JumpStart Seattle The crisis of COVID-19 has laid bare the stark economic inequality and housing instability that communities across Seattle were already facing prior to this pandemic. Low-income workers, hourly workers, gig and contract workers, communities of color, the LGBTQ community, our immigrant and refugee families, disabled workers and undocumented workers that have been disproportionately left behind in wage growth, sick leave protections, and other critical labor policies are experiencing an even greater toll from this economic crisis. We’re headed for a long and painful recovery, and we have to rebuild our economy from the bottom-up, not the top-down. The Need • • • • • • • • Seattle was in the midst of a homelessness emergency and affordable housing crisis prior to COVID: o There were an estimated 11,199 individuals experiencing homelessness countywide in 2019. o Average rents in Seattle rose 69 percent between 2010 and 2018. o Thousands of Seattle renters faced eviction threats every year, and the 2018 Losing Home report found that most tenants who are evicted become homeless. o Evictions Seattle fall disproportionately on women and people of color, with people of color constituting about 35 percent of renters, and nearly 52 percent of evictions involved people of color. The King County Regional Affordable Housing Task Force found that an additional 244,000 affordable homes are needed in the region by 2040. The Third Door Coalition proposes the creation of 6,500 units of permanent supportive housing to solve chronic homelessness in Seattle/King County. The COVID-19 pandemic and related economic and unemployment emergencies and already exacerbating the existing affordable housing crisis and homelessness emergency: o The United Way of King County Home Base fund providing rental assistance to King County households below 50 % of AMI experiencing financial impacts due to COVID-19 had received thousands more applications than funds available to serve them within two days of launching in April. o People experiencing unsheltered homelessness are at risk for infection when there is community spread of COVID-19. o The Centers for Disease Control and Prevention cautions that congregate shelter settings could facilitate the spread of infections. About 18% of the population of Seattle’s population, or 140,000 people, are undocumented and are excluded from federal COVID-19 relief. Seattle’s average unemployment rate is 16%, and that is expected to increase as the economic impacts of COVID intensify. In Seattle, about 13% of adults experience food insecurity (or don’t have enough money for food). Seattle families with children experienced higher rates of food insecurity, from 22% of families with young children (Best Starts for Kids Survey) to 51% of low-income families with children Around 9,000 small businesses in Seattle applied for the City’s small business stabilization fund; due to limited funding, 250 eligible small businesses were selected through a lottery and awarded $10,000. Nuts & Bolts • • Our immediate spend plan prioritizes the most urgent needs; funding programs that are already up and running; and filling in gaps left behind from various funding sources Our long term spend plan focuses on economic revitalization, ensuring we have strong housing & homelessness protections, and protecting services and supports to the city at large An equal opportunity employer 600 Fourth Avenue, Floor 2 PO Box 34025, Seattle Washington 98124-4025 Phone (206) 684-8808 Fax (206) 684-8587 TTY 711 Email teresa.mosqueda@seattle.gov 1 2020 (approximately $80-$120 million) Program % Housing Security 40% Immigrant & Refugee Support Small Business Supports 20% 20% Food Security 15% City Administration 5% 2021 (approximately $80-120 million) Program % City Programs & Services 75% COVID Response Support 20% City Administration 5% 2022-2030 (approximately $200-300 million) Program % Housing 65% Equitable Development 10% Economic Revitalization 20% City Administration 5% Description Expansion of homelessness prevention, rental assistance, and foreclosure prevention programs; support for non-profit affordable housing and shelter providers Funds for non-congregate shelter/housing options for sheltered and unsheltered individuals experiencing homelessness Language Access Support; Direct Cash Assistance Technical Support/Guidance: $300,000 Cash assistance to businesses: 20% directly to childcare Expansion of Emergency Voucher Program ($400/month for 2 months per recipient) to be used at Safeway and potentially ethnically