Spokane City Council has approved a measure that will impose a 0.1% sales and use tax, the revenue from which will be dedicated to providing more affordable housing within the city.

The city’s taxing authority for the ordinance was made possible by Washington state legislation passed earlier this year. House Bill 1590 allows counties and cities to impose a sales tax of up to 0.1% with the provision that revenue from the tax must be spent on the construction, acquisition, and rehabilitation of affordable housing, as well as on housing-related support services.

Council President Breean Beggs says the state had given counties until Sept. 20 to enact the tax, but Spokane County didn’t move to do so. Thus, the city decided to pursue the funding mechanism. Council members Betsy Wilkerson, Karen Stratton, and Kate Burke sponsored the ordinance, which passed 6-1 at the Council’s Nov. 30 meeting.

The text of the ordinance states that a minimum of 60% of revenue collected from the tax must be used to construct affordable housing and mental and behavioral health-related facilities, fund the operations and maintenance costs of affordable housing units and housing-related program facilities such as shelters, or fund newly-constructed evaluation and treatment centers.

A housing action committee will be formed in the first quarter of 2021, Beggs says. The committee will make recommendations to the Council regarding the use of revenue from the tax and provide input on the use of funds from any tax increment financing districts that allow the use of revenue for affordable housing.

“Like all investments, there’s a cost, and this is one-tenth of a percent, which our staff estimates is about $25 for your typical household in Spokane each year,” Beggs says. “When you put that all together, it comes out to almost $6 million a year that can be spent on housing and provide jobs for people.”

Instead of beginning to collect the tax in April as City Council originally had planned, the city will begin collecting the tax in July, unless the city can identify an alternative, equivalent source of funding before then.

“It would not go into effect if the administration and the Council were to identify and actually start collecting alternative funds in the same amount for the same purpose,” Beggs said during the meeting.

Beggs says the change to the ordinance regarding the timing of implementation was requested at the last minute and ultimately approved. That change stems from concerns about the effects of the COVID-19 pandemic on sales activity.

In a meeting last week, the Council also reviewed eight rezoning proposals, three of which were approved. Beggs says the Council has caught the ire of some local organizations for declining to rezone 10 acres of land located at East 53rd Avenue and South Palouse Highway, on the southern portion of the South Hill.

Beggs says the parcels in question are bordered on one side by single-family housing and on the other by multifamily apartment buildings.

“The challenge of it was that there were apartments around it, so it’s not that big of a change, but what we heard from the neighbors and that whole area is that traffic congestion is horrible up there and the schools are bursting at the seams,” Beggs says.