Your weekend reading

There are a number of reports and documents that have been published in the last couple of weeks and are worth paying attention to. So curl up in front of the fire, break out your reading glasses, and dig in.

Catching up on the Ft. Lawton case.  Judge John Coughenour is clearly getting fed up with Elizabeth Campbell in her challenge to the redevelopment of the old Ft. Lawton property next to Discovery Park. You may recall that last summer Campbell fired her attorney and asked for a delay in the case while she hired a new one. But under court rules, an attorney-of-record may not withdraw if it leaves a party unrepresented (expect in certain circumstances). So the Court refused to grant the withdrawal until several weeks later.  Shortly after that, the City of Seattle asked the court to join the US Army and the Seattle Public School District as additional defendants, given their roles in the redevelopment plan. Over Campbell’s objections, the judge agreed in November and ordered Campbell’s new attorney to file a revised complaint that includes the Army and the School District. That revised complaint was never filed, and then in December Campbell’s new attorney asked to withdraw from the case without explanation — though the Queen Anne and Magnolia News reported that Campbell has been unable to pay her attorney. The City of Seattle objected, complaining of the delays in the case and reminding the judge that the revised complaint still has not been filed. So on Friday, Judge Coughenour ruled that he will only approve the petition to withdraw once the revised complaint is filed — and ordered it to be filed within 14 days. Recognizing that once the Army and the School District join the case they will need time to prepare, so he vacated the current trial schedule and scheduled a status conference for March 3. However, he also threw down the gauntlet, warning Campbell, “if they fail to comply with this order, the Court may dismiss their case.” We’ll see how this plays out over the next two weeks.


Washington State Dept. of Health weekly influenza update.  The Department publishes a weekly update on cases, deaths, and types of influenza. Flu spiked early this year in Washington state and across the country. According to the CDC, 41 states, including Washington, have high levels of flu activity.   So far this flu season, there have been 52 deaths in Washington related to influenza, mostly persons with underlying health condition and/or the elderly.  Cover your cough, wash your hands, and if you get sick then stay home.


It’s instructive to compare this to the novel coronavirus that originated in Wuhan, China in December and started to spread last month.  According to the WHO, there are seven confirmed cases in the U.S. with no fatalities. 98.9% of all cases so far have been in China.

While the WHO has now declared it to be a global emergency, the efforts (including in the U.S.) to stop it from spreading seem to be working: new cases outside of China have remained low.

The WHO is also saying that its research shows the virus is rarely transmitted person-to-person before the infected person shows symptoms. That’s good news, and all the more reason to practice good hygiene: avoid the flu, and also avoid the coronavirus.  Here’s the CDC’s situation update for more information.

The state economic forecast. The state Office of Economic Forecast released its updated national and state economic forecast a few days ago.

Interesting notes in the report:

  • U.S. GDP growth is forecast to be 1.9% in 2020 and again in 2021.
  • In December, the U.S. manufacturing employment declined by 12,000, while Washington State added about 1,700 — 900 in aerospace. U.S. indudstrial production was up 1.1% in December, due mostly to auto workers returning from strike.
  • Washington’s unemployment rate in December was 4.3% — the lowest since 1974.
  • Boeing’s suspension of 737MAX production led to a reduction in the forecasted U.S. GDP for the first quarter of 2020 by .5 of a percentage point. But as production ramps back up in the second and third quarters, that is expected to return.
  • Washington personal income increased 4.2% year-over-year in the third quarter of 2019, versus 3.8% for the U.S. as a whole. The state number wa boosted by the information sector, but hurt by the farm sector. Washington personal income is expected to increase 4.4% in 2020.
  • Housing permits issued in Washington were 54,300 in Q4, up from 48,000 in Q3. Of those, 26,600 were single-family, and 27,600 were multi-family.
  • Real estate sales spiked in December, a race to close sales before the new, graduated REET tax rate took effect on January 1. Expect a commensurate spike in state and local REET revenues for December, and a decline in 2020.
  • Seattle-area home prices were up 0.8% in November, the fifth consecutive monthly increase after four consecutive monthly declines.
  • The Seattle-area annual CPI inflation rate for December was 2.2%, lower than the national CPI of 2.3%. Shelter was up 3.6% versus 3.2% nationally; excluding shelter, inflation was 1.3% versus 1.8% nationally.
  • Washington exports declined 33.4% in Q3, following a 27.6% decline in Q2 — That’s mostly Boeing; though agricultural exports declined 8.3%.

  • The ISM index of manufacturing for Western Washington moved up in December to 52.5, from 47.0 in November. A value above 50 represents growth.
  • Just over 25% of economists predict the U.S. will slide into recession in the next 12 months.

