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Seattle passes business tax to build affordable housing for the homeless

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Homeless person living near Green Lake in Seattle

The Jet City has seen its homeless population explode

By Frederick H. Lowe

Seattle, home to the nation’s third-largest homeless population and two of the world’s best-known and most-profitable companies, has passed an ordinance that will tax large companies to raise $47 million annually for construction of affordable housing for the homeless.

The ordinance, passed on Monday by a unanimous vote over the angry objections of Amazon and Starbucks, will levy a yearly tax of $275 per full-time employee on the employers reporting $20 million or more in annual revenues beginning January 1, 2019. The companies argue the tax is hostile to business. The tax will expire in five years but it can be renewed.

Both Amazon and Starbucks have deep, deep pockets.

Amazon reported on March 31 first quarter net sales of $51 billion compared with the $35.7 billion for the same three-month period last year. Starbucks reported a second quarter revenue on April 2 of $6.031 billion, up 14% compared to $5,294 billion for the same three-month period last year.

Starbucks cups

The Seattle city council passed a compromise bill, which originally was set at $75 million a year, but Seattle Mayor Jenny Durkan threatened to veto it. Durkan explained that the compromise legislation would address the city’s homeless crisis without jeopardizing jobs.

Seattle has constructed affordable housing but the units have not been erected fast enough to keep up with the exploding homeless population.

Amazon logo

“Local government funds housing and services for thousands of people experiencing homelessness each year, but the need is growing faster than we can keep up with it,” the Seattle City Council said in a statement.  In 2017, city-funded programs placed 3,400 homeless people in permanent housing but a the time there were 8,522 homeless individuals. 

Currently, Seattle, which  is based in King County, Washington, and the homeless population is estimated at more than 10,000,  third in ranking behind New York City (64,060) and Los Angeles (53, 798), according to the U.S. Department of Housing and Urban Development.

Part of the reason for Seattle’s high homeless population is its housing costs. The median price of $1,307 per month for a modest rental  apartment is the sixth highest rate in the nation.

Amazon, which employs more than 45,000 in Seattle, opposed the tax, saying it was not happy by its passage.

“We are disappointed by today’s City Council decision to introduce a tax on jobs,” Amazon said in a statement. Prior to the vote,  Amazon paused construction on a new office tower in Seattle until the city council voted.

Starbucks also opposed the tax.

“This City continues to spend without reforming and fails without accountability, while ignoring the plight of hundreds of children sleeping outside. If they cannot provide a warm meal and safe bed to a five-year-old child, no one believes they will be able to make housing affordable or address opiate addiction,” John Kelly, senior vice president of global public affairs and social impact at Starbucks.

About two-thirds of the money collected from the ordinance will be spent on new housing, including nearly 600 affordable units. Some 300 units will be staffed with a permanent case worker. The balance of the money will be spent on rental subsidies for 300 units, 250 shelter beds and services to collect 570,000 pounds of garbage annually.

Blacks suffer the highest rate of homelessness in the nation. Although African Americas comprise 12.5 percent of the U.S. population, but they comprise more than 40 percent of the homeless population.

 

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