Seattle’s elite got their way when it came to repealing the head tax, but at what cost? They certainly outed themselves as callously opportunistic with no real plan to address the affordable housing crisis and little care for the homeless people suffering most from it.
Here’s one example: Land use superattorney Jack McCullough (who is also a board member of the Downtown Seattle Association) told a cabal of disgruntled businesspeople that the head tax was “an opportunity to take back our city” and one members may not see again in their lifetimes, according to leaked minutes reported in The Atlantic. “What do we want? A new city council,” Tim Ceis reportedly added. Ceis was deputy mayor under Greg Nickels and has made a name for himself as a hard-nosed political consultant nicknamed “The Shark” by his enemies.
Is Jack McCullough the Most Oppressed Seattleite?
That McCullough feels dispossessed and wants to “take back” Seattle is rich. His tentacles are in deep. Few people have the kind of political access that he has as a DSA chair and political megadonor. And McCullough is the go-to guy for Seattle’s landed aristocracy. “I don’t use anybody else,” billionaire skyscraper-developer Martin Selig toldThe Seattle Times.
McCullough was hailed as the powerbroker and mastermind of the Grand Bargain that gave us the Mandatory Housing Affordability (MHA) program, the centerpiece of the Housing Affordability and Livability Agenda (HALA). “Jack wanted to do something for working people,” then-mayor Ed Murray opined in 2015. He’s also probably a big reason why the downtown inclusionary zoning (aka MHA) requirements are relatively low. MHA requires developers to reserve a set number of new units to be set aside for people making 60% of area median income or less–or pay an in-lieu fee. Downtown MHA requirements ranged from 2% to 5% (depending on zoning type) despite having the highest land values in the city and often gaining more height and capacity in the paired MHA rezones. Elsewhere in the city, MHA requirements ranged from 5% to 11%.
Of course, inclusionary zoning wasn’t McCullough’s idea; he came to the HALA bargaining table after the Seattle City Council, led by Mike O’Brien, began to move on a linkage fee in 2013. In fact, McCullough sued the city over the resolution to pursue a linkage fee. Councilmembers agreed not to pass the linkage fee when MHA replaced it and still got to 6,000 new affordable homes. Some developers are still upset to face a fee at all, even after getting upzones in exchange. That Councilmember O’Brien was singled out by the No Tax on Jobs coalition and targeted with Chamber-placed Facebook ads comes as no surprise.
How Far Would Seattle’s Elite Go to Save 14 Cents per Hour?
How far would Seattle’s elite go to avoid the 14 cents per hour head tax (which works out to about $275 over the course of year)? Well, many of the same donors that fund Seattle Metropolitan Chamber of Commerce’s political action committee funded a newly formed No Tax on Jobs PAC which paid $250,000 to Morning in America–a political outfit that has worked for the Trump campaign and is named after a Ronald Reagan speech–to do paid signature gathering. Morning in America was apparently responsible for a majority of the signatures gathered. Those efforts pushed the petition past the 20,000 threshold and would have put a head tax repeal referendum on the ballot this fall had the council not just voted 7-2 to repeal it. (Note that this is all up in air given that the signatures have been turned in to the Seattle City Clerk’s Office despite the repeal, because an appeal based on open meeting rules could potentially invalidate the council’s vote.)
Where did they get all this money to spend on taking away nearly $250 million in affordable housing and homelessness services funding? Well Amazon, Starbucks, and Vulcan Inc. each gave $25,000 to the campaign. To the billionaire CEOs behind each of those corporations (Jeff Bezos, Howard Schultz, and Paul Allen), that’s pocket change.
Does the Chamber Have a Plan?
Rallying around the banner No Tax on Jobs, the coalition was all about “no” but offered nothing when it came to alternative funding sources. In fact, Seattle Metropolitan Chamber of Commerce chair Heather Redman argued the City of Seattle already had enough money and was just spending it poorly, as she told The Atlantic:
“I do not know that more revenue would solve it,” she said. “The city has been spending more and more on homelessness and it’s been getting worse.” She suggested trying something new, a “moonshot” type solution that reinvents the city’s approach to homelessness and affordable housing. She suggested using technology and evidence-based approaches to fight the problem. Amazon, for example, specializes in logistics, she said—why not apply the company’s expertise in helping people move through Seattle’s housing?
What little plan the no-tax crowd has is arguing what the city has already been doing is enough. The Seattle Metropolitan Chamber of Commerce argued upzones, not new progressive funding sources, would be sufficient to deal with the crisis. She pointed to the MHA rezones already in motion–ignoring that these only touch about a fraction of the city and leave 94% of single-family zones untouched. The Downtown Seattle Association has also argued the city already has enough money if only they’d spend it wisely.
What We’re Doing Isn’t Enough
Here’s the thing though: What we’re doing isn’t enough.
Report after report–whether the Poppe or McKinsey–has argued for increased funding for affordable housing. McKinsey report suggested $200 million additional dollars per year are needed to house the homeless. Anyone arguing with any intellectual rigor would acknowledge that the money we’re spending on homelessness is having a big impact even as the problem grows larger and point-in-time counts go up. That’s because rising rents continue to push more people into housing insecurity and homelessness. The scale of our response has to increase as fast as rents do.
Seattle has also not gone far enough to gear its land use to create affordable housing. Indisputably single-family zoning has led to the creation of luxury housing only the rich can afford when you look at median single-family home prices, which have reached $820,000. You can see this spatially in a map of home prices.
