What is the social housing initiative? You asked, we have answers

Seattle voters have until Tuesday, Feb. 14 to vote on the social housing initiative, I-135.

If you live in Seattle and are registered to vote, you got a ballot in the mail for the Feb. 14 election. When you finally get around to opening that ballot — probably at the last minute, let’s be real — you’ll see just one item staring at you: Initiative 135 or the social housing initiative.

Initiative 135 would create a publicly owned developer that builds and preserves affordable housing. KUOW’s Joshua McNichols recently reported on some of the arguments for and against I-135.

After that story aired, we received a number of questions about the initiative. We looked into a few of those questions:

Who is in charge of the publicly funded development entity? What oversight and guardrails are built into the structure?

If passed, this initiative would create a public development authority or PDA, which is a public entity that will acquire, build, and maintain housing.

The PDA will have a governing board with 13 members, and supporters say they’re really meant to represent renters in Seattle. There are a number of requirements for who will be on the board. For example, three of the seats will be held by people who make 50% or lower of the area’s median income.

There are also requirements that a certain number of board members must have experienced housing insecurity or financial eviction.

A few other board members will be appointed by the city council and mayor. Other board members will be appointed by groups like the county labor council.

In terms of transparency, there will be open-to-the-public board meetings where budgets are discussed. Minutes for those meetings will be available to the public, too.

You can read more about the board structure on the third page of the PDA's charter.

How do our existing housing PDAs operate? How are they financed and how do they raise money? Are we making the best use of them?

To answer this question, Soundside spoke with Chris Persons, CEO of Community Roots Housing, a PDA that works to create affordable housing in the Seattle area. They have around 50 buildings and more than 2,000 tenants.

Community Roos offers affordable housing to people who earn between 30% and 100% of an area's median income.

Persons said that, by and large, Community Roots acts like a nonprofit organization.

"But there are some differences," he said. "Our board meetings are open, public meetings. We're able to issue our own bonds, which is really important aspect of being a PDA."

Issuing bonds essentially allows a PDA to take out low-interest loans that they can pay off slowly over time. Community Roots also relies on a mix of federal funding, low-income housing tax credits, and Seattle Housing Levy dollars.

As a PDA, they have what Persons described as a special relationship with the city. Community Roots is eligible for local land transfers from the city, and their board members are approved by the Seattle City Council. However, they ultimately operate independently from the city government and don’t need city approval when making decisions.

Persons said he can’t make endorsements for initiatives because he leads a public entity, but he wonders if the social housing PDA is that much different from Community Roots.

"It's been challenging for us to understand how it's different than what we're already doing, or what other PDAs that do affordable housing are already doing," he said.

Why is mixed-income housing needed?

There are two main reasons why this initiative is going for mixed-income housing.

The first is that there's a housing shortage across the economic spectrum, and anywhere there's a shortage on that economic spectrum, it hurts people at the bottom because somebody can always go one rung down the ladder and get the choicest unit at this price point. Then that competition for homes keeps trickling down until you get to the bottom of the economic ladder. In that scenario, if you can't afford a home, you're on the street or you're couch surfing.

The second reason why this initiative is going for mixed-income communities is because the people at the top of the economic spectrum can help pay for amenities for the people at the bottom. This comes in the form of kind of taxation of the people at the top because the homes that rent out for a lot more to households that are earning more are less deeply subsidized. They bring in more income relative to the costs to operate the building. That money can offset some of the deeper subsidies that it takes to float people who are earning much less.

"This does bring up you know, a little bit of a difference between the social housing PDA that would be created by this initiative and the Community Roots PDA," KUOW's Joshua McNichols said. "Community Roots takes tenants earning up to 100% of the area median income, but the social housing PDA would take people earning a little bit more, people earning up to 120% of the area median income."

McNichols said that this means the new social housing PDA would have a little bit more money with which to operate.

I heard in Joshua's recent reporting that some thought the PDA would be self-sustaining within 18 months due to varied income levels of its residents. On the ballot measure, the occupancy appeared to be based on a lottery system. How will the PDA achieve a balanced mix of area median income of residents if selecting by lottery?

So, one note about funding for the PDA: When the organization actually wants to start acquiring existing projects and preserving them as affordable housing, or building new projects, it's going to take additional money from the $750,000 or so the PDA will receive from the city upon startup. The PDA has bonding capacity, which means they're going to have access to what are essentially low-interest loans that they can pay off slowly over time.

In the long run, organizers are looking at more progressive funding models, but these couldn't be included in the initiative.

"When an initiative gets too complicated, when it tries to do too many things at once, it ends up being illegal and it gets rejected," McNichols explained.

As for how the Social Housing Developer will achieve a mix of incomes while still using a lottery, House our Neighbors, the group behind the initiative, said that it envisions people submitting both their names and income to the lottery. Then, it’ll do something like hold separate lotteries for people in each of the four income brackets they’re using.

Seattle voters have until Tuesday, Feb. 14 to vote on the social housing initiative, I-135.