Mercer Street, 1959 (Seattle Municipal Archives)

The City Council approved a rezone of the South Lake neighborhood on Monday, May 6 by a 9-0 vote.

The rezone increases maximum building heights to 400 feet adjacent to Denny, and 240 feet in much of SLU to Mercer, aside from the Cascade neighborhood. Previous zoning was 65 to 85 feet in most of this area, and 125’ adjacent to Denny. The rezone is intended to meet new growth targets for Seattle’s implementation of the Seattle Comprehensive Plan, required by the state Growth Management Act.

I proposed amendments related to the urban form along South Lake Union Park and along Westlake, and to provide for additional housing, as described below.

Dept. of Planning and Development presentation, 2012

GROWTH MANAGEMENT ACT (GMA)/SEATTLE COMPREHENSIVE PLAN

The previous zoning in SLU provided capacity for 12,000 new units and 18,000 jobs; the state GMA requires development capacity to be at least 125% of the 20-year growth target. The most recent 2031 targets are for 12,000 housing units, and 22,000 jobs.

DPD estimates the new updated zoning provides capacity for 22,000 to 24,000 housing units, and 28,000 to 30,000 jobs. This equals 190% of 2031 housing estimates, and 131% of job estimates.

SUMMARY

Council amendments to the Mayor’s original proposal included:

• Views: Creating permanent setbacks on east-west corridors to protect views of the Space Needle; this was accomplished without reducing development potential;
• Landmarks: Expanding incentives to encourage preservation of all landmarked structures;
• Schools: Strengthening incentives for developers to include a public school in their project;
• Conservation: Requiring all new buildings to meet the LEED Gold standard;
• Zoning: increasing height in the Cascade neighborhood from 75’ to 85’, and from 85’ to 125’ on parts of the southwest side of the lake, and reducing height from 240’ to 160’ between Valley and Mercer.
• Affordable Housing:  Applied a Consumer Price Index increase to the existing affordable housing pay-in-lieu price for developers who don’t want to build affordable housing and added a 20% premium to incentivize on-site affordable housing development.

The Council approved other elements of the proposal submitted by Mayor, including:

• Farm/forest: the first step in a program to preserve farm land and forest land by transferring development rights into South Lake Union; if approved by future legislation it will generate funds for transportation improvements;
• Design standards for different neighborhoods within SLU;
• Most of the proposed building heights;
• Preserving existing affordable housing in Cascade by maintaining current heights.

URBAN FORM: MERCER BLOCKS AND WESTLAKE

I co-sponsored two amendments to address the visual impact of towers proposed for the blocks adjacent to Lake Union Park at the South end of the lake. The Mayor proposed height of 240’; I co-sponsored a 160’ limit, which the Council passed by a 6-3 vote. The previous zoning was 40’, with 65’ under some circumstances, so even 160’ represents a significant increase. With 400’ along Denny and in the Denny Triangle, and 240’ in between, 160’ provides a good transition for maintaining urban form. This change will reduce the visual impact of shadows from the towers on Lake Union Park during the winter months.

Secondly, I also co-sponsored a proposal to limit the floor plate size (the size of each floor), for slimmer towers to protect views. Although this didn’t pass, the Council did approve a 105’ limit on the east-west width of towers.

The Council increased the zoning of a section of South Lake Union adjacent to Westlake and Dexter avenues, from the Mayor’s proposal of 85’, to 125’. I co-sponsored an amendment to ensure a smooth transition in the base heights, in line with the slope of Queen Anne Hill. The developer who owns the site planned on commercial buildings only at 85 feet; 125 feet will allow them to build up to 4 residential towers. This area is along a High Capacity Transit Corridor identified in the Seattle Transit Master Plan, and removed from the seaplane flight path. It’s a good location for additional housing.

HOUSING

I’m pleased that the Council increased the obligation of developers taking advantage of the potential for increased building heights to provide affordable housing, but it’s not nearly enough to meet South Lake Union’s future need. The City’s goal for affordable housing in South Lake Union is 4,200 units, the proposal the Council passed will result in approximately 700 affordable units produced.  Estimates are that these SLU upzones may result in over $12 billion worth of development over the next 25 years.  Without significantly more affordable housing for people working in the city, traffic congestion will increasingly clog our streets, hurting the economy and our environment.

