Durkan’s Housing Plan is About More Money, Not More Housing

Jenny Durkan has a housing plan. While it touts microhousing as part of the solution and supports the notion of vouchers (just helping people with their rent now) as being more efficient that building $500,000 units in 5 years, it still is missing the fundamental point: we have a housing scarcity problem, not a public funding problem.

The weaknesses in the thinking behind this are likely because Durkan got very little input from market rate developers who build the bulk of housing in Seattle. The best place to look in this plan is in the “how” part, especially how it would be funded.

Here’s my quick reaction. First off, It’s silly to fund microhousing when you could just make it legal again. Durkan proposes building 1000 units of microhousing, but at the height of the microhousing the market produce twice that in a single year. Councilmember O’Brien’s legislation killed it off. Check out this graph from the smart guys at Sightline:

​The language in Durkan’s mircohousing proposal is muddy. Does she mean tiny homes for $10,000 as a temporary fix? Does she mean congregate microhousing? It’s not quite clear. But microhousing and concentration of homeless people in neighborhoods has been widely and deeply resisted. It’s hard to understand where she’ll get the political support for microhousing all by itself, but offering it as a permanent structure and an alternative to homeless camps? That’s sure to raise the angry neighbors ire.

More reaction to the funding portion.

  • Increasing the commercial linkage fee on city-owned land when disposed to the market.

This is inherently inflationary. If you want small local businesses to keep their locations, this is likely to add costs to their rents and to make moving and upgrading more difficult. Raising the price of commercial property will raise it’s rents. What “city-owned land” are you planning to sell? Any numbers behind this? Why wouldn’t the City simply build housing or do long term leases or other partnerships to utilize the land. Councilmemer Sawant proposed using City debt capacity to build on City owned land but that idea but it was rejected by the bureaucracy. Why not bring that idea back and fully study it.

  • Create a fee for landlord licenses. Seattle has a Rental Registration and Inspection Ordinance that requires landlords to register all rental housing units in Seattle, as well as pass a health and safety inspection. Jenny will ask for a reasonable fee of $100 associated with this license every five years.

Again, I’d like to see the numbers. It’s not a nominal charge if you are talking about a charge per unit. Again, this is inflationary and will add the rent burden already rising. Legally, it looks a lot like a tax and would be, therefore, illegal.

  • Medicaid waiver funds. Medicaid waiver funds can be spent on housing if it is a one-time cost. Jenny will work with the King County Accountable Communities of Health to advocate for part of this funding to pay for the micro-housing construction.

This is interesting but I doubt you’ll find a way to use Medicaid funding for capitol costs. Also, you’ll likely face opposition from the safety net providers who are very much depending on Medicaid funding for primary care services at a time when other federal funding is in jeopardy.

  • Jenny has said that she will use revenue from city income tax funding, which totals about $140 million per year, to lower regressive taxes and she intends to keep that promise. But given this emergency, she will also use a portion of that funding to pay for the rent voucher program.

This isn’t going to happen, period. Along with being unconstitutional, Cities simply can’t levy taxes — on anything — without legislative authorization. You should know that as an attorney.

Durkan’s plan has a lot of ways to spend money but very few that will actually result in more housing production. Helping pay people’s rent now, however, is a great way of efficiently helping people with a cost burden. We’d support looking more into that idea. Taxing rental housing will just raise rents and probably an illegal tax. We’re not getting an income tax without legislative approval, period.

Durkan should talk with people who produce housing across Seattle, not just non-profits who build under a regulatory regime that recklessly consumes scarce subsidies or by trying to squeeze money out of the production of market rate housing.

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