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Why someone earning over $100,000 could qualify for Seattle’s affordable housing

caption: Fremont and the University District neighborhoods are shown as the sun goes down on Tuesday, December 10, 2024, in Seattle.
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Fremont and the University District neighborhoods are shown as the sun goes down on Tuesday, December 10, 2024, in Seattle.
KUOW Photo/Megan Farmer

Funding for social housing is on the ballot in Seattle’s Feb. 11 special election.

Social housing, which was approved by Seattle voters in 2023, aims to serve a broader swathe of households than traditional affordable housing does. That means low-income and moderate-income households alike.

The debate surrounding how to fund social housing has raised a big question: Who are we building affordable housing for?

Y

ou don’t have to be on a low-income to know there’s a housing crunch in Seattle. In fact, nearly half of renting households in and around Seattle are rent-burdened, meaning they pay more than 30% of their income for housing — if they can even find a place.

That's one reason some housing advocates have promoted the idea of “social housing.” While still serving low-income households, the affordable housing model opens the door to higher-income households, too.

To make affordable housing cover its costs, developers have to bring in a wide range of funding sources, both to build and later operate that housing. This typically looks like additional money from the government or from philanthropists to help keep rents low. Social housing adds one more funding ingredient to the list: Higher rents from higher-income renters.

Some of the Seattleites allowed to live in this housing could earn as much as $126,600 annually — 120% of the 2024 median income in the Seattle metro area. That's a much higher salary than would qualify for Seattle’s more traditional affordable housing projects.

RELATED: Can Seattle's social housing program survive the February ballot?

It’s unclear how much of a discount, if any, people earning that much would get by renting in a social housing apartment building. But the fact that a single person on a six-figure salary could live in a publicly-owned, publicly-financed building may strike some as novel, even incongruous.

Listen to KUOW's Booming episode on social housing:

So how did housing you can comfortably pay for while keeping enough money for food and savings become out of reach for so many people?

It's a simple matter of supply and demand.

Most experts agree: We’ve been underbuilding housing in this region for years. Construction in Seattle has sped up lately, breaking production records in 2024. But that's not enough to offset pent-up regional demand dating back to the dot-com boom of the late 1990s-early 2000s.

RELATED: Cities in Washington can no longer make vague promises to build enough 'affordable housing'

Over the decades, construction in the Seattle area has been cyclical. It reaches a frenetic peak, as it did in 2024 — making real progress on meeting demand before outside events, such as the Great Recession or recent high interest rates, send housing developers into hibernation.

While construction is cyclical, population growth is more consistent. Seattle planners expect job growth here to draw a quarter million new residents by 2050. That means demand, and therefore rents, could start rising faster again.

RELATED: How will Seattle grow through 2044? City leaders are about to find out

What does 'affordable' really mean?

Generally, affordable housing is that which doesn't cause you to become "rent-burdened." People who pay less than 30% of their income in rent have more money for food, transportation, health care, or even for retirement.

For someone earning $60,000 a year as a customer service representative, for instance, that would mean paying no more than $1,500 a month for housing. But the average rent in Seattle for a one-bedroom is now over $2,000.

What kind of person would get to live in social housing?

Traditionally, affordable housing is targeted at people on low incomes, such as fast food workers, and or people on moderate incomes, such as public school teachers.

caption: An artists' rendering of a potential social housing development by Neiman Taber Architects, published by House Our Neighbors, an advocacy organization for social housing in Seattle
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An artists' rendering of a potential social housing development by Neiman Taber Architects, published by House Our Neighbors, an advocacy organization for social housing in Seattle
House Our Neighbors

Social housing expands the definition of who gets to live in affordable housing , where rents are kept lower than market rate. It's built for people on low and moderate incomes, but allows for — and perhaps depends on — people who earn more than a city's average salary.

“[In our projects, we’d] have people who are...not traditionally what you would consider lower-income, but nonetheless, they cannot afford rents in the city,” said Tom Barnard, chair of the Seattle Social Housing Developer Board.

That includes nurses, bus drivers, firefighters, data analysts, physical therapists, mechanical engineers, even some attorneys.

RELATED: Seattle’s hidden housing crisis: Middle-class workers forced out of the city

“They're making what you would consider to be perfectly good incomes, but they can't live here,” Barnard said. “Or if they can live here, they can never own a house because they'll never be able to save up money.”

Social housing renters would pay no more than 30% of their income in rent, according to the original charter of the Seattle Social Housing Developer. That will mean different rents for different people.

Designing a financially solvent housing project

A broader range of people would theoretically create a more financially sustainable project, social housing advocates say.

Imagine a teeter totter. The teeter totter represents the building's operating budget, and people who pay low rents sit on the left side, and people who pay higher rents sit on the right side. Ideally, the teeter totter starts to balance so you don’t have one side sitting on the ground.

“There's sort of a symbiotic relationship between the higher income [earners] and people on the lower end,” Barnard said. Because some people are paying more rent, other renters can pay less.

