by Jim Scarantino | Feb 12, 2020 | General
One segment of the housing market can and should bear higher taxes to generate funding for affordable housing. That is realtors, who take a percentage of the sale price of houses built and maintained by other people. As real estate prices rise, they earn increasingly higher commissions for the same effort. Higher taxes on realtors can alleviate the harm being caused by decades of poor land use and zoning regulations, stifling building codes and regressive, constantly rising property taxes.
Those harmful policies must be reversed, but it will take a sea change in political power and perspective. The current Democrat majorities at state and local levels will, until that change comes, continue to seek sources of funding for affordable housing. The taxes they choose, such as property, real estate excise and sales taxes, only aggravate inequities. Bringing real estate commissions into the mix can generate substantial revenue for affordable housing funds, and contribute greatly to eventful, more meaningful reforms. This can be done without making housing less affordable and less available, serious flaws in the other solutions housing activists have been pursuing.
Readers of this site are likely surprised to see me calling for a tax increase. But back during the Prop 1 campaign in Jefferson County in 2017 (a ballot measure to raise property taxes for affordable housing) I made the same proposal. The need for affordable housing has only gotten worse. I am not talking about housing the itinerant homeless. We are seeing working class people and small business owners unable to live to in our county because they cannot find a place to live. Creative, industrious people that can contribute to our growth and prosperity are departing or avoiding Jefferson County. The ripple effect of their aversion to participating in our community hurts all of us on many levels, now and in future years.
Make no mistake, the decades old policies and ideology of the Democrat monopoly on power is responsible for this situation. They have determined zoning, building codes, land use regulations and tax policy. They seem more averse to achieving substantial corrective policy reforms than they do to raising taxes. Currently, we are seeing housing activists, working with Democrat sponsors, pursuing and achieving increases in sales taxes and appropriations, which, of course, are funded by taxes.
The resistance in Jefferson County to raising property taxes presents an opportunity for considering what should have been to housing activists an obvious, just and simply administered source of tax revenue: real estate commissions.
I would venture that housing activists have not examined this idea because they have been co-opted, if not corrupted, by politically influential realtors and their trade groups. Perhaps I will expand on that observation as this series unfolds.
Consider the alternatives housing activists have been pursuing.
Increasing Property Taxes. Here, in Bellingham, Seattle, Tacoma and elsewhere, they have sought, and sometimes won, property tax hikes in the name of combating homelessness and housing insecurity. But when they have succeeded they have only made housing for everyone more expensive, placed homeownership out of reach for more people, and caused rents to rise.
Extracting Concessions from Homebuilders. Housing activists sometimes simply want to have government require builders to create affordable housing. To the builder, that means spending their resources and time on housing that does not pay its way or earn a positive return as it is sold or rented at below market rates. Putting greater burdens on home builders in the name of increasing the supply of affordable housing makes no more sense than raising property taxes to promote affordable housing. Builders are the people who take the risks to actually build something. They have to make a profit in order to stay in business. Their continued success means that the next house can get built. Set asides–requiring them to restrict the income they can make from a certain percentage of new housing units–is a disincentive to building anything. At the same time they are being hamstrung in their ability to earn income from what they have built, their costs and taxes continue to rise. This is no way to encourage more home building.
Rent Control. Rent controls have been proven to limit the supply of new housing stock. Sure, if you are lucky enough to score a rent controlled unit, you are happy. But squeezing landlords, who are risking their investments and time to provide rental housing, does not encourage investment in more rental units. The overall effect is to stagnate the supply of habitable units as demand increases. Cities that have frozen or slowed rents do not freeze or slow the taxes and underlying costs that erode a landlord’s ability to keep her rental units in good condition. Legislation that ties a landlord’s hands in how they conduct their business–by prohibiting them from ensuring that prospective tenants will not be trouble, or requiring them to house for free deadbeat tenants for prescribed periods of time–do not encourage anyone to take on what is already a difficult and risky way to earn a living.
Realtors Are The Answer. Realtors can be taxed at higher rates and there will be no adverse consequences for the housing and rental markets.
