By Erica C. Barnett
Later this year, Seattle voters could take a first step toward building a new kind of permanently affordable, mixed-income public housing known as “social housing.” The House Our Neighbors! Coalition — a project of the housing advocacy organization Real Change — is collecting signatures for Initiative 135 (I-135), which would create a new public development authority (PDA) to build and operate new housing; funding for the PDA would come later, through future State or local legislation.
What Is Social Housing?
In the U.S., most affordable housing is either public housing (built and maintained by government authorities) or housing built or purchased, and operated, by private nonprofits that receive government funding. (Housing subsidies, such as Section 8 vouchers, are aimed at helping renters afford market-rate housing.) In other parts of the world, including Europe and South America, “social housing” refers broadly to a type of housing that’s permanently affordable, with rents capped at a percentage of renters’ income.
The umbrella term “social housing” can refer to many different models, including some that incorporate private and nonprofit developers into a public funding scheme, and the term does not refer exclusively to low-income housing. The Vancouver, British Columbia, definition of “social housing” has been a source of recent controversy, because it serves people making up to six figures, as would Seattle’s.
How Would It Work in Seattle?
Initiative 135 would achieve a social housing model by creating a public developer to build, acquire, and operate housing that would be funded by State or local revenues, including bonds. This publicly owned housing would have to be permanently affordable (costing less than 30% of monthly income) to a mix of people earning between 0% and 120% of Seattle’s area median income — as of last April, $81,000 for one person living alone, or $115,700 for a family of four. Under the authority’s charter, renters could not be kicked out if their income rises; their rent would simply rise accordingly.
After an initial startup period, the PDA’s 13-member governing board, which would manage the authority, would include a seven-member renter majority elected by residents. Each building would also have its own elected governing board, a kind of public HOA that would advocate to the board on behalf of residents and make building-level decisions, like how to spend the annual budget for common areas.
How Would It Be Funded?
Supporters of I-135 say they deliberately did not include a funding source in the initiative in order to avoid violating the State “single-subject rule,” which limits ballot initiatives (and State laws) to a single issue.
The initiative would simply set up the development authority and get it going, creating a temporary board and requiring the City to provide “in-kind” support to get the authority ready to build new housing or buy existing buildings once funding is in place. Other public development authorities in Seattle, such as the Pike Place Market PDA, also started without a funding source and pay for the market’s operating budget and capital improvements through rents, investments, and a 2008 ballot measure that increased property taxes to pay for $73 million in improvements.
Supporters have been vague about where future funding might come from, saying all potential sources are on the table, including State- and City-backed bonds, the State capital budget, and private philanthropy. “We are working on identifying progressive revenue sources,” Real Change Advocacy Director Tiffani McCoy said, “but we wanted to put together the structure and the vision and build up that startup support” first.
Seattle is currently facing a budget shortfall brought on by the end of COVID-era federal support but could be in better financial shape by the time the PDA comes to the City Council seeking funding through the City budget or Council-issued bonds.
State Rep. Frank Chopp, a longtime advocate for affordable housing, says he supports the initiative and will work to find funding for it if it passes. “We clearly need another tool to provide housing that is permanently affordable,” Chopp said. As examples of potential funding sources, Chopp pointed to successful previous efforts to fund housing through the State’s document-recording fee and through the capital budget, which included money for nonprofits to rapidly acquire existing buildings and convert them to affordable housing this year.
What Else Would the Initiative Do?
In addition to creating a new public developer, Initiative 135 would place a new restriction on the City when it considers selling or giving away public land for a nonpublic use, requiring a feasibility study to determine whether the land should go to the PDA instead.
This point could cause some friction with the City Council, which passed two separate resolutions requiring the City to determine whether surplus land can be used for affordable housing before selling it (and requiring most of the proceeds on the sale of surplus land to go to affordable housing). The initiative would require an additional specific analysis to determine whether the land “should be transferred to the Public Developer for social housing,” as opposed to affordable housing in general, which could put the PDA in competition with nonprofit housing agencies that have historically partnered with the City to build and manage low-income housing.
The initiative would also give tenants the right to a “restorative justice conflict resolution” to address the root causes of their behavior before the PDA initiates an eviction. And it would require all new buildings to meet “Passive House” building standards, which cost more up front (adding 2% to 3% to the cost of new multifamily buildings) but save money in the long term because the airtight buildings cost very little to heat and cool.
