Developers, Guns and Money: Another Week of Council Controversies

[00:00:10] Hello and welcome to the first week of April edition of Seattle Nice. I'm David Hyde, here as always with Erica C. Barnett of Publicola. Erica, how are you doing? I'm doing great, David. How are you? And I'm good. And political consultant Sandeep Kaushik, how are you? I'm excellent, David. Wow. We're all in a very mellow afternoon mood, it seems like. Yeah, we haven't been reading any national news. Today, it's sunny outside. We've got some burning hot topics to get to on the podcast.

[00:00:38] A spicy city council meeting where the topic was gun violence, a juicy resolution about defunding the police. But first, we turn to housing and Erica's reporting on Publicola.com about the city, considering some tweaks to legislation that folks may or may not be that familiar with, depending on how long they've lived here, called MHA Mandatory Affordable Housing. Mandatory Housing Affordability, I guess is what it stands for.

[00:01:04] And basically, what it says is, if a developer wants to build more units, right, in certain areas, they can do that. But in exchange, they either have to build some affordable units, or they can put some money into a fund that allows for affordable housing units to be built. So kind of a boring, bureaucratic thing, but it led to some fireworks on the city council this week. Right, Erica? Yeah, I mean, that's basically right.

[00:01:33] The one thing I would just note is that it is mandatory. So whether a developer wants to participate or not, if they want to build in certain areas, they have to pay into this fund. And 95% of developers do pay into a fund to build affordable housing off-site. And the meeting was about the updates to the comprehensive plan, but they also talked about, this is in a meeting of the city council's housing committee, chaired by Kathy Moore. They also talked about MHA as part of this discussion.

[00:02:02] And very briefly, Kathy Moore wants to impose these requirements, which say, you know, you have to build a certain amount of housing or put a certain amount of money per square foot into a fund. She wants to impose them in all of the former single-family areas. So those are the areas where the city is going to have to allow up to four units of housing on most lots, up to six on some.

[00:02:26] And she wants to impose these fees, which would make this housing substantially more expensive. And the city actually solicited a report that found that it would make it infeasible. She did not agree with this. She said this is different than what she's been hearing and that developers essentially should be willing to just take less of a profit and build these units anyway. Yeah, and just to add a little bit to the context here, right, the state a couple of years ago passed legislation.

[00:02:55] HB 1110, right? And that legislation basically requires cities to allow fourplexes or sixplexes in some areas in what previously were exclusively single-family zoned housing. And so the city needs to comply with this state legislation. And so that's what they're working on doing. What are the city – how is the city going to comply with those requirements?

[00:03:22] And, yeah, as Erica is saying, Council Member Moore is suggesting we apply this multifamily program, MHA, this fee, affordable housing fee, that came out of the HALA process 10 years ago, right? The housing affordability and livability agenda process under – If we didn't have enough acronyms. I know, I know. It gets pretty complicated.

[00:03:46] But it came out of that process and it was basically at the time called a grand bargain, right, where developers were going to get more height and we're going to be able to – David, as you said, build more units. But in exchange, they had to basically pay into this affordable housing fund, right?

[00:03:59] And so extending it into these little micro-developments of fourplexes or what have you that are going to be now allowed in single-family zones, as Erica is saying, there's a lot of reason to say, man, that might – that essentially could eviscerate the intent of HB 1110 to allow greater density in these sort of fourplexes in these previously, you know, very low-density zones.

[00:04:27] MHA is like a political relic. It was designed, as Sandeep says, as a grand bargain, basically to appease nimbies of a previous era and progressive leftists of a previous era who hated building any housing in Seattle, essentially. And so this was an idea where market-rate housing is the demon spawn. We hate market-rate housing no matter what, even though there's tons of studies showing that where do you think affordable housing comes from?

[00:04:54] You've got to build market-rate housing at ages, and eventually some of that becomes affordable housing. But forget all that. So the question is what Kathy Moore is proposing. How much more can we screw things up, Erica? Well, I mean, to put it in concrete terms, like let's say you're building four townhouses or a fourplex with four units.

[00:05:11] What this would require developers to do if they're going to build on-site, which is what the sort of anti-MHA, anti-housing development, anti-market housing people want is to force developers to build on-site. So they would have to make one of those units an affordable housing unit. And let's say it's for 60 percent, people making 60 percent of the median income. So that means that the three other units need to go up in price. The rents need to go up in order to subsidize that fourth unit.

[00:05:39] If they pay into the fund, it's a similar problem because you're paying, let's say, $140,000, $150,000 in fees. Well, you're going to have to make that money back somewhere. I mean, Kathy Moore suggested that developers are just being greedy. And I can't disagree that the private market can be greedy and capitalism runs on greed. But that doesn't make it the case that they're suddenly going to accept less profit.

