Will a No Vote on Prop. 1 “Keep Seattle Affordable”?

Keep Seattle AffordableThis is rich. I spotted the ad at right this morning.

I laughed out loud when I read it. Specifically the first word there: “keep.”

If you’re not wealthy, Seattle is already unaffordable by nearly any metric. Rents are soaring, home prices are hitting new all-time highs, and inventory of both rentals and for-sale homes are at all-time lows.

I don’t live in Seattle proper, nor do I have any desire to. I have no position on Seattle Proposition No. 1 (a.k.a. “Move Seattle”), but I find the language in this ad to be laughable.

The numbers listed on the KeepSeattleAffordable.com “Facts” page are amusing as well.

Consider this sample tax bill from a home without a view on Queen Anne.

The property’s assessed value is $713,000. The total property taxes last year came to $6,833, of which the city’s portion was $1,870.

…if voters approve Proposition 1, the burden will jump another $439…

So $37 a month on a $700,000 home. That’s the line between “affordable” and “unaffordable.” Right.

I’m sure there are good arguments for and against this transportation levy, but “keep Seattle affordable” is not among them.

0.00 avg. rating (0% score) - 0 votes

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

43 comments:

  1. 1
    ongsomwang says:

    When you consider the fact that many Americans are feeling squeezed for money, than yes 500 dollars a year does feel like a lot of money!!

    After you factor in getting ripped off on child care expenses (which easily can go for 2K in this city), student loans (1K), monthly car payment, etc. etc (300 dollars)… it starts to add up. So yes 40 dollars a month (500 dollars extra) a year is just one more burden you don’t want to think about.

    When does it stop?

  2. 2
    Eastsider says:

    “So $37 a month on a $700,000 home. That’s the line between “affordable” and “unaffordable.” Right.”

    So $15/hr for the poor working class. That’s the line between “affordable” and “unaffordable.” Right.” /sarc

  3. 3
    The Tim says:

    You’d need to be earning around $140,000 a year and have a $140,000 down payment to barely “afford” a $700,000 home at today’s interest rates (affordability calculator).

    If you’re making $140,000+ a year and you literally can’t afford an extra $37 a month, you have serious budgeting problems.

    Note I am not saying I agree that taxes should go up. I am making a purely financial argument about personal budgeting and the usage of the term “affordable.”

  4. 4
    Eastsider says:

    In 2016, we can expect

    – (significantly) higher health insurance premium
    – higher prices due to $15/hr wages
    – (likely) higher gasoline prices
    – higher property taxes due to higher assessment
    – higher transport costs (e.g. 520 tolls, 405 tolls)
    – higher interest costs due to Fed lift-off
    – …

    Another $439 for Prop 1 is a non-issue???

  5. 5
    ongsomwang says:

    By Eastsider @ 4:

    In 2016, we can expect

    – (significantly) higher health insurance premium
    – higher prices due to $15/hr wages
    – (likely) higher gasoline prices
    – higher property taxes due to higher assessment
    – higher transport costs (e.g. 520 tolls, 405 tolls)
    – higher interest costs due to Fed lift-off
    – …

    Another $439 for Prop 1 is a non-issue???

    Exactly. An extra $439 when we are getting hammered with the cost of living is nothing to slouch off. It is an extra burden for those of us who are middle class. Yes 140K in Seattle is middle class.

  6. 6
    Erik says:

    RE: ongsomwang @ 5
    You could always buy a ranch in north Everett like Tim did if you are willing to live there.

  7. 7
    The Tim says:

    By ongsomwang @ 5:

    Exactly. An extra $439 when we are getting hammered with the cost of living is nothing to slouch off. It is an extra burden for those of us who are middle class. Yes 140K in Seattle is middle class.

    You have a strange definition of “middle class.”

    Only 18% of Seattle households make $150k a year or more, according to the most recent Census data (54,362 out of 297,920 households). The number goes up to 35% when you include everyone making $100k and up.

    If “middle class” is defined as the income range for which roughly a third of households are making less and a third of households are making more, then Seattle’s middle class makes between ~$50,000 and $99,999.

    Top 35% = $100,000 and up (103,353 households)
    Middle 28% = $50,000 to $99,999 (84,206 households)
    Bottom 37% = Under $50,000 (110,361 households)

    No way is a household making $140,000 “middle class,” even in Seattle.

  8. 8
    district says:

    RE: The Tim @ 7

    Since housing values have gone up, people are paying taxes on houses they could never afford to buy (again, at the current price.)

