Tonight In Ballard: Two Hours Hate

I wanted to write about a lot of other things tonight—the council meeting to discuss potential changes to the proposed employee hours tax, a heated council committee discussion about the downtown bus tunnel, a meeting tonight where Democratic Party members ousted former King County Democrats chair Bailey Stober from yet another position and endorsed his opponent —but instead, I’m writing about this:

What I witnessed in Ballard tonight, at what was supposed to be a panel discussion, with a moderated Q&A,  on a proposed business tax to pay for homeless services, was not just a crowd of angry neighbors wanting to be heard by their elected representatives. It was an organized mob that showed up with a single goal: To shut down dialogue, create chaos, and prevent people with opposing views from having a voice. The Two Hours Hate began before the meeting even began, as audience members tried to shout town the Rev. Kathleen Weber—pastor of Trinity United Methodist Church, where the event was held—during her introductory remarks. (The gist was that people should try to be respectful, a request the crowd ignored even as she was making it.) It got worse when the panel, which included three members of the city’s Progressive Revenue Task force and four city council members—tried to stick to the announced format, a moderated panel with written questions from the audience. “O-PEN MIC! O-PEN MIC!” the crowd screamed in unison—a wall-to-wall, full-volume chant that bore an eerie similarity to a phrase often shouted by Trump supporters during the 2016 campaign.

(I recorded and posted a snippet of last night’s meeting here—in it, audience members can be heard attempting to shout down council member Mike O’Brien and then loudly mocking progressive revenue task force member Kirsten Harris-Talley when she mentioned that she, like many of them, had been up since 6am getting her kid to school and working her job before coming to the meeting.)

The mob got its way—it’s hard to imagine what they would have done if they hadn’t, or if any member of the panel had decided to leave the stage—and the forum, which was to have included questions and answers from the seven panel members, turned into the one-way shoutfest the audience apparently came for.

“We’re entitled to have a house!” one man screamed from the audience. “Free from drugs!” he added. “FUCK YOU!” another shouted in the panel’s direction. Others chimed in, from around the room: “BULLSHIT!” “BULLSHIT!” And, memorably, “BULLSHIT!” “We didn’t come here to talk about taxes!” someone yelled. “RESIGN NOW!” several others screamed, as a homeless woman tried to speak. “Let’s have a highly publicized event where we round up some of them,” a speaker said, referring to homeless people struggling with mental illness and addiction.

When the crowd wasn’t hurling invectives at the panel or cheering Alex Tsimerman, the omnipresent Nazi salute-throwing public commenter who is routinely kicked out of meetings for spewing obscenities, they were screaming the same short phrases over and over, like toddlers who didn’t want to take a nap. “NOOOOOOOOO!” they yelled. “RESIGN!” they bellowed .”SHUT UP!” they screamed, when the panel asked if they would like information about the tax proposal or the rationale behind it. They didn’t come to learn. They came to howl.

Perhaps that’s why so many of them seemed so ill-acquainted with basic facts. When Katie Wilson, head of the Transit Riders Union and a tax panel member, observed that “the shortage of affordable housing is a major driver of homelessness,” people in the crowd shouted “NOT TRUE!” When a homeless woman stood up to speak, a man behind her yelled, “Stand up and speak, coward!” A man claimed that when he calls 911 to report a crime, the “police” on the other end tell him their hands are tied and they can’t respond. A woman said the city council has prevented police from investigating  rapes by homeless people. A speaker who supported the tax pointed out that, contrary to what several speakers before him had claimed, the proposal involved a tax on businesses, not individuals. “LIES!” several people screamed. A speaker said he owned a home in Ballard and supported the tax. “SHILL!” “PLANT!” “PHONY!” the crowd roared.

By the time the forum ended at 8:00, the screaming had died down a bit. But I couldn’t shake the feeling that I was in the presence of real hate—a kind of hate I’ve never felt at a public meeting in Seattle before. When I sat down at the start of the meeting, the guy behind me grinned, “Those cops outside had better get in here quick, because there’s gonna be action,” I smiled politely because I thought he was joking. It was only later, when he was screaming into my ears so loudly that I asked him to calm down (and when he snarled, with a look of pure rage, “If you don’t like it , you can leave!”) that it dawned on me that he might be hoping for a riot. At the end of the meeting, I asked a male colleague to walk me out; I was shaking. I walked down the street, past the bottles of piss and the giant junk structure had left on the grass to make a point about how homeless people are “trashing” the city with their presence. Then I got in the car and cried.