[00:06:07] And also, I mean, there is a certain point at which you can't get funding and financing for development if it's in that risky area. So, yeah, it's a way of making it extremely unlikely that housing will get built.

[00:06:20] And the result of that would be that, you know, single family areas, which have been, you know, so sacrosanct for NIMBYs for so long, would continue to be protected from renters like me, who, you know, are not wanted by some people in those single family areas.

[00:06:43] So, you know, again, not to get so far down in the weeds here, but at the time that MHA was first being sort of cooked and put into effect, right, they set a, you know, a fee rate of how much you'd have to pay. And they said, here's how much height you get in exchange for that, right? That was a bargain. You get to build more as a developer, but you've got to pay.

[00:07:05] And I was just talking with Ben Moritz, who's a developer in town, kind of, you know, involved in various progressive stuff. He was on the King County Regional Homelessness Authority, who's the board chair of, you know, one of their, you know, infinite number of governing committees. All two of them. Yeah. He was on the implementation board. Yeah, he was the board chair of the implementation committee. Thank you.

[00:07:28] But I was in anticipation of talking about this, and I was asking Ben, how is MHA working now, right? And he was like, look, in the 2018 to 2020 period, the tradeoff between what developers had to pay and the additional height and units that they got was about a wash, right? It worked out, right?

[00:07:47] But now, under the current market conditions where interest rates have gone way up and housing, you know, construction, material costs have gone way up, it doesn't work anymore, right?

[00:07:58] The dials and levers on this are off, and it has become a major impediment, along with lots and lots of, David, to your point, lots and lots of other well-intentioned regulatory stuff that we do, but it has become a major impediment to actually building as much housing as we need, right? And so they're already talking about the fact that they probably have to tweak MHA here.

[00:08:25] I mean, the other thing Ben said to me is, look, extending, as part of the comp plan stuff, this interim thing they're doing, or what they're talking about doing is creating these neighborhood centers, right, are going to be the areas of the city where we are going to accept denser multifamily housing. And, you know, Ben says extending MHA to the neighborhood centers makes sense. That's the place where this sort of housing is supposed to go, provided you tweak the dials and knobs correctly and get the cost of it, right?

[00:08:54] Like, extending it to single-family zones, as Erica is saying, for these very micro, you know, quadplexes kind of stuff, he says just makes no sense and will actually kill, you know, any actual development of that sort. Well, and to be clear, MHA has brought in quite a bit of money. I'm just, I'm looking at one of these studies now. And, you know, in 2023, it brought in 59 million. In 2022, it brought in 68. And that is expected to kind of fall off a cliff.

[00:09:24] But, I mean, it brings in money for affordable housing. That money can be leveraged. It can be combined with other funding sources. And it makes sense in a lot of ways to put money into that fund rather than forcing developers to build on site. Sometimes it makes sense to build on site. But, I mean, I just, I think that this whole debate over single-family areas and neighborhood centers as well is just, you know, it's a backdoor way of keeping housing out of the parts of the city where housing belongs, that is, in neighborhoods.

[00:09:53] You know, personally, I think you solve the problem by allowing apartments everywhere and not just, you know, having these torture debates over, you know, oh, my God, four units or six units. Just let's have apartments everywhere. We can set height limits if we have to. And, you know, build, baby, build. But that is not the environment we are in right now with this council. David, aren't you, I mean, David, basically, you're making an argument, though, that sort of goes, and you're just saying, why can't we be more like Houston? Right? Yeah, that's exactly right.

[00:10:23] And Erica just said it. I mean, MHA aside, why aren't we just building everywhere? That's the new abundance agenda that we should embrace here in cities like Seattle. But we should have embraced it like 40 years ago. We wouldn't be in this mess in the first place. And so lesser Seattleites who have passed away are burning in hell because we're all suffering down here. Can I just make one observation that I just, I found kind of funny over the years is, you know,

[00:10:50] the NIMBY agenda, you know, in part is, and I'm not saying there aren't like people who are legitimately in favor of keeping all trees on private land because of environmental reasons. But it's often because they don't want development. But the argument there is, you know, we need trees. We need shade. The shade is so important. This tree I wrote about recently, it was that the shade was so important for these apartment dwellers who were not part of the debate that, you know, all the single family folks were insisting we had to keep this tree.

[00:11:17] But then when you talk about apartments, the argument is it's going to shade our house. And, you know, and that's going to that's going to destroy my quality of life if there's shade on my house. I just I just find I mean, that's just a tiny internal contradiction among so many internal contradictions in these arguments. But I'll also point out that those neighborhood centers that Sandeep was talking about, Kathy Moore doesn't like those either. And so her argument is like, let's let's let's just not even I mean, she seemed to suggest last week, let's just not even have them.

[00:11:47] But I know that she is trying to, you know, at least get rid of one in her district. And that would be like a node of a little bit more housing right around a commercial area. And she doesn't like that either. Support for Seattle Nice comes from Hearth Protection, offering commercial protective services with trauma informed, community oriented and evidence based physical security practices.

