Outside City Hall: Mayor’s grand bargain and HALA affordability requirement serves primarily developers

(this story is essentially a slightly updated version of an earlier Outside City Hall column by John V. Fox and Carolee Colter posted in Pactific Publishing Newspapers)

A coalition of primarily developer-sponsored groups have been formed calling itself “Seattle for Everyone”.  They’ve joined hands with Mayor Ed Murray and are mounting a well funded PR campaign to pump up support for Mayor’s Housing Affordability and Livability Agenda (HALA).

Describing it as a “grand bargain,” this coalition chose to back HALA after the Mayor and Mike O’Brien, then head of the council committee charged with implementing HALA, agreed to add provisions requiring office developers to pay a housing linkage fee, and those developing market rate housing to include some low-income and affordable housing in their projects.

Bargains, of course, require something given back — in this case, to developers. What these groups, O’Brien and the mayor are willing to trade away is nothing less than the heart and soul of our communities. Over the next two years, HALA would phase in upzones in every Seattle neighborhood, meaning more runaway growth.

While the mayor retreated from one element of the plan that would have upzoned even single-family areas, HALA still commits the city, over the next two years, to upzone all commercial, mixed-use and multi-family zones, as well as 6 percent of the city’s land area now zoned single-family within an “urban center 10-minute walkshed.” Every neighborhood would be affected.

Rather than a “grand bargain,” it’s more of a Faustian deal that will only accelerate the loss of low-income housing and cause more displacement and homelessness in our city. So much for “growing together.”

 Not enough to fill the need

Yes, HALA requires developers to pay linkage fees or set aside some lower-priced units in their projects (the “mandatory housing affordability MHA requirement”), but the cost to the developer would be no more than 2 to 9 percent of the value of their project depending on area or zone where they’d be redeveloping. And even with these developer fees or ‘set-aside units, the HALA the plan would produce over 10 years only an additional 6,000 “very-low-income units” priced for those at or below 30 percent of median income, and 9,000 “low-income units” serving those between 40 and 60 percent of median.

The bulk of the HALA’s 65 recommendations are designed to accommodate — via upzones, developer tax breaks and other giveaways — another 35,000 market or near-market-rate units.

Currently, city data indicates 42,000 to 45,000 households in Seattle are earning at or below 30 percent of median income, but only 13,000 to 16,000 of them live in housing they can afford — and nearly all these units are subsidized. Compare that shortfall of 30,000 units to the 6,000 in the mayor’s plan serving this group.

The second-greatest level of need is for those between 30 and 50 percent of median. About 72,000 households earn at or below 50 percent of median citywide, but there are only 51,000 units at rents affordable to this group. Compare that shortfall of about 20,000 units to the 9,000 in the mayor’s plan serving those between 40 and 60 percent of median.

At first glance, it may seem that these 15,000 very-low and low-income units in HALA would help close the gap. But market forces set in motion by the upzones in the plan will cause the loss of thousands of existing low-cost units — far more than these 15,000.

That’s because the vast majority of low- and very-low-income households (30,000 to 40,000) depend upon a stock of older, lower-density, still-relatively affordable, unsubsidized and privately owned brick apartments, older cottages, townhomes and duplexes. About 25 percent of all Seattle renters live in single-family homes. Nearly all these units are located precisely in the areas that would be upzoned under HALA. They would be lost at an accelerated rate — far more than the 15,000 created with linkage fees in the mayor’s plan over 10 years.

Already in Seattle, we’re losing more than 2,000 units a year to redevelopment and speculation under the existing zoning code.  (Since 2006, Seattle lost over 6500 existing units to demolition and applications are pending now for removal of another 1500 plus – 80-90 percent of these were low cost rental units.  We’re also losing each year roughly a 1000-1500 low cost units in apartment buildings sold off to speculators who then push rents up above what longtime low income residents in these buildings can afford.  HALA upzones will greatly accelerate these losses.

Moreover, even with funds raised with linkage fees, the mayor acknowledges HALA falls about $200 million short of what’s needed to produce those 15,000 units. But there’s no shortage of dollars in HALA to produce the 35,000 market- and near-market-rate units. Tax breaks and upzones will easily “incentivize” their creation. Seattle has a pyramid of need, but HALA turns the pyramid upside down.

 What can be done

Some mechanisms could mitigate these housing losses: a demolition-control law requiring developers to replace one-for-one the low-cost units they remove, neighborhood special review (or conservation) districts, creation of a growth increment fund – allocating a portion of new city revenues attributed to growth for low income housing, and creation of a fund to ensure that when existing low income properties come up for sale and the city is notified according to the recently passed right of first notice law that funds are available and there is an active effort to acquire these properties that otherwise would be sold to developers.

However, the HALA advisory group, top-heavy with developer interests, summarily rejected every viable anti-displacement strategy. It’s as if the Mayor is completely deaf to citizen outcry about the impacts of the tsunami of growth washing over our neighborhoods.

Despite backing away from their plan to upzone all single-family zones, they’re still listening to developers, their surrogates and special interests.

We need to yell a bit longer and louder, and with more of us doing it! Or we can just say goodbye to our neighborhoods and the physical and social diversity at their heart.

 

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About John V. Fox

Director, Seattle Displacement Coalition
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