After I got home, I checked my Twitter notifications and found that plenty of people were eager to inform me that this was what democracy looks like—a mass of humanity screaming in unison, with the goal of making sure other voices are literally drowned out—and that if I didn’t like it, I just needed to grow up. I disagree. I maintain—in fact, I know—that there are ways to express strongly held opinions without terrorizing or demonizing those who happen to hold opposing views, turning meetings over to the control of whoever screams the loudest, or dehumanizing people who are suffering by suggesting they be “rounded up.”. The fact that we have gotten to this point in Seattle makes my heart hurt. It should make everybody’s heart hurt.  I would love to blame what happened tonight on a crowd of carpetbaggers whipped into a frenzy by a mendacious right-wing provocateur like Dori Monson, but the behavior I saw tonight must be laid squarely at Seattle’s feet. And Seattle won’t begin to solve its problems with homelessness, inequality, and all the other issues the city is struggling to address unless we can figure out a way to speak to each other without shouting each other down.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

Morning Crank: I Don’t Want That Rumor to Be Perpetuated

1. Sitting at the year’s first meeting of the Progressive Revenue task force Thursday morning, it was hard not to flash back to a press conference the previous day, when Mayor Jenny Durkan announced that the city would spend some of the $11 million it expects to receive from the sale of a city-owned property in South Lake Union (a different property than the “teardrop” site council members discussed as part of their budget deliberations last year). At that briefing, held in front of two “tiny houses” under construction at the Seattle Vocational Institute, Durkan said it would take time to build all the housing that will ultimately be funded by the $290 million 2016 housing levy, and that in the meantime, a $5.5 million investment in “bridge housing”—or, in the clunky title Durkan chose for the initiative, “building a bridge to housing for all”—would give people living on the street slightly better options. “In an ideal world, we would not need to be building tiny houses,” Durkan said. Then she acknowledged that state and federal support for affordable housing is about to fall off a cliff.

The rest of the money would pay for rental assistance for people on SHA’s Section 8 voucher waiting list—”we’re going to focus on the people who need that assistance the most,” Durkan said— design of a new fire station, and city expenses related to the land sale. The developer buying the property would also provide $2 million of a total $7.7 million payment toward affordable housing projects elsewhere, required as part of the city’s Mandatory Housing Affordability program, to build actual affordable housing.

The reason I was thinking about Durkan’s announcement Thursday morning is that it was basically a rounding error—what government staffers sometimes call “budget dust”— in the funding needed to actually address the city’s homelessness problem, which has been growing every year since at least 2013. According to task force co-chair Kirsten Harris-Talley, if every unit of affordable housing requires $160,000 in capital expenditures from the city (more on how advocates for a higher employee hours tax arrived at that number in a minute), and the city will need around 20,000 new units for very low-income people in the next 10 years, that means the city will need to spend around $3.2 billion over that time. As you can probably imagine, the city isn’t spending anywhere close to that right now—according to the presentation, the city spent just under $95 million from all sources on capital housing investments last year. At that rate, it would take more than 33 years to come up with $3.2 billion (and that’s assuming housing costs stayed flat).

Obviously, none of this is an exact science. The $160,000 figure is an estimate provided by council member Kshama Sawant’s office, of what the city would need to contribute if it ramped up its affordable housing production and was unable to find a significant amount of new funding from other sources to help pay for all the new units. (Currently, each new unit costs the city about $93,000 in capital costs, but the programs that pay for the difference between the city’s contribution and the total cost to build a new unit, about $311,000, are only committed to a certain number of units, requiring the city—theoretically—to pay more for each additional unit out of its own pockets.)

If Harris-Talley and Sawant’s figures are correct, that provides a ready-made argument for the employee hours tax (effectively a flat annual tax for each full-time employee on every business over a certain revenue threshold) that they’ve wanted to pass all along. Today, the task force looked at potential revenues from the so-called head tax at different levels and with different sizes of business exempt from the tax, which I’ve copied below. (Last year’s proposed head tax would have exempted businesses with less than $10 million in gross revenues, up from $5 million in the initial proposal; some businesses argued that basing the tax on gross revenues was unfair because it didn’t take into account thin profit margins in certain industries, like restaurants.)