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[00:12:45] Right. And the opposition to those neighborhood centers, there is a vocal opposition to this comp land stuff that the mayor sent down. And it's coming from, I think, mostly older residents of single family zone homeowners right in single family zones. And as you know, I mean, even Kathy, Kathy is opposed to a neighborhood center in Maple Leaf, you know, but Maple Leaf has already had.

[00:13:11] There's actually a fair number of people living in Maple Leaf now, I think, in like townhomes, right, already. And I suspect those people don't think adding more townhomes to Maple Leaf is going to, you know, destroy the character of the neighborhood or whatever, right? The way maybe some of the detached single family homeowners do, right? And but those seem to be the voices that are most vocal right now. And that council member Moore is hearing.

[00:13:37] One thing that Kathy Moore raises in this piece, Erica, that you wrote is she argues that in the past developers were arguing for a certain percentage of profit. And she was questioning, like, well, how, you know, what does it really mean for a project to pencil out? And shouldn't we really, you know, insist that developers lower their profit margins? But it seems like, you know, I mean, if you could do that, fine. But the point is, money is fungible.

[00:14:06] Like, they can take their money and they can develop elsewhere. Seattle's not the only place. Yeah. So if we want the housing to be concentrated here because we want it to become more affordable, you know, we have to ask those questions. But I don't know the answer to her specific question about, like, 5 or 10 or 15 or 20 percent profit. Well, you know, who does know the answer is Burke Consulting and Eco Northwest. And they both did studies on this that, you know, that are on the city of Seattle's website.

[00:14:33] They were on the agenda, actually, for this meeting where she was making these points about we don't know what it means to pencil out. And developers have made pretty clear what it means to pencil out and have explained to her and to the council more broadly, like, this is the amount, you know, we need to make to have a cushion for this. This is how much construction costs have gone up. This is how much they may go up. This is how much uncertainty. This is how much we have to have to get financing from a bank because if they can't get a lender, then, you know, the project's no-go.

[00:15:01] So it has been explained many times now, maybe not to her satisfaction, but I don't think that – I don't know what would be satisfactory from a developer. Like, what Kathy Moore, in her mind, would find satisfactory from a developer explaining, like, this is why we need to build in, say, a 15 percent margin. I don't think she's ever going to, you know, love what a developer has to say about their profits because I think that, you know, fundamentally – I mean, her argument is, like, these are not affordable housing.

[00:15:31] We need to be building affordable housing for low-income people. And that's just a completely separate category of housing. So they're just talking past each other. Yeah. First point, I do think, you know, when I listen to Kathy Moore talk about this and reading your article, Erica, you know, she does seem to be channeling, like, a old-school left sort of – Like a John Fox. Yeah.

[00:15:53] 20 years ago, John Fox, Jim Street, you know, Peter Steinbrook, to some extent, former city council member, Nick Licata, right? You know, the former kind of, you know, lefty on the council, you know, 15 years ago, right, were anti-developer and, you know, skeptical of density. They were sort of – they came out of a lesser Seattle tradition.

[00:16:17] In the 80s, we passed a citywide initiative, the CAP initiative that capped downtown building heights because people wanted – they didn't want Seattle to grow and become bigger. They just don't want a fucking skyline. Right. That's where the left – that came out of the left of Seattle, right, at that point. And we've had a – we've done a 180 on the left in Seattle where now it's, like, the left that is pushing for these kind of urbanist agendas and stuff.

[00:16:43] And Kathy seems to be a little bit of a throwback to this kind of old-school way of thinking about this stuff. The other point, though, I wanted to come back to, David, is you were making a bigger picture of, like, why the fuck do we do any of this shit, right? Like, you know, coming back to the question of, like, there seem to be these cities, these other cities. If you look at Houston, you know, that have lots more housing and it's way more affordable.

[00:17:07] And, you know, and like almost everybody else of a certain cohort in blue cities right now, I'm reading Abundance, right? The Ezra Klein, Derek Thompson book, right? And the argument that they're making in that is that in cities like Seattle, we've become so enamored with regulating the fuck out of everything. We've made it really hard to do anything, including build housing. And the consequence of that is that affordability has become a massive problem in these places.

[00:17:37] And ultimately, it's a massive political problem because what we're seeing, if you do the current math nationally, what we're seeing is people voting with their feet. People are, it's less so here in Seattle, but in California cities, they are moving out of those cities and they are moving to red states, right? You are seeing California slated to lose four electoral votes in the next redistricting in 2030.

[00:18:04] Massachusetts, another blue state is going to lose a bunch of electoral votes. And Florida and Texas and those Sunbelt states are gaining them. And that's five years away from redistricting, which is going to make the math for Democrats to elect a presidential seat. Okay, okay, this isn't Blue City Blues.

