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Agreement will bring affordable housing to neighborhoods across Seattle

City of Seattle
FOR IMMEDIATE RELEASE: 7/13/2015

Agreement will bring affordable housing to neighborhoods across Seattle
HALA recommendations include focused density and a path to 20,000 new affordable homes

SEATTLE – Mayor Ed Murray and Councilmember Mike O’Brien today hailed an unprecedented agreement that will lead to at least 50,000 new homes in Seattle, including 20,000 affordable homes, over the next 10 years. Affordable housing will be included in nearly every residential development across Seattle as the rate of construction of new affordable homes triples.

“As Seattle expands and experiences rapid economic growth, more people are chasing a limited supply of housing. We are facing our worst housing affordability crisis in decades,” said Mayor Ed Murray. “My vision is a city where people who work in Seattle can afford to live here. Housing affordability is just one building block to a more equitable city. It goes hand in hand with our efforts on raising the minimum wage, providing preschool education for low-income children, and increasing access to parks and transit. We all share a responsibility in making Seattle affordable. Together, this plan will take us there.”

“Since 2013, the City Council has called for a robust, citywide, mandatory affordable housing program to help ensure that the people who work in this city can afford to live here. The combination of Mandatory Inclusionary Housing and a Commercial Linkage Fee will ensure that as Seattle continues to grow, we are creating housing for all incomes,” said Councilmember Mike O’Brien.

At the heart of the action plan to make Seattle affordable is Mandatory Inclusionary Housing, a requirement that developers reserve five to seven percent of units in every new multifamily building to be affordable for residents earning up to 60 percent of King County’s Area Median Income (AMI). Developers could opt to contribute to a fund for off-site construction of the units.

In 2015, 60 percent of AMI is $37,680 for an individual and $53,760 for a family of four. Current market-rate rents in new buildings on Seattle’s Capitol Hill currently average $1,887. In 2015, individuals with incomes of 60 percent of AMI pay $1,008 for income-restricted apartments.

New buildings will have taller height restrictions in existing multifamily residential, mixed-use and commercial zones throughout the city. A substantial portion of the additional development will occur within the existing Urban Centers and Urban Villages, designated two decades ago as the preferred location for denser housing. Only single-family zoning within Urban Villages and along major arterials will be converted to low-rise residential.

A map of the proposal, which was negotiated by Murray, O’Brien, developers and affordable housing advocates, shows where the growth could occur.

The action plan also includes a Commercial Linkage Fee on new commercial development, phased in over three years, to fund additional affordable housing for the lowest-income families. The linkage fee will range from $5 to $14 per square foot, based on the size and location of the commercial development.

When fully implemented, Mandatory Inclusionary Housing and the Commercial Linkage Fee will lead to the construction of at least 6,000 new affordable homes over 10 years.

The Housing Affordability and Livability Agenda (HALA) advisory committee today delivered to the mayor 65 recommendations after 10 months of work. The consensus-driven proposal was crafted by a 28-member committee of affordable housing advocates, community voices, developers and housing experts appointed by the mayor and Seattle City Council last September.

“Many thanks to all the committee members and staff for an extraordinary amount of work over the past 10 months,” said HALA co-chairs David Wertheimer and Faith Li Pettis.  “We were asked by the mayor and council to offer bold, new concepts in our approach to solving the affordable housing crisis. We think this plan fully delivers on that request.  We were able to complete our task because we approached the challenge with a single, shared goal: to make Seattle affordable for all families. None of us got exactly the solution we may have envisioned at the outset, and every one of us had to give a little to reach this landmark agreement. In the end, we are confident that our collaboration will result in thousands of new affordable homes across our city.”

Murray immediately responded to the recommendations with his roadmap to make Seattle affordable, a path to reach his goal of 50,000 new homes, including 20,000 new homes for low- and moderate-income people, over the next decade. Some items in the action plan could be completed this year, while others will require at least two years to implement. In the coming weeks, the mayor will transmit to council a resolution to formalize the elements and framework of the Mandatory Inclusionary Housing program. 

Today, about 45,000 households in Seattle spend more than half their incomes on housing. An estimated 2,800 people sleep outside each night in Seattle. Currently, about 700 income-restricted homes are built in Seattle each year.

The increased development capacity across the city will ensure increase supply of housing to respond to growing demand, as Seattle is forecast to add 120,000 residents over the next 20 years.

Single-family zones currently represent 65 percent of all land in Seattle. After the proposed zoning changes, single-family zones will still cover 61 percent of Seattle. HALA proposes code changes that will make it easier to build accessory dwelling units and backyard cottages (only one percent of homeowners have done so), as well as allow duplexes and triplexes, while preserving the character of single-family neighborhoods.

Residential development continues to be excluded from industrial areas under the proposal.

The City is currently engaged in a community process to update its Comprehensive Plan, called Seattle 2035. Over the past two decades, the Comprehensive Plan has been successful in locating 75 percent of Seattle’s new housing in Urban Centers and Urban Villages. The update, to be completed in 2016, contemplates expansion of Urban Villages and denser housing around transit hubs and light rail stations. HALA’s recommendations will be implemented in conjunction with the updated Comprehensive Plan.

Doubling of Housing Levy in 2016
To meet the needs of the Seattle’s lowest-income residents, those earning less than 30 percent of AMI, HALA also proposes to double the existing $145 million Seattle Housing Levy scheduled to expire in 2016. Over the past 30 years, the levy has funded $400 million to build and preserve nearly 12,000 units of affordable housing.

In 2015, 30 percent of AMI is $18,850 for an individual or $26,900 for a family of four.

This year, the City will award a record $42 million from the Housing Levy and the existing Incentive Zoning program for the development and preservation of low-income housing. The Seattle Office of Housing will issue project guidelines and invite partner applications later this week.
The HALA report also urges the Washington State Legislature to allow Seattle to adopt a 0.25 percent real estate excise tax dedicated to affordable housing development, as well as an increase in the State Housing Trust Fund.

To support moderate-income families, HALA recommends expanding the Multifamily Property Tax Exemption Program (MFTE) that is set to expire at the end of the year. Under MFTE, developers receive a tax exemption when they dedicate 20 percent of units in new buildings for moderate-income people, typically between 65 percent and 85 percent of AMI. HALA proposes to expand the program to all areas where multifamily housing can be built and incorporate a new incentive for three-bedroom units to extend program benefits to larger moderate-income families.

In 2015, 80 percent AMI is $46,100 for an individual and $65,800 for a family of four.

HALA recommends a range of tenant protections to ensure better access to housing, prevent housing discrimination and minimize displacement as rental and ownership costs increase across the city:

  • Prevent displacement as rents increase across the city through a Preservation Property Tax Exemption and other mechanisms.
  • Remove barriers to housing for renters with a criminal history that disproportionately impact people of color.
  • Strengthen the Tenant Relocation Assistance paid to low-income renters who are displaced by new development.
  • Develop new homeownership tools for Muslim buyers who cannot use conventional mortgage products due to their religious convictions.
  • Establish new protections to prevent discrimination against renters due to their source of income.

HALA also recommends that the City continue to review parking policies that contribute to the growth of housing costs or inhibit development in single- and multifamily residential zones.

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