If the city goes through a recession, of course, the amount it can expect to collect will shrink. However, recessions tend to actually lower rents; Downtown Emergency Service Center director and task force member Daniel Malone pointed out that during the last recession, the county’s annual point in time count of people living outdoors tends to stagnate or even decrease, as it did between 2010 and 2011, and between 2011 and 2012. That’s one of the paradoxes of a weakening economy: Although revenues from taxes that are less stable, like direct taxes on businesses, tend to decline, so do rents, making it possible for some people forced onto the street by an impossible housing market to actually find a place to live.

2. In a King County Board of Health discussion about the possibility of a Hepatitis A outbreak in Seattle yesterday (a nationwide outbreak, ongoing now, began in California and was widely blamed on lack of access to handwashing facilities for the state’s homeless population), King County Health Department Director Patty Hayes expressed concern about the city’s decision last year to cut funding for three downtown hygiene centers that provide restrooms, showers, and handwashing and laundry facilities for homeless people living and moving through downtown.

City council and Board of Health member Sally Bagshaw—a vocal proponent for cutting funding to the facilities as part of the city’s new “performance-based” approach to homeless service contracts—objected to Hayes’ characterization of the problem.

“I think that [problem with the closure of the hygiene centers] is more apparent than real,” Bagshaw said. “We’re putting huge investments into new 24/7 shelters …  I’m working with those 24-hours shelters to say, ‘Can you open these up for people who aren’t [staying] here tonight” to take showers, she said. “We opened up community centers [for people to shower]. There are more facilities open now than before. It’s just that the money’s being shifted. I don’t want that rumor to be perpetuated. There were some organizations that didn’t get funded” because the city went to a competitive process, Bagshaw said.

I covered the cuts to funding for hygiene centers, and the reason some advocates believe community centers and shelters are not an adequate substitute for public restrooms and dedicated hygiene facilities, here.

3. The Sightline Institute, a progressive think tank that researches and covers of housing, transportation, and environmental policy from a green, pro-transit, pro-housing perspective, just brought on a new (unpaid) fellow to cover “issues of infrastructure, technology and energy with a view towards sustainability.” His name: Daniel Malarkey.

If that name sounds familiar, it should. (If it doesn’t, you weren’t following Seattle politics in the early 2000s.) He was the finance director for the Seattle Monorail Project, the transportation agency that was going to build a monorail line from Ballard to downtown to West Seattle. That project was doomed to failure after Malarkey’s revenue projections overshot the mark by about 50 percent, and after the agency compounded the problem by trying to paper over the error. (The error Malarkey made was counting revenues from taxes on every single car in Seattle, when in reality, thanks to heavy lobbying from the auto industry, all new cars and cars brought to the city by people moving here from out of state were exempt from the monorail tax. The result was that Malarkey overestimated the monorail’s tax base by a third) When he resigned at the end of 2003, I wrote this. Interestingly, it looks like his three years consulting or working directly for the monorail agency aren’t on his official Sightline bio.

Anyway, it looks like he’ll be writing about autonomous cars.

Full disclosure: I have written several pieces for Sightline and often use their research in my reporting.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

2018 City Budget Passes Without Head Tax. Now What?

Seattle may be rolling in tax revenues thanks to an economic boom that just won’t quit, but this year’s budget process played out like a recession-year knock-down-drag-out battle. It started when the council’s new budget chair, Lisa Herbold, proposed a budget that presumed the council would agree to a head tax on large employers (and made their top-priority projects dependent on the tax). When the tax failed on a (somewhat predictable) 5-4 vote, council members were left scrambling to come up with a new “Plan B” that would preserve their top priorities. This plan—call it Plan C—included deep cuts to incoming mayor Jenny Durkan’s office, without commensurate cuts to the legislative branch, whose budget included some literal padding in the form of $250,000 for new carpet in council members’ offices.

