Affordable housing best practices? Seattle City Council procrastinates
by Drew Atkins
The current Seattle City Council.
The term “affordable housing crisis” has been batted around Seattle with increasing fervor recently — an indication of a city where many low-to-middle income residents are being priced out, and home ownership is increasingly out of reach to all but the wealthy.
At a Seattle City Council meeting Wednesday though, where consultants delivered a long-awaited report meant to guide new housing legislation, the mindset was far more relaxed. The city's updated affordable housing plan was originally slated for passage by the end of summer. At the meeting, it was announced a plan will now be passed by the end of the year, and legislation won’t be passed until 2015.
Intended to serve as a nationwide “best practices” primer, Wednesday’s presentation — delivered primarily by Kurt Creager of design and urban planning firm Otak — compared affordable housing in twelve other American cities, in an effort to weed out ideas that could work here.
“We’re not the only city grappling with this,” said councilmember Sally Clark. “The good news is you [the consultants] are going to tell us we’re doing pretty well, but the bad news is we need a lot more [units].”
As Clark predicted, Creager patted the council’s back many times, saying the city has “led the way for 30 years” in national affordable housing policy, and is “on the right track” because of the “council’s values.” Early on, he noted that while “rental and ownership housing is unaffordable for many lower and middle income households, Seattle ranks near the middle of the comparison jurisdictions in terms of housing rental rates and sale prices.”
Not everyone was so laid-back about the issue, however. Freshman councilmember Kshama Sawant was stone-faced throughout the meeting. After perhaps one too many jokes between other councilmembers, exclaimed, “This needs to be infused with a sense of urgency! We’re in a crisis situation.”
Sawant’s frustration certainly has legs. Nearly all of Creager’s praise revolved around Seattle’s housing levies. Those are an action by voters more than the council, with taxpayers shouldering the burden. City Hall’s main instruments to encourage affordable housing are incentive zoning (which we’ve covered in-depth previously) and multi-family tax exemptions (MFTEs) — neither were explored in-depth Wednesday. The city’s approach to the first has been called severely flawed by both developers and affordability activists, and Councilman Nick Licata says Seattle’s MFTE policies “suck.”
As the city undergoes a housing construction boom, this announced delay — matched with only small changes in housing policy last year — could represent an inability to strike while the iron is hot. The real estate market doesn’t wait. The only question is how the city can best capitalize on its changes.
Still, Wednesday’s meeting wasn’t meant to be a major policy pow-wow. Just a Powerpoint walkthrough of a longer report that councilmembers are still digesting. Less than 20 people attended, and only two used the public comment period to make relevant statements. One asked that Seattle’s new housing policies be “rooted in race and social justice.” The other stated that Google, Amazon, and Microsoft are “bloodthirsty killers” and that the city shouldn’t build any housing, for fear of becoming like China.
Public engagement will likely start ramping up next month. The council’s Planning, Land Use and Sustainability Committee will be holding a public feedback session on July 14, focused on how developers can be encouraged to create more affordable housing. Another meeting on preserving this housing will be held at the Ballard Community Center July 16. All this leads up to September, when the council now hopes to pass a resolution as a precursor to future legislation.
In the interest of informing that future conversation, below are three of the “best practices” presented in the report.
Getting Employers Involved
One of the biggest areas of conversation Wednesday was an initiative in Silicon Valley, where the tech industry’s housing impact has held ominous undertones for the Puget Sound. Called the Silicon Valley Leadership Group, it represents a public-private partnership between the state, every city in Santa Clara County, and 353 local businesses, including large companies like Hewlett-Packard, Cisco, Adobe, Sun Microsystems, and Yahoo.
In 1978, major tech companies initially invested $1 million into a affordable housing trust fund founded by David Packard, co-founder of HP. This has since been leveraged to attract more investment from both the private and public sector. The group has raised over $76 million, produced 10,000 affordable homes, advocated for 65,000 overall, and provide first-time homebuyer loans, multifamily loans, and loans to the recently homeless.
“In the long run, major employers saw they were going to have a hard time attracting a good workforce without housing they could afford,” said consultant Paul Peninger, who created the report with Creager. “Silicon Valley is no paradise for affordable housing development. At contentious hearings SVLG is often at the front, hand-in-hand with local grassroots advocates. It’s a unique dynamic.… Apple does nothing. Google does some. The interest varies from company to company, and how much they’re invested in the region.”
Housing prices in Seattle are nowhere near Silicon Valley levels, and Amazon, Microsoft, Starbucks and Boeing haven’t shown significant interest in lending a hand here. But with other cities like Minneapolis also establishing private-public housing trust funds, the idea is likely a future topic of conversation between Seattle and local employers.
The land around transit stations, properly utilized, is capable of sparking much wider community development. As Creager put it, its value can increase by as much as 1600 percent the moment transit is cited nearby.
Using specialized loans, money from housing levies and other funding, the report suggests Seattle might want to lock up this sort of property. This is called “land banking,” or tying up real estate so it can only be used or sold under your conditions. In Denver, a Transit-Oriented Development Fund has helped create and preserve affordable housing along transit corridors with much success. The city’s Urban Land Conservancy, established in 2003 for this purpose, has served over 10,000 low-to-middle income people.
With light-rail still under development, this could be a viable option for Seattle as well. The question, the report says, is how much the rest of the region can be counted on to help, and how long to wait for their decision.
Beyond buying the land, the city must also rethink density and parking regulations around transit stations, Creager noted. Reducing regulations and supporting new development types, he said, could “help the market respond to demand.” He mentions this as an idea the council should move on “right away.”
Rethinking “Affordable” Goals
In Seattle, housing is “affordable” if those making 80 percent of average median income (AMI) can live in it. That’s roughly $51,000 a year for a family of two. The problem is that housing isn’t scarce at all in this top price range.
Cities like Austin and Portland have focused on creating housing for those at 60 percent AMI or less, using a range of developer incentives to encourage its construction. Seattle has a big need here too. Only about a third of the city’s housing is affordable to people at 50 percent AMI or below. That group represents over 40 percent of city residents.
The study recommends Seattle define its housing goals more accurately, putting City Hall and all relevant organizations on the same page regarding benchmarks. As the council formulates those tighter numbers, there’ll be debate over how to effectively shift our AMI focus to these lower brackets, in areas ranging from incentive zoning to tax benefits.
The housing debate is a complicated one, devoid of quick wins or easy talking points. Discussions about loan structures and terms like Government Property Leasehold Taxes might be a deterrent for some, but the stakes couldn’t be higher for the city’s future.
The City Council's delay on legislation might be a dragging of feet — but it also gives the public more opportunity to get on board and push for better solutions.
“Changes might only create a negligible impact,” Clark warned. “We’re not going to find one thing that creates affordable housing. We’ve got to just grind it out.”
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