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Comparison of February Ballot Social Housing Funding Propositions: 1A and 1B

Writer's picture: SSHSSH

Explanation of Terms


The table below is designed to provide information Proposition 1A or 1B, which are the two alternatives on the February x ballot to fund and continue the work of the Seattle Social Housing Developer, the PDA established through the earlier passage of I-135. The table is not intended as an endorsement of either propositions, but purely as a source of information for voters trying to decide which one they would like to support.


Some terms from the table that will assist in this:


  • AMI: Area median income. This is the midpoint of a region's income distribution, where half of families earn more than the median and half earn less. It is often used as a measure of affordability in measuring the need for services in housing and other services.

  • Excess Compensation Tax: This is the revenue device that Proposition 1A would use to fund the Social Housing Developer.

  • Jump Start Tax: This is the existing tax the City of Seattle uses to fund specific community needs, including affordable housing, small business assistance, climate change programs, and certain kinds of economic revitalization. A portion of the current tax has been proposed by the Mayor and City Council to offset a budget deficit, starting in 2024.

  • Capital funds: In this case, these are funds used to acquire and build social housing by the SSHD.

  • Councilmanic bonds: also known as limited tax general obligation (LTGO) bonds, are a type of municipal bond that cities can issue without a vote of the people. The city pledges to pay the principal and interest on these bonds using existing revenue sources, such as property taxes.

  • Operating costs: Unlike capital funds, these are costs involving the administrative cost of running the SSHD, including staff and resources.

  • Bonding: Housing bonds are debt securities issued by state or local governments to raise money for affordable housing development projects.


Comparison Proposition 1A (formerly I-137) and 1B (City Council Alternative)

What entity approves/administers the funds

Seattle Social Housing Board

Seattle Office of Housing

Initial Money Allocated

Up to $50M per year

$10M per year for five years. This amount shall increase commensurate with the rate of growth of the prior year's Consumer Price Index (CPI-U)

Ownership of Housing

Permanently public. The housing must be owned exclusively by the Public Developer (per I-135)

Not stated.

Start-up Support

In-kind assistance for the first 18 months of startup, including office space, staffing, supplies, insurance and bonding, and legal services, as well as hiring and retaining the CEO and CFO.

None listed.

Funding Restrictions

The City Council and State Auditor shall have no right, power or duty to supervise the daily operations of the Public Developer, but shall exercise its audit and inspection power and other powers under the ordinance and Charter.

SSHD must have hired a chief executive officer and chief financial officer, or their equivalents, and demonstrated that it has adequate financial controls, as determined by the Director of the Office of Housing, prior to receiving capital funding.

How Money is Raised

Through proceeds from an Excess Compensation Tax: Employers who purchase the labor of highly compensated workers above a $1M in total compensation will pay a 5% marginal tax. Employers pay the social housing payroll tax, not employees.

Through proceeds from the existing Jump Start tax: "This measure would fund the SSHD by allocating funds from city's existing Payroll Expense Tax."

Income Range Served

Between 30% to 120% of AMI. From Initiative I-135: "all developments MUST contain housing units that accommodate a mix of household income ranges, including extremely low-income, (0-30% (AMI), very low income (30-50% AMI), low-income (50-80% AMI),and moderate-income (80-120% AMI),and a mix of household sizes.

Up to 80% of AMI "funding may only be used for the costs for housing residents up to 80 % AMI. For social housing developments that include housing for residents earning above 80 % AMI are not eligible for program funding.

Funding competes with existing City of Seattle housing funding sources?

No

Yes

How many years will funds be provided?

Not limited. Future initiatives will decide the amount of subsequent City support for the Public Developer, possibly including the general fund, grant funds, and/or Councilmanic Revenue Bonds.

Limited to 5 years initially: "may be subsequently renewed by future ordinance"

Capital Funding

No restrictions. All funding from tax proceeds, future rental income, and other sources can be used for capital funding.

Capital funds may be awarded in the form of either a grant or a loan, by the Office of Housing.

Additional Funding

Funding will be added to by other sources inlcluding federal grants, State of Washington revenue streams, and other sources.

None listed.

Bonding Availability?

Annual revenue stream can be bonded on to accelerate production of social housing.

Not stated.

Administration of Funds

Only 5% of funds can be used to administer the tax.

No restriction listed.


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