Over the weekend, though, council members decided to have mercy on the mayor, reducing the proposed cuts to her office by half (and sacrificing their top-dollar carpet in the process). That change would have meant less new funding for the Human Services Department, but a last-minute amendment by council member Kirsten Harris-Talley increased HSD’s funding by dipping into the budget for the Department of Construction and Inspections, which administers permits and inspects buildings (including rental housing) for code compliance. That change, along with numerous other last-minute amendments, happened almost in the moment, and council members who hadn’t seen the proposed changes before today appeared to be reading them on the fly in the moments before voting them up or down. The public, meanwhile, had no way to read or absorb many of the proposed amendments unless they were physically in council chambers, where staffers made hard copies of (some of) the amendments available as the council discussed and voted on them.

Council member Kirsten Harris-Talley

The debate over how much additional funding the council should allocate for HSD—which administers all the city’s grants for homeless services, a job that has grown in scope as the city’s budget for those services has increased—broke down along somewhat surprising lines. On the center left-to-socialist spectrum of Seattle politics, HSD’s mission is strictly centrist, and its director, Catherine Lester—appointed by former mayor Ed Murray in 2015—is a staunch defender of that mission. This year, HSD rebid all its homeless service provider contracts under a new system known as “performance-based contracting”—a process critics say favors large, established service providers that prioritize people who are easier to house at the expense of smaller, scrappier groups that focus on more challenging clients. The agency’s job next year will be to administer those projects and implement Pathways Home, a controversial plan developed in collaboration with Ohio-based consultant Barb Poppe. In 2016, Poppe did a report that concluded that Seattle already has plenty of resources to house every person living outdoors, a conclusion many (including this blog) have contested.  Pathways Home, which is based on that report, directs HSD to shift spending away from transitional housing programs that provide long-term assistance and toward more “cost-effective” solutions like  “rapid rehousing”—short-term rent subsidies to move people directly from homelessness into market-rate apartments. Critics of this approach have argued that expecting people to move from homelessness to full self-sufficiency in a matter of months is unrealistic in a city  where the average one-bedroom apartment now rents for around $1,800.

Murray and Lester butted heads with the left wing of the council (as well as many homeless advocates) over rapid rehousing, performance-based contracting, and Pathways Home, but you wouldn’t know that from this month’s budget debate, in which HSD was often portrayed as a direct social service provider rather than a contract administrator. (This happened a lot earlier in the process, too, when hundreds of thousands of dollars were shifted from the Department of Finance and Administrative Services to HSD). On Monday, Harris-Talley described Lester as “a jewel of the community” and said she had “deep concerns about what has happened in regards to HSD, how that department has been treated.” It was disappointing. she added, “to see a department with a black woman at the helm” taking on significant additional responsibility without a commensurate amount of additional funding. It’s unclear whether Durkan—who supports Pathways Home—will appoint her own HSD director or keep Lester on board.

Comic Sans and public opinion in the ladies’ room.

The employee hours tax tax isn’t dead. In fact, several council members attempted to forcibly resurrect it yesterday, by proposing a budget amendment that would have required the council to pass the head tax after going through the motions of a four-month process to come up with a sustainable revenue source for homelessness. The five council members who voted against the head tax, unsurprisingly, weren’t interested in committing in advance to the same tax they just rejected, and they (also unsurprisingly) prevailed, inserting language into the amendment that commits the council instead to coming up with “progressive taxes” of some sort that will yield at least $25 million for homeless services. Any proposal they come up with will likely include a head tax, because the council’s taxing authority is quite limited, and council members made that clear. That didn’t stop the crowd from screaming “Bad!” and “Shame!” and booing council members so loudly they had to repeatedly stop the proceedings. (A couple of people were kicked out). Sawant, too, repeatedly denounced her council colleagues, as she has throughout the budget process, as “corporate politicians” kowtowing to their masters at the Chamber of Commerce. This kind of rhetoric definitely riles up the base, but it doesn’t win any currency with people like Rob Johnson, an earnest liberal who fought (against Herbold!) to ensure that supervised consumption sites were fully funded in this year’s budget, a position that I’m betting scored him zero points in his Northeast Seattle council district.

Social service and safe consumption site advocates line up hours early for yesterday’s 2pm council meeting—as they do whenever they know council member Kshama Sawant has invited her supporters to “pack city hall”

A cynical observer might point out that by keeping the discussion over the head tax alive, council members who did not prevail last week got another opportunity to make rousing speeches and rally the base on Monday. The council’s resident (official) socialist, Kshama Sawant, has encouraged her supporters (on social media and through her official city council email list) to “pack city hall” for every budget discussion and vote, and they have done exactly that, showing up at every budget meeting to wave red “stop the sweeps” signs, applaud Sawant’s lengthy speeches (one of many she made yesterday stretched nearly 15 minutes) and shout down council members who voted against her proposals.

