Tuesday, March 28, 2023
March 28, 2023

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‘Social housing’ is on the Seattle ballot, but what is it?


SEATTLE — More than 100 years after Vienna, Austria, undertook a project to create long-lasting affordable housing for its residents, a similar model is on the February ballot in Seattle.

“Social housing” has become an increasingly popular concept in recent years, both locally and across the U.S., but its European roots date back to a time when land was much cheaper — vastly different from the brutal forces battering Seattle’s housing market today.

The Feb. 14 special election puts in front of voters the decision of whether to create a new public development authority, Seattle Social Housing Developer, to develop, own, acquire and maintain social housing in Seattle.

The initiative was placed on the ballot by a group of homelessness and housing advocates called House Our Neighbors. It’s a response to a failed 2021 homelessness measure that proposed requiring the city to build 2,000 shelter units while keeping parks and sidewalks clear of encampments. It’s the only measure on the ballot.

Proponents of social housing say the ultimate goal is to remove more housing from the private sector and place it under a government’s or a public authority’s control. That would insulate it from market forces and desegregate low-income tenants from people who make well over Seattle’s median income.

But critics question whether introducing another subsidized housing developer — on top of Seattle’s Office of Housing, three federally funded housing authorities and several nonprofit developers — will create too much competition for limited dollars.

“I think that the idea of disconnecting a substantial part of the housing stock from the private market is exactly the right concept,” said Dan Watson, adviser to the executive director of the King County Housing Authority. “But the question is, ‘How do you get it done?'”

Few people dispute that Seattle needs more affordable housing as the city faces a growing homelessness crisis. A recent report estimates the city needs upward of 20,000 units that are affordable to households earning 80% of area median income or below. Last year, Seattle’s median income for a family of four was $120,907, according to a city report.

Proponents say a social housing authority would provide more options to achieve that, rather than block other developers from the market.

“This is about a choice,” said Tiffani McCoy, co-chair of the House Our Neighbors coalition.

Inspiration from Vienna

One of social housing’s biggest obstacles might be communicating what it means to voters.

The general idea is to create permanently affordable units for people earning a wide range of incomes, not just the lowest earners.

The emphasis on mixed incomes is key — and differentiates the model from most U.S. low-income housing. Proponents say that counteracts the historical segregation of poor people — who are also disproportionately people of color — and the sometimes substandard quality of their housing.

In Vienna, more than half of the city’s nearly 2 million residents live in permanently affordable city-owned housing or in properties owned by nonprofits that receive government subsidies to keep rents low.

To entice renters with higher incomes, the developments must be well-designed, desirable to live in and spread across neighborhoods.

“Our mayor is always proud to say, ‘You can’t say if a person is rich or poor because of his address,'” said Christian Schantl, who works in international relations for Wiener Wohnen, which oversees Vienna’s city-owned housing.

Initiative 135 says that in every building the Seattle Social Housing Developer acquires, units would be divided among different income brackets, ranging from 0% to 120% of the area’s median income and done in a way that no one would be charged more than 30% of what they earn.

If this is divided among income brackets correctly, organizers say, each building would earn enough in rent to make it self-sustaining.

John Fox, who recently co-wrote an opinion piece opposing the measure in The Seattle Times, said that what the model doesn’t account for is when buildings fall into disrepair and need more investment, when inflation causes operating costs to skyrocket, or when renters need a rent reduction.

“It’s pie in the sky,” said Fox, the longtime director of the Seattle Displacement Coalition, a 45-year-old housing and homeless advocacy group.

The city of Vienna invests about 450 million euros, or about $491 million, annually into subsidized housing to cover building updates, meet renter needs and help acquire more housing, Schantl said.

Seattle’s social housing developer would be run by a governing board with the majority comprising renters. In addition, every social housing building would have a governance council, similar to a homeowners association model.

Examples already here

There are already some examples of what this might look like.

Starting in 1989, the King County Housing Authority tried something similar, purchasing private-market rental properties. To do that, the authority sold bonds at low interest rates to make the initial acquisitions and improvements.

Under the ballot measure, the proposed Seattle Social Housing Developer would also have the ability to issue bonds in exchange for low-interest loans.

King County Housing Authority has acquired about 5,000 units of what it calls “moderate-income housing” this way, according to Watson, adviser to the authority’s executive director. Seattle Housing Authority has done the same thing with about 1,500 units.

The use of the authority’s dollars instead of federal funding or subsidies allows the authority to have more flexible standards for renters. They’re even able to accept some renters without applying any income stipulations, in contrast to most federally funded affordable housing programs that are limited to people who make 80% or less of area’s median income.

Watson acklowledges, though, that with 5,000 or so units acquired by the authority over the last 30 years, housing is not being added at a fast enough rate to solve the region’s affordable housing crisis.

There has been little organized opposition to the measure.

The initiative received notable early opposition from a lobbying group whose members include King County’s major nonprofit housing developers, local housing authorities and financial institutions.

But Housing Development Consortium Executive Director Patience Malaba said on Wednesday the consortium opposed the idea before it qualified for a vote but, now that it is on the ballot, the group has shifted to a “neutral position.”

Several unions, nonprofits and local and state elected leaders have come out in favor of the measure, including King County Councilmember Girmay Zahilay, state Sen. Joe Nguyen, representing the 34th district, which includes West Seattle, and state Rep. Frank Chopp, who co-wrote the ballot-guide statement in favor of the measure.

“We are in a generations-long housing crisis that seems to have no end. I-135 is a bold approach toward a solution,” Nguyen said.

While no City Council members, nor the mayor, have taken official stances, Seattle City Councilmember Tammy Morales tried to get funding for the social housing developer included in the most recent city budget. That effort failed.

Notably, several organizations active in affordable housing and antipoverty work, including the Low Income Housing Institute and Solid Ground, are also supporting the initiative.

“There are agencies and nonprofits across Seattle that are doing incredible work to build more affordable housing. But we all know, it’s just not enough,” said Neal Simpson, spokesperson for Solid Ground.

Yet, the question of what this new agency would cost remains unclear.

If passed, the initiative includes language that requires the city to provide startup funds for the first 18 months to cover expenses that include office space and two staff members. The city estimates that cost to be around $750,000, chief organizer McCoy said.

McCoy said the authority would immediately be able to start applying for support from philanthropic organizations, and that once buildings are running, its officials would design renter revenue in a way to make projects sustainable. The trick will be securing funding to start acquiring properties.

McCoy said the initiative intentionally left out a financing branch to prevent it from being possibly struck down in court. She said the campaign’s hope is to first start with city and state government leaders to see if budget lines can be carved out to help finance the developer’s yearly operations.

In addition, McCoy said organizers behind the initiative are exploring the feasibility of a progressive tax, which would go in front of Seattle voters, just like the current initiative, to help fund the social-housing developer.

“It’s about creating that vision and structure first and then securing that funding,” McCoy said.

The initiative needs a simple majority to pass.