The lawyers in the legal challenge to Initiative 976 have been churning out legal briefs at a frantic pace. After the initial dueling motions for summary judgment filed on January 10, both sides and the intervening parties filed their responses on January 24:

Then one week later, the replies to the responses were filed:

There isn’t that much new in these briefs; we saw most of the arguments in the back-and-forth briefs for and against the preliminary injunction, and there’s a lot of close parsing of the law, I-976, and prior court rulings. But here are a few interesting notes:

  • The State of Washington notes that Sound Transit is not a party to the case, and so the plaintiffs should not be allowed to challenge a provision that affects a different government entity. At best, they argue, the plaintiffs’ assertions about Sound Transit raise factual issues that would need to be decided at trial and thus are not appropriate for a summary judgment ruling. They make a similar argument regarding factual issues for the City of Burien’s claim that I-976 impairs its bonds. The Plaintiffs respond that they are representing their citizens, many of whom are in the Sound Transit taxing jurisdiction. They also argue that the defendants have not requested discovery related to the factual issues they assert are in dispute.
  • The State offers a weak argument that I-976’s specific calling out of Kelley Blue Book as the official valuation mechanism for vehicles doesn’t confer a privilege upon the company. They suggest that nothing in I-976 requires the state to enter into a contract with KBB because KBB information is currently publicly available. They also argue that the state has a “reasonable ground” for entering into a contract if necessary. The plaintiffs, of course, disagree, and argue that I-976 confers an illegal “statutory monopoly.”
  • Didier, whose briefs are mostly nonsense, argues that under the “priority of action” rule, the case needs to be heard in Thurston County, rather than King County because there was an earlier, long-since-dismissed, case there challegning the ballot title of the initiative.

Oral arguments are scheduled for this coming Friday, Feburary 7.

The challenge to Seattle’s income tax.  The plaintiffs (mainly the U.S. Chamber of Commerce) in the legal challenge to Seattle’s imposition of an income tax, have filed their brief arguing that the state Supreme Court should not take up the City of Seattle’s appeal to a Court of Appeals ruling finding the income tax to be unconstitutional.

Among its arguments:

  • The Court should not overturn its own prior rulings finding that income is property for the purposes of article VII section 1 of the State Constitution. To that end, since that’s what the Court of Appeals ruled, the Supreme Court should decline to take the case at all.
  • If it does take the case, then there are several other issues it needs to address, all of which are statutory issues which should be dealt with before reaching for the constitutional question.  Those include questions as to whether Seattle has been explicitly granted authority to impose an income tax; whether RCW 84.36.070’s prohibition on ad valorem taxes on intangible property effectively bans Seattle’s income tax; and whether RCW 36.65.030 (the ban on taxing “net income”) violated the “single subject” rule when the Legislature enacted it, as the Appeals Court ruled.
  • While several parties filed amicus briefs arguing that the Court should take the case because the current regressive tax system in Washington is harmful to its citizens, the plaintiffs argue that since voters have repeatedly rejected income taxes, they have “rejected the argument that lack of a graduated income tax is harmful.”

Affordable middle-income housing report.  The Mayor’s “Affordable Middle-income Housing Advisory Committee has submitted a 76-page report recommending ways to address the critical shortage of housing affordable to middle-income families.

It has three key recommendations:

  1. The City should cultivate new partnerships and recruit new private sector investors and philanthropic dollars for innovative real estate financing.
  2. The City should advocate to the State for action to extend the Multifamily Tax Exemption program (MFTE) beyond 12 years of affordability and should ensure program continues as the City’s most effective tool for the production of middle-income housing.
  3. The City should reform permitting practices to bring new housing online as fast as possible.

Many of the detailed recommendations under these themes involve arm-twisting other parties into taking action, or creating or adjusting financial mechanisms (tax incentives, funding programs). But the third area does include several recommendations related to the touchy topic of zoning:

  • increasing density allowed in LR1 zones;
  • allowing congregate housing in some neighborhood commercial and lowrrise zones;
  • rezoning around light-rail stations and high-frequency transit;
  • allowing more townhomes, duplexes, triplexes and cottages in some areas currently zoned for single-family residential homes;
  • adding more flexibility on large, unique lots in single-family zones.

The Mayor’s Office released a statement saying that the council’s recommendations “will be considered by Mayor Durkan over the coming months.”

Homelessness data. Last week, while the 2020 Point-in-Time count of homeless people was being conducted, the U.S. Department of Housing and Urban Development published its 2019 Annual Homeless Assessment Report to Congress.

According to the report, which tracks year-over-year trends, since 2016 homelessness has been increasing on a national level (after decreasing steadily, if slowly, from 2010 to 2016) and spiked up last year.

Worse: the number of sheltered decreased while the number of unsheltered increased. The report shows that homelessness is a problem across the country, with hotspot states throughout the midwest and east coast and a deeper concentration along the west coast (including Alaska).

Washington made the list of states with the five largest decreases in homelessness in 2019 — though I have previously written about why those numbers are highly suspect.

The report is a wealth of data about homelessness across the country, in major metropolitan areas, and in rural parts of the country. for example, it breaks out the demographics of the homeless population:

Seattle reflects the US population as a whole, though when broken out by category of community, it more closely matches “other largely urban” areas than “major cities.” In general, it’s interesting to note the differences in demographics, especially by race:

The data on “family homelessness” shows that it’s a problem across Washington State: Seattle/King County, Spokane, and rural areas.

The report also charts the change in beds for homeless and formerly homeless people nationwide — and we can see the effect of HUD’s decision to move away from transitional housing, even though it’s now recognized as a best practice for homeless youth and young adults.

There’s much more in the report worth reading through.


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