A word about the screaming. It may be directed at the three women and two men who vote the “wrong” way, but it has the effect, in the moment, of shutting down all discussion. When you use brute verbal force against political opponents (both those on the dais and those who are scared to speak because, well, they’re worried about screamed at) it goes beyond merely “disrupting business as usual.” It’s disrespectful, counterproductive, and, most importantly, intimidating—social service advocates whose programs are in the budget still show up (hours early, to get ahead of Sawant’s supporters) to speak at council meetings, but otherwise, public comment is overwhelmingly dominated by a single set of voices. People who used to show up don’t show up. Dissent—the normal give and take of democracy playing out in public—is almost literally drowned out when one side asserts their right to own a public space by shouting everyone else out of the room. This year, I was disturbed to hear council members explicitly equate “the people here in the room today” with “the community” at large. Most of the 700,000 people in Seattle, and indeed most of the much smaller group of people who have an opinion about the 2018 city budget, weren’t represented in council chambers, and rarely are. This, even under ordinary circumstances, is perfectly understandable—most people have to work during the day, for one thing—but council members should take that into account, and not conflate “people with time to sit in council chambers day after day” with “a representative sample of the community at large.”

It will be interesting to see what happens to the council’s left wing—Lisa Herbold, Kshama Sawant, and Mike O’Brien—once council member-elect Teresa Mosqueda takes office, replacing Harris-Talley, next week. Mosqueda defeated the far left’s preferred candidate, Jon Grant, and will not be a reliable vote for the Sawant wing of the council, who couldn’t muster a majority for the head-tax-based budget even with Harris-Talley on the council.

Sawant, who represents council District 3 (which includes Capitol Hill and the Central District), was the only council member to vote against the budget—as she has since her election in 2013.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the substantial time I put into reporting and writing for this blog and on social media, as well as costs like transportation, phone bills, electronics, website maintenance, and other expenses associated with my reporting. Thank you for reading, and I’m truly grateful for your support.

After Defeat of Head Tax, Council Scrambles for Plan B

City council budget committee chair Lisa Herbold made a risky gamble this week, and she lost. As a result, the council will pass a budget this coming Monday whose details were thrown together largely at the last minute, after a budget proposal that hinged on the passage of the controversial employee hours tax failed to secure a majority.

The gamble Herbold took was fairly straightforward, First, she proposed a version of the budget that incorporated revenues from the head tax—a $125-per-employee tax on businesses with more than $10 million in gross receipts, known as the HOMES tax. Second, she made sure that city council members’ top-priority projects would be on the chopping block without the tax, so that any council member who voted against the tax would risk losing funding for her favorite projects. Third, instead of coming up with a backup plan in collaboration with head tax opponents, she crafted a “Plan B” that included draconian cuts to council members’ priorities (including the criminal justice diversion program LEAD, housing for homeless Native Americans, and trash removal at homeless encampments), giving them an additional incentive to vote “yes” on the tax.

The problem was with step 4—the one where a majority of council members were supposed to fall in line and support the tax. That didn’t happen, for a number of reasons. First, some council members were simply dead set against passing the tax, or—to hear council members like Lorena Gonzalez tell it—opposed to passing it on a rushed timeline without an opportunity to do deeper analysis and look at other alternative revenue sources. (Council members have had less than three weeks to consider the proposal.) Second, several council members bristled at the way Herbold’s initial balancing package, in council member Debora Juarez’s words, “held hostage” so many important projects by putting them “in the head tax parking lot.” Juarez, in particular, was indignant about this forced tradeoff. And third, potentially persuadable council members may have been put off by the behavior of the head-tax supporters who showed up, many at Sawant’s behest, day after day, screaming invectives (“Shame!” “Their deaths are on your hands!” “Republican!”) at council members who didn’t fall in lockstep behind the proposal.

After the tax failed, it became clear that Herbold didn’t have a backup, and the council ended up canceling a scheduled budget meeting to hammer one out. The result was that the process that led to a final budget package was disorganized and chaotic, with some council members reportedly in the dark about budget amendments until less than an hour before they had to vote them up or down. (Many amendments weren’t available in hard-copy form until minutes before they were voted on.)

