Kevin Daniels Says Businesses Can Help Solve Seattle's Affordable Housing Crisis, But Not Through A Head Tax

All eyes are on Seattle, thanks to Seattle City Council’s decision to impose a head tax on the city’s top employers.

Daniels Real Estate President Kevin Daniels has heard from people all over the world asking about the controversial new tax.

“Are we sending out the right message to the world about our city?” he asked.

Daniels will address the head tax at Bisnow’s Seattle Downtown event June 26 at The Sanctuary. As the developer of The Sanctuary, Daniels preserved the 100-year-old former First Methodist Church. The Mark, another Daniels development, sits on the same block.

Daniels said the new tax gives the world the impression that Seattle is not business-friendly, though he doesn’t believe that was the council’s intention.

Lack of affordable housing is a problem, he said, but taxing businesses that create jobs is not the proper mechanism to raise the funds. There is a lack of efficiency at the city that slows down the whole building process, including efforts to build affordable housing.

“It takes three years from start to finish to get anything built in Seattle,” he said. “Go anywhere else and it’s a year.”

Common sense is missing from the process, he said.

Seattle has a housing crisis, Daniels said. But the problem is due more to lack of planning than anything else. Restrictions on high-density housing in certain neighborhoods choke out opportunities for living space while driving up the prices of existing dwellings.

Additionally, some of the businesses that will have to bear the brunt of the new tax started out as small businesses in Seattle, he said.

“They should be celebrated.”

Daniels is not saying that businesses shouldn’t contribute to the housing crisis solution.

“Businesses can help solve the problem,” he said. “Amazon spent more money last year through Mary’s Place than this whole head tax will raise.”

He expects the head tax will do more damage than good, and he knows that wasn’t the intention. However, the city’s resources must be better managed.

“The city had more revenue last year than it ever had, but it finished in a deficit,” he said. “That is the single reason for the head tax. They really lost control of the city’s finances. If you pass a tax — rather than invest in the city — and you’re already spending more money than you have coming in, you are just forcing less money to come in.”

Seattle’s economic boom has driven up the price of housing there, but those who own homes have benefited from that.

“Why would we want to use a water hose to put out a flame?” he asked. “If the city wanted attention, they got it. We look like a commie outpost out here on the West Coast.”

Daniels hopes the tax will never come to pass. He expects the council will recall the tax once council members realize the momentum behind the repeal efforts.

“This isn’t a fight ... most of the city council wants,” he said.

Until then, other cities such as Tacoma salivate over the thought of a major Seattle exodus. It recently offered a $275 per job incentive for businesses that create jobs in Tacoma, just 30 miles south on Interstate 5.

“The other cities are watching Seattle and saying, ‘hmm,’” Daniels said.

Hear from Daniels and other experts at Bisnow's Seattle Downtown event June 26 at The Sanctuary.