Will Housing in Seattle Remain Affordable?

The cost of housing continues its meteoric rise in Seattle with rents for 2 bedroom apartments rising nearly 20% over the last two years and home prices approaching pre-Great Recession levels.

Overall, between 2000 and 2013, Seattle added 50,600 housing units.  Of these, 12% had City investment totaling $247M in over 100 projects producing a net of 6,140 “affordable” housing units (serving households at 80% or less of Area Median Income) by using a variety of funding sources and financing tools.

The City Council has started a review of our affordable housing programs that are targeted at preserving and increasing the supply of housing affordable households between 60%-100% Area Median Income (AMI), such as Incentive Zoning, the Multi-FamilyTax Exemption (MFTE), and the Housing Levy.

At a forum at City Hall on February 13th national experts and electeds from other municipalities discussed best practices in affordable housing production.  Seattle leads other cities in mechanisms to increase the supply of affordable housing using locally approved funding sources such as the Housing Levy.  It’s clear the Seattle’s MFTE has not been effectively used to spur development in underdeveloped areas (and instead used to finance micro-housing on Capitol Hill) but MFTE is the choice of both for- and non-profit developers alike to help finance their projects by deferring taxes for as many as a dozen years.  Yet this program too is continually plagued with accusations of ineffectiveness and undergoes on-going tinkering.

And while the effectiveness of Seattle’s Incentive Zoning program has been questioned, what is not described by the free-market advocates is the efficacy of citywide Inclusionary Zoning which would mandate for any upzoned property the inclusion of some level of affordable and/or family sized units.  Other municipalities including some nearby use this tool; Seattle does not – yet.

There are calls for Seattle to “just build more” by removing zoning restrictions and development fees so we can become as dense as Manhattan.  Or that we should incorporate towers like Vancouver.  Yet those cities remain remarkably expensive, and are becoming enclaves for the wealthy.  Seattle has already exceeded its housing growth target for 2024, and it seems obvious to many that we cannot build our way out of this mess.

Absent from the “supply/demand” conversation (which usually focuses on why NIMBYs and regulation (i.e. growth management) are limiting “supply”) is the distorted “demand” created by 30,000 new jobs added by Amazon in the last 2 years. Just how much does rapid job growth impact housing affordability? As these are not “local” hires, new housing is necessary.  And as these new employees are higher paid, the “market” now can demand higher rents, thereby displacing longer term residents not able to meet rising rents.

Also, the larger issues of income disparity and the growing demand for rental units are equally as relevant as the supply/demand argument.  The $15/hour effort may have as much an impact of addressing housing affordability as subsidies and tax breaks provided to developers.

In a city constrained by geography, and a desire to preserve the character of single family neighborhoods, how can we deliver affordable housing stock?  Can we improve the tools we already have, and are there other means to provide affordable housing that deserve more attention?

This month the SNC will further this discussion with our own panel of experts:

  • Mike O’Brien – City Council member and chair of the land use committee looking at Incentive Zoning
  • Sharon Lee – Executive Director of the Low Income Housing Institute, a non-profit developer
  • Marty LiebowitzMadrona Company, a for-profit housing developer,
  • Howard Greenwich – Research and Policy Director at Puget Sound SAGE
  • John FoxSeattle Displacement Coalition, working to prevent the continued loss of low income and affordable housing in Seattle, and
  • Michael Pyatok, Principal at Pyatok Architects, also teaching architecture and design at UW, specializing in affordable family and senior housing.

Please join us for a discussion of how to keep housing in Seattle affordable on Saturday, March 8, 2014.

[by Bill Bradburd, Mar 3, 2014]

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