Compared to other major cities, Seattle’s housing market is rebounding wonderfully since the 2007 crash and Capitol Hill properties fare much better than in the rest of the city. But there are still thousands of residents facing foreclosure or struggling to pay mortgages higher than the value of their home. And the next bump in the economy — whenever it may come — could drag thousands more down with it.
The Seattle City Council’s Housing, Human Service, Health, and Culture Committee passed a resolution Wednesday that would enable City Hall to study how to use public resources, including eminent domain, to save underwater mortgages. The resolution now moves on to the full council.
Several homeowners who faced foreclosure or underwater mortgages spoke in favor of the city getting directly involved with reducing mortgage principals. “If my husband lost his job we’d be on the streets, the banks won’t give us a chance,” said Joelle Craft, a mother of three and volunteer with Washington Community Action Network.
In addition to exploring options for eminent domain, a study the city commissioned last year suggested the Seattle think about creating a “municipal land bank” that could take tax-foreclosed property and convert them into a “beneficial community use.”
“There’s not going to be any silver bullet … but it will be another tool that we can use,” said Council member Nick Licata. “We’re not alone at looking at these strategies.”
“More than one third of Seattle’s home mortgage total – about 42,000 homes – is underwater with an average negative equity of approximately $92,000,” a statement from Licata’s office this fall detailed. “Nationally, 19.4% of home mortgages are underwater, with average negative equity of approximately $73,000.”
In 2011 the City Council passed a resolution to track and study foreclosures in the city. But getting reliable data on foreclosures is difficult, to say the least. The Office of Housing is currently working with housing nonprofits to empty of distressed properties and small band-aid loans.
CHS City Hall Notes:
- City Attorney Pete Holmes addressed proposed changes to the Seattle code that would encourage SPD to cite people for smoking outdoors who have already been warned. SPD wants to change the ordinance language to read that officers should issue warnings “whenever practical” from ”whenever possible.” CHS reported last week on the City Attorney’s call for an increase in the number of pot store licenses allocated for Seattle and a looser interpretation of buffer rules to keep the stores away from schools and playgrounds.
- Council members have been working for months to update the city’s Multi-Family Tax Exemption program in an attempt to get the program to more directly help lower income residents. After nine meetings on the MFTE, the committee decided to put the changes on hold again pending the results of a sweeping independent study on affordable housing due in March.
- The HHSHC committee approved Pamela Banks, president of the Urban League of Metropolitan Seattle, to join the Capitol Hill Housing Board. She said she supports CHH’s plans for affordable housing at 23rd and Union because it will “slow down the gentrification of our community”