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City allocates $45M to affordable housing, promotes housing levy renewal in 2016

Mayor Ed Murray announced Wednesday the allocation of $45 million dollars to fund eight new affordable housing projects throughout Seattle, amounting to a total of 809 new units.

Funded by a 50/50 combination of revenue from the City’s incentive zoning program (which allows developers to build affordable housing or pay into the city’s affordable housing fund in exchange for extra floor area) and the age-old housing levy, this investment sets a new record for the amount of public money given out to affordable housing developers through the Office of Housing’s annual rental housing program awards. During the year 2015, the Office of Housing awarded $22 million, equaling a total of around 450 units (according to the Mayor’s office).

Murray framed the investment as chipping away at the goal set by himself and the HALA committee of building or city acquisition of 20,000 new affordable units over the next decade. “These 809 apartments are a step towards achieving 20,000 affordable homes over ten years, the goal set by the housing affordability and livability agenda,” Murray said.

Of the 20,000 new affordable units, the HALA committee called for 6,000 of those to be affordable to those making less than 30 percent adjusted median income (AMI), 9,000 for between 30 and 60 percent AMI, and 5,000 for 60 to 80 AMI.

“I’m trying to contain my excitement,” Steve Walker, director of the Office of Housing, told the assembled crowd, going on to call the investment a “historic milestone for funding for affordable housing.”

UPDATE: Here’s a table of the how much the Office of Housing received in payments through the Incentive Zoning program by year. The payments are variable based on the development cycle.

Year Total IZ Pmts
2015 $25,745,871
2014 $21,455,726
2013 $6,628,121
2012 $0
2011 $1,634,269
2010 $0
2009 $3,727,981
2008 $3,733,116
2007 $10,995,039
2006 $1,410,800
2005 $535,500
2004 $2,837,075
Total $78,703,499

While none of the projects announced this week are located in District 3 (the locations range from Sandpoint to the Mt. Baker neighborhood in southeast Seattle), all of them are targeting people at the lowest end of the economic spectrum: low-income and chronically homeless families, individuals, youth, and seniors.

Most of the projects will offer units (of various types, multi-bedroom and studio) at rents affordable to those making between 30 and 60% of the AMI. Two projects, Sandpoint Youthcare and Estelle Apartments (developed by Youthcare and the Downtown Emergency Services Center), will offer units strictly at 30% AMI for homeless youth and chronically homeless individuals respectively. Sandpoint Youthcare will offer 19 units and Estelle will offer 91.

“That will literally change lives and it will save lives,” Murray said.

“If we are to ensure that we are a equitable city, a city that is inclusive of all communities, it is projects like this and the housing levy that we will face in the coming year that will make this city affordable.”

Mayor Murray also used the announcement as an opportunity to plug for the renewal and expansion of the housing levy next year. Since 1981, Seattle voters have continually opted to tax themselves (with cherished property taxes) to fund the development and operating of affordable housing, raking in a total of $388 million and producing 12,000 rent and income restricted units. The 2009 housing levy, which brought in $145 million, will expire at the end of 2016.

“If we are to ensure that we are a equitable city, a city that is inclusive of all communities, it is projects like this and the housing levy that we will face in the coming year that will make this city affordable,” Murray said.

In District 3, affordable housing developments have and could benefit from the housing levy Like many non-profit developers, Capitol Hill Housing (CHH) cobbles together housing levy dollars with various other private and public sources (like tax credits, grants, and the state housing trust fund) to finance projects. The housing levy helped fund developments like the 12th Avenue Arts building and the refurbishing of the Haines apartments, according to a CHH spokesperson. Several upcoming CHH affordable housing projects –he revamping of the Liberty Bank building in the Central District into affordable housing and the all-affordable housing project that will encompass the Capitol Hill light rail station —could potentially benefit from the housing levy, though the spokesperson said CHH doesn’t have a specific funding breakdown available yet.

“ Our most important tool, the housing levy, will be up next year. We will ask the people of this city to expand it and to renew it,” Murray said Wednesday. “Much of this year’s record investment comes from the incentive zoning program supported by the current construction boom. But this construction boom will not last forever,” he said, adding that the housing levy, in combination with the rest of the HALA recommendations —such as mandatory inclusionary zoning and pushing the legislature to increase the tax rate on real estate transactions — are “key” to building affordable housing once local development slows down along.

“I need to you to make this the number one priority for the new year, to pass Seattle’s housing levy in 2016,” Murray told the crowd.

Here’s a list of the eight projects that the 2015 rental housing program awards will fund.

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7 thoughts on “City allocates $45M to affordable housing, promotes housing levy renewal in 2016

  1. I wonder why the Mayor has chosen to allocate the $45 million to the private/nonprofit sector instead of the Seattle Housing Authority? Yes, the rents will be relatively low under this program, but significantly higher than rent in the SHA buildings, which is calculated at 30% of income, and results in many having rents in the $300/month range. There is always high demand for the SHA units, and significant wait lists.

    To guess on an answer to my own question….perhaps the costs involved in building new SHA apartments would mean that fewer units would be made available if the money was spent that way.

    • Bob, all of the apartments we fund are rent- and income-restricted, meaning that the rents are capped at a level that is affordable (housing costs are less than 30% of a household’s income) at different income levels. Some are capped at 30% of Area Median Income (AMI), others at 50% AMI and others at 60% AMI. Seattle is well known nationally for having a strong and efficient nonprofit sector to support affordable housing development. Currently in Seattle about half of the income-restricted apartments are through the City and the other half are through SHA.

      • Thanks for the information. Do you help fund SHA? Where does the rest of their money come from? (the feds?). How do monthly rents compare at SHA buildings vs. affordable housing offered by the nonprofit sector?

  2. Interesting how these “low and moderate income” requirements are handled after the building is constructed. At the Joule (Broadway Ave / Republican) the building was refinanced almost immediately after it was completed, which made the original agreement to provide low and moderate income rentals null and void. The building is now condo.

    If we are going to make these agreements, they need some teeth. Developers absolutely will circumvent them if they can.