by Jonathan Rosenblum
$15 is not enough; Seattle needs a massive public housing program
When New York City fast food workers first hoisted the $15 minimum wage banner in late 2012, quite a few pundits called the demand absurdly ambitious. But thanks to worker walkouts, demonstrations, marches, and lobbying during the last 4 ½ years, more than 17 million low-wage workers in the US have won pay increases, and 10 million of those will see their hourly pay rise to $15 in the next few years.
Here in Seattle, the minimum wage for most workers has risen from $9.32/hour in 2014 to $13/hour today, and it’ll go to $15 in 2019. (Although many tipped workers won’t see $15 until 2021.)
If you work full-time, that’s worth $638/month in additional income today compared to 2014.
So why isn’t everyone celebrating?
The short answer is that landlords pocketed most of the pay raise.
The expense side of your budget matters as much as income. And the harsh reality is that since 2014, while minimum pay rose under the new law, the average apartment rent shot up $519/month, to nearly $2,200/month.
In other words, 81 cents of every new dollar earned by a typical minimum-wage worker has gone to pay for rent hikes.
Two years ago, city officials noted that it would take two wage earners, both working full-time at $15/hour, to rent the average one-bedroom apartment and be able to afford other basic living expenses. Today those same workers would need to each be paid $19.84/hour to afford the same apartment.
And forget about buying a home: Since 2014, Seattle median home prices have soared from an outrageous $450,000 to a stratospheric $729,000 today.
As inspiring and transformative as the Fight for $15 has been, it’s wholly inadequate for our needs. Yes, we must continue to fight for higher pay, at union-management bargaining tables, in city council, on the picket line, and in the streets. But a pay raise is no good if the landlord takes it from you. With equal vigor, unions and allies need to fight to expand housing options and to lower the cost of housing so that Seattle can become affordable to workers in the coming years.
Mayor Murray’s 2015 deal with developers and housing advocates – grandiosely called the “Housing Affordability and Livability Agenda (HALA) Grand Bargain” – would build, optimistically speaking, 20,000 new units of affordable housing in the next decade.
That’s a start, certainly, but like the wage gains, 20,000 new housing units are far short of what working people need. Today more than 100,000 Seattle households are considered “cost-burdened” – paying more than 30% of their income on housing.
Many are paying more than 50 percent of their income, an absurd amount, on housing. More than 8,000 city residents are homeless. Seattle’s population is expected to grow by 120,000 over the next 20 years and most of this growth, at least in the near term, will be low-income households.
However, don’t blame mom-and-pop landlords for the rent catastrophe. Increasingly, rental rates are being driven by global real estate profiteers like Starwood Capital Group, Blackstone, and Harrison Street Real Estate, who collectively are on a multi-billion-dollar buying spree in the Seattle housing market.
You can be sure that these corporate executives will continue to insist that “the market” – in other words, they themselves – remain in control of setting rents. The other certainty is that private landlords and developers have zero interest in building the tens of thousands of affordable apartments and houses that Seattle’s working people need. Affordable housing is less profitable for them.
The solution for unions and other social justice organizations – tenant and housing groups, immigrants and communities of color, faith groups, the LGBT community, climate justice and transit activists – must be to demand a massive investment in affordable housing that is built, owned, and operated by the city. Public ownership means public control of rents, protected from the corporate profiteers.
Because a dollar saved in rent is as important as a dollar won in better wages, unions should pursue a massive public housing investment program with the same fervor and focus that they fight to improve pay and job benefits. Some unions and allies, like Puget Sound Sage, have taken important initial steps – but a lot more needs to be done. Public housing investment, done in partnership with building trades unions, will double as a jobs program, ensuring fair wages and job protections, along with apprenticeship opportunities for local residents, especially women, people of color and immigrants.
How much more housing should we demand? For starters, take the HALA goal and triple it. At least.
At current construction costs, it would take more than $8 billion to fund another 40,000 publicly-controlled homes on top of HALA’s goal. That may sound extravagant; it’s more than the city’s entire annual budget. But the wealth exists in Seattle to pay for this needed housing investment. Tens of thousands of millionaires call the area home, and just four individuals in our midst today – Bill Gates, Jeff Bezos, Steve Ballmer, and Paul Allen – are worth more than $227 billion. Less than 4 percent of the wealth of these 4 individuals could pay for the entire cost of an affordable housing building boom.
What’s lacking isn’t resources, but political will to have these billionaires and their multimillionaire cousins pay their fair share for the community’s well-being.
It’s understandable that more than a few people will dismiss this bold idea as pure quackery, politically unrealistic. Fine. That’s exactly what the pundits said, just a few years ago, about a $15 minimum wage.
Like the wage fight, a massive public housing program funded by taxing the rich won’t just happen on its own. We will have to build a huge movement to demand city action. But as Seattle continues to grow, time grows more urgent. Our rent and mortgage bills remind us monthly that our fight can’t stop at $15.
Jonathan Rosenblum lives in South Seattle and is a member of UAW 1981/National Writers Union. He is the author of Beyond $15: Immigrant Workers, Faith Activists, and the Revival of the Labor Movement (Beacon Press, 2017). More about him can be found at www.jonathanrosenblum.org .
At the turn of the 19th century and beginning of the 20th, public and union funded housing was a common. This is not a quacky idea, but a tried and tested idea to address the problem of high paid workers displacing lower paid one.
I don’t disagree with the author, but he skirts the main question behind his proposal: where is the money coming from? who will pay for the housing?
Yes, there are billionaires who live on the Eastside, so does that mean a county income tax?
HALA should generate tens of millions of dollars, but as land values escalate to absurd heights, it likely won’t be enough.
So again, good concept, just lacking answers to the proposals stated.
Have you read the PI this morning? Seattle wants to spend $100,000,000 to renovate the Space Needle. There’s one source.
Seattle Center is privately owned. No taxpayer funds being used.
I would love to see how using the land trust model could fit into the vision to dramatically expand public housing.
The key aspect of the land trust model is a one time public subsidy that reduces the cost of the home and makes it permanently part of the land trust. The homeowner has a mortgage that fits a moderate income household. They are still the homeowner but the home is part of the land trust and no longer part of the private housing market.
The homes in the trust are a permanent stock of affordable homes. Property tax in King County is based on the value determined by the trust not the market value, so the homeowner also has lower property taxes. The homes in the trust are no longer part of the private market they are permanently part of the trust.
Here’s a quote from the Homestead Community Land Trust website:
Unlike the traditional housing market, Homestead homes remain affordable for every new buyer. This means each dollar spent on a Homestead home is a lifetime investment towards sustainable homeownership and community stability. There is no need to invest additional public and private funds to keep homes affordable at resale. Our homeowners, as stewards of this invaluable resource, are both the key investors and the beneficiaries, helping to preserve a legacy of affordable housing both for their families and their communities.
http://www.homesteadclt.org/about-homestead
IT IS BASIC ECONOMICS at play HERE FOLKS. RAISING THE MINIMUM WAGE SPURS INFLATION WHEN GOODS (IN THIS CASE APARTMENTS) are FINITE! YOU DULLARDS! lol!
It’s pretty simple really. The reason land is kept out of productive use is because it is not taxed. Indeed, it captures society’s value increase passively over time. Raise the assessment of land value at the same time you lower income, payroll, and sales taxes and you fix the problem, without hurting the tax base. As long as the LVT rate doesn’t exceed market appreciation of land, you keep Land (and hence rent) stable all the while unburdening productive capital.