More affordable housing: the plot thickens

For several weeks now, Council member Sawant and her coalition have been pushing a proposal to redirect funds from the troubled North Precinct police station project to fund 1000 units on new affordable housing. This afternoon, a competing proposal was announced, introduced by six Council members — including Sawant.

I’ve written previously about Sawant’s proposal and its problematic financial underpinnings. In a nutshell: in order to issue $130 million in bonds (out of a total $160 million cost), the city would need to commit $8.7 million annually for 30 years to cover the debt service. That’s a lot of money, and the bucket that readily has that kind of new money available (REET) is restricted by state law from being used for affordable housing, is restricted by city policy from being used for debt service, and is an unreliable, cyclical source of money — not one you would want to commit for 30 years. It might be possible to work around the restrictions, but that still doesn’t make it a fiscally sound decision.

On top of that, completely defunding the North Precinct project is popular with Sawant’s coalition, but not so much outside of it. Several Council members — most notably District 5 Council member Juarez — are vocally opposed to it.

According to this afternoon’s announcement the new proposal, spearheaded by Council member Herbold and joined by Council members Bagshaw, Gonzalez, Herbold, Johnson, O’Brien, and even Sawant, would address some of these issues. First, it is substantially reduced in scope: it aims to only commit $29 million to affordable housing, instead of the $160 million in Sawant’s proposal. Second, it doesn’t zero-out the budget for the North Precinct (though the announcement doesn’t specify whether it would redirect any portion of the funds currently earmarked for re-planning over the next two years).  Along with significantly reducing the price tag comes a lower annual debt service: just under $2 million per year, a much more manageable figure. That opens up more possibilities for finding legally allowable and fiscally sound sources to cover 30 years of payments — though the announcement doesn’t actually identify one.

Lots of details are still missing from the proposal, and thus it’s impossible to fully evaluate it. There is also disagreement between Herbold’s office and Sawant’s on exactly how many units of affordable housing the $29 million will cover: Sawant says the Office of Housing has told her it’s 180, while Herbold released a letter from Enterprise Community Partners laying out several options that could fund up to 800 by leveraging other funding and efforts.

Sawant is not backing down; she sent a letter to her coalition this evening continuing to push for her original proposal and committing to offering it as a budget amendment.

Three Council members have not signed on to the new proposal at this point: Juarez, Burgess and Harrell. Burgess and Harrell are the fiscal conservatives on the Council and may be waiting for the final financing details before they commit. Juarez, likewise, has been the most vocal proponent for the North Precinct and might be waiting for assurance that the new proposal won’t de-fund that project. So the details clearly matter. Today’s announcement claims that the proposal “does not pit Seattle’s housing needs against other citywide priorities, such as public safety needs” — an obvious dog-whistle for the North Precinct.

I have an inquiry in to Council member Herbold’s office to try to nail down the details of the new proposal. It will also be issued as a “green sheet” (a formal budget amendment) Wednesday morning,  and it will come up for discussion in Wednesday’s budget meeting. So by the end of Wednesday, we will know much more about how this new affordable housing proposal changes the political landscape — and how likely it is to be adopted in the 2017-2018 budget.