Mayor Murray set to unveil affordable housing legislation as Capitol Hill rent climb hasn’t quit — UPDATE

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Murray unveils new affordable housing legislation on First Hill (Photo: CHS)

Murray unveils new affordable housing legislation on First Hill (Photo: CHS)

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Screen Shot 2015-08-31 at 2.35.31 PMIt’s time for the rubber to meet the road at City Hall where officials are aiming to create 20,000 new units of affordable housing in Seattle over the next decade. Mayor Ed Murray and City Council member Mike O’Brien were set to announce new housing legislation Tuesday that will create 6,000 of those units over ten years.

UPDATE 12:50 PM: One way or another, all new development in Seattle over the next decade will contribute to affordable housing. That was the message from Murray and O’Brien as they unveiled two pieces of proposed legislation (PDF) Tuesday afternoon at First Hill’s Cascade Court Apartments.

The first measure, known as mandatory inclusionary housing, would require all new multifamily buildings to make 5-8% of their units affordable to those making 60% of the area median income or require developers to pay into an affordable housing fund. In 2013, Seattle households at 60% AMI took in $40,487. The plan calls for affordability to be calculated at 30% of income, meaning affordable units would be rent restricted to around $1,000 a month.

Developers would have the option to build an additional story, but they must pay-or-play regardless if that story is built. The rate at which developers would pay into the fund has not yet been determined. The fund will prioritize building housing within the same neighborhood from which the fees are generated, O’Brien said.

The second measure, known as the commercial linkage fee, would require all new commercial development to pay $5-$17 per square foot into an affordable housing fund. The option to build additional floor area will be included to help builders offset the fee. Developers would also have the option of providing an equivalent amount of housing offsite.

“This is a bold, progressive proposal where growth itself will support affordable and environmentally sustainable neighborhoods,” Murray said.

O’Brien said the bills will be introduced at City Council next week. A public hearing on the proposals will be held September 9th at 5:30 PM at City Hall.

Original Report: Murray’s Housing Affordability and Livability Agenda Committee released the “grand bargain” plan in July, which included a call for developers to build affordable housing into new buildings or pay a fee to fund it.

The O’Brien-led Select Committee on Housing Affordability started meeting in July on a work plan to tackle the linkage fee and inclusionary zoning measures. The measures to be unveiled Tuesday at First Hill’s Cascade Court Apartments, operated by the nonprofit Bellwether Housing, will be the first to start implementing the HALA recommendations.

The HALA report included 65+ recommendations in all, ranging from up-zones to parking changes. While it wasn’t part of the original grand bargain, Murray made a concession last month to drop a proposal to allow for more density in single family home areas after pressure mounted against it.

According to the mayor’s action plan timeline, creating more accessory dwelling units was supposed to be one of the first fruits of the HALA effort. The other is to sell the City’s surplus property for affordable housing, something that’s already underway.

The HALA report also includes a recommendation to work with the state legislature to increase the tax on real estate transactions — an issue Capitol Hill’s Rep. Brady Walkinshaw recently told CHS he would be taking up next year.

On Capitol Hill, there has been no summer relief from rising rents. The median rent for a 1-bedroom “Capitol Hill” apartment on Craigslist this past week was $1,850 a month, according to data pulled by CHS. A renter would need to make a pre-tax salary of at least $74,000 a year for that apartment to remain affordable, assuming a 30% affordability threshold. In May, the median listing rent was $1,750.

It’s part of a much longer trend of steadily rising rents in the neighborhood. Average rents went up 12% from 2013-2014 and have climbed 38% since 1998, according to a KUOW report earlier this year.

Meanwhile, increasing numbers of property owners appear to be turning towards services like Airbnb to rent out units like hotel rooms. According to Inside Airbnb, Capitol Hill had 413 units listed on Airbnb on Monday — the highest number out of any neighborhood in the city. The average fee was $151 per night. Just over 40% of the listings were from hosts who owned multiple properties.

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40 thoughts on “Mayor Murray set to unveil affordable housing legislation as Capitol Hill rent climb hasn’t quit — UPDATE

  1. With the average nightly rent of $151 for an Airbnb unit, why would anyone go that route? You can get a very nice room in one of Capitol Hill’s beautiful B&Bs for that….more privacy, and breakfast included!

    • The B&B owners might not want semi-permanent “guests”, so that might not be a practical option. That does sound like an old-fashioned rooming house though, where the landlady provides breakfast (and dinner).

