“No” Is An Unacceptable Response to Address Housing Affordability

by Jesiah Wurtz

Skyrocketing rents, the constant looming threat of displacement, proliferation of luxury apartments, and the rapidly increasing economic segregation plaguing this city are facts of life in Seattle. As a co-owner of a small South End business that has become a hub for artists, organizers, and other community members struggling to hold space in this reality, I see and hear the impact of gentrification daily – and there’s no end in sight. Tech giants like Amazon are driving the cost-of-living to unattainable heights for the poor and working class here, who are already forced to get by under some of the most regressive tax codes in the nation. With Trump handing out giant corporate tax breaks while cutting crucial social service funding, Seattle simply cannot continue allowing profit-driven corporate monoliths and their big business lobbyists to evade their civic responsibilities to the rest of us. If we are to equitably share a city, it is time to hold these companies economically accountable for their impact on the housing market.

The Progressive Revenue Task Force was established by Seattle City Council last November to forge a path towards this goal. I was invited to sit on the task force, along with 16 other small/mid-sized business owners, community members, and other stakeholders. Although the Seattle Metropolitan Chamber of Commerce and other big business leaders were also invited to join, they predictably declined to participate in this truly inclusive process. Disappointed but unabated by their absence, we spent nearly three intense months identifying policies that could equalize the playing field for the most disadvantaged in our city, and mitigate the rampant growth of displacement and houselessness in our communities.

This successfully culminated in a new report, which issues recommendations to City Council for how Seattle can secure and dedicate an additional $150M in progressive tax revenue for housing justice – half of which can be easily funded through an Employee Hours Tax. Such an EHT could collect from $200-$400 per employee per year from companies like Amazon, bringing $75M more in desperately needed resources to serve the most vulnerable in Seattle. The task force recommends that roughly 80% of funds raised be earmarked for the creation of new affordable housing, with the remaining 20% allocated to fund emergency shelter and services.

However before the Progressive Revenue Task Force report even had a chance to fully settle at City Hall, guess who emerged from their silence and non-participation with an AstroTurfy campaign designed to mislead, misinform, and invalidate the prospect of an EHT? Seattle Metropolitan Chamber of Commerce. As of this moment while writing, over 250 business owners have already hastily signed their opposition to a tax policy we still have agency in shaping to benefit local economy. The worst part is, those responsible for this campaign are pretending to be us, donning a facade of concern for “small business” and severely manipulating the facts. Thus, as a South End community member, small business owner, and part of the task force that issued these recommendations, I am gratefully taking the opportunity provided by the Emerald to clear up some facts. Here are the key points about the task force recommendations that must be understood:

  • Businesses grossing less than $500k annually would be completely exempt from any EHT or fees
  • Businesses making between $500k and an amount TBD by City Council (likely between $5-10M annually) would be exempt from the EHT, but would pay an annual fee of $395. For a business exactly at the $500k threshold, this would only amount to a truly insignificant 0.00079% of annual revenue. This is being referred to as the “skin-in-the-game” fee.
  • As a progressive tax, the EHT is fundamentally designed to extract most revenue from large businesses and corporations. As Amazon paid zero dollars in federal income tax on $5.6B in profits in 2017, and many other Seattle-based corporations are similarly benefitting from hyper-regressive local, state and federal tax policies, an EHT would still not affect these corporations’ profitability.

As such, claims made by the Seattle Metropolitan Chamber of Commerce that such a tax “will affect every small business,” are clear falsehoods. It is highly ironic that the Chamber thinks they can speak to the struggle of small business when, in reality, they represent the types of businesses actually paying the bulk of the tax: those such as CenturyLink, Microsoft, Amazon, Bank of America, Alaska Airlines, JP Morgan Chase, Comcast, AT&T, Expedia and more.

