Seattle Social Housing is up and running — or stumbling, more like it.
Beset by entirely predictable internal struggles, the fledgling organization is investigating its newly-hired CEO to assess his competency and “allegations of anti-Black racism and demeaning board members …” according to board minutes.
The social housing developer has a fancy PR firm to tout its accomplishments while still trying to draft a long-delayed strategic plan. It recently voted to increase the stipend paid to board members, the majority of which are appointed by the Seattle Renters’ Commission and have no development experience.
Seattle voters approved Seattle Social Housing as a public development authority in 2023. A proposal to fund it with about $50 million annually from a new payroll expense tax won overwhelmingly earlier this year.
First-time candidate Katie Wilson says those victories at the polls inspired her to challenge incumbent Mayor Bruce Harrell. But if social housing is the vision Wilson wants to pursue, Seattle ought to be very concerned.
Social housing sounds good. In reality, it’s like creating a big pile of progressive revenues and burning it.
For starters, the promises of social housing evolved and changed. At first, it was intended to build housing that would charge higher rents for wealthier tenants to subsidize lower rents for others. But such a model could never pencil out without permanent taxpayer subsidies, warned real estate experts. Development and operating costs would make rents for some tenants prohibitively high.
Now, the social housing developer proudly declares that it is entirely dependent on a single source of public dollars — the payroll expense tax. “Traditional affordable housing projects are generally financed through a combination of tax credits, grants, and low-interest loans,” its website intones.
But it’s precisely that kind of combined financing that allows the city to build the most units of affordable housing for the dollars invested.
“The city’s housing funds work with other funds to invest and open new homes throughout the city,” said Maiko Winkler-Chin, director of the Office of Housing, at a recent city council briefing. “By bringing other dollars together with city dollars we stretch our local investments further to build as many homes as possible.”
The true cost of Seattle Social Housing ought to be the number of affordable units that $50 million of public money could build annually with traditional financing.
Its charter states: “Residents MUST be afforded opportunities for restorative justice conflict resolution before being subject to eviction procedures.”
But nonprofit housing operators across the city say they are experiencing financial difficulties in part because strict tenant protection laws make it difficult to evict people who don’t pay their rent. In effect, future financial instability is written into the social housing developer’s DNA.
Wilson says Harrell’s biggest mistakes were not tapping more tax sources to increase the size of what are already the biggest budgets in Seattle history.
Voters beware.
If social housing reflects how Wilson intends to spend all that money, Seattleites should brace themselves for businesses decamping for other locales and feel-good programs that whither in the real world.
