When it comes to creating affordable housing, Seattle voters can thank themselves.
Most rent-controlled units built in the last 30 years have relied on a property tax, Seattle's affordable housing levy, first approved by Seattleites in the early 1980s. That's when federal money for affordable housing was cut dramatically under President Ronald Reagan.
The city has also tried to sway for-profit developers to build cheaper units. In one program, developers receive a tax break, but those rentals stay affordable for only 12 years. Another program lets them build bigger if they add those units, but most have refused the offer, opting to pay a penalty instead.
These city programs have many names, and they’ve produced 15,000 units. They are the building blocks Seattle will use when embarking on a much loftier goal – generating 20,000 more affordable rentals in the next decade. City officials want to pump up the successful programs, like the levy, and rethink the no-shows.
Play with this interactive map to see which programs have generated affordable housing across the city.
Affordable Housing Levy
We see the dramatic influence of the Seattle housing levy across the city, readable from the sea of green dots on the map. Each dot represents an apartment building that received money from the property tax.
Nonprofit developers like the Low-Income Housing Institute are able to build these units with low-interest loans that last half a century. This program has created over 12,000 units – or 80 percent of affordable housing since the early 1980s.
This program targets some of the lowest income people. A two-bedroom apartment costs $606 for a family of four pulling in $26,900 or less.
What could change: A committee studying affordable housing in Seattle (known by wonks as the HALA committee) wants to double the levy when it comes up for a vote again in fall of 2016. Developer fees paid into this fund could also increase, as the committee also wants commercial developers to help pay for affordable housing.
12 Years Of Cheaper Housing
A second program appears to be the runner up, when it comes to productivity. A not-insignificant number of blue dots indicate apartment buildings where developers are given a tax break in exchange for including affordable units.
After a spotty start in the late 1990s, this program, known as the "Multifamily Tax Exemption" program has consistently turned out affordable apartments since the end of the recession.
These buildings include more than 2,400 affordable units. The problem with this program is that rent on these units stay low for only 12 years before snapping up to market rate.
What could change: The committee wants Seattle to lobby the Washington Legislature to allow developers to extend their tax break – and rent control – to 24 years. The City Council must reauthorize the program this year if it is to continue.
Failed Incentive
Seattle hoped for-profit developers would help the effort. They asked builders to include affordable housing that would stay rent controlled for 50 years – and if they weren’t game, they would have to pay a penalty.
The program failed. Developers roundly chose to pay the fee to avoid this obligation. A spokesperson for the Office of Housing says that's not a failure - as those fees help non-profit developers build housing, just like the levy. But the program has not engaged for-profit developers in the way city officials had anticipated. The city intends to rethink the program.
What could change: The affordable housing committee recommends making this a mandatory program in urban villages – where the city has chosen to channel most of its growth.
Developers would be allowed to build bigger buildings but would be required to include rent-restricted units whether or not they take advantage of the incentive. The new program would be called "Mandatory Inclusionary Housing."
[asset-images[{"caption": "Thornton Place Apartments", "fid": "120386", "style": "placed_wide", "uri": "public://201509/thornton_place_2.jpg", "attribution": "Credit KUOW Photo/Joshua McNichols"}]]Bottom Line
It's important not to overstate the role of these programs in creating this housing. These local programs form just a fraction of the funding required for the apartment buildings you see on this map. But the role filled by these local programs is often considered vital, making up just enough of the funding to make these projects pencil out.
Of course, there are other ways to create affordable housing than looking to formal programs like these.
Developers say they could create more affordable housing – if minimum requirements on unit size were relaxed, for example. Such micro-apartments could be rented out at market rate – but even without formal restrictions on rent, they would be more affordable due to their small size. It's a solution that favors young single workers willing to live in such tight quarters over larger families that require more bedrooms.
But the minimum size rule is just one of many constraints developers say restrict the natural flow of affordable housing into the market. Other standards, often imposed for reasons of neighborhood aesthetics or life safety concerns, can have an indirect impact on the cost of housing.
Also, there are other players in the field creating affordable housing, such as the federal government, which currently controls over 28,000 apartments in the city. Over the decades, the capacity of the federal government to build new affordable housing has declined, while Seattle’s own local programs have been ramping up.