A few things stand out about the substance of the budget package that will go before the council on Monday. First, it includes aggressive cuts to incoming mayor Jenny Durkan’s budget. If the budget passes unchanged on Monday, the city’s first female mayor in nearly a century will have to reduce her budget 17 percent, the equivalent of five mayoral staffers. (This was one of the budget amendments that reportedly came through at the last minute). Much of the money that would have gone to the mayor’s office will now fund new contract management positions in the Human Services Department.

Council members who supported cutting the mayor’s budget, including Mike O’Brien, said they were merely bringing it down to the “baseline” level established under former mayor Mike McGinn. However, that characterization is misleading: McGinn had a skeleton staff because he became mayor during the worst economic recession in recent memory, and made the cut at a time when the city faced ongoing annual revenue shortfalls in the tens of millions. As the economy recovered and all city departments expanded back to pre-recession levels, McGinn’s successor, Ed Murray, staffed up too. While budget cuts during recessions are standard, I can recall no recent precedent for slashing the mayor’s budget so dramatically in the middle of an economic boom. Notably, the council did not propose any cuts to its own staff budget, which council members increased by 33 percent just last year.

Outgoing mayor Tim Burgess fired off a sassy response to the council’s cuts, saying that if the council, “in their wisdom[,] believes these funds are needed for other purposes, and remembering that the Legislative Department’s budget is twice the size of the Mayor’s budget, then the funds should come proportionately from the Mayor’s Office and the Legislative Department.” Should Durkan want to respond to the cuts more directly than Burgess did, she could take a hard look at the dozens of statements of legislative intent the council also adopted today, each of which constitutes a request for the mayor’s office to craft legislation or produce reports and analysis. Or the council could decide to dial back the cuts on its own; they still have until Monday to find cuts elsewhere if they don’t want to pick this fight with the new administration. Durkan, it’s worth noting, did quite well in several council members’ districts, including O’Brien’s (Northwest Seattle) and Herbold’s (West Seattle). Both council members are up for reelection in two years.

The cuts to Durkan’s office highlight another unusual aspect of today’s budget proposal: It shifts a significant amount of money into the city’s Human Services Department from other departments, primarily the Department of Finance and Administrative Services. Although intuitively, it makes sense to move funding for things like homeless encampment removals to the department that hands out contracts for homeless services, HSD was not necessarily clamoring for the change, and will need time to hire seven new employees and train them to do the work FAS has been doing. Durkan, meanwhile, presumably has her own ideas about how the department should be run, and who should run it (the current director is Catherine Lester).

Today’s budget debate also solidified the ideological fault lines on the council—and highlighted the need for someone to serve as de facto council leader. As budget chair and a council veteran (before her election in 2015, Herbold was a staffer for former council member Nick Licata for 17 years), Herbold had a chance to be that leader, by counting votes and dealing with both sides to come up with a best-case scenario for the council’s left wing as well as a viable Plan B that could win the support of a council majority. Instead, Herbold went for broke—proposing a budget that was, in essence, an ultimatum, and declining to work with council moderates like Rob Johnson on a backup plan. That gamble didn’t pay off, even with a reliable ally like Kirsten Harris-Talley temporarily on the council. Once the council equation shifts in November (when Teresa Mosqueda, who handily defeated Herbold-endorsed socialist Jon Grant, replaces Harris-Talley), she could find herself increasingly isolated—insufficiently socialist for Sawant (whose supporters yelled “Shame!” and “Republican!” as fervently at Herbold as they did at Johnson), insufficiently “moderate,” (which is to say, conventionally liberal) for the council’s new majority.

I’ll have more to say about the final budget package on Monday.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the substantial time I put into reporting and writing for this blog and on social media, as well as costs like transportation, phone bills, electronics, website maintenance, and other expenses associated with my reporting. Thank you for reading, and I’m truly grateful for your support.

Council Passes Short-Term Rental Tax, Puts Airbnb Regs on Ice Until After Thanksgiving

Council members Lisa Herbold and Rob Johnson, on opposite sides of the short-term rental debate.