Consider how they make their money. They earn commissions, usually around 6%, when a property for which they have the listing is purchased. They also make money on the other side of the transaction if they are representing the buyer. For a property that sells for $500,000, the realtors in the deal split about $30,000. They could make this amount of money in a few days, as frequently happens in tight markets like we see in Jefferson County.
Realtors earn this hefty amount of money without risking any of their own. They did not invest in that house. They did not fix the septic system. They did not pay taxes and maintain the landscaping. But they may reap a profit equal to what the homeowner spent to put on a new roof.
As real estate prices increase, realtors are not working harder to earn those higher commissions. They pretty much do the same thing for a $500,000 house that they do on a $250,000 house. Additionally, much of the leg work realtors did years ago is being done for them by Zillow, Redfin and similar websites. Taking photographs that make a room look larger than it is in reality may be a new skill for realtors, but it hardly justifies the huge commissions they earn when so much of the screening of a property is done for them remotely on the Internet.
Despite these new technologies, realtor commissions have not appreciably budged. Technology has benefitted consumers in just about every other industry by increasing efficiencies. Why haven’t real estate commissions dropped? We will discuss the anti-competitive legacy and impacts of realtors and their trade associations in keeping transaction costs high and contributing to housing unaffordability.
Currently, realtors in Washington pay a 1.5% tax on their commissions. That is higher than realtors pay in other states. But Washington, particularly western Washington, also has faster rising and generally higher real estate prices and a greater shortage of affordable housing than many other states. The amount of tax realtors pay on their commission is, unfairly, far, far less than the seller pays in real estate excise tax.
That 1.5% tax on a $30,000 commission on a half million dollar house comes to only $450. The realtors in the deal walk away with $29,550
Doubling that tax to $900 would be a drop in the bucket. Realtors would still take the listing. They would still take their photos for Zillow. They would still walk prospective buyers through the house and hand out their cards. The would still be telling the seller to spend more money to make the house more presentable.
And it would make no difference to the supply of housing. I submit that the real estate brokerage tax could be raised to 10% and still make no difference on the availability and price of housing. For the chance at netting $27,000, realtors will take that $500,000 listing. They still could make with a couple days’ work what is a year’s salary for many people in this county.
Next: Realtors’ History of Anticompetitive Practices Contributes to Housing Unaffordability.
by Jim Scarantino | Feb 3, 2020 | General
Jefferson County will be just fine even if the models predicting global warming prove accurate. We will face no inconvenience other than more rain.
Don’t take it from us. Listen to University of Washington meteorologist Cliff Mass. He has been working with a team of very able and qualified researchers, using the best computers, running the most reliable climate change models. He has found that Jefferson County, along with much of Washington State, will be in a “sweet spot” even if the most realistically dire computer scenarios come to pass. “A compelling case can be made that the Pacific Northwest will be one of the best places to live as the earth warms,” he and his team of researchers have concluded. Read their conclusions in more detail here and here.
Mass believes the earth is warming and that increased warmth in the atmosphere will induce a changing climate. But he has stated repeatedly that “we do not face an “existential threat” and that there is no scientific basis for raising alarms about a “climate emergency.”
“There are so many local politicians, media outlets and activist groups painting a depressing, fearful picture of our future regarding global warming. They are wrong.” Dr. Cliff Mass, University of Washington meteorologist
What about dreaded sea level rise? Not a problem for the Olympic Peninsula or most of Washington, the UW team has concluded, except for the area around Long Beach. To the contrary, much of the Washington coast is RISING as we continue to emerge from the last Ice Age and the land springs back.
What about increasing drought and water scarcity? The opposite, increased flooding due to increased precipitation, is what the UW researchers predict. Mass and his team are urging better storm water channeling and construction of larger reservoirs.
What about increasingly “extreme weather”? Not to worry, Mass and his team of researchers assure us. We should not even worry about significantly worse wind storms.
Heat waves and more destructive wildfires? Governor Inslee has raised alarms about the state burning up as it dries out due to runaway temperature spikes and heat waves. But the scientists don’t see what Inslee sees. A cooling Pacific Ocean (it has been cooling for 35 years) will continue to produce moderate temperatures for the Pac NW. Increasing fires are likely only on the eastern slopes, and there the solution, according to Mass & Co., is reversing decades of forest mismanagement and discouraging building close to or within forest boundaries.
