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March 4, 2021

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Affordable housing goal of proposed tax

Vancouver City Council eyes property tax to ease instability, homelessness

By , Columbian City Government Reporter
Published:

The Vancouver City Council wants to ask voters to approve a property tax in November that could generate $8.4 million a year for affordable housing and make a dent in the community’s growing problem with housing instability and homelessness.

Vancouver’s rental housing vacancy rate is less than 2 percent, and the city’s skyrocketing rental costs are the fastest-growing in the nation. Waiting lists for Section 8 and subsidized units are closed, and federal grant money for affordable housing has been declining for years, according to Peggy Sheehan, the city’s community and economic development program manager.

“The need is in our community today and is only getting worse without action,” said Andy Silver, executive director of the Council for the Homeless. “This is a good time to ask voters what they’re willing for their role to be. … There’s a chance we could lose if it goes on the ballot, but that has to be balanced with what happens if we don’t do anything.”

At a workshop Feb. 22, Vancouver City Councilors directed City Manager Eric Holmes to set in motion the process for placing an affordable housing tax ballot measure on the general election ballot. The next step will be for the council to declare an emergency with respect to the availability of housing for very-low-income households. Then the council must approve a ballot resolution. Finally, the council must provide a ballot title and explanatory statement to the county auditor’s office by the Aug. 2 deadline.

The idea was recommended by the Affordable Housing Task Force, which formed last year after public outcry over mass notices to vacate at apartment complexes left tenants scrambling to find housing.

The maximum levy rate the council could seek would be 50 cents per $1,000 of assessed property value for up to 10 years, which would increase the annual property taxes on a $200,000 home by $100 starting in 2017. The tax revenue could be used for buying, building and preservation of low-income rental housing and homelessness prevention in the form of rental assistance and housing services.

The money would be restricted to helping households earning a maximum of 50 percent of the area’s median income, which is $33,750 a year for a family of four. In Vancouver, 13,855 rental households fall into that category, Sheehan said. Annual tax revenue of $8.4 million could create 75 to 100 living units each year and directly serve an estimated 455 households per year, she said.

The tax revenue also could be used to leverage other funding or partnerships to achieve a larger outcome, she said. For example, she said, the city contributed $200,000 in federal funds toward construction of the 30-unit Lincoln Place housing project for the chronically homeless that opened this month in downtown Vancouver. The project also was funded by Clark County, the Vancouver Housing Authority and low-income housing tax credits.

Debating city’s role

At the Feb. 22 workshop, Councilor Bill Turlay objected to the city becoming a landlord, saying owning rentals was a private sector business and that the money could be better spent for low-income residents to make down payments on homes. He didn’t want to saddle future city councils and citizens with an affordable housing program, he said.

“We need an exit strategy. Is there one?” Turlay asked. “I don’t want to see this as a permanent department in the city. … We’d hope the economy would recover enough so there wouldn’t be affordable housing problems. We’d get enough people jobs … and we’d work our way out of this problem.”

Councilor Jack Burkman said he didn’t see the city ever providing down payments for all low-income residents to buy single-family homes. Neither did Burkman see the economy of any community in the nation being so robust that affordable housing problems are nonexistent, he said.

“We just have too many people that are left outside that economic recovery,” Burkman said. “So I believe the city does have a role … and it doesn’t go away.”

Councilor Alishia Topper said the exit strategy is that a housing levy would be for a fixed period of time. To renew the levy, the council must seek voter approval again. The city already has the internal structure in place for handling affordable housing funds, but it would need to add more staff members to administer a housing tax revenue program, city officials said.

By the end of the discussion, Turlay said he would support moving ahead with a ballot measure.

Education campaign

Passing the levy would require 51 percent voter approval — and, in all likelihood, a vigorous campaign to get the public on board. Because government agencies can’t legally lobby for their levies, other people must. In this case, the Council for the Homeless has volunteered for the job.

On Feb. 22, Silver told the council he estimated a public education campaign would cost $80,000 to $100,000. Contributions to fund the campaign might come from local residents, as well as people elsewhere in the state who are interested in providing stable housing, he said.

Burkman warned that if the ballot measure were to fail, the council would have political problems in the future approving money for affordable housing programs the public said it didn’t want to fund.

“We’ve gone down this road once before with the Metropolitan Parks District,” he said. “It didn’t pass.”

But two other Washington cities, Bellingham and Seattle, successfully have created affordable housing funds with property taxes. And the cities of Olympia, Tumwater, Lacey and Tacoma have all officially announced they’re considering pursuing such a program this year.

Four years ago in Bellingham, 56 percent of voters approved a measure called the Bellingham Home Fund for a levy of 35 cents per $1,000 of assessed property value. Since, then, more than 2,000 people have been served through programs targeted toward homeless and very low-income residents, domestic violence victims, youth and seniors, said Samya Lutz, the city’s block grant program manager. The city has 500 affordable housing units under contract, exceeding its goal of 417 housing units for the seven-year levy period, she said.

Seattle’s efforts date back to 1981, when voters approved a bond measure for senior housing, followed by affordable housing property tax levies in 1986, 1995, 2002 and 2009 (when it passed with more than 60 percent approval).

Seattle’s current housing levy rate of about 13 cents per $1,000, or $61 a year for a $480,000 home (the median home value in Seattle), raises $145 million in seven years. The levy expires this year, and the new levy the mayor is proposing would raise $290 million and cost the owner of a $480,000 home $122 a year, or $10 a month, said Todd Burley, communications director for the Seattle Office of housing.

Historically, Seattle’s “strong” affordable housing developer community has risen up to support the levy campaigns, he said.

In 35 years, the city has created more than 12,500 units of affordable housing, helped 800 residents buy their first home and provided emergency rental help to 6,500 households, according to www.seattle.gov/housing/levy. The new affordable housing units have 50-year rent, income restrictions and they are built to last, Burley said.

“We are constantly working to ensure that the public’s investment is stewarded well for a very long time,” he said. “Here, we have a really successful program that has not only delivered on its promises, but exceeded them, and I think that record speaks for itself.”

Seattle has learned that having a flexible local funding source is a “very powerful tool,” Burley said. The city has been able to leverage $3 of outside funding for every $1 of city funding, he said.

“When we’re able to go in with a local investment … that strengthens your proposal,” he said.

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