The Seattle City Council could add another $29 million to build hundreds of units of affordable housing through a bond and shuffling of funds from the Seattle Department of Transportation and the Seattle Police Department’s controversial North Precinct project.
The Council’s budget committee discussed District 1 representative Lisa Herbold’s proposal, Wednesday, which would add $29 million to the housing levy’s estimated $54 million for the biennium.
“I wanted to (use a bond) in a way that allowed the North Precinct project to move forward,” Herbold said.
District 3 representative Kshama Sawant has signed onto Herbold’s proposal which would reduce the scope of the precinct project.
Sawant credited the Block the Bunker movement for the progress on the proposed reallocation of funding but said she wants to see all of the North Precinct funds put toward housing, which she has said would build an estimated 1,000 homes. Two different scenarios show the $29 million could build 198 or 270 units.
“I do definitely support this budget amendment because I think given the scale of the housing crisis, affordability crisis, that we have in this city, elected officials very much have a duty to make sure every possible dollar goes into affordable housing that we can raise,” Sawant said.
Sawant said having visited the North Precinct, the need to replace it is not as great as the need for people trying to afford life in Seattle.
“We do see a crying need for affordable housing,” she said.
Council members Lorena Gonzalez, Sally Bagshaw, Mike O’Brien and Rob Johnson have also said they will support Herbold’s proposal.
O’Brien said he supports Sawant’s work agains the North Precinct project but that Herbold’s proposal is a “good start.”
Exactly how the funds would be used to create the housing hasn’t been finalized. Potential uses include putting the fund toward predevelopment to move big projects forward, doing seismic retrofits, and encouraging homeownership through subsidy, among others.
Herbold said she is particularly interested in the seismic retrofits.
“If we can find ways to get public money into existing, privately owned, naturally affordable housing, that’s a way that we can buy long-term affordability in those buildings,” Herbold said.
CHS reported earlier this month on seismic work planned for classic Capitol Hill apartment building The Whitworth that will keep the 17th/John building and its 56 units safe for residents. In April, the City of Seattle added some 300 buildings to its list of old brick structures most at risk of damage or collapse in the event of a major earthquake. Among the 1,160 unreinforced masonry structures counted in a recent report, Capitol Hill continues to have the most of any neighborhood in the city — roughly 13%.
Bagshaw also suggested researching modular homes as an option.
Herbold said there’s “a lot of unanswered questions” about how to use the money.
Where payments for debt service on the $29 million bond would come from is a little confusing. Here’s the breakdown. The city would issue a 30-year, $29 million Limited Term General Obligation bond in 2017. In 2017, the city would have to pay $1.4 million to its debt. In 2018 and every year after it would pay $1.9 million.
In a roundabout way, the money would come from some of the funds proposed for the North Precinct, which was originally budgeted at $160 million. The precinct was going to be funded using Real Estate Excise Tax (REET) dollars. The budget currently estimates the project will get $15 million in REET money over the next two years. But the city cannot directly take the REET money and put it into an account to develop affordable housing, according to state law, council members say.
Because of the city’s homelessness emergency, the council would direct funds allocated to the Seattle Department of Transportation to the bond debt for 2017 and 2018. The city would then move REET money from the north precinct fund to SDOT — $1.4 million in 2017 and $1.9 million in 2018, bringing SDOT’s budget back to where it is planned to be.
For payments starting in 2019, the city would create a growth fund with some of the property taxes from new construction.
It’s a lot of math and budget sleights of hand. But given the state of affordability in the city, Seattle might need to roll out every trick in the book.