Mass and fellow researchers do see temperatures very slowly rising, but not rapidly and only noticeably towards the end of the century.
Local climate alarmists (dare we say, climate alarm manipulators and exploiters) who sit on the Jefferson County Climate Action Committee and the Public Health Board are talking about declaring a “climate emergency.” An emergency declaration could be used to restrict just about every personal and commercial activity, to increase taxes and fees and impose a wide array of regulations on land use and energy consumption.
The City of Everett is considering declaring a climate emergency as a prelude to draconian and unprecedented regulatory measures. Mass has criticized that effort on the grounds that Everett, like all of the Puget Sound, does not face a climate emergency, at least if you bother to consult the best science coming out of the University of Washington’s Department of Atmospheric Sciences.
In 2017 the Jefferson County Commission declared a “housing emergency” as an excuse to seek a property tax increase for the alleged purpose of providing affordable housing. Voters saw through that ruse and soundly defeated the scheme, known as “Prop 1.”
County Commissioner Kate Dean, who pushed the “housing emergency” and Prop 1 campaigns, is playing a central role in promoting a “climate emergency.”. Kees Kolff, chair of the Climate Action Committee, a hospital commissioner and member of the Public Health Board along with Dean, may be pushing even harder in order to accelerate implementation of strict measures called for in a climate action plan he helped draft.
Dean and Kolff intend to roll out their effort over coming months, perhaps culminating about the time of Earth Day with public hearings, a “charette,” that Dean discussed at the last Public Health Board meeting. Even though climate science is against them, they and local activists still seek to use their political power to achieve declaration of a climate emergency, followed by implementation of restrictions on the use of fossil fuels, wood burning, construction, vehicle choice and usage, the mill and marine industries, and a wide range of personal and commercial activities.
We will continue to follow their effort to declare a “climate emergency” in Jefferson County.
In the meantime, it is worth noting that Dr. Mass is not alone in decrying political maneuvering to declare a climate emergency. On September 29, 2019, 500 scientists delivered a letter to the United Nations very clearly stating, “There is no climate emergency.” You can read about that at this link. For the letter itself and list of signatories, click here.
by Jim Scarantino | Jan 31, 2020 | Politics
Gary Ridgeway, the Green River killer, raped, tortured and murdered over 48 women. The Port Townsend Womxn’s March wants him, and all other rapists, murderers, child rapists and wife beaters released from prison in the name of women’s rights.
Yup. That’s right, crazy as it sounds. But the Womxn’s March is nothing any more if not crazy.
In reading what follows, please remember that the Port Townsend City Council and the Jefferson County Board of County Commissioners have enthusiastically endorsed the PT Womxn’s March, to the point of offically declaring a day of recognition for the group’s efforts.
The Womxn’s March’s primary and longest serving organizer, Emelia De Souza, released on the group’s Facebook page a statement from a local drag queen who calls himself “Golden Powers.” (A weak play on words, alluding to an act most people would find revolting. If you don’t get it, just Google “Golden Powers Drag Queen” and you won’t be long in the dark).
This is how low the PT Womxn’s March has sunk. Its last march drew only a fairly small, low energy group, far below the numbers it attracted when it was the Port Townsend’s Women’s March. As this author observed, at least a third of its marchers were imported and came off the ferry from Whidbey Island.
But back to the Womxn’s March call to release Gary Ridgeway and other very bad, very dangerous, downright evil people.
In the message from Mr. Powers, broadcast by the PT Womxn’s March, he calls for an end to all prisons. “We must see people in prison as humans, advocate for their care, then begin to talk about divestment from prisons.” He goes on to quote Angela Davis, who escaped all but a year in jail for purchasing firearms for a courtroom takeover resulting in the death of four people. Powers likes what she wrote: “[Prison] relieves us of the responsibility of seriously engaging with the problems of our society, especially those produced by racism and, increasingly, global capitalism.”
Powers is a genius. He knows what makes killers and rapists tick, and it is, “increasingly,” global capitalism. (As Stalin once decreed, there is no crime under socialsim. Never mind people like Andrei Chikatilo or Yang Xinhai, and we’ll also ignore the tens of millions murdered by anti-capitalists Lenin, Stalin, Mao, and Adolph Hitler).