    • With Airbnb you can select the entire home so you have an actual full on apartment rather than a bedroom that comes with a typical bnb. In that case your get more privacy (and a lot more room) with Airbnb. Plus, high demand in Summer means limited traditional bnb availability.

  2. Average Capitol Hill rents “went up 12% from 2013-2014 and have climbed 38% since 1998”. Well in that same time frame (1998-2014) the cumulative US inflation rate was 45%. (You can do the math here:
    http://www.usinflationcalculator.com/)

    Net: the average rent was about 5% CHEAPER in real dollars last year than it was 17 years ago! Hmm…

  3. I belive the 38 percent figure was after adjustment for inflation. In other words, rent today is 38% more expensive after adjustment for inflation. A policy challenge to me, but not a crisis requiring rent control.

    • I think the bigger concern really lies somewhat outside the specific discussion of rents or rent control– namely, that salaries have been essentially stagnant for years. So even with flat rents or rents that don’t outpace inflation, stagnated wages make it relatively that much more expensive. Unless, of course, you’re one of the bloated Plutocrats sucking off the teat of the middle class and working class, and getting ever-richer at their expense.

    • I’ll stop being myopic if you can stop being dramatic. Seattle is already dying for air for space for everything, but let’s keep cramming humans into every square inch! That’s vibrant. Next up gridlock, oh wait that’s already here.. And murders… Oh wait! But density is good! Keep all of it coming. Seattle is like a toddler without a strict parent. Let the kids playing simcity have their way!

  4. All the new apartments under construction combined with the stock market correction could moderate prices before the mayor even has a chance.

  5. In a city that desperately needs housing that is affordable to people making 50% of the AMI or less (this is especially the case in Southeast Seattle), could the City of Seattle also lean heavily on the Seattle Housing Authority to NOT SELL SHA’s land to fraudsters like Lobsang Darghey so they can build MARKET RATE housing on it? BTW, building market rate housing is not in SHA’s mission statement.

    http://www.seattletimes.com/business/real-estate/dargeys-troubles-halt-potala-tower-endanger-othell-project/

    SHA’s most spectacular giveaway of all was selling PUBLIC LAND to Vulcan so it could build thousands of market rate apartments, condos and hotel rooms, while merely replacing the existing amount of low income housing. That is a travesty, and a recipe for failure in what should be strenuous efforts to INCREASE the amount of low income housing in our city, which grew by 20,000 people just in the last year.

  6. Seattle needs to come to terms and realize that having 70% of the city being single family homes with yards isn’t really sustainable if we want affordability. Rowhouses, duplexes, triplexes, townhouses…there’s going to need to be a lot of varying types of units available rather than just cramming everyone into ‘urban villages’.

    But that requires change and difficult conversations that might leave the vocal minority unhappy, so our impotent mayor and incompetent city council will run the opposite direction.

    • Those of us who require responsible density and growth will continue to fight the density zealots that can’t figure out how tax bases really work….but n
      Know how to type loud on the interwebs.

      • All you mean when you say “responsible density” is “growth that I can’t personally see and don’t have to deal with.” But Adam is right, we can’t achieve widespread affordability, sustainability or inclusivity by cramming everybody, including families, into urban villages. It’s wrong that single family neighborhoods, which look and function like suburbs, don’t absorb any of the growth that Seattle is experiencing. All it does is create scarcity, which drives up price and forces middle class families out of the city. That is terrible for the planet, terrible for middle class families, and an ugly message to send to newcomers. “We all got here when land was cheap, but now that it’s expensive, sucks to be you.” Of course homeowners are happy to see their property values skyrocket, so I would expect nothing less than their total opposition. So we need to take their power away from them through either legislative or judicial means.

      • I bought my Cap Hill house fifteen years ago. It has appreciated, on average, about four percent per year. This figure would be less, but I did some renovation and added some square footage so today’s value reflects those improvements. Does four percent annual appreciation minus the value of the renovation sound like skyrocketing values to you?

      • Have you seen all the Levys headed to the ballot that are funded solely by property taxes in Seattle proper? And no don’t tell me what I mean. We need to slow the growth before this city is impassible and neighborhood bound since no one will be able to get anywhere, I’ve learned long ago you can’t win arguements on the webs with the zealots.

      • Slow the growth? Seriously? How do you propose that? Ban employers from offering more jobs? Make Seattle hostile to new businesses and residents so no one wants to be here any more?