Now this same group that intentionally abstained from the Progressive Revenue Taskforce has found legs in a new group, OneTable, galvanized by Mayor Jenny Durkan, that claims to also be concerned with affordability. However, the only suggestion received so far from OneTable is yet another regressive sales tax. Not only would this, again, disproportionately affect the lowest-income members of our community, it would also be grossly insufficient in addressing the current scale of the problem. This isn’t progress, no matter how well you dress it up.

While the Progressive Revenue Taskforce recommendations may not be perfect, they are not meant to be creed. They are meant to be a compass to guide the city into a more equitable, progressive approach to tax revenue through an inclusive, community-centered democratic process.

New taxes, even those designated to fund affordable housing, cause understandable concern. However, there are easy ways to prevent an EHT from contributing to the unaffordability of this city for local residents and the small businesses that serve us. First, I believe it is imperative we get rid of the so-called “skin in the game fee,” which has been immediately rejected by progressives and business owners and associations alike. Second, we must set the exemption threshold at $10 million in annual revenue. While this may seem like a high threshold, the amount of undue tax burden on businesses in this bracket is truly significant, and many familiar local businesses fit into this category. Ultimately, it is not businesses making $10 million or less in revenue that are driving our affordability crisis. Other exemptions to protect businesses that provide cultural space and services for locals must also be examined. However, we cannot let big business interests con us and our community into throwing the baby out with the bathwater.

As a former member of the task force and a small business owner vested in the issue, I’m personally committed to hearing concerns and helping bring the right voices to the table in crafting and advocating for a plan that ensures the EHT is implemented in a way that strengthens a locally-rooted economy. In order to secure an equitable future, we must work together to advocate for fundamental change in the current trajectory.

Please join us this Friday night at the “Housing for All House Party” at Cafe Red for music, speakers, and discussions with community organizers and advocates behind these efforts. Together, we can secure the right to the city for all, and achieve the transparency, honesty, and justice we need for a better Seattle.

More information on the Housing for All House Party this Friday can be found here: https://www.facebook.com/events/201766683750693/


IMG-2014Jesiah Wurtz is co-owner of Cafe Red, board chair of the Martin Luther King Business Association, and member of the Artist Coalition for Equitable Development.

Featured image by Alex Garland

 

 

11 thoughts on ““No” Is An Unacceptable Response to Address Housing Affordability”

  1. This article is a mockery of a mockery. The PRTF was anything but inclusive. It was packed with people who already supported the “head tax.” All that was left to quibble about was “how much?” And when the “Task Force” talked about potential savings from other programs, the only mention was “Criminal Justice.” Not a word about auditing say, SHARE/Wheel, which has gotten millions of City dollars and has only an archipelago of camps to show for it. Where’d the money go?

    I notice that the woman in the forefront of the picture is Ginger Jentzen, the failed “Socialist Alternative” candidate for the Minneapolis City Council, and ideological comrade of Kshama Sawant How many other “protesters” were brought in from outside Seattle to create the impression of (local) public support for the proposed measure?

    And you wrap up with a call for people to meet at “Cafe Red,” which you own. Whatever the merits of your argument, this makes your column a barely disguised advert for your self interest. Your credibility suffers as a result.

    Like

  2. The whole point of the piece is inviting people into the conversation to shape the policy moving forward.

    You guys at SAFE have your political beefs with people or groups who have been in the convo and that’s cute and all, but ultimately nothing you said here has anything to do with the issues at hand which are:

    1) Companies like Amazon have benefitted significantly on public tax dollars and municipal subsidies while having a negative impact on equity and affordability in the housing market.

    2) We need solutions to this issue that hold them accountable to their outsized impact without hurting local small businesses.

    3) The taskforce recommendations are an imperfect start to finding these solutions, but communities most impacted or at-risk MUST be involved for an equitable solution.

    Your whole comment is completely irrelevant to these points with a personal attack cherry on top.

    Pointless.

