Council gets down to business on Housing Levy

This morning the City Council finally moved on from background presentations started considering ideas on how it might want to modify the Mayor’s proposal for the 2016 Housing Levy.

The Council’s central staff, assisted by representatives of other city departments including the Office of Housing, presented some issues they had found with the Mayor’s proposal, and reviewed ideas that Council members had submitted. The full list of issues and ideas are in this memo prepared by the Council central staff.

They started with some good news: while the levy would bring in approximately $290 million in revenues over seven years, there are additional funds available for housing programs:

  • They pointed out that the city is being conservative in its estimates of federal matching funds. Given the recent trends in cuts to federal housing programs this conservatism is warranted, but there is definite upside here as the city has been very successful in gaining federal funds in the past.
  • Since there are usually delays between when the tax levy brings in funds and final approval of specific proposals for spending them, there will be cash sitting in the bank. That creates two opportunities: it generates interest income, and the cash can be used for loan programs that will be repayed before the money is needed for the original purpose. Of course, the city can’t plan to do both at the same time with the same funds — though they could split available funds across the two.
  • The about-to-expire 2009 Housing Levy included some loan programs as well, and many of those loans are now being repaid which generates additional cash that can be rolled forward into¬† the 2016 Housing Levy program.

That’s all good news, because the Council members have ideas about other programs they would like to see included in the new housing levy without taking money away from anything the Mayor proposed. In fact, when Council member O’Brien floated the idea of further increasing the size of the new levy, there was strong pushback from several Council members, most notable Herbold, Gonzalez and Burgess.

The ideas raised cover a number of issues:

  • Preservation of existing affordable housing was a top issue, especially by Herbold who recently raised the issue for consideration outside the context of the housing levy.
  • Increasing the investment in permanent supportive housing units received broad support.
  • There was discussion of using housing levy funds to continue support for programs that received one-time funding through the Mayor’s State of Emergency declaration. However, there was a strong desire on the part of Council members to keep the levy’s programs purely focused on housing and not mix in other social-service programs (such as mental health services and addiction treatment programs) that received funding under the state of emergency.
  • There was support for increasing funding to the homelessness prevention program, understanding that interventions that prevent people from entering the homeless system in the first place are more effective and cost-effective than trying to get them through it and out the other end.
  • There was a healthy discussion of adding a foreclosure prevention program, though data seems to be showing that as the economy continues to come out of the recession the number of households at risk of foreclosure in the Seattle area has dropped and such a program may not be needed. Central staff suggested further study by the city before a program is set up and money invested.

The Council members had two other suggestions for refinements in the Mayor’s proposal: they would like to see compliance with All Home’s tenant screening criteria and participation in the “coordinated entry” program be a requirement for all providers who wish to access Levy funds.¬† This is an excellent incentive to encourage good behavior and help to streamline the process of getting eligible households into appropriate housing. They also want to encourage “family sized” housing units with 2+ bedrooms to be built through having the Office of Housing prioritize proposals that create and preserve such units.

The Council had more ideas for how to spend money than they have extra money to spread around, which means they will have some difficult decisions to make over the next few weeks. Of course, this is in the context of a proposed doubling of the 2016 Housing Levy over its 2009 version, from $145 million to $290 million, which in itself will make an enormous difference in the scale of programs to address affordable housing and homelessness in Seattle.

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