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Proposed developer fees could drastically expand city’s affordable housing efforts

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Areas where the fee could be implemented (Image: City of Seattle)

The Seattle City Council moved one step closer to implementing a long-discussed program to place a fee on new construction in Seattle in order to expand the city’s affordable housing efforts.

On Tuesday, members of the council’s Planning, Land Use, and Sustainability Committee unanimously passed a resolution stating the council’s intent to draft a so-called linkage fee program and instructs relevant city departments to start drawing up the plans. The resolution will go before the full council on October 20th. It will likely take several months for a draft ordinance to surface, council members said.

The linkage fee would replace the city’s existing incentive zoning program and could generate multiple times more funding for affordable housing projects. Under the initial proposal, developers in certain area could either pay a per-square-foot fee or dedicate at least 3% – 5% of the units in their project to those making below 80% of the area mean income.

The proposal has drawn serious ire from developers and their attorneys, some of whom were present at previous committee meetings. Council member Sally Clark said during Tuesday’s committee meeting that it was not lost on her that perhaps dozens of attorneys were listening in, but she said the plan would move forward. “This deals with a good problem to have, an affordability crunch due to the strong desire to develop in the city of Seattle,” she said.

Meanwhile, Mayor Ed Murray has tapped the expertise of Capitol Hill developer Maria Barrientos and others for his housing affordability advisory committee. The flurry of affordable housing activity comes as Seattle recently became the 10th most expensive U.S. city for renters with rents rising faster than any other major city.

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9 thoughts on “Proposed developer fees could drastically expand city’s affordable housing efforts

  1. I’m not sure why developers and their attorneys would object. They will simply pass the fee on to the recipients of their products. It’s not like it’s dipping into their profits, I’m sure they would never let that happen. They will just charge more. The greed displayed by some, they may even find a way to profit from it!

    The city should just bypass developers and tax the wealthy(er), this is in essence what will happen.

    • You’re kidding, right? Market rents are a product of supply/demand too; rents have been rising because of diminished supply and increased demand pushing the equilibrium (and prices) up. Developers are still beholden to the “willingness to pay” of their consumers. They can’t just “pass the burden along to renters,” rents are a very elastic commodity – people won’t pay the increased rents. If people could pay more for rents now, developers would charge it. Trust me, they are already trying to maximize their rents (profits), just like any good capitalist. This makes for a competitive disadvantage to new development and would stifle future supply but would raise rents on existing structures because they are not beholden to the fee (cap supply, while demand in the form of population increase continues to rise).

  2. This is one of the most short-sighted ideas of our council (and I am surprised because a lot of their ideas are short-sighted). The result of this will be one of two outcomes: 1. the fee is passed directly on to renters meaning that Seattle will be a place for low income housing or the wealthy (a kick in the face to the middle class) or 2. developers stop building because the cost of capital (typically equity that comes from places like pension funds like those of public employees) becomes too high. The result of this would be a severe constraint of supply with prices rising and NO money at all for affordable housing.

    Both outcomes are worse than what we currently have. Lets give the mayor a chance to convene his affordability committee. If that fails to produce an outcome (unlike the recent possible success with the minimum wage) then we can let Sawant turn Seattle into a socialist paradise with the worst economy in the country.

    • Typical city council response to “solve” affordable housing… drive everyone else’s housing costs up so that the lottery winners in “affordable” housing can pay $400/mo for a 2 bedroom in the most desirable neighborhoods in the city. Exactly, this will be like pouring gas on a fire further turning Seattle into city of the rich paying tons of taxes and fees and the poor getting every conceivable social service and public benefits (why work when you can get everything you want for free?). The middle class in Seattle will be eradicated since they aren’t “vulnerable” and “disadvantaged” enough for every handout and cant afford all the taxes and fees.

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