The next step for Seattle’s controversial new tax on big businesses is a crucial one: How best to spend its new $45 million head-tax revenue next year to get people off the streets and out of homelessness.
The Seattle City Council passed a spending plan with the tax, but it is nonbinding, setting up conflicting approaches between Seattle Mayor Jenny Durkan and some allied council members versus a voting bloc of at least four members on the other side.
The approach backed by Durkan, Councilmember Sally Bagshaw and council President Bruce Harrell focuses on an immediate, visible response, including more spending on cleanups of the city’s hundreds of unauthorized homeless encampments and a surge in emergency shelter beds.
On the other hand, a spending plan backed by M. Lorena González, Lisa Herbold, Teresa Mosqueda and Mike O’Brien focuses on a long-term strategy of building affordable housing while shifting away from the city’s focus on more emergency solutions.
Each strategy has allies and detractors, and pros and cons.
The strategy backed by Durkan could pay off in short-term gains, giving Seattle residents, many of whom are fed up with the camps, a sense that the city is taking action. It’s also faster and cheaper than investing in permanent housing.
“We absolutely cannot wait to build the housing before we get people somewhere safe and warm,” Durkan said Tuesday.
“That would be wrong. So it’s going to be a process of doing both. But to tell people ‘Until we have the housing built, you’ve got to wait, sleep in a tent or car or RV or doorway,’ to me that is morally unacceptable.”
But this strategy would produce significantly less permanent, affordable housing over the life of the tax, which will expire in five years. The projected new business-tax revenue rises to almost $50 million in the final year.
The strategy preferred by the other side of the council — which also got the vote of Councilmember Kshama Sawant — is backed by many homeless-services providers. They argue that, without more affordable housing, no amount of money, whether it’s for shelter or other emergency services, will significantly reduce the number of people experiencing homelessness.
“A spending plan that continues to focus on band-aid approaches is going to result in doubling down of the status quo,” said González. “It is now time for us to focus on the development of deeply subsidized affordable housing to move people through the shelter system into housing. It is not enough to move people from street to shelter back to the street.”
But the affordable housing could take years to come online, and it’s a much pricier strategy.
Meanwhile, homelessness in King County has risen nearly 23 percent since 2014, including a huge increase in people sleeping outside. A new snapshot count of homelessness is expected at the end of May.
The new surge in spending from the business tax comes after Seattle has already boosted homeless services by more than 40 percent from four years ago. Seattle is already on track to spend $71 million this year, said Seattle Human Services Department spokesperson Meg Olberding.
A ticking clock
As the council and Durkan hash out details of the spending plan over coming weeks and months, both approaches are up against a ticking clock. Thousands of men, women and children still live on Seattle’s streets, even as residents’ patience with the city’s response to that crisis continues to wear thin.
The council pursued the new head-tax investment before knowing the results of a reform effort last year that rebid contracts. It shifted its strategy toward a model of emergency shelters that provide clients wraparound services.
As part of this reform, Seattle required its contracted providers to meet quarterly performance measures, toward a goal of moving 7,400 people out of homelessness and into housing by the end of 2018.
That’s a huge jump. In 2017, city funding resulted in a little more than 5,000 exits out of homelessness into housing. The city had not yet released its first-quarter numbers before debate about the head tax roiled city politics.
In the middle of that debate, the consulting firm McKinsey & Company last week released a study showing a regional gap of 10,000 to 14,000 housing units for homeless people. To fill it, countywide spending would need to more than double, to $410 million. It was widely cited by supporters of the approach backed by González and her allies.
In theory, moving people into housing should work like an assembly line in a factory — moving people out of camps, into shelter and into housing. But when there is a gap in available affordable housing, a backlog forms in the shelters, leaving more people on the streets. Last year, emergency shelters for single adults were full 90 percent of the time, according to data from All Home, King County’s coordinating agency for homelessness services.
Meanwhile, affordable-housing units were also full. As of December, King County’s waiting lists for affordable housing stood at 8,689 people, including 2,118 families. They wait an average of more than five months. The backlog has slowed the work of Seattle’s Navigation Team, which offers services and shelter to people living in tent camps before removing the camps. Earlier this year, the city admitted the Navigation Team was curtailing camp removals, because there weren’t enough shelter spots.
Faced with those facts, the council faction favoring a long-term approach proposed spending about two-thirds of the new business revenue on affordable housing, building about 591 units over five years, with the first units likely not available for at least two years. That’s more than double the number of units in the approach backed by Durkan.
The council version that passed Monday also endorsed long-term rental subsidies and master leases of apartment buildings as a way to get people into affordable housing immediately.
This long-term strategy, however, leaves less money for emergency-shelter beds. A spending plan introduced by Harrell, with the support of Durkan, suggested 1,300 more shelter spaces, including tiny-house villages.
That is about 1,000 more than the spending plan backed by González, O’Brien, Herbold and Mosqueda.
Bagshaw agreed Tuesday that more affordable housing is needed but said Seattle cannot afford a strategy that takes years to reduce the number of homeless people on the streets. And it is not up to Seattle alone to build these units when homelessness is a regional issue, she said. “Do you think this business community is going to stand still if they look out their window and they see nothing is improved?” Bagshaw said.
While she agrees moving tent camps from place to place doesn’t work in the long run, she also advocated for Seattle to take a harder stance on people who refuse to move from those camps. But she left it to the mayor to determine how to execute such a shift in approach.
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