Whether the Council enacts upzones in SLU or any other neighborhood, upzoning adds significant value to private property.  Seattle is among the most active real estate markets in the country, and we still have a great opportunity to get this right.  Just saying we’ll build more housing isn’t enough of a solution.  Housing regulations of cities across the country generate new units of affordable housing for their workforces. Denver and San Diego set aside 10% of all new units for affordable housing and Boston and Sacramento set aside 15%. Seattle’s incentive zoning program only sets aside 5% of all units.  I proposed an amendment to increase the affordable housing setaside to 10% of all residential floor area in a 240’ high building.  The amendment did not pass.

While the legislation passed by the Council does not require that enough affordable units will be built, I’m also concerned that the housing built will not serve the full range of workers. The Council’s own study found that by 2031, 100,000 new jobs will come to downtown Seattle. If current wage levels are maintained, one in four of the workers in these new jobs and one and three of workers in all jobs downtown, new and existing, will be paid wages that qualify them for affordable housing.  I proposed an amendment that half of the affordable units produced be affordable to these workers.  It did not pass.  Instead, the Council passed legislation with a target household income set at 80% average median income.  This means that childcare workers, health care, grocery/retail, hospitality and janitors will be priced out of South Lake Union and endure long commutes, contributing to pollution and suburban sprawl.

We all suffer if we push more people out of the city.  For these reasons, I will seek city-wide incentive zoning, requiring housing be built for our entire workforce, not just those earning the highest wages.

BLOCK 59

Included in the Mayor’s original submittal in November 2012 was a summary sheet and Memorandum of Understanding with Vulcan, under which Vulcan would sell four properties in “Block 59” of South Lake Union adjacent to Aurora and Mercer, to the city, to be combined with City properties. In return, they would receive a credit of $10-12 million for affordable housing bonus payments, locked in at the rate proposed by the Mayor. The facility would provide low and moderate income housing, a childcare facility, education/job training programs, and other services. Numerous social service agencies were involved in the planning, along with Vulcan and the Mayor’s office. Vulcan would pay up to an additional $3.25 million to build up to 240’ in the Mercer waterfront blocks.

Valuation for the Block 59 properties would be determined by an independent appraiser at the proposed rezone height of 240 feet. The appraisal value would be capped at $12 million; Vulcan could opt out of the agreement if the appraisal came in at less than $10 million. The zoning at that time was for 65 feet, with the King County Assessor listing an appraisal of the land value in 2012 at $4.7 million.

The Council received a funding scenario from Vulcan at a January 31 meeting of $76 million, mostly from SLU housing credits. It estimated 337 units of low and moderate income housing would be produced over 12 years on that site. The funding scenario included $6.5 million each from the state and King County, $7 million in city land, and $4 million in additional city housing funds.

The Council opted to not pursue the agreement, because it was tied to a specific Vulcan request, and the credits could only be used for one project, rather than for projects throughout South Lake Union. In any case, the Mayor never submitted legislation to the City Council.

While I didn’t support the agreement as it was presented, I found the concept intriguing and worth considering; I am continuing to explore options for pursuing the vision of an integrated program in SLU that would provide for the same services and housing.

In recognition of Earth Day today, our city is garnering a lot of attention for the grand opening of the Bullitt Foundation’s new headquarters on Capitol Hill. The Bullitt Center is not only intended to be the greenest building in the world, it is intended to have a lifespan of two hundred and fifty years.

It is the first commercial building in the U.S. to earn the Forest Stewardship Council’s certification for using 100 percent FSC-certified wood and it is the largest structure to qualify for the Living Building Challenge.

The Bullitt Center on Capitol Hill

The Living Building Challenge is the built environment’s most rigorous performance standard. To be certified under the Challenge, projects, over a minimum of 12 months of continuous occupancy, must meet a series of ambitious performance requirements, including net zero energy, waste, and water.

Last year, The Living Building Challenge was a topic of discussion for me and other Councilmembers during a Planning, Land Use and Sustainability Committee (PLUS) meeting regarding the approval of Ordinance 117516, which allows additional design departures under the Demonstration Program for Living Building Design.

