Big Story 10

Seattle's tax on Amazon to help homeless may fall short, locals say

SEATTLE (Thomson Reuters Foundation) - Seattle is imposing a new tax on big business to help combat growing crises with affordable housing and homelessness, but advocates and residents worry the new funds will not be enough.

Protesters hold placards during a city council vote for a new "head tax" on the city's biggest companies, including, as a way of fighting a housing crisis sporsors attibute largely to a local econonimic boom driving real estate costs, in Seattle, Washington, U.S., May 14, 2018. REUTERS/Gregory Scruggs

The City Council unanimously approved a tax on Monday on, the city’s largest employer, and other large companies on grounds that they have fueled an economic boom that has driven up real estate costs.

About 1,000 people move to the area every week, according to U.S. Census data, putting it among the nation’s fastest growing cities.

Median rents have doubled since 2010, according to real estate firm Zillow, and the area has the third highest homeless population in the nation, according to U.S. government statistics.

Local counts estimate the number of homeless at nearly 12,000 people.

The tax will raise roughly $47 million a year for affordable housing and emergency services such as shelter beds.

The hotly debated measure was a compromise after a city-appointed task force recommended a levy raising $75 million a year instead.

Advocates fear the compromise is insufficient.

“We recognize that it’s a victory and a step forward, even though it’s not as significant a step forward as we hoped to have taken,” Katie Wilson, who served on the task force, told Thomson Reuters Foundation.

Even $75 million a year would not have been adequate, she said.

The call for a tax on business began last year as a grassroots movement with town hall meetings, rallies and marches.

It has been watched closely by other cities amid a highly publicized search for a second North American headquarters by Amazon, the world’s largest online retailer with first-quarter revenues of nearly $50 billion.

Consultants McKinsey & Co. estimated the Seattle area needs at least 14,000 new units of affordable housing at a cost of $360 million to $410 million annually.

The consultants pointed out a link between rising rents and rising homelessness.

“It’s entirely possible that in the next few years I might become a statistic and one of those homeless people,” said Seattle resident and renter Pauline Van Senus during a public comment session before the council vote.

With such high rents, “there is no way for low-income working families to be able to truly have housing stability on their own in many cases,” said Councilwoman Teresa Mosqueda.

Jason Anderson, who lives in a village of shed-sized “tiny houses” that the city permits as temporary housing, said the measure is a victory nonetheless.

“We were hoping for $75 million, but it was still a win,” he told the Foundation.