research shows the legislation “will create thousands of affordable units.”

However, Fox has found a lefty ally, Seattle state representative Gerry Pollet (D-46, N. Seattle) who sent an email to the city council on Sunday (the council is all-in on Murray’s legislation) flagging his concern that the bill “did not ensure the units are actually affordable or that landlords will accept section eight housing vouchers.”

Harper, however, pointed out that Seattle already outlaws discrimination against section eight vouchers. And he noted that there’s a separate bill making its way through the legislature that bans source of income discrimination in housing statewide.

The bill is also facing surprise resistance from the opposite camp; new King County Assessor John Arthur Wilson has an alternative proposal that would allow property owners to get the tax break by setting aside units at the more expensive 80 percent of area median income ($51,000 for a two-person household.)

Harper says 80 percent is too high. “I fundamentally disagree with giving a benefit [a property tax break] when there isn’t a clear return to the public for affordable housing.”

2. State senate Republicans have their story—and they’re sticking to it: the Lynn Peterson beheading was about accountability not about ideology.

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That’s hard to believe when, after voting Washington State Department of Transportation director Peterson out on Friday, the Republican senate transportation chair was quoted in the Seattle Times this way:

“She’s very partial to transit, very partial to bike and pedestrian paths, all those things,” King said. “We need to protect the citizens that want to travel on our roads. That’s why we’re there. We need to protect the ability of people to use our roads, use their cars. From the get-go, she was about moving people on transit, moving people on light rail.

Meanwhile, Republican state senator Andy Hill (D-45, Kirkland)—pictured in the goof ad above—railed about I-405 tolling, a program that data shows has created reliable transit lanes.

GOP critics took Craigslist with a spoof WSDOT director wanted ad playing up the the ideological differences at the heart of Peterson’s demise:

Wanted immediately - Secretary of Transportation for WSDOT

Must show ability to manage multi-billion dollar transportation budget and keep it focused largely on freeway expansion in GOP districts (see pork). Must display an aversion to or active distaste for transit, walking and definitely bicycling. Well versed in the war-on-car memes.

Compensation commensurate with experience. Employment is subject to tantrums thrown by GOP-led state senate (see Andy Hill , Curtis King ). Experience working with toddlers who have not had their hug or their nap would be considered important and relevant experience.

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