[00:18:50] It isn't Blue City Blues. One of the reasons for that affordability is not just that you can build whatever, wherever. It's also that Houston can kind of sprawl infinitely in three directions. Right, famously, they have no zoning, really, right? I mean, you're- Right, but you're talking about the fact, right. You're talking about the fact that they famously have no zoning. And that does lead to, I mean, it's like Tokyo. I mean, in a weird way, it's a very different city, but like, you know, stuff gets torn down, it gets rebuilt. I think that that's never going to happen in Seattle. But I think that, you know, within reason, what we should be doing is moving more toward that model.

[00:19:20] Within reason, like, again, I think Houston is fairly reasonable, to be honest. But in Seattle, like, so maybe we have height limits in certain areas still, but we don't, you know, and we say you have to, you know, have this much green space or impervious, you know, surfaces or whatever. Like, impose environmental rules. But then, like, yeah, just like, let people live in neighborhoods.

[00:19:41] And it just boggles my mind that there is still opposition to allowing people, the 60% renter majority and growing in Seattle, to live in neighborhoods that, you know, that single-family homeowners seem to think belong to them. And the city doesn't belong to any person or property owner. It belongs to everybody. And so, anyway, it just, we need to go more in the direction of Houston than certainly we have.

[00:20:07] And we definitely don't need to be going backwards by, you know, continuing to backdoor our way into single-family zoning. I just want to close it out by a quote that Ben Ritz gave me as we were kind of talking about this issue. And what he said to me is the fundamental sort of takeaway line here is, quote, you can't make housing more affordable by making it more expensive. And that's what we keep doing in Seattle is we add all these mandates and all this stuff that make it more expensive. All right.

[00:20:31] Well, let's turn from that cheerful note to another cheerful topic, elevated numbers of shooting incidents, people being injured in gun violence. There was a meeting about this last week. Erica, you were there, or you were there virtually. I was there virtually, yeah. And the meeting got a little heated. Yeah.

[00:20:51] So this is, there's an audit that the mayor's office and Council President Sarah Nelson asked for that basically looked at, you know, the rates of gun violence in Seattle, which are going up while other cities' rates of gun violence, like Baltimore, are going down. And so the question is, why is that happening? What are we doing and what could we be doing better to, you know, coordinate the response in the city to gun violence and actually get those rates coming down?

[00:21:17] And the audit was pretty critical of the city's current policies. And the meeting, you know, about that audit was pretty boring until Sarah Nelson and particularly Maritza Rivera, who represents Northeast Seattle, started saying, look, you know, I have been complaining and telling you guys about gun violence and incidents, you know, other incidents that are happening in Magnuson Park for months and months and months.

[00:21:46] And the mayor's office has not taken me seriously. And she said that very explicitly. That's almost a direct quote. And I think she, you know, at length expressed a lot of frustration about that. And it kind of turned into a little bit of a, not a shouting match at all, but a little bit of sniping back and forth between the council members on the one hand and Deputy Mayor Tiffany Washington on the other.

[00:22:12] And, you know, I think that the mayor's office response, I mean, they concurred in this audit. You know, you can respond. They give the mayor an opportunity to respond to all their audit findings and recommendations. And they made four recommendations. The mayor's office technically concurred with all of them. But the way they concurred was basically to say, yes, and we're already doing that in response to an audit that said over and over, you're not doing this. You're not doing this. You're not doing this. And so their response was basically like, thanks on it.

[00:22:39] And and so Tiffany Washington, the deputy mayor, you know, said that it was she felt disrespected by the fact that there even was an audit because the mayor's office tried to pull it or said that, you know, they shouldn't go forward with it in April. And then Sarah Nelson said, you know, in October, no, we want you to go forward with this audit. And so she, you know, she said she was just she felt disrespected. They didn't need an audit.

[00:23:05] And and then it's been the city council over the last 10 years that has prevented them from from doing anything on contracts on gun violence. And so it got really heated. And I don't think that, you know, I talked to the the auditor's office today and they were very diplomatic. But I don't think that the two sides really agree on whether the city is doing enough.

[00:23:27] I went back and listened to that that that section of the it was last Thursday's, you know, governance accountability committee meeting where that that auditor's report was being presented. And yeah, I mean, Maritza Rivera, you know, she talked for about nine minutes. And, you know, there was I want to be careful. Like it wasn't like heated, like they were like yelling or anything like that. But but clearly Maritza was very frustrated and heated for Seattle. Yeah.

[00:23:57] What Erica was saying, she she said very directly. I've been trying to raise alarm bells with you all in the mayor's office for a year now because I'm hearing from my constituents their real concerns about in some in some particular locations. She mentioned Magnuson Park being and there was, I think, a homicide there within the last year. A kind of kind of tragic incident where there were some people partying in the park and one of the there's a low income development right there housing.

