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City Council Adopts Resolution of Intent 
Relating to Local Sales and Use Taxes Under Substitute House Bill 1406

-- Tacoma is Among the First in Washington State to 
Take This Action Backing Affordable and Supportive Housing --

TACOMA, Wash. -- The City Council has adopted Resolution 40388 relating to local retail sales and use tax, stating the City of Tacoma’s intent to authorize the maximum capacity available under the provisions of Substitute House Bill 1406 for affordable and supportive housing. The local retail sales and use tax provides a 0.0146 percent credit against Washington state's sales tax. There is no increase in sales tax for the consumer.

Concurrent with this resolution, the City Council has also adopted Ordinance 28599 to authorize the local retail sales and use tax and revenue sharing program on an emergency basis, which enables the City to authorize this tax effective Sept. 1, 2019.

“I am so proud to be among the first in Washington state to take action on this," said Tacoma Mayor Victoria Woodards. "This decisive move by the City Council sends a strong signal that we have prioritized, and will continue to prioritize, affordable housing and ensure that all Tacoma residents have access to resources to meet their needs."

The tax can be in place for a maximum of 20 years, and can be used for acquiring, rehabilitating or constructing affordable housing; operations and maintenance of new affordable or supportive housing facilities. Funding must be spent on projects that serve individuals whose incomes are at or below 60 percent of area median income.

The City's estimated annual revenue is between $800,000 - $900,000, and this action also authorizes the City to issue general obligation or revenue bonds with this funding. 

“Addressing the housing affordability crisis requires ongoing collaboration with our community partners,” added Woodards. “I am excited that the City of Tacoma will be able to bring these additional resources to bear on this important issue without any changes in the taxes paid by consumers, while continuing in our work to take a regional and collaborative approach to this issue.”

Implementation of the Affordable Housing Action Strategy (AHAS) developed by the City in collaboration with its partners calls for a large investment of public, philanthropic and private resources totaling as much as $70 million over the next 10 years. From now until October 2019, when the City Council receives its next AHAS update, the City has 12 teams in place working on key actions that move its AHAS goals forward.

Tacoma lacks affordable, high-quality homes for all of its residents and, today, nearly 33,000 households in Tacoma pay at least 30 percent of their income on housing costs each month, reducing their ability to pay for other necessities. The cost of rental homes has increased by nearly 40 percent and home values nearly doubled since 1990 and, within the last few years, these costs have begun to accelerate.

Details on what the City is currently doing to address the housing affordability crisis are available at cityoftacoma.org/affordablehousingstrategy.

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