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Posted on: December 13, 2022

Council Votes to Continue Discussions on .01% Countywide Sales Tax for Affordable Housing

A photo illustration showing affordable housing in the context of an umbrella.

Today the Pierce County Council voted to continue discussions on a countywide one-tenth of one percent sales tax increase for affordable housing and related services, as allowed by Washington State law, until Tuesday, March 7, 2023.  The motion to continue was made by District One Councilmember Dave Morell.

“There is no question affordable housing is part of the solution in addressing the homelessness crisis in Pierce County,” said Morell. I am committed to working with my colleagues to find a solution to address these challenges in a way that works for Pierce County.”

If adopted, the sales tax is expected to generate approximately $103 million in revenue over the next four years. The county’s Comprehensive Plan to End Homelessness estimates Pierce County spends approximately $40 million a year to operate the homeless crisis response system and needs to spend an additional $117 million a year to fully fund the system in the next five years.

The county’s Housing Action Strategy, which was adopted in November 2022, also found Pierce County must build at least 50,600 housing units at 50% of Area Medium Income (AMI) or less by 2044, and over half of these units must be affordable to households earning 30% AMI or less. According to the strategy, the private market is not able to build housing for this population without significant public subsidy.

The intent of the tax is to create more affordable housing funds that support people whose income is at or below 60% of the median income of Pierce County and have behavioral health conditions, are veterans or senior citizens, persons who are homeless or at-risk of becoming homeless, unaccompanied homeless youth or young adults, persons with disabilities, or are domestic violence survivors.

A minimum of 60% of the revenue must be used for

  • Constructing or acquiring affordable housing, behavioral health facilities, or facilities providing housing-related services.
  • Funding the operation and maintenance costs of new units of affordable housing and facilities where housing-related programs are provided. 
  • Supporting newly constructed evaluation and treatment centers. 

“The collective impact this will have on the county’s response to the homeless crisis cannot be understated,” said Council Chair Derek Young. “This is a major investment in the health of our county, and it meets the funding needs outlined in our plan to end homelessness. It will provide flexibility for an ever-evolving crisis.”

If the affordable housing tax is eventually adopted, the Pierce County Council must approve all expenditures from the fund and periodically establish funding priorities by resolution or through the Council’s normal budget process. Any unexpended funds remaining at the end of any budget year shall be carried forward from year to year and not be transferred to the general fund.

“A key piece of this legislation is the revenue can be used to help support people who are at a chronic risk of becoming homeless,” said District Four Councilmember Ryan Mello. “We need this approach. To end homelessness, we have to prevent it from happening in the first place.”

The impact to the taxpayer in Pierce County would be ten cents for every $100 spent, with groceries, medicine and certain medical supplies and hygiene products exempt from the tax.

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