[00:24:27] One of the residents of that, I think, had come out to complain and ask people to be quiet. And they pulled out a gun and shot it. Right. And he died on, you know, you know, family and kids. Terrible. Tragic. Homicide. And so you could tell she was very, very frustrated. Like, why aren't we seeing more action on this stuff? You know, why are we getting auditors report like audit reports like this saying we're not doing enough?

[00:24:52] And yet it still feels like business as usual and we're not seeing action here. So I thought that was kind of kind of a very interesting exchange. Yeah. And I mean, these these recommendations are basically, you know, just to kind of sum them up. They're basically stop, you know, having everything be in silos, which is term, you know, I'm using it, but I hate that term.

[00:25:14] You know, like you can't you need to have SPD talking to King County Public Health, talking to the Parks Department, talking to the Human Services Department, talking to the care team. And, you know, and sitting down and identifying, you know, people and places where, you know, gun violence is occurring and sort of the community, the groups, you know, where gun violence is concentrated, you know, like literally like the peer groups. And, you know, and look at interventions that are evidence based, you know, et cetera, et cetera.

[00:25:42] So it was it was just like you guys need to do what other cities like Baltimore are doing. And and yeah, I mean, the the mayor, the response is basically, well, we're going to further our existing plans to continual continually improve. And, you know, we'll we'll update the council on that. And they said that, you know, there's there's this whole thing about problem oriented policing. And they said that the audit says they're not doing that. And the mayor's office says, well, guess what? Good news.

[00:26:12] We have a new police chief and he's doing this thing called stratified policing. And I talked to the auditor and they're like, we don't know what that is. And so, you know, there's just a real I don't know the vibe that I got from the mayor's office and including Natalie Walton Anderson, who's their public safety advisor, was that they they seem to think they're doing a pretty darn good job. And, you know, there is an audit that was somewhat similar in 2012.

[00:26:38] And I think most of those things that the auditor recommended at the time were not implemented. And so, you know, it's just I can I can imagine being a little frustrated as the auditor. They're they're very diplomatic. But the response was basically like to kind of shrug off the, you know, the recommendations and say they're already doing them. Hey, Seattle. Nice listeners.

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[00:27:34] Download the Ikes app today or head on over to Ikes.com. That's Ikes.com. There was another high profile incident last week, too, in West Seattle. Right. Right outside of Councilmember Rob Saka's house where something like 100 shots were fired. And luckily, nobody was actually injured or killed in that. But but, you know, got a lot of attention over there in West Seattle.

[00:28:03] So I'm going to I don't know exactly what was going on. It sounds like something of pretty intense gun battle, you know, in a neighborhood in West Seattle. But I don't know that Rob Saka is like proposing like system wide improvements as opposed to just get more cops here. And that is not, you know, an effective strategy in the long term. I mean, every you know, every report has found, you know, just flooding a place with cops temporarily reduces crime in that area temporarily, pushes it to other places.

[00:28:28] I mean, one of the other things they said that, you know, they're they're doing a, you know, a systemic response by putting CCTV cameras all over the city. And, you know, I talked to the auditor again about that. And what they told me was, you know, yeah, CCTV cameras work in limited areas. And I've reported on this to basically parking lots at transit stops. And what they prevent is not gun violence. They prevent or help solve people stealing cars.

[00:28:56] So, you know, I mean, these are not like CCTV cameras everywhere. I mean, frankly, it's just not a serious response, especially, you know, if we have data out there that shows what does work. And if Seattle's gun violence rate is going up while other cities are going down, you know, we're just we're not we're not doing the right thing. You know, and what works is is is reducing our silos.

[00:29:18] Well, what what works is I mean, look, I'm not an expert on how any of this stuff works, you know, but I would say it sounds sort of like doing case conferencing for homeless, you know, for homeless individuals. I mean, that's what, you know, is a very effective strategy when you're talking about homelessness is, you know, all the different providers get together and talk about, you know, Jeff Smith. And, you know, and where is he this week and what are his needs? And, you know, I mean, it's not exactly equivalent, but it's analogous.

[00:29:47] And the city is not doing that. The city is sort of using a very police based response and not really. And also another thing they talk about is like there's no there's no transparent data about, you know, where gun violence is happening, why it's happening, who it's happening to. And there is in Baltimore is just looking at their their dashboard. And it's really comprehensive.

[00:30:07] And the city, the mayor's office said that they can't do that because it would compromise or they can't do it to that extent because it would compromise investigations, which I, you know, citation needed on that, I think, because other cities have no problem doing it. This is where I do think maybe the action, you know, that that you're looking for from the executive side may not be the same actions that, say, Councilmember Rivera is looking for.

