Tacoma’s affordable housing crunch is so bad even business leaders want a tax to fix it
How important is affordable housing? How dire is the need in Tacoma to create more of it?
For your answer, look to the City Council’s consideration of a one tenth of 1 percent sales tax increase to help build it, and specifically who’s supporting it.
Tacoma Housing Authority, with its “primary mission” of providing “high quality, affordable housing and supportive services to persons and families in need”? That’s natural. The Tacoma-Pierce County Affordable Housing Consortium? Ditto. The Korean Women’s Association, which owns and operates hundreds of units of affordable housing in the area? No surprise.
The Tacoma-Pierce County Chamber of Commerce, whose job it is to represent the interests of businesses across the region?
That’s how you know this is serious.
While it’s unfair to pigeonhole or stereotype the Chamber of Commerce, it is safe to say that new taxes are something the influential advocacy group thinks long and hard about before endorsing. If the Chamber isn’t tax averse by nature, it’s at least tax wary and rarely tax curious. The Chamber’s bottom line is the bottom lines of local business, always and forever.
So when Tacoma-Pierce County Chamber of Commerce president and CEO sighs into the phone and tells you, “We know there’s a need for more dollars” to address the city’s lack of affordable housing and its ongoing homelessness crisis, you can be assured it’s not a proclamation made without significant consideration.
“I’m not overly excited about the sales tax, but it is one tenth of 1 percent,” Pierson said when asked about the Chamber’s early support for the proposed tax, particularly amid a pandemic, when he knows many businesses are already struggling.
“It is a tough decision, and it’s a tough time. We’re not usually advocating increases in taxes, but this is one of those pieces we believe in,” Pierson said.
As The News Tribune’s Allison Needles recently reported, Tacoma’s City Council is weighing the tax hike, which is expected to be voted on in the coming weeks. Using the authority provided by the state Legislature in 2020 under House Bill 1590 — which allows city and county councils to raise local sales taxes for housing without voter approval — it would bring in an estimated $5 million annually, with collection beginning as early as this summer. By law, the tax can be used to fund the creation of affordable housing and the services necessary to make it successful.
According to Jeff Robinson, director of the city’s Community and Economic Development Department, the money could be leveraged to help secure millions of dollars more from the state, the feds and private sources — to the tune of $16 for every $1 the city spends — while potentially generating 160 new units of affordable housing each year.
Together with other funding opportunities and the city’s existing affordable housing tax credits, as many as 200 to 250 units of affordable housing could be created annually, Robinson said.
Ultimately, that could go a long way toward meeting the need laid out in the 2018 Affordable Housing Action Strategy, which called for a permanent funding source for the city’s affordable housing trust fund and 6,000 units to be created over the next 10 years to help address the crisis, Robinson noted.
Although creating 6,000 units of affordable housing is an undoubtedly tall task, THA Executive Director Michael Mirra believes it’s a goal that matches the growing need. Thousands of Tacoma households are considered severely cost burdened by rent and housing costs, while rents in the city continue to rise, Mirra said.
The proposed sales tax won’t solve the problem, but it would represent a big step in the right direction, Mirra said. Tacoma’s affordable housing shortage has been magnified by COVID-19, and without significant steps to address the problem, it’s only going to get worse once the pandemic subsides, he argued.
“The city of Tacoma has long been facing what it has acknowledged to be an emergency shortage of affordable places for its residents to live. That shows in almost every way you might want to measure it,” Mirra said.
“Over half the renters in Tacoma are paying unaffordable amounts for their housing,” Mirra continued. “And then a notable number of people don’t have any place to live. That’s evident just driving around.”
While Mirra expressed his sentiments to The News Tribune this week, the truth is that he — and plenty of other affordable housing advocates — have been offering similar warnings and pleas for a long time.
In 2010, an advisory group delivered a report to the city describing Tacoma’s affordable housing shortage as “very serious.” Even back then, identifying a permanent funding source for the development and construction of affordable housing was a key recommendation.
Eleven years later, it’s a step Tacoma appears poised to finally take. While Mirra acknowledged the regressive nature of sales tax, he also noted the obvious: It’s one of the very few tools available for the city to increase revenue, and the only avenue provided under HB 1590.
Mirra described himself as optimistic about the chances of the proposed tax being passed by the council early next month. As a city, he believes elected leaders and residents have realized — and seen firsthand — what’s at stake.
So have many businesses, according to Ben Ferguson, the owner of Ferguson Architecture downtown.
Ferguson, 50, opened his firm in 2015. Having grown up in Puyallup, he returned to the area after college in the late 1990s, right in time for what he described as “the beginning of (Tacoma’s) Renaissance.”
As an active member with the Chamber, Ferguson said he’s taken a keen interest in the proposed tax. He believes it’s essential for local government and private sector development to work together to address the housing shortage and believes the new tax can be part of the solution.
“Tacoma can’t be … the best place to do business if our employees can’t afford to work here, and if the people who buy services in Tacoma can’t afford to live here,” Ferguson said.
“I think the tax is something where we all need to contribute a little bit.”
