Imagine if poor people living in Seattle were guaranteed a minimum level of income for housing costs. I don’t like the standard typically used to establish the normative standard for housing costs—30 percent of gross monthly income discounted by some percentage of Area Median Income—but let’s start with that. In my thought experiment everyone earning 30 percent of area median income, or $19,000 would be assured of at least $475 a month for housing.

AMI	30 %	40 %	50 %	60 %	65 %	80 %
Annual Income	$19,000	$25,320	$31,650	$41,145	$41,145	$48,550
Standard Rent	$475	$633	$791	$1,029	$1,029	$1,214

According to a recent presentation hosted by Councilmember Lisa Herbold, there are 36,000 households fitting in this income band. It’s time for Seattle to consider a property tax for guaranteed housing income for people in our city who are poor.

You may think I have lost my mind. But stick with me for a minute. First of all, I have never ever said that the market would “sort out” the housing problems faced by the truly poor. On the contrary, I have always said,  as I did earlier this week, that increasing the supply of market rate housing will have to include some subsidies for people who earn very little money.

One idea I have always liked is the idea of a negative income tax—an idea with support from a hero of mine, Milton Freidman. Friedman is hardly a socialist, but he liked the idea of a guaranteed income from a reverse tax because it put more cash in the hands of poor people without any strings. And most importantly he said,

The proposal for a negative income tax is a proposal to help poor people by giving them money, which is what they need, rather than as now, by requiring them to come before a government official to tally all their assets and liabilities and be told that you may spend X dollars on rent, Y dollars on food, etc.

I like the idea that instead of laundering taxes and fees generated by private enterprise and development through a government housing bureaucracy, a guaranteed housing income would simply give poor people more income, and if they use that income for housing it would free up other money for other important things. This would mean less money spent on City process, rules, fees, penalties, and staff and more money in the hands of real poor people.

As I said early this week, data is being presented to show a housing problem when what it really reveals is a poverty problem – people earning $19,000 a year simply don’t have very much money. A guaranteed housing income would mean more money for families that need it and more choice about where they live and how they manage their expenses.

How would this program work?

My best math (and remember I am a philosophy major) shows 36,000 households getting $475 per month toward a basic, guaranteed housing income would be $205,200,000 per year. If we spread that across all property value in Seattle, about $117,000,000,000 through a tax, it would break down to about $1.75 per $1,000 of property value. So a single-family home of median value, about $550,000 would pay about $964 annually to distribute this income to poor people in out community.These numbers are old, but you get the idea. Everyone would have to file an income tax form, but people in Seattle love that idea!

Now, the vast majority of people with incomes as low as $19,000 are already housed. One way of managing this subsidy would be to allocate funds to pay for all housing costs above the normative standard. So, those households paying 50 percent of their income on housing could have that cost reduced down to 30 percent. So a single person earning $19,000 and paying $792 a month in rent would get a monthly payment of $317. Problem solved! The additional funds could be set aside and invested in building housing on City owned land.

My theory of taxation is simple. Taxes are a good and necessary thing in a society and economy because they, 1. Raise revenue for shared and public goods, 2. Incentivize and disincentivize different kinds behavior and investment, and 3. Redistribute wealth.

I’m sure that my friends in single-family neighborhoods living in houses valued at half a million dollars would be glad to contribute $1,000 a year toward helping a person struggling in our city earning very little to make ends meet each month. And of course the costs of the program would be passed on to all housing consumers in higher housing costs and rents, but it would be a mild, predictable, and reasonable burden to bear, shared by everyone in the city. That’s something that EVERYONE can cheer about, right?