[00:30:31] Right. I mean, I think I think she'd be quite happy if there was a there was greater police presence in Magnuson Park or in the U district and another problem area. But that might be called for. I'm just saying that this report doesn't say just do that. They're not. This report isn't defund the police. It's like, no, no, you're right. Use police more effectively and use all this other stuff. Yeah, you're right. That they're calling for. It's all of the above. Right. Yeah. Speaking of defund the police, Erica, there was a resolution about that. Yeah. Defund is dead.

[00:31:01] Long live defund. I thought it was already dead. Why did we need it? I mean, we all love sense resolutions or I should just resolutions generally that are symbolic and don't do anything. But why do we need this one? This one was proposed by Rob Saka. And as I wrote in my piece about it, it was I mean, ironically, for a council that came into office saying they were going to end, you know, the performative bullshit of the last council. It is the most performative bullshit.

[00:31:28] And it's just it's literally a resolution saying we denounce defund. It's over. We, you know, essentially apologize for the previous council. They're causing all the problems. They caused all the problems. But now it's over. And we're no longer ever going to again talk about defund the police. And God, I hope they don't because we never defunded the police. And that council that was there in 2020 was there five years ago.

[00:31:54] And if this council, I mean, I don't know what the strategy is of continuing to blame that council for everything that's happening now. I just I don't think it works if it ever did. But yeah, just a complete performative resolution denouncing defund. And, you know, and everybody cheered. And did you advise Rob Saka to sponsor this legislation? I did not.

[00:32:22] And I just for full disclosure, have not had any conversations about this matter at all. You know, I mean, I've said before, I'm Erica's point. I've not been a big fan of this kind of, you know, symbolic resolution stuff, no matter what the topic of it has been. And there's been plenty of this kind of bullshit from the left. Like, you know, the previous councils like Shama Sawant seem to love. So you're doing it. You're as obsessed with Shama Sawant.

[00:32:51] No, I'm just pointing out that this is a tradition that the left brought to the council and seemed to fall in love with these. There's been performative resolutions going back like through all time, Sandy. But this one I thought was particularly bullshitty because they never did defund the police. So it's demonizing something that never happened. No, something did happen. And if you want to talk about the substance of it, let's not get into that argument again.

[00:33:15] But I do think it pointed at something real that did happen in the city and the direction that the city was going. Yeah, there were mass protests in 2020 against police brutality led by black and brown people who Rapsaka erased by saying that the only people who wanted this were who wanted to defund were white saviors on the council. Those protests were disproportionately white. And frankly, they were an expression of sort of, you know, white progressive luxury beliefs as far as I'm sure there were some black and brown people. We've relitigated. Wow.

[00:33:44] Let's not litigate the whole defund debate. I'm glad that at least you're sure there were some black and brown people. I was there covering it, and I assure you that there were. And your characterization of luxury beliefs is pretty wild. I did polling at the time, and it was very clear that support for defunding the police was disproportionately white and upscale. Right. So in Seattle.

[00:34:10] But, you know, the interesting thing, Erica, and I'm curious what you made of this, because while it was a unanimous vote for this resolution, six to nothing, there were three council members, perhaps conveniently absent as it went through. Alexis Rink, Dan Strauss and Kathy Moore were not there and therefore didn't have to weigh in on this resolution. And I thought that was pretty noticeable. Yeah.

[00:34:35] I mean, I think that Dan Strauss, and I don't know about Kathy Moore, maybe out of town, they asked for that date off back in, I believe, I want to say early, I want to say February. It could be wrong. Might have been early March. So before this was scheduled to be on the agenda. This was scheduled, and I don't know, it would be pretty, I don't know, it would be pretty calculating to ask for time off, you know, just for this meeting. I mean, they haven't been at other meetings either.

[00:35:03] Now, Alexis Rink, I don't actually know. I went back and I looked and I could not find her asking for the time off. So I don't know what her reason was. So, I mean, you could be onto something there, Sandeep, I just don't know. Yeah, call me suspicious. I mean, I could see her not wanting to have a big conflict with her, you know, her fellow council members because she doesn't want to be in the position of Tammy Morales. But, you know, that's just pure speculation on my part.

[00:35:28] But yeah, it would have passed if they had all been there and voted against it, which I don't think all of them would have voted against it. Right. But it just, I'm speculating. She's on the ballot this year while nobody stepped up to run against her. Yet, you know, you could see why a left-leaning council member wouldn't want to either vote for that. That resolution calling out defund the police or vote against it for political reasons. Yeah. Well, I just want to say one more thing about this, this Rob Saka resolution.

[00:35:57] First of all, I've heard that it was the very first thing he wanted to do when he came on the council and was unable to do it for reasons I don't, I don't know why. Maybe there were other priorities or he was advised against it. But so this was a really top priority for him. And he seems to take it incredibly personally. You know, he made this whole speech about how, as a black man, he can't abide having white people speak for him. And legit, I mean, totally.