Here’s where Powers, and by endorsement, the PT Womxn’s March, calls for freeing The Green River Killer. He writes: “People in prison are more than a TV show or punchline. Prison abolition is the epicenter of community care. Inmate’s rights are women’s rights, LGBTQ rights, immigrant rights, worker’s rights.”
This call for abolition of prisons, Mr. Powers writes, springs from “our feminism.”
The walls the PT Womxn’s March want to bring down separate us from people like Ridgeway, who preyed primarily on sex workers, another group Powers wants the Womxn’s March to champion. Prisons keep off the streets people who kill, rape and rob, and will do so again if they are not behind bars. It is more than a punishment; short of execution, incarceration is the only way to protect the weak, vulnerable and defenseless from monsters like Ridgeway. When Ted Bundy got himself out of prison, what did he do? He bludgeoned to death more young women. If Bundy were alive and able to attend one of the Drag Bingo parties Golden Powers hosts, he’d be there hunting for his next victim.
But, hey, feminism demands the end to imprisonment of rapists and murderers. So says the PT Womxn’s March through its thoughtful spokesperson.
The Women’s March was nonsensical from the beginning. It never stood for anything. It was about venting and throwing a tantrum. It had as its national leaders people who have called for sharia law that oppresses women around the world, who have openly displayed their hatred of Jews, and who participated in the kidnapping, sexual torture and murder of a gay man. Its leaders were friendly with the Nation of Islam, not exactly a force for liberating women. If you doubt what I’m writing, do some research on Linda Sarsour and Donna Hylton.
And now, on our local scene, its voice is that of a man who dresses as a woman and wants Gary Ridgeway again cruising SeaTac’s International Boulevard. Because, after all, putting killers and rapists back on the street is the “epicenter of community care.”
by Jim Scarantino | Dec 3, 2019 | General
The City of Port Townsend bought and imported at significant cost a nearly 70-year old building that had just failed a Canadian hazardous materials inspection. The presence of asbestos and lead in the troubled building has been disclosed only recently as the group behind the “affordable housing” project seeks a State Environmental Protection Act (SEPA) permit, and the projected costs of completing the building’s eight apartments break the $3 million mark.
This and other information that will be reported in upcoming articles came to light in response to another public records request filed by Port Townsend Free Press. Our past reporting has exposed the soaring costs of the project, subsidies hidden from taxpayers and knowledge by the City and project developers that the amount of the City’s loan to complete the project was inadequate from the start.
Cherry Street “Affordable Housing” To Cost More Than $2 Million, May 28, 2018.
The Tragedy of the Cherry Street Project, December 12, 2018.
What’s Happening With The Cherry Street Project?, October 29, 2019.
Asbestos and Lead
In May 2017, the City of Port Townsend purchased a mid-Twentieth Century wooden building that had been standing in Victoria, B.C. That building was later barged across the Strait of Juan de Fuca and settled onto stacks of wood, known as “cribbing,” off Cherry Street in Port Townsend. It sat on those stacks of wood for over two years until the Summer of 2019 when it was finally provided a permanent foundation.
The City gave more than an acre of land, valued at over $600,000, and a quarter of a million dollars to a non-profit group called Homeward Bound Community Land Trust. It was at the time a defunct organization with only one member. The public was told that the cost of rennovating the building and adding four small single bedroom units at ground level would be less than $500,000. Since then the City has loaned the group $834,000 and provided a nearly $500,000 additonal subsidy and other grants and services free of charge. An upcoming report will detail how the projected cost now exceeds $3 million, more than six times the original stated cost.
Because the building had been slated for demolition, a hazardous materials study was conducted in February 2017 by Island EHS of Victoria, B.C. Their investigation found asbestos insulation on pipes and elbows. Asbestos was also found in kitchen flooring. The levels of asbestos concentration significantly exceeded Canadian standards for environmental exposure. Removal of the flooring was deemed “high risk.”
Lead at unsafe levels was found in the interior wall paint and exterior trim.