    This has to factor into your affordability argument too! It’s not the people who, today, can afford to buy the $700k house that are being taxed on the $700k house. It’s the people who bought for less, for whom an extra ~450 might be a bigger deal.

    This is not to say that the ad isn’t misleading or that I agree with it. It just doesn’t seem that much worse or more misleading than any other political ads. It’s easy to figure out how they are construing the facts once you look at it for five seconds.

  9. 9
    LW says:

    I wish I had bought a house 4 years ago when I left the area and just rented it out. Moving back here involved backing up the old Brinks truck. Paying way more for way less house.

  10. 10

    You Bloggers Did a Great Job, Especially Tim’s Comments

    Its like that old TV show called “Dragnet” where the Sergeant Joe Friday would comment, “just the facts mam”.

    Not much I could add, perhaps some honesty? How about folks that don’t need the Levy’s transportation fixing, the Levy fixes nothing for them? I assume most of these folks vote against more property tax funding for this type of transportation levy. Light rail comes to mind.

  11. 11
    ronp says:

    I bus and bike to work and walk a lot so I support the levy even though nearly half of it goes to roads and bridges . It costs a lot to live in Seattle but it is worth it to me and we need to keep our infrastructure up to date and safe.

    Here is a list of what the levy includes — https://docs.google.com/spreadsheets/d/1I1M7t-VDQfg8nX-lW98VXb0POBZEbQ2Cz2LqidktzM8/edit#gid=2139838350 .

  12. 12
    The Tim says:

    By ronp @ 11:

    Here is a list of what the levy includes…

    You mean what it might include.

    From page 8 of the full bill (pdf):

    The Spending Breakdown (Attachment A) provides additional information about the anticipated deliverables, anticipated spending amounts, and the anticipated revenue sources; but the Spending Breakdown is illustrative only and shall not be mandatory.

    Emphasis mine.

  13. 13
    HappyRenter says:

    Washington state does not have a state income tax. Money for public infrastructure has to come from somewhere. This time it comes from property taxes.

  14. 14
    I'm just hear so I won't get fined says:

    RE: softwarengineer @ 10

    Softwarengineer, you have had this backwards for a long time now. The only person blogging here is Tim. Everyone else including you are commenting on his blog posts.

  15. 15
    ongsomwang says:

    By The Tim @ 7:

    By ongsomwang @ 5:

    Exactly. An extra $439 when we are getting hammered with the cost of living is nothing to slouch off. It is an extra burden for those of us who are middle class. Yes 140K in Seattle is middle class.

    You have a strange definition of “middle class.”

    Only 18% of Seattle households make $150k a year or more, according to the most recent Census data (54,362 out of 297,920 households). The number goes up to 35% when you include everyone making $100k and up.

    If “middle class” is defined as the income range for which roughly a third of households are making less and a third of households are making more, then Seattle’s middle class makes between ~$50,000 and $99,999.

    Top 35% = $100,000 and up (103,353 households)
    Middle 28% = $50,000 to $99,999 (84,206 households)
    Bottom 37% = Under $50,000 (110,361 households)

    No way is a household making $140,000 “middle class,” even in Seattle.

    I disagree with you there. Please read this article:

    http://www.theamericanconservative.com/articles/are-you-really-middle-class/

    And this is why people in the so called “middle class” can barely afford to live in Seattle. It is VERY hard to have a decent lifestyle in the Seattle area if you are making 50K-70K a year with a family. If you are a single person, sure you are fine. And if you have a family, maybe you should move to the midwest…

    Factor in the cost of things like child care, student debt, car repairs, car payment etc, paying into savings, retirement etc…and your disposable income drops significantly.

    Finding a decent home let a lone a place to rent that is nice is not easy right now. The fact is the average “middle class” person is spending much more money on things like education, transportation, and health care than ever before.

    The average man on the street knows it. Doesn’t matter what CNBC talking heads spout off about.

    So yes low six figures in Seattle is what it takes to achieve the same life style as prior generations.

  16. 16
    HappyRenter says:

    RE: ongsomwang @ 15
    Cost of education is becoming more and more a factor.

  17. 17

    I prefer to see taxes be applied to all who will benefit. Prop 1 is supposed to:

    “replace an expiring levy and would fund bridge seismic upgrades, transit corridor and light rail access projects, pedestrian and bicycle safety projects, synchronized traffic signals, street maintenance and repair, freight projects, and neighborhood street projects.”

    I think it would be more appropriate to tax vehicles and bicycles instead of home owners…maybe up some Metro and light rail fees.