[00:36:25] But he erased the five-woman-of-color majority that was on the council that, you know, was considering these things at the time. And again, never actually defunded the police. But, you know, four of those women of color were on the side that Rob Saka opposes. And so I just, I thought that was interesting. I don't know if he was trying to make a point that they were actually white or if he just kind of didn't, you know, was thinking of the other white members of the council.

[00:36:55] But, I mean, as he pointed out, there were no black members of the council at the time. So in his newsletter today, we're recording on Thursday, he said that this was a truth and reconciliation process. And you guys are a little bit older than me, but I remember the Truth and Reconciliation Commission on South Africa. And I'm wondering what you guys think of that analogy, that this is a truth and reconciliation process between the police department and people protesting the police department.

[00:37:25] Did he use that phrase in the context of South Africa? He didn't say South Africa, but we all know what that phrase comes from. Oh, well. I don't know. You know, obviously it's a non-binding council resolution. I'm just saying it's pretty strong language. As I recall, the post-apartheid truth and reconciliation process in South Africa was quite involved. It was more than just one non-binding resolution.

[00:37:55] Anyway, that's all I'm going to say about it. Let's talk about budget holes. We've got a few days, like about a week before we're going to get a new budget forecast. But for now, there's an anticipated problem with this payroll tax, Erica, coming in at $47 million less than anticipated, which isn't good. That's a fair amount of money.

[00:38:24] What can you tell us? Well, I mean, what is happening is what has been kind of predicted, which is that this funding source, which comes from the tax on the payrolls of large companies with highly compensated employees. And, you know, companies move around. They have layoffs. And the tax is just inherently volatile. And yet the council has made a decision in the last several years.

[00:38:53] But, you know, to kind of make this permanent in last year's budget, they decided to rely on this funding source to fill a general fund gap. And that's not technically a problem yet because, you know, they I mean, they do have ever growing budget deficits, you know, out into the future. But it's not it's not technically a problem yet.

[00:39:15] But it could there could come a day when, you know, I mean, I think this year's budget, we could find out that revenues are going to be quite a bit off and there might not be enough of this magic money, which, again, was supposed to be dedicated to specific, you know, capital projects and short term things that, you know, you wouldn't have to keep paying for year after year. Now it's paying for things like police and fire. So, you know, I mean, it's it's going to be a problem at some point.

[00:39:43] I mean, unless, you know, today we're recording this as the stock market tanked on Thursday. So I don't anticipate a massive economic turnaround. And so we're going to get more news about revenue forecasts, as you said, in a week. But I think that, you know, this kind of illustrates the the lack of wisdom in relying on a volatile funding source to pay for things that the city has to pay for. Right.

[00:40:08] I mean, it raises the bigger question that, you know, we've kind of danced around or at least maybe brought up in passing and in previous episodes. But basically, to put it bluntly, like, what the fuck is Seattle going to do if we actually if Trump Trump actually tanks the economy? Right. If we have a real recession in Seattle, which the last time we had anything like that was the Great Recession back in 2008, 2009. Right. When McGinn was mayor and involved a very painful belt tightening of city governance.

[00:40:37] There were lots of layoffs back in back in that era and a significant shrinking of of, you know, the scope and and and scale of municipal governance. And that was now what? That's 16 years ago. Right. That is 16, 17 years ago that that was happening. We've had a sort of we've been kind of fat and happy ever since.

[00:41:01] Right. It's been a period of enormous growth and increase in wealth and increase in revenues and increase in services and increase in, you know, just about everything in Seattle population, et cetera. So what happens if we have that kind of recession again? Holy shit. Well, not just that, but I mean, even even in the absence of that, I mean, federal funding cuts are coming.

[00:41:28] And, you know, a huge amount of of the stuff that the city of Seattle pays for is, you know, is partly funded or largely funded by federal dollars. So we're talking about, you know, health and human services cuts, HUD cuts, cuts to, you know, the agency that or the elimination of the agency that oversees addiction treatment in this country. I mean, it's it's going to be ugly even if somehow the stock market pulls out of its spin and, you know, we don't go into a depression.

[00:41:56] I mean, there is we're just meeting about this and council today to discuss like what this is going to mean for all the homelessness agencies, including the regional homelessness authority. I mean, it's going to be really, really significant. And I worry that, you know, that this has not been taken seriously enough by our current elected leaders, at least in the city. That kind of recession, depression, whatever whatever happens is going to affect every city, not just Seattle.

[00:42:24] I mean, I guess I mean, the saving thing is that our tax base tends to be less volatile than taxes in other states that are dependent on what we should have and wish we had, which is an income tax. But when you have major recessions, income taxes are the ones that are the most volatile compared to sales and property taxes. So I don't know how much the volatility question enters into it as much as just the volatility of the recession, which is going to affect everybody really badly.

