Developer completes 12th Ave affordable housing trifecta

Reverb apartments as seen from the rooftop of its sister building, Decibel.

Reverb apartments as seen from the rooftop of its sister building, Decibel.

In 2014, CHS wondered whether Capitol Hill’s affordable housing might not be built on Capitol Hill but in the neighborhoods to the south along 12th Ave. Today, a trio of Capitol Hill-adjacent affordable housing developments from Spectrum Development Solutions has been completed.

Reverb Apartments, the final of three developments in the 12th and Alder area of the Central District, threw an open house party on Thursday featuring music and a community event to show off the newly opened building.

“It’s been a long journey, and we’re really excited to be a part of the community and to play hopefully an important role in bringing workforce housing to this area. It’s much needed,” Spectrum’s Jake McKinstry told CHS.

Across the three buildings, 56 units qualify as affordable with the other projects priced as “workforce” housing designed to appeal to young, working professionals willing to sacrifice space and perks like parking in exchange for proximity to employment centers and public transit. Spectrum is focusing on “the missing middle” — teachers, nurses and other young professionals, who are trying to live near their jobs and don’t qualify for affordable housing, McKinstry said.

Construction on the 85-unit Reverb development wrapped up in September. Seventeen of the units qualify as affordable housing for people earning 65% to 85% of area median income (AMI) of $61,800.

Studios start at $1,000 and go up to $1,450. One bedrooms run from $1,300 up to $1,800. Two bedrooms start around $1,700 and go up to $2,500. Reverb also has four townhomes that start around $3,000 per month

The Multifamily Tax Exemption bonus program provides a property tax break to developers for 12 years if they set aside at least 20% of their units for affordable housing. Across the three planned Spectrum buildings, the developer has made 25% of its units available to tenants who make less than the area median income of $61,800 for one person. An Anthem tenant will pay $868 a month for a one-bedroom apartment. Spectrum will also, of course, enjoy a healthy tax break.

Reverb features a rooftop club, dog run, fire pit and barbecue grills. McKinstry said it has more of a “chill residential vibe” with a library near the entrance.

About 30% of the units in the $25 million development have been leased. McKinstry said by the end of the first quarter of 2017, Spectrum would like to see the majority of apartments leased.

“We try to really mix in a spectrum of affordability within the project,” he said.

In June, construction on the 75-unit Decibel Apartments building wrapped up. It also offers 20% of its units as affordable housing using. It features many of the same amenities as well, but also has commercial space. McKinstry described Decibel, a $24 million development, as the “edgiest” design in the trio.

Decibel units went quickly, hitting 96% occupancy in six weeks.

Anthem on 12th, a $28 million project, was completed in May 2015 and offers 36 of its 120 units as affordable housing. The remaining units are available to workers earning up to 120% of AMI. When construction was completed, 40% of its units were pre-leased, and it was 90% full six months after opening. Anthem’s commercial space, however, is still available.

All three buildings are transit-oriented, Reverb has 13 parking spaces for its 85 units, but is located close to bus lines and the streetcar. Each unit also has wall mount space for bikes and there’re communal bike racks as well.

So far in the other developments, the low number of parking spaces hasn’t been an issue and the bike racks are well-utilized.

The surrounding community has also been supportive of the multi-story projects. While Spectrum was working through the permitting process for Reverb, the city considered the idea of putting a park in the lot instead but the community lead by the 12th Ave Stewards group supported the development.

“I think as we see in politics and as we’re seeing in real estate, unfortunately, we’re moving to the extremes — the haves and the have-nots,” McKinstry said. “… We have situations where it’s only deeply affordable housing or it’s very high-end, super expensive, market-rate housing, so there’s a huge area of bandwidth in the middle that we need to be serving.”

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15 thoughts on “Developer completes 12th Ave affordable housing trifecta

  1. Whats the zoning in this area? Instead of building cubes that house only 75 homes we should have apartment towers that house 400 homes. This stretch of 12th Ave is prime for this kind of building.

    • Why do we have short buildings in Seattle? The answer is: affordability. Tall towers are constructed entirely of concrete. Concrete is extremely expensive. To cover the cost of the concrete alone, a tower-style building could not ever be considered “affordable.” (Have you heard about the housing affordability crisis currently happening in Vancouver, BC? Just look at their skyline for hints). Wood is cheap and you can build up to 6 stories simply with wood products. Many of our 6 and 7 story buildings in Seattle are constructed on a concrete foundation or pedestal 1-2 stories tall, with the rest of it above consisting of wood. It keeps the prices low AND makes development more attractive to investors, which helps bring more units to market. Using simple supply and demand economics, you can see that increasing supply decreases cost.

      This also goes into parking requirements. Parking garages take up space and cost a ton of money. To cover the cost of the concrete, and the opportunity cost of having a garage instead of rentable units, parking spaces would need to be exorbitantly expensive OR the apartments above them need to be priced in a way that absorbs the additional costs. Developers would shy away from new construction at a certain cost. Decreasing costs for developers helps expand the housing stock. Not requiring parking is an easy way the City can help move it’s affordability agenda.

