Housing was the topic at Monday night’s Lynnwood City Council meeting as State Rep. Lauren Davis (D-32nd District) spoke with city leaders about ways to provide housing and other assistance by increasing the sales tax.
Earlier this year, the Washington State Legislature passed House Bill 1590, which gives local governments authority to adopt a 0.1% sales and use tax by ordinance to provide funding for affordable housing.
The tax can be imposed at either the county or city level, with the revenue used to fund affordable housing initiatives aimed at helping specified groups, including domestic violence victims, military veterans and low-income, elderly, disabled or mentally ill people. During the council’s Nov. 30 business meeting, Davis said she supports local governments’ decisions to implement the tax at any level as long as they take advantage of the new tax.
“Admittedly, I’m pretty agnostic as to what mechanism is used,” she said. “I’m interested in the resources.”
Davis — who co-sponsored the legislation — said that although the bill includes language in the title about affordable housing, she wanted to inform the council about lesser-known ways the city could use potential revenues from the proposed sales tax. Should the city implement the new tax, staff estimate $2 million in revenues could be generated.
“The bill title indicates that it’s for affordable housing and that tends to be the beginning and the end of the conversation,” she said. “To be clear, I will support affordable housing to the end of the earth, but I think it’s important to know that there are two other allowable expenditures.”
Under the new bill, revenues could also be used to fund behavior health facilities for those requiring mental health and/or substance use disorder services. Davis said this could include much-needed psychiatric evaluation and treatment facilities due to a drastic increase in behavioural health issues since the COVID-19 pandemic began earlier this year.
In 2010, Snohomish County adopted a similar tax — the Chemical Dependency and Mental Health Sales Tax — which uses a 1/10th of 1% sales tax to fund new and expanded mental health and chemical dependency programs.
Davis said health officials are projecting 3 million Washingtonians — or 40% of the state’s population — will need behavioral health services as a result of impacts from the pandemic that include hopelessness, isolation and unemployment.
“If we do not provide services, we will see an enormous spike in what they call ‘deaths of despair,’ which is really deaths by suicide and overdose that’s going to be in our adolescents as well as our adult populations,” she said.
With a local behavioral health facility, Davis said community members would have a place to receive treatment closer to home instead of traveling to other cities, like Seattle. The facilities would also be able to serve the wider community, she added.
Davis said there are some who aren’t supportive of these facilities and added that work must be done to destigmatize terms like “affordable housing.”
“It’s really based on misinformation; it’s fear that’s promulgated by lack of information.” she said. “If we actually saw communities really embrace and get excited about and welcome these communities…really embracing those types of communities would be revolutionary and I’d certainly be proud to see a city in my district take up that mantle.”
During the discussion, some council members praised Davis’ efforts and commitment to providing housing and behavioral health resources. Councilmember Ian Cotton called the proposed facilities a “huge need” for the community.
Conversely, Councilmember Ruth Ross said she did not support increasing the city’s sales tax, which is currently 10.5%. According to Ross, raising the sales tax will only hurt those it’s intended to help. Additionally, she said that the city has spent years investing money in ways to create affordable housing and mental health facilities and has seen little progress. If the council were to impose this new tax, Ross said she would want to see actual results.
“I think if we can’t come to some kind of agreement on how this money is going to be spent, it’s difficult to support it,” she said. “I know that need is great — it gets greater by the day — but the solutions don’t seem to get any better.”
In other business, the council received its monthly update on the city’s housing action plan — a document that will guide the city by offering a comprehensive plan to bring a variety of housing options for people of all income levels. The plan will address the city’s current housing needs and the needs of the projected future population.
“It’s important to remember that this is a plan; it doesn’t enact the changes itself but it identifies changes to be made,” said Senior Planner Kristen Holdsworth. “If (the city) adopts it, there will be much more engagement and input and implementation that will be required down the road.”
Based on findings from a housing needs assessment report and public engagement, Holdsworth said staff identified four goals for the Housing Action Plan: produce housing that meets the needs of the community; preserve existing housing that is affordable and safe so that people can stay in Lynnwood; partner with housing educators, providers and other groups to find equitable housing solutions and remove systemic barriers; and prepare for continued growth and increase quality of life in Lynnwood.
The council is scheduled to receive its next update on the action plan at its Dec. 7 work session. A draft plan is scheduled to be presented in January.
Also during the meeting, the council received the city’s third-quarter financial report from Finance Director Sonja Springer.
Revenues generated by permits, development fees and business licenses, as well as sales tax, were higher during the third quarter compared to the first two quarters of the year. Meanwhile, Springer said city departments continue to reduce expenditures.
In the written report, Springer said she had to estimate the sales tax revenue for September since the information had not been available. During the Monday meeting, Springer announced that staff had received the information and revenues from sales tax were higher than projected.
According to the Springer, general fund reserves were still above the amount required by the city’s financial policies — by more than $840,000.
“The good news about this report is we have not dipped into our reserves,” she said.
— By Cody Sexton