[00:42:52] Unless we're somehow more dependent on federal tax dollars than other cities. I don't know. I don't think we're more dependent. But I think that, like you said, I mean, just like a recession or depression will affect every city. So will, you know, the federal tax, the federal cuts that, you know, I mean, every homelessness department depends on massive amounts of federal dollars to, you know, to make housing work, to make shelters work, to make services work.

[00:43:15] And, you know, I mean, we're also seeing cuts to health care for the most vulnerable, not just unsheltered people, but, you know, non-English speakers, people who live in rural areas. I mean, it's just it's going to be pretty devastating. And I think that I mean, I remember talking to Bob Kettle about this early on and I was like, you know, so what are we going to do if there's, you know, a natural disaster, say an earthquake or, you know, something bad and FEMA doesn't come.

[00:43:42] And, you know, I mean, his response at the time, I'm sure, you know, this wouldn't necessarily be his response now, but this was after the election. You know, he said, well, we'll worry about that when it happens. And I just I just found that a very inadequate response and kind of alarming that like, you know, at the time, maybe people were giving grace to Trump in some way, which I don't think was warranted if that was going on. But I mean, yeah, we're fucked. Like it's it's not going to be a pretty four years in Seattle, like no matter whether there's a recession or not.

[00:44:11] I mean, we're just we're going to have to supplement so much money. And the state, you know, Bob Ferguson is pretty clearly against the wealth tax and possibly against other taxes. So I don't know that we're going to have revenue saving us at the local state level either. Yeah, I was just going to going to say, I mean, a few weeks ago, the Trump administration, you know, announced that they're closing the Small Business Administration office in Seattle. Right. And then just in the last week, I think it was the Health and Human Services office.

[00:44:38] They just announced they're closing to Erica, to your point, like this seems like, you know, and then we're looking at D.C. like Elon Musk and his, you know, doge boys are basically like driving a Mack truck through huge swaths of the federal government and basically, you know, you know, unraveling and destroying it. And then obviously that's going to have some downstream consequences.

[00:45:00] That's going to. And then you add the punitive stuff where Trump's going to start coming after places like Seattle because he doesn't like our politics and what we believe in on immigration or whatever. Right. And sanctuary stuff. I mean, we rely on global trade, these tariffs. I mean, just every from every direction. I mean, it may not affect Seattle that much more than other cities that are going to be devastated. But I do think, you know, we should have been raising the alarms, you know, last November.

[00:45:25] It's all going to be offset by the rush in new manufacturing jobs, though, that flood our economy and the return of our vibrant working class. Yes, yes. Well, you know, just to bring it back to the to the to the jumpstart tax. Right, David, which is where you started this segment of the conversation. So and to a point that Erica was making earlier, when the jumpstart tax was first passed in 2020, they had some projections of estimates or guesstimates of what they thought it was going to raise.

[00:45:53] And even with this forty seven million dollar decline, it's still bringing in more than they were originally assuming. And so last year, yeah, to Erica's point, they did use a ton of that money to backfill their budget hole. But they were still able to fund all of the, you know, new spending stuff that had originally been committed to as part of the jumpstart tax. They just took the delta. Well, I mean, they were able to fund it based on the original estimates. Yeah, based on the original estimates. Extremely ridiculous math to make that work.

[00:46:22] Right. But my point is that's not going to go on. And I think this is your point, too. That's not going to go on forever. They're going to start running into now, you know, a decline in the total revenue as well as, you know, the ongoing budget hole costs. And are they going to now start the day when they start cutting in even that original sort of spending commitment, I think, is the day when things amp up. Of course, they're going to get rid of that. I mean, they don't care, but they weren't there. They hate the last council. They think everything they did was bad.

[00:46:51] And like, I'm sure that they support some of the programs that jumpstart was originally earmarked to fund. I mean, not specific programs, but program types like like affordable housing. I mean, Kathy Morey talks about affordable housing all the time. That's what jumpstart mostly pays for. But I think that, of course, like that's going to be the first place they look because it's an easy place that looks like free money. And, you know, and I just I don't think like if we if we end up with a budget that relies on 400 million dollars from jumpstart.

[00:47:17] I mean, that is a huge chunk of, you know, a six billion, seven billion dollar budget. And then that goes away. You know, there's then you've got to cut 400 million dollars. And so, you know, I just I think that, you know, last year the council had the council and mayor treated the budget in a very unserious way. They added tons and tons of new spending after saying they were going to make cuts. And if they do that again this year, I mean, you know, it's just I think that'll be I don't know.

[00:47:44] It's a it's a bad sign if they're not taking this budget crisis seriously as well. And they didn't take it seriously last year. They just said, look, we got free money over here. We're going to find 100 million dollars in new stuff. It's the gloom and doom episode of Seattle Nice. That's it for another episode. I know Sandeep's got more to say. Save it. We're going to hear it next time. I'm David Hyde. She's Erica C. Barnett. He's Sandeep Kashuk. Our editor is Quinn Waller. And thanks, everybody, so much for listening.