relevant grocery stores Ongoing administrative costs Description Reinvesting in City programs, contracts, services cut due to the estimated $550 million shortfall between 2020-2021 Investments in food security, small business support, housing security, immigrant & refugee support, etc Ongoing administrative costs Description Construction/acquisition of housing serving households 0%-50% AMI, with at least 70% of funds used to serve households between 0-30% of AMI. Operating and services costs to support housing serving 0-30% of AMI households (see Page 3 for more details) Support for community-initiated equitable development projects that advance economic opportunity, prevent displacement, build on local cultural assets, promote transportation mobility, develop healthy and safe neighborhoods, and enable equitable access to all neighborhoods. Support local business, tourism, and economic stability for workforce. This category includes EDI support for underserved communities around the city. Ongoing administrative costs How we fund it Business size by Seattle Payroll For incomes over $150,000+ For incomes over $500,000+ $7 million-$1 billion 0.7% 1.4% $ 1 billion + 1.4% 2.1% • Higher-income payroll tax on businesses over $7 million only on payroll for individuals at $150,000+ • Assessment continues for 10 years • Assessment begins accruing January 2021 • Assessment not collected until early 2022 • Strong language to indicate intent to sunset earlier if equivalent regional or state payroll tax is implemented An equal opportunity employer 600 Fourth Avenue, Floor 2 PO Box 34025, Seattle Washington 98124-4025 Phone (206) 684-8808 Fax (206) 684-8587 TTY (206) 233-0025 Email teresa.mosqueda@seattle.gov 2 Affordable Housing Details Sixty-five percent (65%) of JumpStart revenues in 2022 – 2030 would be dedicated to the construction, acquisition, operations, and services for housing serving 0-50% of the Area Median Income, with the following allocations: • • 70% for housing affordable at 0-30% of AMI. This funding could be used to create Permanent Supportive Housing or rental housing for households with very low incomes. The remaining funds may be used for housing affordable up to 50% of the AMI. Permanent Supportive Housing (PSH) is a combination of housing and services designed to support people to recover from and permanently avoid homelessness. It is the only proven strategy to solve homelessness and has a success rate of roughly 95%. Affordable housing between 30% to 50% of the AMI would serve households with incomes between $23,250 $38,750 for an individual and $33,200 - $55,350 for a family of four in 2019. These affordability levels serve seniors, people living with disAbilities, and the lowest wage workers and their families. Per Unit Cost (with land) City's Per Unit Cost with leverage Per unit yearly cost for ongoing services (PSH only) Housing serving tenants with incomes at <30% of AMI (Permanent Supportive Housing) $320,000 $320,0001 $20,0002 Housing serving tenants with incomes at 30-50% AMI $320,000 $170,0001 n/a Acquisition of existing buildings (to be converted to income and rent restricted units) $250,000 n/a n/a 1 Ability to leverage these investments against the Low Income Housing Tax Credit (LIHTC) is expected to be limited because of other investments that rely on this leverage (e.g. Housing Levy funds); this is particularly true for the PSH units. This chart assumes the City is paying the full per unit cost for PSH units and the City pays the full per unit cost for 80% of the units service households with incomes at 30-50% of AMI. The per-unit cost of units could be lowered through other strategies, including: building on publicly-owned land, removing barriers within development regulations and permitting processes, and innovative construction methods. 2 Operations and services funding requires a 20-year commitment for PSH units, and the $20K annual per unit cost must be adjusted for inflation. The JumpStart tax ends after 10 years, and the City would need to identify an ongoing funding source for the remaining 10 years of services funding. The City also has the option to frontload services funding for PSH units (i.e. match capital investments in PSH with the equivalent of 20 years of services funding). These different approaches involve trade-offs for the amount of funding available for capital investments. An equal opportunity employer 600 Fourth Avenue, Floor 2 PO Box 34025, Seattle Washington 98124-4025 Phone (206) 684-8808 Fax (206) 684-8587 TTY (206) 233-0025 Email teresa.mosqueda@seattle.gov 3