When Port Townsend Free Press reviewed the City’s records more than a year ago, this hazardous materials report was not in any of the permit or correspondence files. It was turned over to the City only in September 2019 during the process of obtaining a SEPA permit, a necessary step before further work could proceed. Correspondence reviewed by Port Townsend Free Press shows Homeward Bound only disclosing the findings after being informed that its SEPA application must address any hazardous materials in the building. The report was provided in what appears to have been an attempt to assure the city that hazardous materials were not an issue. But upon receipt of the report, a city building official immediately noticed and informed Homeward Bound that the report indicated the presence of asbestos and lead. At that point, the correspondence in the SEPA permit file ended on this issue and it remains unresolved.
Homeward Bound has not responded to any questions posed by Port Townsend Free Press as to how long it has been aware of the presence of hazardous materials in the building and whether it has any plan for dealing with them. They did not answer our question whether the costs of asbestos and lead mitigation or removal are included in the original or latest budgets.
As of now, Homeward Bound has not submitted a complete SEPA permit request. We did not find any applications for other necessary permits to take the project beyond where it is now–an empty building needing major electrical, plumbing, carpentry, and civil engineering work before it is ready to be occupied.
The scope of work submitted by Homeward Bound in its November 12, 2019, presentation to City Council (see video and related documents by clicking here) states that the building will receive all new plumbing, drywall and kitchens. These are the locations where the dangerous levels of asbestos and lead were found. Demolition of those contaminated features will require special procedures and permitting and will be costly. Their scope of work notes asbestos in the subfloor that will be repaired. The submittal to City Council does not mention that the pipes and elbows to be replaced are all encased in asbestos.
Unsafe Conditions Within
The public has repeatedly been assured that, despite its age, the building is in excellent shape.
Those statements have been misleading, if not false.
During the first week of August 2019, city building official Angela Garcia and Assistant Fire Chief Brian Tracer entered the building and gained access to the upper floors via a ladder they found on site. She reported, according to an email in the City’s files:
“[W]e observed multiple hazardous conditions such as holes in walls and floors large enough for a person to fall into.”
Garcia requested that measures be taken to safeguard the building from unauthorized entry to protect anyone who may wander inside.
Three days after receiving Garcia’s request, Homeward Bound on its Facebook page posted photographs of its Board members putting up plywood sheets across the openings on the ground level. Homeward Bound stated this was being done “because our insurance company needed assurance that it wouldn’t be damaged while we carry on to Phase 2.” No mention was made of the City’s request.
Homeward Bound in its latest presentation to Council stated that it will have to replace floors, all electrical systems, all plumbing, all windows and all drywall–in contradiction to previous representations regarding the building’s condition.
Growing Problems with Neighbors
We have previously reported about problems being caused for the homeowner who lives in front of the building. She told us that Homeward Bound’s plans block her driveway. The SEPA permit file also reveals increasing concerns by Grace Lutheran Church, which has been a supporter of the project since inception.
A two-page, single-spaced letter from Pastor Coe Hutchinson dated September 17, 2019, details multiple inaccuracies in the SEPA application (e.g., getting the grade of slope wrong, pointing out that the planned exterior wheelchair ramp could not be going to the third floor and could not possibly be at a 12% slope). He also raised concerns about erosion that started when the building was moved in and much of the area scraped and excavated. “Water is running off Cass St. and down through the area used for parking by GLC. The runoff is not going into the current catch basin in the Cass St. right-of-way,” he wrote.
Those concerns have not been addressed in the past months. This author upon a recent visit observed the erosion damage from almost three years of failure to appropriately channel runoff.
Pastor Coe also raised concerns with what appears to be inadequate access to the building once it is occupied, including the possibility that a proposed gravel roadway from Cherry Street up the hill would not handle all the building’s anticipated traffic, as well as use by GLC. (The alternative is paving, another considerable expense which does not appear to have been included in existing cost estimates, already grossly inaccurate. Homeward Bound, in its presentation to Council, was hesitant to include “street work” in its latest $1.83 construction estimate. More on that in an upcoming report).
Lastly, Pastor Coe shares that GLC is now facing a “parking dilemma.” Homeward Bound’s plans pose the possibility that they will lose parking they have been using for the past 50 years. This is a similar concern to that raised by the neighbor, mentioned above.
