Wealthy Seattle venture capitalist Nick Hanauer says he wants to tackle the city’s homeless crisis with the same ‘ruthless’ energy that made him rich

He has six homes. Now this 'self-loathing plutocrat' wants to help those with none

Sitting on a plush velvet couch in his corner office in a glassy Seattle skyscraper, Nick Hanauer tilted his head back, squinted his eyes and took a moment to recall the number of homes he owns.

The tech mogul and venture capitalist counted slowly and out loud.

One. Two. Three. Four. Five. Six. He paused.

“Six,” he said again, declaratively. “But one is for sale.”

Seattle is in the midst of a homeless crisis, or what Hanauer likes to call a “success crisis”. The city’s economy is booming, cranes dot the landscape and the Pacific north-west city continues to swell with newcomers. At the same time, rents are skyrocketing, the housing market is outpacing the nation in home-price growth and a record number of people are living in tents or sleeping on a slab of sidewalk.

And so, Hanauer, the first non-family member to invest in Amazon, who later sold a company to Microsoft for a reported $6.4bn in cash, and has more houses than he can remember off the top of his head, is on a mission: to ensure everyone in Seattle has a place to call home.

His methods are drawing attention, and he is not modest about his ambitions. When he throws his support behind an idea or ballot measure, “you do not want to be in my fucking way”, he said. “Because I’m ruthless in my pursuit in winning.”

Hanauer has a track record to point to; after the shooting at Sandy Hook Elementary School in 2012, he backed an initiative in Washington state to expand background checks on gun sales. He donated more than $1m to the campaign and the measure passed overwhelmingly.

The issue that currently drives Hanauer, to the extent that he has been called “America’s premier self-loathing plutocrat”, is the growing disparity between the wealthy and poor, which he frames as a matter of self-preservation. In a 2014 piece titled, “The Pitchforks are Coming … For Us Plutocrats”, in Politico, he argued that no society can survive the income inequality gap of the kind emerging now. In consequence, Hanauer played a crucial role in the effort to increase the minimum wage in Seattle to $15 an hour in 2014. He sees homelessness as an another manifestation of extreme inequality.

“You show me a highly unequal society, and I will show you a police state,” he wrote in the Politico essay. “Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”

Facebook Twitter Pinterest A man hugs his dog in a temporary city-approved area for people living in their vehicles in Seattle. The number of homeless people in the county that includes the city rose by 1,000 between 2016 and 2017. Photograph: Elaine Thompson/AP

The state of Washington’s Democratic governor, Jay Inslee, who campaigned on solving the homeless crisis, said the state is lucky to have a number of tech entrepreneurs like Hanauer. “You can’t disagree their motivations are virtuous” the governor said, “because they aren’t making a buck on it.”

Still, technologists have a mixed record when it comes to homeless initiatives. It’s true that Paul Allen, of Microsoft, is donating $30m toward permanent housing for homeless Seattle families, and that Jeff Bezos’ Amazon will host a homeless shelter in one its new buildings. But before last year’s elections, San Francisco tech investors such as Ron Conway donated tens of thousands to a ballot measure that sought to change the city’s police code and ban sidewalk tents – which are the only place many people are able to call home.

You do not want to be in my fucking way​. Because I’m ruthless in my pursuit in winning Nick Hanauer

A University of Washington philosophy major whose family owned a pillow-making business, Hanauer, in his late 50s, has a low-key demeanor despite his grand statements. He sports a summer tan that seems to attest to an ability, as he put it, to “convert money into fun”. His current fun-fueling assets include a private jet and three yachts.

Over a decade ago, Seattle declared it needed 10 years to solve a burgeoning homelessness crisis. It failed. During a count in January, nearly 5,500 people were found living without proper shelter in the broader King County, up by 1,000 since 2016.

Earlier this year, Hanauer and the Seattle mayor announced an effort to put a property-tax levy on the city ballot to raise $275m for homeless services. “I’m going to donate enough money to that campaign to make sure that we would win,” he told the Seattle Times. “It’s so far below the amount of money that I care about that.”

Hanauer says he spent $250,000 gathering signatures. But he faced criticism for his boast about his deep pockets, after previously supporting campaign finance reform that sought to reduce the influence of wealthy elites in politics.

And one former Seattle city government official pointed out in a column in a local paper that while Hanauer speaks of bolstering the middle class, he backed a city property tax increase in a town where it’s incredibly difficult for the middle class to afford homes. The article was titled, “Seattle, where millionaires push taxes on everyone else”.

The effort quickly fizzled, and Hanauer’s new campaign, intended to go before voters next year, is a 0.01% sales tax that would generate an estimated $68m in the first year to fund a wide-range of homeless services.

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Without careful crafting, this may not be a perfect solution, either. Sales taxes tend to hit low-income people the hardest. In Washington state the bottom 20% on the income ladder pay a far larger percentage of their income on such taxes – about eight times more – than the 1% do. Hanauer’s team acknowledges that a sales tax is not the best option, and they also support tax reform in Washington state that would boost levies on the wealthiest.

In any case, some observers are glad a plutocrat like Hanauer is involved. “What I appreciate about Nick Hanauer is he understands we have a systemic problems both causing homelessness and limiting our ability to help and house people,” said Alison Eisinger, the executive director of the Seattle/King County Coalition on Homelessness. She added that he was making “an important contribution to public policy conversations”.

For Hanauer, changing the conversation is presumably not enough.

“You can compete to be the richest or you can compete to create the most positive social changes, so I do that,” Hanauer said. “I used to compete to be the richest and I got bored with that, and now I’m competing in a different dimension. And that’s how I self-justify.”

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