City Council looks for HALA answers

Crosscut archive image.

Construction in July 2015 of multi-family housing at Summit and East Pike

Are the recommendations of Mayor Ed Murray’s Housing Affordability and Livability Agenda group going to make real improvements in housing options for low-income people?

The Seattle City Council’s Select Committee on Affordable Housing, created specifically to wade through the HALA group's recommendations, met for the second time Tuesday. With the committee looking for improvements in overall housing supply, it focused on three smaller questions: which recommendations could create how much housing; why the city wanted to increase development capacity when estimates say there’s enough; and the significance of the mandatory inclusionary housing recommendation.

Of course, housing conversations are hard to contain, and representatives from the Mayor’s Office, the Office of Housing and the Department of Planning and Development touched on numerous issues, including the difficulties of keeping track of market rate affordable units.

The strategy for achieving the mayor’s goal of developing 20,000 affordable units over the next ten years really depends on two things: money and developers. In short, how does the city raise money and/or get developers to include affordable units.

The meat and bones of this strategy are the HALA proposals for mandatory inclusionary housing and commercial linkage fees. The former allows developers to add an extra floor above what current zoning  allows. But regardless of whether or not developers take advantage of that floor, it requires that they include 5-7 percent affordable housing. Developers can choose to pay a fee rather than include affordable units.

The latter levies a per square fee on developers of commercial real estate that the city would use to build affordable housing.

Leslie Price and Robert Feldstein of the mayor’s Office of Policy and Innovation told council members they expect mandatory inclusionary housing to create 3,700 units: 1,500 thanks to developers including units, 2,200 as a result of opt-out fees.

Money earned from commercial linkage fees is estimated to produce 2,400 units of affordable housing.

The math to get the remaining 14,000 units is a little more challenging because it relies on revenue sources that are not guaranteed. The primary funding source would come from a larger housing levy that voters would see in the fall of 2016. And while Seattle voters generally approve taxing themselves, the specter of levy-fatigue haunts elected officials.

Some of the other funding sources rely on state government, through a possible real estate tax, or private organizations, via a voluntary employer fund and social investments.

The existing multi-family tax exemption, an exemption for developers who include affordable units, may also be expanded.

One question raised by Councilmember Tom Rasmussen in the first select committee meeting referenced a Department of Planning and Development conclusion that Seattle had plenty of capacity to grow. For some, especially those opposed to adding density, this is proof that Seattle does not need to upzone or slim its single-family zones.

Feldstein, however, told the council Monday that adding height was not to create greater overall housing capacity, but rather to create the best way of having developers take part in the inclusionary housing requirement. “We’re not adding capacity because we’re out of capacity,” said Feldstein. “We’re doing it to put in a new mandate of affordability.” In fact, Feldstein didn’t think that upzones and increased density would incentivize developers to build at all. Simply, as developers choose to build, the city wants those affordable units. Legally speaking, the city has to offer something in exchange for those units, hence the additional height.

In theory, inclusionary housing would also allow the city to add affordable housing in parts of the city with greater transportation and infrastructure.

When it comes to “naturally affordable” housing, units not subsidized but affordable by virtue of the market, the city has no good method of keeping track of stock, as Crosscut recently reported. Therefore, preservation is also a challenge. Councilmember Kshama Sawant brought this up at the first select committee meeting, concerned that the mandatory inclusionary housing piece of the puzzle would not keep up with the replacement of affordable buildings with newer, more expensive buildings.

Feldstein said one possibility was, as property owners announced their intent to demolish, the city could be tipped off and look into whether that building contained affordable units. He also said the city could target neighborhoods that tend to contain older buildings to investigate naturally affordable housing stock.

After Monday’s meeting, a number of issues were left hanging in the air. For one, Councilmember Rasmussen pressed on whether the parts of the city that could see more density had the infrastructure to support more people. Several public commenters said they had felt left out of the housing process, so Councilmember Sally Bagshaw wondered how the city would conduct outreach.

Most notable, however, was a general concern on the part of some councilmembers as to whether all this math would add up. Essentially, will the money come as expected, will developers build and will those two translate into 20,000 units? The answers will begin to unfold, although slowly: Some zoning changes, assuming council approval, won’t begin to take effect until the latter part of 2017.


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About the Authors & Contributors

David Kroman

David Kroman

David Kroman is formerly a reporter at Crosscut, where he covered city politics.