Wednesday, February 3, 2021
CAMP 210: Camp 210 began as a noble experiment—the use of our most public space to focus public attention on a public problem, both locally and nationally: Homelessness. And whatever missteps the City of Bellingham may have made in its handling and dismantling of the ad hoc protest encampment at City Hall (and there appear to have been several), it was clear from the steady escalation in police reports—from occasional nuisance in November to serious assaults and social unrest by January—that the camp was ultimately doomed by the persistent bedfellows of homelessness: Untreated mental and behavioral health issues.
The under-told story at Camp 210 is that homelessness in Bellingham and Whatcom County has declined by about 8 percent over the past decade, thanks to financial instruments such as the Bellingham Home Fund and other public efforts. That morsel of success is almost certain to be snatched away through the lasting economic impacts of COVID. There is little cause for optimism that eviction rates and numbers of unhoused won’t skyrocket. The persistent bedfellows of untreated human and social health disorders will certainly complicate the solutions.
More money, more public revenue, is needed, and it needs to stretch further. However, if past is prologue and paralysis persists, very little of this assistance will arrive from federal sources and must instead arrive through creative public policy at the state and local levels.
We’ll suggest a couple of instruments:
Expand the enormously successful Bellingham Home Fund levy to include all of Whatcom County. This would add hundreds of millions of dollars of additional assessed property value to build tangible assets in the form of affordable and low-income homes that would benefit all county residents. Likely, that construction of a particular type would supercharge the local economy.
Approved by voters in 2012 and extended in 2018, the city’s lower-income housing levy is projected to generate $40 million in revenues through its extended ten-year term. Funds are dedicated to the production and preservation of scores of affordable homes, as well as rental assistance and homebuyer support services.
A countywide levy would more than double this capacity, and frankly the only thing preventing county voters from considering such a levy is the political will of Whatcom County Council to place such a proposal on the fall ballot.
To stretch this revenue further—and indeed to prevent it from evaporating in the event of economic collapse from COVID—local governments must pursue public banking initiatives. With a surplus of Democratic lawmakers in Olympia this session, the possibility of public banks draws near.
Senate Bill 5188 was introduced into that body’s Business, Financial Services & Trade Committee last week that would allow local governments to explore public banking options. The concept, long championed by Sen. Bob Hasegawa of south Seattle’s 11th Legislative District, is cosponsored by Anacortes Sen. Liz Lovelett, among others.
“While local governments successfully borrow for infrastructure and economic development capital projects through private sector lenders and the bond markets, other government entities do not have the same access to capital at attractive rates to be used in building out public infrastructure,” the bill sponsors note in the text of the proposal.
“A cooperative Washington state public bank would provide opportunities for state, local, and tribal government entities to competitively finance a broad array of public infrastructure and economic development projects, including housing, at competitive rates with low administrative costs,” the bill sponsors assert. “A cooperative state public bank will complement the existing banking system by filling gaps that the [current] system cannot or will not fill.”
If formed, the Washington public bank would handle state and local tax revenue and could leverage the core of the state’s equity to benefit Washingtonians. Over time, a public bank would establish independence from Wall Street banks and commercial lenders.
After California approved its version of a public banking act in 2019, the cities of Los Angeles and San Francisco announced plans to establish their own public banks. To date, more than 25 public banking concepts are circulating in state legislatures around the country.
The reason, Hasegawa has noted in presentations to local governments, is that a state bank can provide enormous financing capacity for public projects without having to sell bonds through Wall Street brokers at commercial interest rates. Repayment of those interest rates steeply cuts into public revenues—our local tax dollars are being shoveled into the pockets of distant lenders.
“While the rest of the world uses public banking as their financing foundation, we in the U.S. have relied on commercial banking instead,” he explains. “We need to find a better way. We simply don’t have enough money to keep going into debt to Wall Street to fund projects in the public interest.”
In the event of a collapse in Wall Street’s fortunes, a public bank could provide an alternative source of capital to keep projects and public goals moving forward.
Public banks’ mission to serve the public interest allows them to extend financing to projects other banks won’t consider, and their internal controls allow them to lend money to local governments for public projects at interest rates far below those of other banks. Indeed, if Bellingham’s financial capacity had not been tied to international banking fortunes in the last economic downturn of 2007, the city might have had snatched up scores of acres of sharply discounted properties as holders and lenders cratered, and access to capital to keep the construction industry working through that downturn building or renovating affordable homes.
This is an initiative our state legislators in Olympia now have the numbers to approve. They should be encouraged to do so, as we use our public space to focus public attention on public problems.