USA TODAY International Edition
Seattle goes back to square one on helping homeless
After ‘Amazon tax’ fails, housing crisis lingers
After defeat of ‘Amazon tax,’ no clear path forward for battling housing crisis exacerbated by tech sector.
SAN FRANCISCO – After a bruising, monthlong fight in which Amazon and other businesses squelched a new corporate head tax to fund homeless services, Seattle is struggling to find a path forward to deal with a crisis that’s exploded in recent years.
Other metropolitan areas with rapidly rising housing costs are also grappling with residents priced out of the market. But Seattle’s tax situation puts it in an especially difficult position on raising funds to help its homeless residents.
It could also be a warning to the 20 cities currently vying to become home to Seattle’s second headquarters. Amazon stopped construction on a 17-story office building during the debate over the tax. It would have cost big businesses $275 per employee per year and was approved by a unanimous vote of the Seattle City Council on May 14, then rescinded by seven of nine members of that same council June 12.
The construction pause “was a concrete action as opposed to just a threat,” said Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a nonpartisan Washington, D.C.-based nonprofit. “It seems pretty clear now that whoever ‘wins’ the HQ2 battle is very likely going to be giving Amazon a free pass on a wide variety of state and local taxes for some period of time.”
Called “the Amazon tax” by many in Seattle, the corporate head tax was meant to raise revenue to deal with the homeless crisis in Seattle’s King County. A count in January found 12,112 unsheltered people in the county. The numbers come even as unemployment in the county is at 3 percent, the lowest in the state, according to the Washington State Employment Security Department.
The problem is twofold, experts say. Housing is becoming less affordable. At the same time, Washington’s tax laws give cities few options when it comes to raising funds for more housing.
Rents in the city have risen 42 percent over the past seven years, fueled by the growth in high-wage earners such as the white-collar workers at Amazon.
In 2011, 35 percent of county rental units would have been affordable to households earning below 50 percent of the median area income. In 2017 that affordability was just 18 percent, according to a report released in May by consulting firm McKinsey and commissioned by the Seattle Metropolitan Chamber of Commerce.
“This is not the story of the last 15 years; this is the story of the last five years. This is that dramatic,” said Alison Eisinger, executive director of the Seattle/ King County Coalition on Homelessness.