  18. 18
    Cap''n says:

    RE: Rhonda Porter @ 16

    If you own a home in Seattle, and ever decide to leave it, you benefit from the type of projects that could be funded by prop 1 regardless of your preferred mode of transportation. The assumption that homeowners need infrastructure, and property tax should be the source is reasonble. Home owners are presumably very likely to own cars, take public transport, bike commute….

  19. 19
    Scotsman says:

    When I worked very briefly as a mortgage broker 25 years ago I was constantly surprised by the number of folks who lived right on the financial edge. Forty year olds buying what today would be $600K homes who needed to borrow that last little bit from mom and dad, no real savings, every month a battle to the end. I doubt it has changed that much for those who are primarily dependent on income for their purchase. Maybe some of the brokers on this site can chime in with more current info? But I think many would be surprised just how tight finances can be for those most would perceive as wealthy and above the daily struggle. Yes, $40/mo can be an issue where you least expect it.

  20. 20
    Scotsman says:

    At any rate my ballot is already in the mail back to King County. Didn’t vote to approve a single tax increase. The issue isn’t getting more money- it’s what they do with what they already have. Just say no.

  21. 21
    The Tim says:

    By Scotsman @ 18:

    But I think many would be surprised just how tight finances can be for those most would perceive as wealthy and above the daily struggle. Yes, $40/mo can be an issue where you least expect it.

    I don’t doubt it. I still stand by my earlier statement, though:

    If you’re making $140,000+ a year and you literally can’t afford an extra $37 a month, you have serious budgeting problems.

    The problem here isn’t that one more tax is going to make Seattle suddenly “unaffordable,” it’s that people don’t understand basic budgeting.

    Of course, people also can’t be bothered to understand simple things like loan amortization before taking out massive student loans. Sadly, I am never really surprised by Americans’ lack of financial common sense.

  22. 22
    Cap''n says:

    It’s kind of interesting looking at the number of detached single family homes in Seattle compared to the number of households in each of the income tiers the Tim mentioned. At least at the last census, every household in the top third could own a detached SFH and there would still be tens of thousands of homes left for lower income tiers. Require owner occupancy of detached SFH and limit ownership to one home to resolve affordability problems? I am sure there are downsides….

  23. 23
    ongsomwang says:

    By The Tim @ 20:

    By Scotsman @ 18:

    But I think many would be surprised just how tight finances can be for those most would perceive as wealthy and above the daily struggle. Yes, $40/mo can be an issue where you least expect it.

    I don’t doubt it. I still stand by my earlier statement, though:

    If you’re making $140,000+ a year and you literally can’t afford an extra $37 a month, you have serious budgeting problems.

    The problem here isn’t that one more tax is going to make Seattle suddenly “unaffordable,” it’s that people don’t understand basic budgeting.

    Of course, people also can’t be bothered to understand simple things like loan amortization before taking out massive student loans. Sadly, I am never really surprised by Americans’ lack of financial common sense.

    The average 19-23 year old American isn’t thinking about financial common sense when they are taking out student loans. I agree with you that many people in this day and age lack common sense when it comes to financial planning, but Americans are encouraged to go into debt..

    That is a different story altogther.

  24. 24
    The Tim says:

    By ongsomwang @ 22:

    …but Americans are encouraged to go into debt.

    Indeed.

  25. 25
    ronp says:

    RE: The Tim @ 12 – Well it is close enough to vote for, the interest groups keep a sharp eye on SDOT, and priorities change over time so some flexibility is OK.

  26. 26
    LW says:

    I’m on solid financial ground. I always have budgeted carefully and saved/invested resulting in very significant gains. Although, in today’s housing market you can make a bad purchase. This purchase can wipe out all of your hard earned money. You can be looking at it becoming your forever home that will be impossible to unload when the stock market turns. If you are buying now, make sure you like the neighborhood and enjoy living there. You might be stuck there for a long time.

  27. 27
    Erik says:

    RE: LW @ 26
    I think the upcoming presidential change in 2016 may tip the scales and create a good buying opportunity for those with some cash.

  28. 28

    If they’re opposed to Prop. 1 a better strategy for Seattle voters would be to argue it doesn’t spend enough money or raise enough taxes. ;-)

  29. 29
    kenmorem says:

    By Erik @ 27:

    RE: LW @ 26
    I think the upcoming presidential change in 2016 may tip the scales and create a good buying opportunity for those with some cash.

    i thought house prices weren’t declining ’til 2024……..