After several hours of discussion and a number of convoluted parliamentary procedures, the city council voted this afternoon to impose a new tax on people and businesses that provide short-term rental housing through online platforms like Airbnb—$14 per night for an entire home, and $8 a night when the rental is a single room in a larger residence. They did not resolve a key question about the underlying legislation, which would limit each short-term rental operator to just two units, down from an unlimited number today—namely, how many existing units would be exempt from the new requirements. (The legislation, as written, would exempt existing short-term rental units in parts of downtown, Lower Queen Anne, South Lake Union, and some units on First and Capitol Hill.) Council member Rob Johnson argued that it made little sense to adopt the tax without knowing how many rental units it would apply to (and therefore how much revenue it could generate); others, including council member Kirsten Harris-Talley, argued that delaying the vote could give lobbyists for companies like Airbnb time to pressure  community groups into supporting their preferred version of the legislation.

Ultimately, the council put off, for at least two weeks, several amendments that would raise or lower the number of existing short-term rental units that would be exempt from the two-unit restriction. On one end of the revenue-vs.-regulation axis, Johnson suggested exempting all existing short-term rental units from the new two-unit limit; on the other, council members Lisa Herbold and Mike O’Brien proposed requiring short-term rental operators who currently rent out several or many units to reduce their rental stock to two or less, with no location-based exemptions. (O’Brien, along with Sally Bagshaw, also offered a middle-ground amendment that would restrict the area in which short-term rental operators could continue to have more than two units to a small area of downtown).

The big-picture question today, as it has been since the city began discussing how to regulate short-term rentals a couple of years ago, was whether short-term rentals remove affordable housing units from circulation in sufficient quantities to drive up housing prices. Advocates argue that they do, but come armed mostly with anecdotes, not data—for every story about a person who got priced out of their old apartment only to see it turned into an Airbnb, there’s one about a homeowner who was able to pay her mortgage by turning her kid’s old room into short-term lodging for a few days every month. The point is—we just don’t know, and arguments that rely on anecdote and correlation-causation fallacies (2,000 people had to move last year because they couldn’t pay their rent and the number of Airbnbs increased; therefore, Airbnbs caused the displacement) aren’t convincing.

For one thing: The total supply of housing in the city has increased faster than the number of short-term rental units—an important factor for people making supply-side arguments against short-term rentals to consider. For another: Many Airbnbs are rooms in people’s homes, and there’s little evidence to suggest that people who want to rent their spare room out a few nights a month would be just equally eager to take on a full-time roommate if Airbnb were not an option. (The difference between a tourist who comes home late at night and a roommate who’s always underfoot is self-explanatory). And for still another: Airbnbs serve the same function as hotels; that’s who the company is competing against. Shutting down Airbnb or dramatically reducing the number of short-term rentals in Seattle would only increase demand for hotel rooms—and hotels are single-purpose buildings that can’t be easily adapted to serve as permanent rental housing if the economy slows or demand for hotel rooms dries up.

Full disclosure: I stay in Airbnbs almost exclusively, whenever I go to another city where I don’t have friends or family I can stay with. I also live in a building where one of the three rental units is an unregulated Airbnb with random people coming and going at all hours of the day and night. Having seen the short-term rental from at least two angles (and talked to plenty of homeowners who rent out rooms in their houses for extra cash), I think they should be taxed and regulated, but not run out of town. As someone who likes to hit the road every chance I get, my options are generally: Airbnb, or chain motel by the freeway. And when travelers like me stay at chain hotels near highways, or even at corporate hotels in the parts of town where such amenities tend to concentrate (downtown; near convention centers), our money goes to Hilton and Starbucks (or Motel Six and Bucky’s), not local boutiques and coffee shops.

Is the “Head Tax” Half-Baked—or Long Overdue?

A plan to tax businesses with gross receipts above $5 million to pay for homeless housing and services faced intense scrutiny from several skeptical city council members yesterday at the first budget briefing since council members Mike O’Brien and Kirsten Harris-Talley first floated the HOMES (Housing, Outreach and Mass-Entry Shelter) Act last week. (The proposal would resurrect the so-called “head tax,” a tax for each hour an employee works, that was repealed in 2009). Council member Rob Johnson called the proposal a “false choice” between a head tax and doing nothing, and council president Bruce Harrell took umbrage with council member Kshama Sawant’s suggestion that council members who oppose the head tax are “beholden to the Chamber of Commerce.” After the meeting, Johnson told me that his goal is “to stay focused on the outcomes” and figure out how much money service providers need first, rather than to “reverse engineer” a set of solutions based on a specific revenue source like the head tax.