        Stopping construction will not stop demand. It simply raises prices for everyone else. A vibrant, healthy, growing Seattle is best for everyone. As a property owner myself, I don’t want to see less people moving and working here. A dying Seattle is not a good investment for anyone. Stop being so myopic.

    • Adam, sorry to inform you, but that train has left the station. Haven’t you been following the news lately?…..the Mayor has retreated on his proposals to upzone single family neighborhoods. (and I am glad he did).

  7. “On Capitol Hill, there has been no summer relief from rising rents. The median rent for a 1-bedroom “Capitol Hill” apartment on Craigslist this past week was $1,850 a month, according to data pulled by CHS. A renter would need to make a pre-tax salary of at least $74,000 a year for that apartment to remain affordable, assuming a 30% affordability threshold”

    Is the 30% threshold really based on pre-tax (i.e. gross) earnings? If so, why is that number used rather than net earnings?

  8. new york has inclusionary housing laws like this. but unfortunately, developers tried a ‘separate but equal’ approach, giving the ‘poor folk’ not only different amenities within the same building, but also different entrances and common areas. luckily, this spring, they updated the laws to call bullshit on that.

    i hope seattle has the foresight to keep that from happening in the first place.

    • If no rules like this exist, and I doubt they do, it’s gonna be really interesting to see how these developers build below-grade zero-frill apodments into these new buildings. I can see a building with a basement storage space amenity next to the “poor pods”.

    • Why should someone be given the same furnishings/perks when they pay significantly less (and lets be honest, probably work much less). The necessity is a roof over ones head, not high end appliances, pools, roof decks, etc. When does the gimme, gimme, gimme stop and people begin to take responsibility for their own actions/choices?

      • Finally somebody with some sense. How about we require Canlis to provide low cost meals to those who make less. I pay $80 for a steak and you pay $10. That is fair right.

        I refuse to buy into this socialist escapade. I will vote with my wallet and never live in such a building. I would qualify for one of these units but refused to have my life subsidized by those around me. One should earn their own keep.

      • How dare you not kowtow to our Dear Leader Ed Murray! The right to live in one’s favorite neighborhood and not spend more than 30% of one’s income on housing is the most fundamental human right.

    • Doesn’t the Broadway Building at Broadway and Pine already have the separate ‘affordable entrance’? There’s the main one on Broadway, then a separate one on the side by Panera for “The Studios at Broadway”.

      Not that I have a problem with it. I don’t get the outcry. I think it’s fine if the affordable units have a separate entrance and hallways, and different layouts and finishes. It’s essentially just combining two buildings into one structure. If you’re getting to live at a great location at prices way below market, you shouldn’t really be complaining about those kind of things anyway.

  9. It will be interesting to see if inclusionary zoning actually manages to have an effect on overall prices. I doubt it (SF and NY have it, and aren’t paragons of affordability). Likely, housing will continue to be expensive. But a few lucky people will get cheaper housing, which isn’t a bad thing.

  10. A simple question.Who pays for the levies that get passed,the renter-leaser or the property owner.Murray no more terms for you

  11. Dale: The answer is everybody pays. Unless landlords don’t factor property taxes into their tenants’ rent, which you and I both isn’t the case.

  12. Imagine how low the rents would be if instead of Seattle “allowing builders to build one more additional story” They were allowed to double the height of these new buildings or better yet if there were no height limits. Buildings need to go up for rents to go down!

  13. I just got my rental increase notice on Thursday. My rent is being jacked up 50%. It has finally come time to say goodbye to the neighborhood. I am bummed out since capitol hill has been my home for a good 12+ years out of the 16 years I have lived in Seattle. I finally give up and the dude bros, and woo girls can have it. Time to go find another place that is cool and artsy and still affordable.

  14. Wow, what a minimal effort to provide affordable housing. Developers won big. 5-8% OR the ability to pay into affordable housing somewhere else (that will never be built). Eek.

    Even in San Francisco, where the minimum is now 30% affordable units, developers are skirting that by paying into an affordable housing offset that isn’t being used. 90% of housing built there is luxury or above-market-rate.

    With our relaxed laws on development don’t expect to see any new affordable housing being built any time soon. I hope you’re getting used to the constant stream of luxury on the hill. It’s not going to stop any time soon.

    • I agree. The requirement to include only 5-8% of affordable units is laughable. What is that?….probably 1-2 units in most new buildings. It’s hardly going to make a dent in our affordable housing problem.

      • I think 5-8% of your salary should go towards supporting social programs…you shouldn’t be able to make money just like developers unless you support the lifestyles of those around you