Seattle's social housing board is still trying to figure out what the right ratio of low-income renters to upper-middle-income renters is to make the whole thing financially sustainable.

A lack of published financial details concern critics

Seattle's social housing developer hasn't publicized detailed breakdowns of how the finances would work, leading critics to question whether this balance is even achievable.

"I think if there was some magic formula, we would have discovered it, but our sector really isn't based on magic, it's based on a lot of hard work and years of experience developing very complex financial models," said Chris Persons, head of Community Roots Housing.

The group is a public development authority like the Seattle Social Housing Developer, and according to Persons, also has the ability to serve households up to 120% of area median income, though that has not been its main focus.

RELATED: King County Council considers housing development for middle-income residents

Al Levine is another critic of social housing. He's worked on affordable housing since the 1970s, including in senior positions with the Seattle Housing Authority. He helped write one of the February ballot's statements against Proposition 1A, which would fully fund the Seattle Social Housing Developer.

"They're... asking for $50 million a year and have yet to provide a clear understanding of what the money will be used for and whom it will serve," he told KUOW. "Parks, affordable housing, transportation, emergency services, libraries, and other public needs all face the voters on a regular basis. I think committing $50 million a year forever to a completely unknown, unproven entity with no track record or experience is foolhardy. And I think alternative 1B gives them an option to prove they know what they're doing and can deliver a product that has a value for the public dollar invested."

Getting precise with the numbers

University of Washington researcher Julie Howe sits on Seattle's social housing board and brings 25 years of affordable housing real estate experience to the table. In response to KUOW's request for more detailed information about the financial model for Seattle social housing, she shared a spreadsheet that she and the social housing developer's new CEO Roberto Jiménez are using to do some preliminary analysis of hypothetical properties.

Assuming certain things, such as low interest rates comparable to what other agencies with bonding authority can get, one can add and subtract housing units targeting various rents.

Playing around with the spreadsheet, one can see how adding higher-income units can bring a project into feasibility — and how subtracting them can knock it out of financial balance, condemning the proposal to the banker's wastebasket.

This brings us to the February special election ballot, which determines how social housing funding will work and which people qualify.

So what exactly is on the ballot?

Social housing was approved by Seattle voters in 2023. Now there are two competing ballot measures about how to fund it and who gets to live there.

First, voters face a question: Should either of these measures be passed? In other words, should the Seattle Social Housing Developer receive any funding at all?

After answering that question, voters face a second question: If we’re going to fund it, how so?

Proposition 1A would send the social housing developer an estimated $50 million a year from a new tax on wealthy companies. Presumably, this is the option that would build the most housing.

Modeled on Seattle’s Jumpstart tax, the new tax would charge companies that pay high CEO salaries. It kicks in when an employee starts earning over $1 million dollars per year, and taxes companies 5% on salaries over that amount. If the employee earns $2 million, the company would pay $50,000 dollars – less than the retail value of one of Amazon’s Rivian delivery vehicles.

Proposition 1B would limit the Seattle Social Housing Developer to receiving $10 million per year and would draw those funds from the existing Jump Start tax, putting it in competition with other affordable housing providers vying for the same money.

But more significantly, proposition 1B would put a much lower income cap on who can live in social housing: 80% of area median income. That would make it much more comparable to traditional affordable housing, or “workforce housing," which targets that income bracket. That means registered nurses or mechanical engineers probably wouldn't qualify, and could mean fewer, if any, housing projects would show up as financially viable using Julie Howe's spreadsheet.

Proposition 1B would also give the Seattle City Council more oversight of the Seattle Social Housing Developer, which in its current form, has a lot of independence from city government. And if the developer fails, its unused funds would go to other affordable housing providers after three years.

Here's what voters will see on their ballots, which went out by mail on January 22, 2025.

City of Seattle Proposition Nos. 1A and 1B

Proposition 1A (submitted by Initiative Petition No. 137) and Proposition 1B (alternative proposed by the Seattle Council and Mayor) concern payroll expense tax funding for the Social Housing Developer.

Proposition 1A would impose a tax on payroll expenses for employers doing business in Seattle. The tax rate would be 5% on annual compensation above $1,000,000 paid in Seattle to any employee. Proceeds would support the Social Housing Developer, a public development authority created to develop, own, and maintain social housing in Seattle. The tax imposed would be in addition to the City’s payroll expense tax levied under Seattle Municipal Code Chapter 5.38.

As an alternative, the Seattle City Council and Mayor have proposed Proposition 1B (Ordinance 127101), which would allocate $10,000,000 of existing payroll expense tax revenues from the next five annual budgets to fund the Social Housing Developer. Proceeds would support the acquisition and development of social housing in Seattle. The Developer would have to apply and meet certain conditions as determined by the City before the award of funds. If no allocated funds are awarded within three years of their initial allocation, they would be available to support other affordable housing projects.

1. Should either of these measures be enacted into law?

  • Yes
  • No

2. Regardless of whether you voted yes or no above, if one of these measures is enacted, which one should it be?

  • Proposition 1A
  • Proposition 1B
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