Stone 34 in Wallingford

During that discussion, many people testified to object to developer Skanska USA’s plan for the Stone 34 building in Wallingford. Skanska’s plan calls for qualifying through the City’s Living Building Challenge for a 20 foot height increase above the property’s then current height limit of 45 feet. The International Living Future Institute, which manages the Living Building Challenge certification program, objected, claiming that the Skanska project doesn’t meet the Challenge’s intentionally stringent standards. The Bullitt Foundation expressed concerns, also, that the City’s green building standards appeared to be weakening. Skanska’s project was eventually approved under the City’s less stringent Deep Green program, rather than under The Living Building Challenge.

July 25, 2012 PLUS Committee Meeting Video

In response to concerns raised over the Skanska project by the surrounding community, the Bullitt Foundation, and Living Building Challenge representatives, I have introduced Resolution 31400. It calls on the City to provide updates and enhancements to its Living Building Challenge and Seattle Deep Green pilot programs.

Resolution 31400 also requests the Department of Planning and Development (DPD) to form a standing Green Building Advisory Board to advise the City on sustainable building practices; to screen proposals for eligibility; and to assist in developing new or updated sustainable building programs.

Although DPD has in the past employed ad hoc technical advisory groups to advise on sustainable building projects, those groups do not always include members certified in LEED architecture, sustainable building practices, and building energy systems engineering, nor do they always include representatives of a neighborhood community council. My proposed advisory board would require such members and would also create a standing body rather than one that is ad hoc. Such continuity, along with community and expert membership, should help quell the kind of criticism the Council received over the Skanska approval process.

My resolution will be discussed and possibly voted on during the May 8 meeting of the PLUS Committee, which is chaired by Councilmember Richard Conlin. Councilmember Conlin is co-sponsoring my resolution. The committee agenda isn’t posted yet, but you can check for it a few days before the meeting by clicking here.  I encourage you to read my proposed resolution, here, and consider sending your comments to the committee members listed below.

Seattle City Council Planning, Land Use, and Sustainability Committee, May 8, 2013, 9:30 a.m. meeting in the Council Chamber: 600 4th Ave 2nd Floor:

Richard Conlin, Chair, 684-8805;

Tim Burgess, Vice-Chair, 684-8806;

Mike O’Brien, Member, 684-8800;

Sally Clark, Alternate, 684-8802.

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The annual report is required to include, among other things, the estimated total amount of tax exempted annually and cumulatively for individual projects in the MFTE program, as well as for the entire program.  The report is also required to provide an estimated annual impact of the MFTE program on the individual Seattle homeowner.  In the 2011 Annual Report we learned that for MFTE projects receiving an exemption under this program, their owners are estimated to receive about a $170,184,350 exemption for the life of the building’s participation in the project, with a total Seattle homeowner tax impact of $197.50 through 2025.

This year, OH was not ready to provide information on the tax impact of the program and has asked for additional time.  Last year, at my request, the Office of City Auditor conducted a performance audit of the MFTE Program, which is managed by the City of Seattle’s Office of Housing (OH).  One of the findings from the Audit Report was that “OH should…report on actual data, if it is available, rather than estimates. This should include providing actual tax exemption impacts from the King County Department of Assessments…”  My HHSHC Committee is in the midst of a program review.   I support getting accurate information now from the King County Assessor’s Office about the actual tax impacts of the program.

This program was passed in 1998.  There were changes to the program in each 2004, 2008, and 2011.  My emphasis has always been to support increasing the number of rent-restricted units required under the program and making them available to lower income people, for whom the need is greatest.  I voted against the program in 2008 because I believed the changes undermined its effectiveness by 1) subsidizing private developers to build units at essentially market rents, 2) expanded the program to build these market rate units in neighborhoods that have already met growth targets and 3) raised taxes for the rest of us to pay for it.

Each of the times over the last 12 years that program changes were made, the Council and the public was told that there was no general fund impact resulting from the program because the tax reduction developers receive were actually offset with increased property taxes for all other property owners.  Today we found out that this is not the whole story and that some portion of the exempted property taxes is forgone altogether.  In evaluating the project and making future changes it is critical to know what funds we may be foregoing that would otherwise pay for other critical tax-funded services.