How serious are the issues raised by Grace Lutheran Church in its comments on the SEPA application?
Correspondence from Homeward Bound’s consultants in the city’s files shows an acknowledgment that conflicts with the neighboring church, including an unresolved water line issue, may hold up project permits. The SEPA permit application had been scheduled to be delivered by October 17, 2019. It has not yet been submitted.
A Long Way to Go
In its November 20, 2019, article on the soaring costs of the Cherry Street project, the Port Townsend and Jefferson County Leader reported that the project was “75% complete.” Just the fact that the project lacks at least $1 million with no source of additional funding in sight, should have been enough for the reporter to know this statement was false. But the reporter more likely misunderstood what was said by Paul Rice, Vice President of the Board of Trustees of Homeward Bound, in his November 12 presentation to the City Council. He stated that Homeward Bound was “75% of the way to permitting.”
The files reviewed by Port Townsend Free Press found nothing to substantiate that claim. Indeed, it appears Homeward Bound is already off its own timeline for permit application.
It is no wonder this has been and will continue to remain a troubled project, with no foreseeable upward limit on the taxpayer investment. It is now clear that the City purchased this building blindly, without inspection or a professional estimate of what it would cost to make the old structure up-to-code and habitable. For years, both the City and Homeward Bound have known this project would cost far more than they had been telling the public or The Leader and the Peninsula Daily News.
Homeward Bound is headed for default on its loan from the City. It was granted a two-year grace period at the start of its forty-year loan term during which time it would not be required to make any principal or interest payments. That grace period expires in July 2020. Homeward Bound has not only indicated that it will be unable to make its first payment, but will be back to ask the City Council for $1 million or more in additional funding.
The public may be surprised because they have not been told the truth. But neither City leaders nor Homeward Bound trustees can claim to being caught unawares at this turn of events. They’ve long known this project was in trouble.
City files contain a printout of an email from Monica Bell, a former Homeward Bound Trustee, to her fellow Trustees, all members of City Council and other persons in the homeless services and affordable housing communities. She questioned the “deal” between the city and Homeward Bound and wrote that the person then serving as project manager, the person in the best position to know what lay ahead, had called the numbers then being given for the project’s cost “rushed, slapped together” and “completely bogus.”
Only now are taxpayers learning how true those words are.
by Jim Scarantino | Nov 27, 2019 | General
The tables are set, the turkeys are roasting, volunteers are getting excited about seeing old friends and making new ones. The annual Tri-Area Community Thanksgiving Meal will return starting noon tomorrow and filling bellies and bringing smiles until 3 p.m. Hundreds of people are expected to line the long tables at the Tri-Area Community Center, across S.R. 19 from Chimacum Grange, and next door to Chimacum High School.
I am returning to volunteer as table setter, water pourer, silverware fetcher, table wiper, dishwasher, plate stacker, whatever the dedicated, cheerful team leaders give me to do. My wife and I spent last Turkey Day helping out and seeing our local community with new eyes. A very diverse group comes for what is a surprisingly tasty, perfect Thanksgiving meal. (I can’t cook one whole turkey right. How do they manage to serve hundreds of pounds so well?)
Families, seniors living alone, folks who can’t afford their own celebration, people just looking to connect on this holiday. They were all seated at the tables, happily tucking into the delicious food.
Did I mention the killer pumpkin pie?
Good stuff will be served up: turkey, mashed potatoes, green beans, cranberry sauce and not just pumpkin pie. (I’m hoping to see some of that tasty ham they dished out last year. The food just kept coming and coming).
Last year Chicago Bob and friend provided live music. I hope to see and hear them again.
The Tri-Area Community Meals team, expertly organized and ably led, pulls this off seemingly without effort. Their many, many hours of preparation and work make this holiday celebration something very special, something worth seeing for yourself.
No more volunteers are needed for Thanksgiving! What a wonderful measure of community spirit! But volunteers are needed for Christmas. Contact t Tria Area Community Meals at 360-605-03000 or contact@triareacommunitymeals.org. For more information see their website: https://triareacommunitymeals.org/
Happy Thanksgiving. Please don’t drink and drive.