Why is a new entity needed? Do not SHA projects have mixed income households (e.g., Yesler Terrace, Othello, Rainier Vista, High Point)? Do not SHA household rents change as their incomes change? Money and land are needed; does a new entity help with those needs? We had a few monorail and HCT votes without funding attached; they tend to make voters cynical.
I have the same question. Seems like if we already have a city government organization such as SHA that owns and operates housing, it might be faster and more efficient to expand their mission to include housing people up to 120% of AMI than to try and build a whole new organization from the ground up. Why was the new organization seen as the preferable option here?
Because an activist wants to become CEO of it and earn a big salary.
SHA is wholly incompetent. They only allow people to enroll via lotteries held every two years or so, with roughly a 10% chance of getting in. Then you have to wait an average of five years to get a place to live. This process literally kills people.
The fact that people can’t be kicked out if their incomes rise makes this structure look all too similar to rent control in New York City. I suppose the important difference is that under rent control, schemes to transfer the rental seem to work, and that presumably isn’t the case here. But rent control in NYC is not serious affordable housing, so the similarity worries me.
If we can convince city hall to stop selling surplus land and renting/leasing it instead the money to do a lot of things is available. The Mercer project represented $1.1B in rental income but mayor teargas took $150M for it. The old SPD HQ site has been a hole in the ground for almost 20 years…could have been developed long ago and turned into productive land. There is a lot of idle/disused land all over Seattle but speculators are strip-mining this city. But if you own the land, you like it that way.
https://www.seattletimes.com/pacific-nw-magazine/money-changes-everything-will-seattle-figure-out-how-to-deal-with-its-new-wealth/
https://www.geekwire.com/2019/public-records-reveal-seattle-turned-mercer-mega-block/
In support of this. We cannot continue to be the City of “no” and not offer up alternatives to what we don’t like. We need to add to the housing supply and course correct if it doesn’t work out.
In violent agreement with all of this but without affordable land — either surplused by the city and leased or taxed under some kind of ground rent/leasehold model — affordable housing is hard to do. Housing/construction costs aren’t what housing is expensive…if so, why are cheaper housed in the ‘burbs a thing? It’s land. If you look into how social housing works in Vienna, you’ll find that they city owns the land and can put it to the highest and best use. We don’t have that option. And even when it’s offered — as in the Mercer megablock project — someone will find a way to give away a huge pile of cash over time for a headline today.
Washington state law makes this tricky due to the Uniformity clause, preventing property to be taxed at different rates. If land and improvements could be taxed at different rates — higher on land to get it into production, lower on improvements to encourage density — this would be easier. It’s almost as if someone was looking out for speculators all the way back then.
I love the concept of social housing. We need more housing that is permanently affordable and not driven by the profit needs of large corporations. But it is not yet clear how HON’s concept of social housing in Seattle is all that distinct from other affordable housing in the city and region.
The main difference is clearly the governance structure and the elevated voice of tenants at the building and board level. But in other cases, it looks like existing models where rents are adjusted based on income (like public housing) or where rents are set at below-market rates for households below 80% of AMI (like much of the non-profit and existing public development authority properties in the City).
This article, and HON’s messaging, has suggested a key distinction is that the housing is “permanently affordable” as if current public and non-profit models are not. While one could argue that privately-developed affordable housing is not permanently affordable, that is largely not being developed in the City of Seattle outside of existing incentive programs (another issue altogether). I find that HON’s initiative is less about some unique financing structure (it will ultimately look very similar to many existing models) and more about the governance. There does not appear to be some secret sauce that has been cooked up here that will substantively change the affordable housing development landscape in the City, unfortunately.
The difference is that higher incomes subsidize the lower, and the PDA gets first crack at City land. That’s not the case w nonprofit housing now.
And yet that is not sufficient. Subsidies and additional funding from the City and State will still be required, in a model that will go up to 120% of AMI…
Because of the enormous support for the Pike Market, the community was able to work with Senator Magnuson to allow the urban renewal funding granted for the tear down to stay and preserve and rebuild the market. It was used for all of the new bracing and structural support the market needed. So it actually started with a pretty good amount of federal support to start.