  30. 30
    LW says:

    I foresee interest rates climbing quickly after Trump becomes president.

  31. 31
    Erik says:

    RE: kenmorem @ 29
    I still think we won’t see a decline in housing prices til then. If the economy goes does go down, inventory may at least free up a bit, but prices will stay the same. These buyers want so badly to believe they will get a buying opportunity that I want them to think there is a chance. Deep down, I think they are screwed, but who knows…

  32. 32
    Nathan says:

    When you say that someone needs to make $140k to be able to afford a house in Seattle, you are only thinking about people that would buy a house today. What about the households that make, say, $80k, bought their house back when it was only worth $200k, and have watched their property taxes soar with new assessments and valuations. Now they are paying property taxes on a $700k house with absurd assessments.

    Even worse, consider the people that bought their house many years ago, paid it off, are retired on a fixed income, and are getting hammered with these new property taxes.

  33. 33
    kenmorem says:

    RE: Nathan @ 32
    retirement isn’t a god-given right. it’s a privilege. if you haven’t saved up enough to cover cost of living increases, then maybe you should’ve worked longer. prices, taxes, etc, etc will only go up under an inflationary environment (which is what made it possible to pay off that home in the first place).

    remember, the concept of retirement is somewhat new in the grand scheme of things. people used to work ’til they died. now, you think it’s reasonable for someone to live for 30 years without working and not think about paying more in property taxes? give me a second… let me find my 1952 pack of topps baseball cards – i’ll sell it to you for a nickel.

  34. 34
    wreckingbull says:

    RE: kenmorem @ 33 – Better yet, let’s just grind up old people and use them for fuel. Sell the de-watered human-pellets to Seattle Steam and let it heat our trendy downtown bistros. A green solution to our energy problem, and they will shut up about surviving on fixed incomes!!!

    Your post leads me to believe that your career does not involve much physical work. There is a reason you don’t see many 75 year old plumbers, welders, and framers.

  35. 35
    kenmorem says:

    RE: wreckingbull @ 34
    i didn’t say life was fair. could the welder or farmer or whoever chose something different to do with their life? of course. should somebody that works at mcdonalds for 40 years expect to have a comfortable retirement because their body is broken down from being on their feet all day long? i’ll let you figure that one out. maybe society should cover the mcdonalds worker who can no longer pay the taxes on their house.

    sure, property taxes suck to pay, but everything gets more expensive over time. without a state income tax, how would you like to fund these things?

  36. 36
    Thin-Skinned Masta-Beta says:

    How much would it be worth to you if you never had to suffer getting stuck in traffic and to know reliably that you can travel throughout the area whenever and wherever you please without any delay?

    Since I’ve moved to Seattle, I’m feeling trapped. I don’t bother going anywhere most times of the day because I dread the traffic.

    For me I’d probably pay at least $200 a month for the freedom and spontaneity of driving and cycling safely and without delay when and where I please. It’s less than $7 a day… so it’d certainly be worth a lot more to me than what it cost…

    I’m sure that the initiative in question will do little if anything to remedy the kind of congestion or delays chronic to the area. However if they ever got bold they could make a real difference. It’s not that the proposal is expensive; it’s that it’s inadequate and that we drivers, cyclists and commuters hardly get anything of value. see the worthless SLUTs (South Lake Union Trolleys) stuck in traffic for a single example. And I and most other cyclists I know pretty well hate the “bikeways” on 2nd Ave and Broadway…

  37. 37
    Matt the Engineer says:

    By Nathan @ 32:

    When you say that someone needs to make $140k to be able to afford a house in Seattle, you are only thinking about people that would buy a house today. What about the households that make, say, $80k, bought their house back when it was only worth $200k, and have watched their property taxes soar with new assessments and valuations. Now they are paying property taxes on a $700k house with absurd assessments.

    Even worse, consider the people that bought their house many years ago, paid it off, are retired on a fixed income, and are getting hammered with these new property taxes.

    Yes. We should all feel bad for those poor people that have had a $500k windfall of equity in their homes. How on earth will they be able to afford $37 a month?! [/sarcasm]

    Washington has some of the lowest taxes in our country. We’re not throwing a big party with this tax money, just paying for some basic infrastructure.

  38. 38
    thatguyeric says:

    RE: ongsomwang @ 1

    This is such garbage. At a minimum, parking in my building downtown is $340/mo ($17/day early bird); I take the bus for $99/mo, some of which is subsidized. If slightly higher property taxes (another $37/mo, *not* the full amount, as I *already pay tax*) get us better bus service, that will make everyone’s commute better.