INTRODUCTION

I begin this UP with a request. After you read this Urban Politics, consider sending a message to the Councilmembers asking them to dramatically increase the City’s plans for providing for more affordable housing in South Lake Union. My prior UP #322 provided background on how the City is developing SLU into a new and vibrant neighborhood, with expectations that in 18 years it will be the site of over 50,000 jobs and hopefully 15,000 housing units to accommodate those employees. Quite likely it will become one of Seattle’s densest urban centers. The question before the City is what kind of a new neighborhood will this be? Will it become a homogenous residential neighborhood, with employees car dependent on getting to work?

BE BOLD – TAKE THE LEAP

Before you is a strategy for creating an environmentally sustainable and an affordable neighborhood in the heart of our city. If you are in agreement, then email Councilmembers and put in the Subject Line: “BE BOLD – TAKE THE LEAP” In the body of the message use your own words for why you believe there should be more affordable housing in Seattle and South Lake Union in particular. Emails for the Councilmembers are:
Sally.Bagshaw@seattle.gov
Tim.Burgess@seattle.gov
Sally.Clark@seattle.gov
Richard.Conlin@seattle.gov
Jean.Godden@seattle.gov
Bruce.Harrell@seattle.gov
Nick.Licata@seattle.gov
Mike.OBrien@seattle.gov
Tom.Rasmussen@seattle.gov

WHAT DOES “TAKE THE LEAP” MEAN?

In short it asks Councilmembers to dramatically increase the requirements on South Lake Union developers to provide affordable housing units when they build larger and higher buildings due to the upzoning of this area. My proposal, which was kindly referred to as the “Licata Leap” by Councilmember Burgess, would do three things. First, reduce carbon emissions from employees driving to work from long distances by creating a greater incentive to provide affordable housing in SLU and in the city. Second, significantly increase the number of affordable housing units beyond what the other plans are proposing. Third, it will begin to make those changes now, capturing the potential to build hundreds of new housing units that would otherwise be lost if we were to wait another year for more discussions.

COMPARISON OF SLU PROPOSALS FOR FUNDING AFFORDABLE HOUSING

The performance requirement (i.e. the developer builds the affordable housing units on or offsite site) and the in-lieu payment amounts (i.e. the developer pays a fee to the city and the funds are used by someone else to build the units elsewhere) would significantly increase with the Leap Plan. Below is a table showing the differences.

This table applies only to new residential construction, not commercial construction, taking advantage of the SLU upzone. Commercial developments would also pay a fee, but their numbers would vary from those presented below.

Notes:

• *AMI is Average Median Income
• **Office of Housing suggests that non-profit developers may build an additional 300 units by 2031.
• *** This is the number of affordable housing units that the Office of Housing has determined that we’ll need by 2031 to meet our needs for the growth of jobs in SLU. Our consultants have confirmed this number and believe that it would be higher by 50% if we included the demand for affordable housing coming from the rest of the central business district.

The Council is moving in the right direction by increasing the amount of affordable housing from what the Mayor has proposed. One way that some Councilmembers have proposed is to increase the fees is by capturing inflation costs through applying the CPI index. This increase is one that could have been administratively applied, without legislation, any of the years since the 2007 passage of our first incentive zoning program.

I’m also glad to see that some Councilmembers are proposing a higher fee (referred to as an “in-lieu premium” of 20-25%) on developers who do not provide onsite affordable housing. I appreciate that Councilmember Burgess, who was the first to propose higher fees than what the Mayor proposed, acknowledges that even with this in-lieu premium, “the fee would be well below what is allowed by state law, RCW 36.70A.540 (h)”… well below the total cost to develop the workforce units.”

My objective is to encourage the development of affordable housing within projects and discourage the practice of developers writing a check to fulfill their incentive zoning obligations. Since its inception, San Francisco’s differential performance requirements and pay in-lieu options has succeeded in this objective, resulting in 80% of projects performing on-site units, 4% have performing offsite, and 16% making an in-lieu fee payment. My proposal is much more modest, but it will still increase the amount of on-site development than is currently being considered.

Here are some of the details of my proposal:

• For developers building affordable housing onsite: 10% of all residential floor area would be set aside as affordable for 60% and 80% average median income workers, which works out to about $60 gross square foot.
• For developers who don’t build affordable housing onsite, they make a “payment in lieu fee” which is equivalent to the cost of developing more units, instead 15% of units, or about $96 gross square foot.