    Like

  3. I have a couple issues with the task force. First, Mr. Wurtz and Ikes weed shop were the only business participants who would not benefit directly or indirectly from the proposed taxes. By far the task force was appointed with advocates of organizations who would benefit from the taxes. Second, The EHT tax voted down last year was to collect $25 million per year. The Task force now proposes additional taxes of $150 million per year. Third the Argument about the Chamber of Commerce choice to not participate is a red herring. The City Council actively shuts business and private housing suppliers out of policy discussions. This task force is no different.

    Like

  4. Those horrible $10 million businesses which are to blame for too many Americans being poor, such as, hmm, for example, the average supermarket’s revenues are over $10 million.

    Is there any question,food markets will pass this “progressive” tax on to customers via higher prices, including low income customers. Washington state tries at least to avoid taxing low income people for food by exempting it from sales tax. Are we gonna exempt food stores from the “progressive” employee tax? No proposal for that!

    Meanwhile, I agree with the previous comment, what is a pitch for a meeting at the cafe owned by the author doing in this posting? Is that really allowable in this blog?

    Like

  5. article #1251651 that decries the high cost of housing, blames “luxury” apartments but not the fact that 54% of seattle is zoned for luxury single family homes. why do socialists do this? why can’t they call out the landed gentry who are literally suing the city to stop even modest rezones?

    Like

  6. Speaking of credibility, Josef Svejk, all one has to do is search out your ad hominem rants against anyone left of Richard Nixon to know you have zero. Where’s your critique of the committee’s actual report, and of the author’s analysis—including a specific principled disagreement?

    feh

    Like

  7. I’ve been a Seattle resident since 1980’s and the costs from taxes keep going up and up as I am asked to pay for everything from $5 Million Pronto Bicycle bail-outs for the City Council special interests to housing the droves of outsiders coming here from around the country (per multiple conversations overheard on a daily basis in front of the Urban Rest Stops) due to the attractive support programs hosted by my overtaxed self. Now with added proposed assessments to pay for rarely utilized and previously paid for Pike/Pike corridor improvements and Waterfront Parks for the tents of addicts and those who prefer street life; I am soon finding myself inexorably pushed out of my home to also become a homeless person.

    Like

  8. Well, for one the tax graduated tax formula only applies to roughly 1,100 or 5% of Seattles 22,000 businesses. They coined a “skin in the game” charge of $395 for the other businesses because it seemed like a good number. Another one. Of the 5% of businesses that will use the tax formula, the rate per employee hour ranges from 10 cents per hour to about 25 cents per hour. Not based on the profitability(progressive tax)of the company, but companies with more employees pay the higher rate. That is not progressive, but ok, let’s go with their assumption. If any of the remaining 95% of businesses that pay $395 per year only have one employee, that small business would pay $395/2050= 19 cents per hour in tax. A little less than the big company maximum tax rate. As with other new city legislation currently in court, many of the task force suggestions to raise additional taxes are currently illegal under state law. It’s clear the task force lacked the essential expertise necessary to put forth a credible report. It looked as if certain central city research staff were embarrassed when the presentation was made to council committee. Well, except a couple of CM’s who co-chaired the task force. Then again, they lacked the expertise to do the work in a competent fashion, they wanted it for political reasons not good governance.

    Like

    1. Good comment Neil. The biggest lack of “good governance” appears to be regressive state laws thanks to this state’s history of reactionary “hate Seattle” legislatures. (No income tax, no rent control…)

      Like

  9. As a landlord in the south end, I have to say April looks like a great month to find affordable housing in Seattle. I have had two rooms suddenly come open at once, and so far, I have had hardly any inquiries, even though mine are just about the cheapest rooms on the market. So if you’re looking for affordable housing in the south end, get in touch (by the way, the author of this article is a former tenant of mine): https://seattle.craigslist.org/see/roo/d/eco-bike-friendly-daylight/6531998086.html

    Like

We'd Like to Hear Your Thoughts:

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s