Redfin Supports a Seattle-Area Tax to Fund Homeless Programs - Redfin Real Estate News

Redfin Supports a Seattle-Area Tax to Fund Homeless Programs

Updated on October 22nd, 2020

As a technology-powered real estate company, Redfin has already been asked about Washington state’s House Bill 2907, which would let King County tax mostly technology companies to fund homeless programs. We’re writing today in support of the bill.

To Say There’s a Wrong Tax, You Have to Say What Tax Would Be Right

Two years ago, Redfin opposed a head tax because it would have encouraged companies to rely on contractors rather than employees, especially for the entry-level positions where workers most need an employee’s job security, benefits and career opportunities.

Seattle building under construction by JoiseyShowaa

But we said then that opposing one tax as the wrong tax obligates us to say what tax would be right. This bill permits a tax of .1 to .2 percent on the total payroll of employees who earn more than $150,000 per year. It spares low-margin grocery stores and gas stations. It’s county-wide so businesses can’t easily relocate from Seattle to Bellevue in order to avoid the tax. It seems designed to address the concerns raised by Redfin and other businesses about the head tax.

Pro-Development Deregulation Has Done Its Part

Like other opponents of the head tax, we argued in May 2018 that taxes couldn’t do much to mitigate Seattle’s housing shortage unless we also zoned for density and issued more permits to builders. But since then, King County has built 32,000 housing units, and issued permits for 27,363 more, even as King County’s population has declined by about 4,000 people per year.
Comparing the last eighteen months to the eighteen months prior, King County home-price growth moderated from an average annual rate of 15.7% to 1.4%, and growth in rents moderated from 7% to 4.2%. For the first time since 2012, in 2019 the number of homeless people in Seattle fell, by 8%.

This is a startling result. The people focused on programs should challenge ourselves to have a bigger impact through taxes than this pro-development deregulation. The people who have wanted deregulation before more taxes should ask ourselves if the only cause of homelessness is rising rents, or if we really think this problem can be solved without more funding to address domestic violence, foster care, mental health and drug addiction.

Philanthropy’s Role Is Important But Limited

And we should all be grateful that major funding has come from philanthropy, not just government. The businesses who opposed the head tax, Redfin included, have had two years to address the homelessness problem through our own contributions. We should applaud Amazon for building an eight-story homeless shelter, and Microsoft for subsidizing $750 million in affordable-housing loans.

But it’s hard for businesses to run a homeless program proportionally funded by all of us when our principal focus should be selling houses, making coffee or flying airplanes. Solving broad social problems is what we elect governments to do.

Redfin Isn’t a Policy Expert and This Bill Isn’t Even a Policy Yet 

This doesn’t mean that House Bill 2907 is perfect, or that Redfin would even be in a position to know if it were. Every bill is the result of the horse-swapping, sausage-making process that all bodies of fallen, fallible humans go through to make rules. 

We’ve spent a few hours analyzing the bill, enough to estimate that it could cost us $50,000 – $100,000 at our current size. Since the bill permits but doesn’t completely define a tax that would be levied by the county, and since income has never been taxed in Washington before, we don’t know how the county will define the income being taxed, what exceptions will be allowed, or what the exact tax rate will be.

It’s Easy to Be a Critic

It’s possible we could still oppose the tax developed by the county but unlikely. You can find a reason every initiative won’t work. We want nothing to do with the gleeful partisans on either side who only want to tear down Amazon, or tear down our government. Seattle is our city. All of us have to take seriously how hard and how important it is to make Seattle a better place. 

When, in the business world, our well-intentioned efforts are still imperfect, folks love to quote Teddy Roosevelt on the man in arena “who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause.”

Homelessness is a worthy cause. The man in the arena whom Teddy Roosevelt was talking about wasn’t an industrial titan but a government leader. And what he was fighting for wasn’t profit, but the people who couldn’t fight for themselves. Our mayor, Jenny Durkan, and our state representative, Nicole Macri, are in the arena, and through their tireless efforts to listen but also to act, they have earned our support.

Glenn Kelman

Glenn Kelman

Glenn is the CEO of Redfin. Prior to joining Redfin, he was a co-founder of Plumtree Software, a Sequoia-backed, publicly traded company that created the enterprise portal software market. In his seven years at Plumtree, Glenn at different times led engineering, marketing, product management, and business development; he also was responsible for financing and general operations in Plumtree's early days. Prior to starting Plumtree, Glenn worked as one of the first employees at Stanford Technology Group, a Sequoia-backed start-up acquired by IBM. Glenn was raised in Seattle and graduated from the University of California, Berkeley. He is a regular contributor to the Redfin blog and Twitter.

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