      I know you’re going to scream and cry and say that this building and others will not be/will never be affordable (as you stamp your feet in defiance and raise a fist with Kshama). But, we’re just not there yet. When this building cycle is over, we’ll probably see some amount of saturation and prices will either hold steady for a while as inflation catches up, or maybe even dip a little.

      Other reasons for not building towers on 12th Ave: utility capacity. There is a limited capacity on utilities (think water, sewer, gas, electricity) for many neighborhoods. The only neighborhoods that are really prepared for the type of density that a tower brings is Downtown and maybe the U-District. The rest of the neighborhoods couldn’t handle it. We’d be looking at water main replacement, sewer capacity increases, changes to the electrical grid (a la Denny Way Substation). This all increases cost (in the form of building requirements, levies and/or property taxes, etc). And we know that cost does two things: kills affordability and kills development as investors shy away.

    • those reasons are absolutely not why the zoning is like that on 12th. the only reason is nimbyism. as everyone points out always, new buildings – whether it’s 3 stories or 20 – are never ‘affordable’. That’s not because of the form, but because it’s new and new stuff is expensive across all things.

      worries about sewer/electric is a common nimby worry, but never turn out to be true, especially given that new construction often consume less resources per captia. the city recently rebuffed wallingford nimbys worrying about sewers because it’s not true – and a relatively easily fixed problem at that. only during times of heavy rain do sewers overflow realistically, and seattle rarely has flash-flood type events.

    • I’m very familiar with the logistics and costs of increasing building heights as well as infrastructure enhancements that are needed to scale them. Once you pass a certain height, the scale of economy makes concrete and steel construction more affordable. Unfortunately this city builds for yesterday without the ability to forecast and plan for tomorrow.

      I’m unclear you mention Vancouver BC. They are undergoing a different set of circumstances than in Seattle that has led to an affordability crisis. Countries around the world build affordable apartment towers and there is no reason we can’t do the same here. Of course, that takes vision and an open mind. Something you seem to be lacking.

      One thing you may not understand is that when many of these newer apartments convert to condo, overseas investors will snag them up and sit on them taking a large percentage of rental units off the market. This has happened in many cities around the world and will drastically drive up rental costs here due to lack of available supply. Its important to anticipate rather than react.

    • Woonerf, you provide a cogent, detailed comment on the economics of building shorter vs. taller buildings. I’m not qualified to ascertain if you are right, but I suspect you are. The issue is far more complicated than just “nimbyism.”

      But your comments also explain why so many of our new buildings are cheap-looking…..they are because they are being built on the cheap, for maximal profit by the developers.

  2. Wow, this is what serves the “missing middle” Studios start at $1,000 and go up to $1,450. One bedrooms run from $1,300 up to $1,800. Two bedrooms start around $1,700 and go up to $2,500. Reverb also has four townhomes that start around $3,000 per month.

    • Gregory, I think you misread the article, which says that only a fraction is affordable — 17 units out of 85 (paragraph 5) then, “Across the three planned Spectrum buildings, the developer has made 25% of its units available to tenants who make less than the area median income of $61,800 for one person. An Anthem tenant will pay $868 a month for a one-bedroom apartment.”

      It’s great that a project will include some affordable housing, but the overall article presents this as an affordable housing project, when it’s a market rate project with a fractional but significant percentage of affordable units..

  3. If the best number available from King County records states that 15% of adult workers are in the tech sector the reality is that 80% of workers of all kinds are not making tech salaries and we are indeed in a regional housing crisis for multiple class levels ranging from disadvantage individuals to working professions not making tech salaries. Forget moving further out, tech workers have driven up rents in the whole region. Ball is in your court Seattle and state leadership.

    • I agree. These guys always seem to get characterized by the press as affordable housing developers. They are not doing anything extraordinary on affordability than any other developer in town does. They utilize the Multi-Family Tax Exemption program. Big deal, it’s available to everyone. All of their projects are market rate.

    • It’s not just the 15% tech worker work force that makes enough $ to live in these apartments. Nurses, doctors, engineers, architects, project managers, pharmacists, white collar workers in all those towers downtown with over 5 years experience are all pulling in $70k on the low end, $100k-110k in the middle. These “market rate” rents are plenty affordable for us and obviously there’s a large enough market out there to continually fill up all these new construction apartments. For us, splitting a two bedroom place with a buddy/significant other with a comparable salary is an outright steal.

    • B – unfortunately that doesn’t fit the narrative that all tech workers are the source of all that could and is wrong in the area.

    • Capitol Park located at 14th and Mercer is 11 stories with 126 affordable 1 bedroom units. Its a great example of affordable housing in a desirable area and it is not plagued by crime.

      I’m not advocating for Seattle to build “project style” housing in improvised areas. We know those don’t work.

    • Mixed sounds good – and in many cases it probably is. From experience I can tell you that the cheaper units also draw some less than desirable tenants to live near.

      When I lived in a building that had a good deal on rent and was in a nice enough area, I found that the ‘good deal’ came at the expense of noise, police showing up to mitigate drunk yelling matches in the elevator lobby, and many younger people that didn’t recognize/care that many of their neighbors had jobs to be awake for in the morning. Ultimately I decided that at renewal time I would rather pay more to price out the noisy type of tenants and moved elsewhere.