The battle to rezone Seattle is an important one, but it’s not a get-out-of-jail-free card for opponents of progressive sources of revenue for housing. Anyway, what exactly are they proposing? Are they saying the MHA rezones are insufficient? If they aren’t, what would a Chamber-backed zoning solution look like? We didn’t hear much of a peep out of the Chamber or the Downtown Seattle Association when Mayor Murray backed away from broader changes to single-family zones. They invested their real political capital buoying the corporate bottomline, not on altruistic do-gooding to alleviate the housing crisis.
Philanthropy is another business-friendly “solution” brandied about, but it’s hard to imagine on a $200 million per year scale, particularly when Seattle has been in a “state of emergency” for three years without philanthropy rising to the challenge to close the housing gap. Formerly known for his stinginess relative to other billionaires, Bezos announced yesterday he has come to a big philanthropy decision. The timing is conspicuous considering he just helped kill a $47 million per year steady stream of housing and homelessness funding.
Don’t Yell at a CEO
Businesses claim they were blindsided, but this was a slow-developing tax. A progressive revenue task force has been working for seven months to craft a recommendation, and the Chamber was invited to be a part of the task force. Chamber leaders declined saying they didn’t want to be demonized and yelled at for a problem they didn’t create. You might think homeless people suffer the most in this crisis, but just think of the yelled-at business executive!
No one actor is solely responsible for the housing crisis in which we find ourselves. Nonetheless, for the business sector to claim absolute innocence doesn’t fly with the facts. For one, many of the same elites helped starve the government of revenue by opposing the state income tax (e.g., Bezos, Ballmer and Allen) and later the city income tax. As the titans of industry they should rightfully take responsibility for the pressure a booming economy is creating. More supply would help, but we’re facing tremendous demand fueled by an influx of high-income earners. Supply has to catch up to demand for price increases to flatten out. We’ve had a quarter or two of good news, but before that Seattle led the nation in rent growth for a decade. It’s going to take more than a flat quarter or two to ease the rent burden inflicted on working class households. It’s not just Amazon driving demand, but let’s remember Amazon’s Seattle headquarters had only 5,000 employees in Seattle in 2010 but has grown to more than 40,000 today. Any city would struggle to meet such a dramatic jump in high-end demand.
A Right-Wing Turn
What the No Tax on Jobs coalition did was remarkably similar to what the Tea Party did in 2010. A small group of disgruntled activists vastly magnify their political might via a massive influx of corporate cash from donors who are really pulling the political strings. Tim Ceis said the business community wanted a new city council, and since the Chamber endorsed most of the Democrats sitting on the council who knows…maybe they’re ready to give the Republican Party a try.
The Chamber did face some defeats in 2015 investing heavily in Shannon Braddock only to see her lose to Lisa Herbold–and of course they tried to unseat socialist Kshama Sawant–who makes big business a perennial punching bag–investing in her opponent Pamela Banks. Sawant won anyway with 56% of the vote. At the same time, the Chamber backed Bruce Harrell, Rob Johnson, Sally Bagshaw, Debora Juarez, Tim Burgess, and Lorena González and saw them all win in 2015.
In 2017, the Chamber faced the misfortune of its trusted pal Tim Burgess retiring and the Chamber-backed candidate, Sara Nelson, failing to make it through the primary. Given their options, the business community seemed to favor Teresa Mosqueda over Democratic Socialists of America candidate Jon Grant, and she won. In the mayor’s race, though, the Chamber’s hand-picked candidate, Jenny Durkan, waltzed through the primary and general election, giving them a veto of this supposedly runaway council where they only have their hooks in five of the nine members.
As far as the emboldened chamber crowd is concerned, the targets on Councilmembers Sawant and O’Brien’s backs in 2019 have gotten even larger. It’s not clear that the Herbold flip-flop was enough to spare her–especially after Braddock was only 40 votes shy of beating her last time around. Meanwhile, Councilmember Mosqueda has until 2021 to face the Chamber’s wrath for bucking them on the head tax
Im taking this as a declaration that he plans to retire. He clearly has no interest in representing his constituents. Council Member Bruce Harrell Introduces Ordinance to Repeal Head Tax https://t.co/q2qsjKz8n7
— Tammy Morales for District 2 (@TammyMoralesSEA) June 11, 2018
By the same token, flip-flopping councilmembers could face a challenge further from the left. Tammy Morales has been vocal that Bruce Harrell’s repeal bill was out of step with his Southeast Seattle district, which has been hit hard by the housing crisis and displacement pressures. After winning by a margin of only 345 votes, Council President Bruce Harrell has to be worried–or at peace with retirement.
The head tax ordeal has shown progressives can take nothing for granted. Tackling the widening gap between the haves and have-nots just isn’t on the political agenda for some. We should be wary as conservative business interests co-opt urbanist language to change the subject and block much needed funding. Supporting upzones doesn’t mean we don’t expect Seattle’s richest to chip in for affordable housing and social services from the ever-expanding mound of cash they’ve extracted from Seattle’s economic boom.
Correction: An earlier version of this article misstated that the head tax was $0.18 per employee hour. We briefly went with $0.13 per hour but settled on $0.14 after consulting the actual bill language. Additionally, we corrected a sentence stating the Seattle Metropolitan Chamber of Commerce funded Morning in America. No Tax on Jobs is organized separately from the Chamber, although the donors are similar.
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