Mayor Jenny Durkan announced Wednesday two early-stage steps for more affordable housing in Seattle. One would allow the city to take advantage of a new state law allowing municipalities to use sales tax revenue to fund affordable housing. Another would renew and improve the city’s current multifamily tax exemption (MFTE) program to limit rent increases.
Durkan made these announcements in a speech in Capitol Hill’s 12th Ave Arts, which includes 88 affordable apartments developed by Capitol Hill Housing (CHH).
“We need more affordable housing in every part of this city and we need it as quickly as we can get it,” she said.
CHH’s CEO Chris Persons, introducing Durkan, stressed the urgent need for cheaper housing in Seattle and money for it, saying the organization has about 1,500 units in the pipeline but it doesn’t have the funding necessary to build them.
Included in those is a plan to create an LGBTQ-focused affordable senior housing project on Broadway.
According to the mayor’s office, the MFTE program, which provides affordable rent currently to more than 4,400 low- and middle-income households in Seattle, is expected to aid 1,300 new such homes by 2022, but without renewal, it would expire at the end of this year.
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The program gives multi family housing owners in certain parts of the city a local property tax exemption if they rent out some units at affordable rates.
To qualify for these reduced rents, tenants have to fall under certain income levels. The maximum monthly rent for a one-person studio apartment would be $1,235, including utilities, for someone with an income under $49,400 and the rent for a one-bedroom for two people would be $1,628 as long as their household income is less than $65,150.
Area median income (AMI) for one person is $72,400 and $82,700 for two people, according to data from the forthcoming Housing Choices Background Report. Maximum affordable monthly rent for the former would be $1,810 and $2,068 for the latter.
Some 35% of all households are cost burdened, meaning they spend more than 30% of their gross income on housing, and 42 percent of renter households face the same dilemma.
To qualify for a studio under the MFTE program, a person would need to earn between 60 and 80% AMI.
The improvement the mayor is proposing would limit rent increases to 4.5% per year and provides that rents will not decrease if income levels decline. The legislation enumerating this was transmitted by the mayor to the City Council Wednesday as part of her new “Housing Seattle Now” plan, according to Durkan’s office.
“The program is working and it’s time to renew and improve it,” Durkan said Wednesday. “We must take these steps, every step we can, and we’ll take that step today.”
The sales tax legislation was made possible by a new state law, co-sponsored by 43rd Legislative District Rep. Nicole Macri, that Seattle officials advocated for that allows individual cities to retain more funds from sales tax revenue to develop affordable housing.
The mayor says that this would bring in at least $50 million in new resources to build and support housing for people experiencing homelessness in a city that currently has 1,900 permanent supportive units. It would not require raising the sales tax.
“Seattle is losing lives and we’re losing neighbors as a result of this crisis,” Council member Teresa Mosqueda, who is working with the mayor on this legislation, said in a press release. “We know what works to solve homelessness: permanent supportive housing. Thanks to our state partners, Seattle now has the option to retain a portion of sales tax dollars already being collected to provide us with much-needed local funds that we can leverage with state and federal dollars to create more homes for our neighborhoods experiencing homelessness.”
If the council passes the legislation in the fall, new funds could be available by the beginning of 2020, according to the press release. Seattle could be the first city in the state to take advantage of this law.
Durkan applauded the state Legislature’s move to increase the housing trust fund, as well.
Durkan also outlined a plan for selling the Mercer Mega Block, an “underused and underutilized” city-owned property, in the words of the mayor, which could house 1,300 apartments or 1 million square feet of commercial space. First, she wants to use it to create affordable and mixed-income housing in South Lake Union.
Second, Durkan proposed creating a new program where the city can purchase property and “create more opportunities.”
“We know that transit is coming soon to places or exist; we need to use the land around those areas to build housing for the people who otherwise couldn’t afford it,” she added.
Third, Durkan said the city could use some of the revenue for a new fund for low-interest loans for people building backyard cottages. The City Council passed legislation recently to make it easier to build these backyard apartment units on single family home properties across the city.
“It’s a generational opportunity that can help build today and into the future,” she said. “We have a chance to make truly transformational investments.”
Today, @MayorJenny announced her vision for creating more affordable housing in Seattle: Housing Seattle Now.
— SEA Mayor's Office (@OfficeofMayor) July 24, 2019