AFFORDABLE HOUSING IN SOUTH LAKE UNION – PART 1


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INTRODUCTION

Proposed South Lake Union Zoning

Upzoning the 340 acre South Lake Union Urban Center could set the tone for how Seattle grows in the future. It provides a seminal turning point for creating a more economically sustainable and socially diverse city, or for becoming a major development that contributes to more urban sprawl and urban gentrification.

Without doubt the Council, the Mayor and a wide range of citizens, organizations and businesses wish to create a more dense community providing increased employment and residential opportunities for new South Lake Union workers. But while we have succeeded in attracting new employment in SLU, we have lagged behind in meeting our goal of providing more housing, both in total units and in affordable ones.

CURRENT CONDITIONS

When we started this work in 2004, there were 778 affordable housing units in South Lake Union, today they number 1,274, with over 80 percent being provided by non-profit housing developers of low income housing. Affordable housing is defined as having rent which is no more than 30% of an occupant’s income, w

ho earns 80% of the Average Medium Income or less for that metropolitan area. Lots of numbers there, but they are needed to actually measure need and the supply of housing which would be affordable to people, who often work in the lower paying restaurant, security, clerical, hospitality, maintenance, and sales jobs. According to Community Attributes a consultant hired by the City Council, approximately 58% of Seattle employees work in those occupations (see their Community Attributes report).

Affordable housing is clearly needed for our mid and lower wage workers so that they are not commuting over long distances, carrying a personal financial burden and a having a community-wide environmental impact by contributing to greater carbon emissions. Currently only 37% of people working in Seattle live in Seattle, and about 25% live outside the Greater Seattle region (including the areas directly east, north, and South of Seattle), commuting from distant rural and urban areas like Everett and Tacoma.

Community Attributes estimates that currently 29,200 people are working in SLU, with them estimating that the total number of housing units needed for them would be 21,900. Following our city’s Comprehensive Plan, which the City Council adopts and the Mayor approves, we should provide 37% of all housing to be affordable to workers earning 80% or less of the AMI. Assuming that the percentage of those working in SLU commuting from outside the city is the same as from those working in Seattle, there is a need for a total of 8,100 housing units in the city for all SLU employees. And approximately 3,000 of those units should be at affordable rent levels.

Having only 1,274 affordable units now in SLU, leaves a gap of 1,726 for SLU workers. Without them, these workers commute from other parts of the city and beyond, in places where they can locate affordable housing, defeating the goal of concentrating workers and their housing in the city.

FUTURE CONDITIONS

The affordable housing shortage in SLU will only grow worse over time if the city does not take dramatic measures.

Planners tell us that in 2031, there will be 51,100 employees in South Lake Union, creating a demand for 14,200 housing units in Seattle. The city’s Office of Housing estimates that we will need 5,500 affordable housing units to meet SLU’s workforce housing needs by 2031.  With 1,274 now existing, that leaves a production goal of more than 4,200 units over 18 years.

According to our Office of Housing (OH), the Mayor’s proposed program for incentivizing developers to build affordable housing in exchange for receiving valuable upzones for SLU, will provide only 450 additional affordable housing units, when we need 4,200.

OH also hopes to see another 500 units from the Multi-Family Tax Exemption program, but these units are only affordable for 20 years, not 50 years as would be the ones provided through an incentive program attached to a rezone. That office also suggests that another 250 affordable units might be provided through micro-housing type of units and an additional 300 for the very low income through other city and state funds. All of these numbers strike me as overly optimistic. Even so, there would still remain a gap of 2,700 affordable housing units to reach our goal of 4,400 affordable units.

Another solution floated by planners and echoed by some councilmembers is to take the money provided by the Mayor’s incentive program and build housing along the Light Rail Line in Rainier Valley, where land for new housing would be cheaper than in SLU, which is being up-zoned. Philippa Nye, of Ally Community Development, addressed that suggestion in front of the City Council by saying: “Having everyone commute from Rainier Valley or Rainier Beach feels like housing segregation to me.”

I view the Mayor’s proposed incentive program for developers as being akin to wanting to build a house with a staple gun, when you really need a hammer and nails. We need an incentive program in SLU that will produce thousands of new affordable housing units to match the expected growth in jobs in this urban center; one that we are paving the way for by legislating upzones worth millions of dollars on each parcel and by the $200 million in city and federal money that we have devoted to Mercer Street improvements.

Without a new approach, housing disparity will actually increase in South Lake Union, resulting in more workers having to drive into the city to work, reducing the value of their hour of work as well as further harming our environment with their long commutes.

Another consultant, Spectrum Development Solutions, presented a report to the Council on February 25 that confirms these concerns and concludes that if our current Incentive Zoning policies were retooled to increase the investments developers make in affordable housing development, the profit of these projects would still meet the reasonable profit expectations of stockholders and other investors.

WHAT THE CITY CAN DO TO GET MORE AFFORDABLE HOUSING IN SOUTH LAKE UNION

The City has incentive zoning programs in several Seattle neighborhoods.  These programs create affordable housing with contributions from developers utilizing additional development capacity granted under the zoning code. In late 2007 the program was extended into South Lake Union for use on specific projects proposed by Vulcan Real Estate for the new Amazon campus.  The program does not exist otherwise in South Lake Union and the Council intends to extend the program throughout South Lake Union.

The current Incentive Zoning program allows for additional development capacity if developers contribute to affordable housing.  They can set aside units equivalent to approximately 5% of all residential floor area in a 240 foot tall building fully utilizing the bonus provided through incentive zoning.  Those units can be built either onsite or offsite in other developments and they must be affordable to people earning 80% of area median income.  Developers who don’t want to set-aside affordable housing in their developments pay $15.15 per gross square foot of 60% of the extra residential floor area above the original height of the building (before the additional development capacity).

AFFORDABLE HOUSING NOW OR LATER?

Throughout this debate the Council has withstood incredible pressure from the business community, who entreated the Council to pass the South Lake Union legislation increasing building heights from 85 feet to 240 feet as well as allowing for several 400 foot towers, together with adopting the Mayor’s proposal for status quo affordable housing requirements that are far more lenient than experts have revealed are necessary for a reasonable return on investment.

I believe we must take the opportunity to increase the public value today, at the same time that we are considering increasing the private value thorough this rezone. Thankfully, Councilmembers O’Brien and Rasmussen agree and on March 3 joined me in taking the position that the:  “Council shouldn’t wait to strengthen affordable housing requirements”
Specifically, they joined me in saying “Zoning is fundamentally about creating public value. The suggestion that we should not create new affordable housing requirements within the South Lake Union legislation before us risks our ability to meet our housing needs, as well as our social equity and sustainability goals. Rezoning an area with the highest opportunity in our region for development is the perfect time to meet these goals.”

I believe now there is agreement among a majority of Councilmembers that we want to improve the affordable housing investments of developers in South Lake Union. On Monday, March 25th, the Council will have an open discussion in its Special Committee on the SLU Rezone on a number of Councilmember generated proposals on what the City can do to increase affordable housing in SLU.

I’ll write more about the affordable housing proposals developed by myself and other Councilmembers on Monday.

Keep in touch…

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Comment from Michael Paine
Time April 12, 2013 at 11:12 am

A thoughtful proposal. My recommendation would be push hard now; to wait will be an opportunity lost. The argument is always that the golden goose will stop producing and that to intervene is dangerous but it can’t be the case that only the very wealthy live in downtown Seattle and South Lake Union.

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