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Spokane sales tax revenue could be funneled to affordable housing

Community Frameworks affordable housing, at the corner of Sprague Avenue and Madelia Street, is seen in September 2017. The Spokane City Council is scheduled to consider a measure Dec. 9 that would allow a portion of the sales tax collected within city limits to be used for building more affordable housing. (Colin Mulvany / The Spokesman-Review)
By Adam Shanks adams@spokesman.com(509) 459-5136

The Spokane City Council will consider legislation this month that would redirect a portion of sales tax revenue into affordable housing.

Aiming to take advantage of a new state law meant to encourage communities to invest in affordable housing, the proposed city law would allow Spokane to take a cut of sales tax revenue and dedicate it to subsidize housing.

The legislation does not increase sales taxes and will not be felt by consumers. Rather, it sets aside a small portion of the locally collected sales tax before it lands in the state’s coffers. The tax will be collected for 20 years.

Though the sales tax is just 0.0073% of the cost of every item sold in Spokane, it is expected to add up to hundreds of thousands of dollars in revenue for the city.

Officials estimate about $400,000 in revenue through the program every year. But the city can opt to get 20 years of revenue up front through a bond, which City Council President Ben Stuckart said would exceed $7 million.

Spokane Valley and Spokane County also have signaled they want to jump on board to use the program and could partner with the city to pool their funds together.

State law allows for the funds to be used for the purchase, construction or rehabilitation of affordable housing units. The money also can be used on the maintenance or operational costs of affordable housing units.

The affordable housing must be set aside for people who earn below 60% of the median income of the county.

Stuckart said he’d like to directly fund housing providers that will construct new affordable housing in Spokane.

The Dec. 9 proposal is the second in a two-step process required by the state. The council first passed a resolution stating its intent to impose the tax on July 29.

The proposal is just one of several housing-related items on the council’s Dec. 9 agenda, which includes a slate of tenant protections and a proposal from Councilwoman Kate Burke to reduce utility costs for providers of homeless shelters.