Affordable housing: A modest proposition?
JASON HAGEY; The News Tribune
Published: October 27th, 2005 12:01 AM
Home prices are soaring. Wages aren’t.
Apartments are being turned into pricey condos that attract urban hipsters. Working-class folks suffer.
All the while, funding for federal housing is on the decline.
For social service providers, it adds up to a looming crisis in which too many people are forced to spend too much of their paycheck – sometimes 50 percent or more – on housing expenses, leaving little left over for the rest of life’s expenses.
Their solution: Tacoma Proposition 1.
The low-income housing property tax levy on next week’s ballot seeks to raise property taxes 18 cents per $1,000 of assessed value in Tacoma, or about $32 per year for the owner of a $180,000 house. It would generate about $2.5 million per year for the next six years, enough to produce or refurbish approximately 740 rental units or houses.
The money would go into a housing trust fund that would be used to make loans to housing developers at little or no interest, making it possible for the developers to rent or sell apartments and houses at below-market rates. Some money also would go toward home repairs.
Social service providers have wanted to establish a housing trust in Tacoma for years. Lots of other places have them, including the City of Seattle and the state of Washington.
But it has failed to materialize in Tacoma, in part because city leaders could always come up with a reason why it was a bad time to ask voters to raise taxes.
Two-thirds of the funding would go toward rental properties. The remaining third would go toward homeownership.
The Tacoma Pierce County Affordable Housing Consortium recommended dividing the money in part because the number of people who would qualify for rental housing is greater than the number who would qualify for homeownership, said Sandy Burgess, president of the consortium and vice president of real estate development for the Metropolitan Development Council.
Levy supporters cite rising home prices and lower-than-average homeownership rates as evidence of the need for more affordable housing.
The price of homes rose 35 percent in the last four years, but incomes rose only 7.4 percent, they say. Just 55 percent of people in Tacoma own their homes, compared with 67 percent nationwide.
It’s hard for renters, too, they say. It takes an hourly wage of approximately $14 to afford a two-bedroom apartment in Tacoma, according to information from the National Low-Income Housing Coalition.
At the same time, the amount of money available from the federal government for housing assistance is declining.
Councilwoman Julie Anderson worries that if the trend continues, the only people who will be able to afford a house in Tacoma will be wealthy professionals.
“I want to live in the same neighborhood as the people who wait on me,” Anderson said. Teachers, police officers and retail workers are all in danger of being priced out of the city, she said.
“There’s something terribly wrong when people can’t afford to live in the same city where they work,” Anderson said.
Backers also say the levy would greatly increase the flow of federal and state dollars to Tacoma, particularly from the state’s housing trust fund, because many of those programs require a local match. Without the trust fund, Tacoma is missing the match and doesn’t receive all of the funds it could, they say.
There’s no organized opposition to the levy, although some city government critics are speaking out against it.
Chris Lucas, part of the group advocating the elimination Tacoma’s city manager form of government, agrees with the goal of affordable housing but doesn’t think the levy is well-conceived. She noted that the Tacoma City Council didn’t approve the plan spelling out how the trust fund will be managed until after it voted to put the levy on the ballot.
“Basically, the ordinance passed saying, we’re going to collect the money and use it in some fashion for low-income people,” Lucas said. “We’ll get back to you later with the details.”
Councilman Tom Stenger voted against the ordinance putting the issue on the ballot for that very reason. He ended up voting in favor of the administrative plan when it came before the council later, but still has mixed feelings about the levy.
“On the whole, I think it’s a good thing,” Stenger said. “But I can understand why people are skeptical about raising taxes on housing to make housing more affordable.”
Financial support for the campaign, called “Homes Now,” comes from a who’s who of social service providers and businesses with a stake in the issue. The campaign has raised more than $62,000, according to the state Public Disclosure Commission.
A large portion of that – $25,000 – came from the Metropolitan Development Council, a nonprofit agency that provides low-income housing in Tacoma.
Other large contributors include construction company Tucci & Sons Inc.; the Tacoma Pierce County Affordable Housing Consortium; Rainier Pacific Foundation; Associated Ministries; the Home Ownership Center of Tacoma; and Intercommunity Mercy Housing.
The Rev. David Alger, executive director of Associated Ministries and a board member of the Home Ownership Center of Tacoma, doesn’t see a problem with nonprofit housing agencies contributing to the levy campaign.
“They’ll receive the money to produce housing,” Alger said. “They’re not going to get rich off it.”
PROPOSITION 1
What it costs: 18 cents per $1,000 of assessed value, or about $32 per year for the owner of a $180,000 house
How much it raises: $2.5 million per year for six years, or $15 million
Who doesn’t pay: Homeowners age 61 or older; disabled people might qualify for an exemption
What it needs to pass: 50 percent voter approval
Who it helps: Low- and very low-income households as defined by the U.S. Department of Housing and Urban Development. A low-income household makes less than 80 percent of the median income in Tacoma, which is roughly $45,000 per year for a family of three. A very low-income household makes less than 50 percent of the median income, or $28,000.
How it helps: Makes money available for construction and rehabilitation of apartments and houses. Combined with tax credits, loans and other grants, it would generate approximately 700 new housing units.