    Maybe you should sell your car and buy something used that’s more affordable.

  39. 39
    Deerhawke says:

    There is a real connection between the price of housing in this city and the decline in our public infrastructure relative to demand.

    Think about it this way. Why would anybody pay $700,000 for a townhouse in Ballard? Or why would they pay $1.35 million for a new single family house there? Does this make any sense?

    Well,….. Part of it is that people do not really want those crappy little 800 sf. uninsulated $550K bungalows with high utilities and never-ending remodel bills. (They come to decide that “Old world charm” can be a highly over-valued commodity.)

    Alright, but part of it is that every day the commute to Amazon/SLU has become longer and weirdly more unpredictable. You are not just worried about the potential for another “fish truck incident” at the Safeco S-curves where everybody is hours late getting home, but about some random fender-bender that might make you 90 minutes late for the 8:45 am strategy meeting where it is decided you are better at finding software bugs than creating next-gen architecture.

    These days, the cost of housing is increasingly driven by transportation and the commute. So it may a bit of a stretch, but maybe, just maybe , if we all vote for responsible public transportation plans, we can make it a more affordable city.

    Yes, this may seem quixotic, but in this environment, false hope may be better than no hope at all.

  40. 40
    Mk says:

    The problem is this is not the only tax. Every year or two, there are 3-5 new levies that increase property taxes by various amounts. They are cumulative, and of course most renters (by definition) are too stupid to realize that every penny of these taxes that they vote for will be passed on to them. And more. Vive la revolution (rent control, my ass)!

  41. 41
    Matt the Engineer says:

    RE: Mk @ 40 – They may be cumulative, but they all sunset. Instead of worrying about being taxed too much in one area, take a look at our overall taxes. We’re a very low tax state and a low tax city (which you could see if you look down at the roads and sidewalks or walk through a school).

    tax burden by state

    tax burden by city

  42. 42
    Mk says:

    Matt, it’s clear you’re a millennial without a clue. This is the reason CA citizens finally got fed up with rapacious politicians and adopted Prop 13.

    I live in Leschi, the neighbors on both sides of us are retired couples in theirs 70s to 80s. One couple is a retired schoolteacher and post office mgr. the other are retired nurses. They bought in the 70s, and paid less than $100 and $60k for their homes.

    Yes, it’s great that their homes are worth multiples their purchase price. But they are still on a fixed income. Short of selling their home (and moving where exactly?), the current value is irrelevant. Also, the market could crash tomorrow, as happened just a few years ago.

    This is why we have gentrification. So many have been forced to sell because of the property tax burden. Guess who the sell to? And guess what that does for affordability?

    Don’t you find it curious that Jeff Bezos (stingy as all hell) and Amazon were dead set against a state income tax. But were big time contributors to Move Seattke? So glad we have so many smart hipsters like you, along with Sawant, to outwit Bezos and ensure Seattle stays affordable. Instead of fighting the big guys and making the tax burden more progressive, let’s just keep dumping on property owners.

    Next year, there’ll be at least three more billion dollar packages that will be approved by the lemmings. And the year after… You’re so.. Winning!

  43. 43
    Matt the Engineer says:

    By Mk @ 42:

    One couple is a retired schoolteacher and post office mgr. the other are retired nurses. They bought in the 70s, and paid less than $100 and $60k for their homes.

    Yes, it’s great that their homes are worth multiples their purchase price. But they are still on a fixed income. Short of selling their home (and moving where exactly?), the current value is irrelevant.

    Of course the current value is relevant. This city gifted them half a million dollars each, just for being here first – no skill or effort required. If they really, really can’t afford $37 a month, then of course they could cash in on a little piece of this gift by pulling out a HELOC.

    Also, the market could crash tomorrow, as happened just a few years ago.

    Are you honestly predicting that the market will crash to the extent that their houses will be worth $60k again?

    Stop being cheap and pay for basic infrastructure. It won’t kill you.

    So many have been forced to sell because of the property tax burden.

    Name one person that has had to sell because of a tax burden. This is a straw man.

    Instead of fighting the big guys and making the tax burden more progressive, let’s just keep dumping on property owners.

    Yes, the poor property owners again, with their ever increasing house values. Who will think of the poor property owners?

    Snark aside, I do strongly believe we need an income or wealth tax in this state. But I’m unwilling to let our city crumble while I hold my breath and wait for that to happen.

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.