So far, the proposal comes with a big number—$24 million a year—but few details. Here’s what we do know: The HOMES Act would impose a 4.8-cent tax on every hour worked by employees for companies with gross receipts of $5 million or more. The math works out to about $100 per employee, per year, and the council members estimate it will raise about $24 million annually, which would include $5 million for shelters, new authorized encampments, and safe lots for people living in cars and RVs; $18 million for new housing construction and long-term housing vouchers for people with very little to no income; and $1 million to expand the Law Enforcement Assisted Diversion program, a pre-arrest diversion program for low-level drug offenders, into the North Precinct. The number of new units the package could build depends on whether the city can rely on state subsidies through the housing trust fund, which cut the cost of construction dramatically, but O’Brien estimates the measure could permanently house 1,000 people over the next ten years.

The Seattle Chamber of Commerce and the Downtown Seattle Association condemned the proposal, calling it a “tax on jobs” that sends a hostile message to businesses hoping to expand or move here. (Amazon came up a lot in the initial press coverage of the proposal, but the tax would actually affect about 2,200 businesses, not just so-called big corporations) O’Brien calls that a false narrative; he says the tax represents a tiny fraction of the cost of doing business—”0.3 percent of your labor cost if you pay your workers $15 an hour”—and that if business groups had a better idea, they would have proposed it by now. “We’ve been dancing around this for years— they hate [the head tax], but they haven’t come up with anything better,” O’Brien says. “It’s the only business tax we have access to, and so there’s a question: Do they hate it because they would like a different business tax better, or do they hate it because they hate business taxes, and this is the one we’re going for, so they hate this one?”

DSA president Jon Scholes insists the downtown business group doesn’t just reflexively “hate” all business taxes; what they hate, he says, is being left out of the loop. Case in point: Scholes says O’Brien contacted him on Thursday to let the DSA know that he was “exploring” the idea of resurrecting the head tax; less than 24 hours later, O’Brien was calling a press conference to announce his plan. The move blindsided the business community, Scholes says. “This was not developed with the input of [O’Brien’s] colleagues on the council or other folks who care deeply about this issue,” Scholes says. “We’re not saying that there shouldn’t be new resources, but we think the resources that are going to go to this issue should be thoughtful and discussed out in the open, not decided behind closed doors and foisted upon businesses and the community.”

Seattle’s business community is unusually progressive by business-community standards—the DSA, for example, was a critical partner in making LEAD a reality, back when there was widespread skepticism about any program that would allow drug offenders to go free. Could the council risk losing business support for progressive ideas like LEAD if it alienates them by imposing taxes they hate? Council member Harris-Talley says she doubts it. “I am hard-pressed to think that the businesses that are in our community are going to set aside their values to have a pissing match with elected officials who want to find resources for solutions” to homelessness, Harris-Talley says. “They know it impacts their bottom line” to allow homelessness to get worse, she adds.

The tax, if it passes, will be based on businesses’ gross receipts, not their net profits, which business groups argue could penalize companies that have thin profit margins and create a perverse incentive for businesses to pay their workers less or avoiding growing past the $5 million threshold. (To get a sense of what businesses would be impacted, they include groups of restaurants, like those owned by Ethan Stowell and Tom Douglas, but not individual Subway franchises or your local dry cleaner.) “Five million in gross revenues—there’s going to be a lot of people wrapped into that,” Scholes says. “Let’s say you’re a business making $4.5 million. If you grow the business [above $5 million], you get to pay tax to the city because you created jobs.”

O’Brien says he’s open to other revenue alternatives, if the business community will help him come up with some. “If we can come up with something better in the next few months, I’m happy to change my support to something better and undo this,” O’Brien says. However, he isn’t willing to shuffle around existing funding for homeless services and hope a new spending scheme will make the numbers pencil out. “Historically, four percent of people in shelters have exited to permanent housing, and to get that number to 40 percent [without additional revenue] is ludicrous. The challenge isn’t that we have a bunch of affordable housing that we’re not using—it’s that there’s nowhere to put them.”