IS THIS PROPOSAL REASONABLE?

The City Council’s consultant produced The Spectrum Report which concluded that an in lieu fee of even $104/gross square foot (mine is estimated as $96) would result in a 6.8% Return On Equity for developers and investors, the baseline threshold accepted by in the current market is 6%. In other words, developers could still make a healthy return on their projects.

Some have suggested that if we ask developers for too much in exchange for them using the upzones, they will not build in SLU if they can make larger profits elsewhere. While that is a possibility, there are other things to consider.

Although incentive zoning should be applied city wide, SLU is and will continue to be the hottest real estate location in the city for some time. The Mayor created a taskforce for considering how incentive zoning should be applied city-wide. It should move quickly and make a proposal by mid-summer, not at the end of the year as is currently planned. We do need city-wide consistency in applying incentive zoning. With a good portion of the Mayor’s appointees on the taskforce being for-profit developers, I expect that they will voice their hesitations about robust incentive programs. Consequently, I have low expectations that they will endorse anything that is bold enough to meet our city’s needs for more affordable housing. However, while the public deserves to hear their concerns, we should not use this taskforce as a barrier for tackling our affordable housing needs now. Rather, we should move forward before the end of the year to address the need city-wide.

Seattle is currently the sixth most active real estate market in the nation, and the risk factor for investors in this market is the second lowest in the nation as well. Both stats come from a report of Real Capital Analytics, a nationally respected firm, whose report received wide attention. However, San Francisco is even a “hotter” and they have a more aggressive affordable program than what I’m proposing (their “in-lieu” fee is over $300 a gross sq. ft. compared to mine of $96, or the Mayor’s at $15.) The requirements of their program applies even when there is no concurrent upzone and any time a builder is building more than 5 units of housing. And developers there have to provide housing units that are affordable to a lower income worker – 55% of Area Median Income, while all our proposals are at 80% of AMI (mine is half at 80% AMI, and half at 60%). Finally in San Francisco the affordable units are permanently affordable, for the life of the project. Our program guarantees affordability for only 50 years.

We need to build housing for our entire workforce, not just those at the highest wage scales. That is why we must have an incentive zoning program that also produces housing for workers earning 60% of the AMI. These are the security, clerical, maintenance, sales and hospitality workers. One proposed new building, just outside the SLU boundary, will be Seattle’s largest hotel employing over 400 people earning less than $25,000 a year. These are people who deserve the opportunity to walk or bike to work, rather than being forced to drive from Kent, Renton or beyond every day because they cannot find affordable housing in Seattle.

CONCLUSION

Council does recognize the opportunity of capturing additional public value for the private value we intend to create.  And, upzoning adds significant value to private property. The Department of Planning and Development has estimated that future growth due to upzoning SLU could result in over $12 billion worth of development over the next 25 years. Is it reasonable to expect that we should shape that development to be sensitive to our physical environment and our community values? I don’t want to see a downtown enclave created that can only house the most highly paid workers.

My vision is the creation of a functional and sustainable new downtown urban center that reflects the social diversity and environmental goals of our city. Can we do that by creating another 500 or even 700 affordable units when we expect there to be 15,000 housing units in SLU by 2031? I, for one, believe we can and must do better.

I welcome the Council’s continued resolve to grapple with these issues now, as well as the fact that we are also collectively rolling up our sleeves to do the same for incentive zoning throughout the City. But we need your guidance. What do you believe we should do?

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 25^th, 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.

You may have noticed the small white and blue vehicles that started appearing in some Seattle neighborhoods beginning in January. The vehicles are part of Car2Go, a car-sharing company that allows members to drive the vehicles one way, and park on city streets. It’s proven to be a popular service during its short time here, and provides a different option for people who usually take public transportation, bike, or walk.

Over 18,000 people have signed up in the first three months, the fastest-growing launch in any US city. Car2Go has requested additional permits to expand their coverage area to include parts of West Seattle, as well as Beacon Hill, Columbia City, and Georgetown, to a southern boundary of Michigan and South Orcas (see this map).

