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Construction inflation could complicate Seattle head tax spending

Seattle's rising construction costs could impact the city's affordable housing plans from the head tax.
Seattle construction costs are rising. (Photo: KING)

Construction costs in Seattle are rising fast, but city leaders say the just-approved employee head tax takes that into account.

The Mortenson Construction Cost Index estimates construction costs will go up from 3.5 to four percent this year. But the city’s Office of Housing said those increases are built into head tax’s spending projections -- even though the details on the spending plan are not yet final.

It already costs hundreds of thousands of dollars to build an affordable-housing unit.

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“$300,000 is the average cost today to construct a unit,” said Susan Boyd of the non-profit Bellwether Housing. “Seattle land is very expensive. Seattle construction costs are very expensive.”

Seattle City Councilmember Teresa Mosqueda said the demand for construction workers impacts projects downtown.

“Part of those cranes that are out there have delays in their timeline because we don’t have the workforce needed,” she said.

Mosqueda said she backed part of the head tax that would add workforce training for more construction workers.

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“If we don’t build now, with urgency, it will be more expensive in the future,” said Mosqueda.

She added that even with increasing costs, she thinks a higher percentage of the tax should be spent on building affordable housing – and a lower percentage on shelter and services.

“Now we have a finite number of years, only five years, and just $50 million, so we have to act with urgency. This money needs to go into housing and construction,” she said.

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