In December of last year, the Council approved Ordinance 124063, which made the program possible, by allowing for free-floating car sharing. Annual permits are $1330 per vehicle to park on city streets.  The ordinance allowed for SDOT to issue permits for up to 350 vehicles.

This Monday the Council will consider Council Bill 117733, which will allow up to 500 free-floating car share permits, sponsored by Councilmember Rasmussen, chair of the Transportation Committee.

The permits generate revenue for the City; the fiscal note for the December ordinance estimated Seattle would receive $332,500 in revenue in 2013, based on 250 vehicles, although the legislation allowed up to 350 to be permitted; 330 permits were issued. This council bill would produce estimated revenues of just under $100,000 to the City in 2013.

Car sharing legislation was first adopted in 2008 in Seattle, and allowed for designated on-street car-sharing zones.

Over 200 attendees crammed into Velocity Dance Center to celebrate this unique development combining affordable housing, arts, and public safety.

What was once a fenced-off 29,000 square foot parking lot will soon be transformed into 88 apartments for people earning 60% or less of the area’s median income; two performance theaters managed by New Century Theatre Company, Strawberry Theatre Workshop, and Washington Ensemble Theatre; meeting space for community events; below-grade parking for the nearby Seattle Police Department’s East Precinct; and street-level space for local restaurants and retailers.

Interestingly, the last Seattle development to combine apartments with a significant performance space was the Paramount Theatre in 1928. It’s taken us 85 years to reinvent the past.

12th Ave Arts is an example of what CODAC advocated for in 2009. Then, with the number of lost arts spaces increasing, I initiated the Cultural Overlay District Advisory Committee with the help of Councilmember Sally Clark. The committee delivered recommendations to the Council and Mayor addressing the loss of arts and cultural space and associated economic activity. Acting on their recommendations was stalled until last year, when I sponsored budget legislation addressing one of their top two priority recommendations: to hire a cultural development manager.

The manager’s duties include identifying culturally significant land uses; preserving the cultural amenities that make neighborhoods desirable; educating citizens, property owners, and developers on the importance of the arts and cultural community to property values and neighborhood character; and promoting tools and incentives for retaining arts and cultural spaces as well as developing new ones.

CODAC’s other top priority was to designate an arts district. A few weeks ago, I blogged about Capitol Hill’s Pike-Pine corridor’s selection by ArtPlace as one of 2013’s top twelve places in the country for art. I consider ArtPlace’s designation more evidence of Capitol Hill being a “cultural generator” neighborhood – a neighborhood that consistently contributes significant arts and culture-related economic and nightlife activity.

That’s why I intend to work this year with the City Council and Randy Engstrom, director of the City’s arts office, to act on CODAC’s recommendation of establishing arts districts, the first being Capitol Hill. In addition to protecting and promoting space for art, culture, and nightlife activities, one of the defining characteristics I want to see included is affordable artist work-force housing. Such a district model would need to include incentives and funding for the kind of affordable artist live-work housing found in Pioneer Square’s TK Lofts and in Rainier Valley’s Hiawatha Lofts.

I’ll be blogging more on this effort as it progresses, so please stay tuned.

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The Van Vorst Building, a registered landmark, in the 400 block of Boren Ave. N. in the South Lake Union/Cascade neighborhood.

4Culture just announced two new funding programs for preserving historic places. Preservation Special Projects and Preservation Sustained Support. Special Projects supports basic community preservation work, such as predevelopment studies on significant properties. Guidelines are now posted on 4Culture’s website. The deadline for applying to Preservation Special Projects is February 27. A sampling of those who can apply include Historic Seattle, Docomomo, the Seattle Architectural Foundation, and the City’s own Historic Preservation Program.

Preservation Sustained Support provides operating funds for organizations with a preservation mission and for cities with active preservation programs. Its application deadline is October 9. This is the first preservation program to fund operations, rather than projects, and will go a long way to keeping such organizations viable, especially smaller organizations.

4Culture’s Preservation Special Projects funds can be used to conduct surveys and inventories, registering landmarks, and project planning among other things. They want preservationists to identify historic places in innovative ways, communicate through new media, and engage people who may not think of themselves as preservationists. Awards can go to individuals, organizations and public agencies and will range from $3,000 to $10,000 per project.

Alice Winship, president of the Association of King County Historical Organizations, welcomes these new funds, which can address needs that are difficult for organizations to fill from other sources, like annual memberships and fundraising drives. AKCHO has more than 70 member organizations including Allied Arts of Seattle, the Pike Place Market Preservation & Development Authority, the Rainier Valley Historical Society, El Centro De La Raza, the Wing Luke Museum and the Ballard Historical Society.

The South Lake Union/Cascade neighborhood, looking north.

A neighborhood that comes to my mind when thinking of preservation is the South Lake Union\Cascade neighborhood. The Council is currently considering an upzone to that area that would include an alternative that would provide the ability of landmarked properties to sell their unused development rights, through a TDR program (transfer of development rights), to other properties wishing to expand their developments once a TDR program is established there. None currently exists in South Lake Union. This alternative would apply if the Council chooses not to establish a program whereby development rights from rural King, Pierce and Snohomish Counties could be transferred to property in South Lake Union.  An added alternative being considered by the Council would provide developers of landmarked properties increased density through a floor-area-ratio bonus program (FAR), which grants projects additional floor space in return for preserving portions of landmarked properties.

With 14 current landmarked buildings within South Lake Union/Cascade and another 34 structures considered eligible for landmark status, 4Culture’s two new preservation funding programs offer timely tools for preservationists to utilize there.

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America’s Top Twelve ArtPlaces is the group’s new annual recognition of neighborhoods in the largest 44 metropolitan areas where the arts are central to creating places where people want to be.

ArtPlace strikes me as an interesting group. It’s comprised of national and regional foundations, such as the Ford Foundation; federal agencies, such as the National Endowment for the Arts; and the nation¹s largest financial institutions, including Bank of America. Their purpose is to accelerate creative placemaking across the country through investments in art and culture that can transform communities for the better.

Although being judged one of their top twelve does not portend ArtPlace funding for any projects in the Pike-Pine corridor, Capitol Hill’s 12th Avenue Arts project was recently named one of 104 finalists from among 1,225 applicants to ArtPlace’s 2012-2013 grant cycle. ArtPlace has provided over $26 million in funding to 76 organizations in 46 communities across the U.S.

Some of you may recall the 2009 recommendations of the Cultural Overlay District Advisory Committee (CODAC) assembled by myself and Councilmember Clark. I sponsored Council Resolution 31155, accepting all six of CODAC’s recommendations.

Last year, I delivered on one of their top two recommendations. I sponsored legislation establishing a new City staff position dedicated to working on behalf of Seattle arts and culture as a liaison to institutions, organizations, foundations, government agencies, individuals, and City departments.

This year, I intend to tackle the committee’s other top priority recommendation: establishing Seattle’s first arts and culture district. I suspect this ArtPlace designation will help my argument.

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I proposed an amendment to add a provision in support of considering the creation of a state investment trust, to “provide financing for housing development, public works infrastructure, educational infrastructure, student loans, and community quality of life projects.” This was passed, and added to the Economic Development section of the legislation.

Representative and Senator-elect Bob Hasegawa from the 11^th District has sponsored legislation to create a Washington Investment Trust during recent legislative sessions, and obtained 44 co-sponsors in the 2012 session. The proposal is modeled on the Bank of North Dakota, the only state-owned bank in the country; the current version of the legislation has a narrowed scope to address concerns, and focuses on infrastructure financing, which can be used for, for example, utilities, schools, sewers, transportation, and broadband.

Hasegawa gave a presentation before the Housing, Human Services, Health and Culture committee I chair on December 12.

An investment trust could reduce infrastructure costs for the state, and allow local governments such as Seattle to obtain low-cost, short-term construction loans for infrastructure construction projects. This would reduce the cost of borrowing for the construction period, because the Trust could offer lower interest rates than the private bond market, with no additional costs or frees. It’s an example of streamlining government to make it more efficient, by reducing costs to taxpayers and generating a higher return on tax dollars. In addition, it would promote economic development, as short-term construction loans could be recycled in the same way that short-term loans can be recycled in the private construction market.

In the long-term, with sufficient capacity, it could provide long-term financing, with even further public savings.

The state constitution prohibition on lending of credit for private benefit; this proposal would provide for lending to public agencies only.

The Washington Public Bank Coalition has worked for creation of a state bank, and has additional information.