Photo by Joshua T. Garcia, via Wikimedia Commons. Creative Commons CC0 1.0 license.
By Erica C. Barnett
On Seattle Nice this week, Sandeep and I brought on two special guests to explain why developers want a holiday from Mandatory Housing Affordability fees, which are added on to of the cost of every new multifamily residential building in Seattle. The fees pay for affordable housing (or a developer can skip them by building affordable units on sight), but they’re bringing in less money than ever as housing development slows.
Since MHA passed, in 2019, Seattle has undergone a political evolution on housing. Density, which neighborhood activists and most political leaders once saw as having an entirely negative impact on neighborhoods, is increasingly seen as a necessity as Seattle’s renter majority grows. Many people no longer agree that the city should segregate renters from property owners by restricting them to dirty, polluted arterials far from parks, libraries, and tree-lined streets. There’s a growing consensus that to reduce the cost of housing, you have to build more of it.
Our guests this week, land use and housing consultant Natalie Quick and former Seattle Chief Operating Officer Marco Lowe, don’t go so far as to call for a total repeal of MHA, but they do make a strong case for its eventual replacement with an incentive-based approach called funded inclusionary zoning. FIZ, which we’ve covered at PubliCola before provides tax breaks, similar to Seattle’s existing Multifamily Tax Exemption program, in exchange for a requirement that developers build affordable units on site. Instead of charging a fee for housing, which drives up rents, FIZ makes it possible for affordable and market-rate housing to coexist.
As Marco points out, housing slowdowns don’t just lead to a shortage of housing, driving up rents. They also deplete city resources, because when developers decide it’s too expensive to build, the city loses out on all other kinds of non-MHA revenues, from sales taxes on materials to taxes on real estate transactions to property taxes on the housing itself.
This one’s a wonky episode, but one well worth listening to if you want to understand why so little new housing—particularly larger units—is getting built right in Seattle right now and what the city could do to reverse the trend.
Editor’s note: This story originally identified Marco Lowe as the former Office of Economic Development director. This error has been corrected.
How can we increase affordable housing production? According to Senate Bill 5156, one button we can press is elevator reform. Sponsored by State Sen. Jesse Salomon (D-32, Shoreline), the legislation would allow the state to change current elevator rules that—practically speaking—force builders to buy from an elevator manufacturing oligopoly. His idea: Allow smaller elevators as a way to bring down the cost of housing.
In 2024, a 100-page white paper from the Center for Building in North America outlined how a clutch of firms, including Otis and Kone, have signed onto a binding labor agreement mandating a set of inflexible elevator specifications that define and limit elevator production in the US and Canada. These specifications, including exclusive propriety installation and repair standards, cut out a bevy of reputable and safe elevator makers that serve the rest of the world.
Prompted by the 2024 report, pro-housing advocates nationwide have been making elevators a YIMBY agenda item. As part of this lift, Sen. Salomon’s aspirational bill would allow changes to Washington state’s building code that could, according the urbanist nonprofit Sightline, increase the production of affordable, smaller-scale multifamily housing: “Apartment buildings with at most six stories and at most 24 units,” specifically, per Salomon’s bill.
The logic goes like this: State-by-state elevator regulations mandate unnecessarily oversized elevators. As a result, according to the CBNA report, elevators in North America are more expensive than elevators in the rest of the world. The report found that elevators cost around $50,000 to install in Europe while in the US and Canada, “these installations start at around $150,000.”
As the summary report on Salomon’s bill notes, this means that “currently, buildings either must have large elevators or [developers] are likely not to build them at all.” This second point gets at a cruel irony about opposition to the legislation.
One rationale for the current size standards is to ensure that elevators accommodate disabled tenants who rely on wheelchairs and make it possible for medics to fit stretchers onto elevators in emergencies. And it’s true that the elevator downsize recommended for smaller buildings in Salomon’s bill—they could take up about 17 percent less floor space—could mean elevators wouldn’t be able to accommodate a fully extended gurney. Citing emergency response concerns, the Washington Fire Chiefs and the Washington State Council of Firefighters testified against the bill last year, when it ultimately failed.
However, under Salomon’s recommended changes, elevators would still be ADA-compliant (current state law requires elevators to be much larger than ADA requirements). And, as Sightline notes: The new guidelines would still have enough room to spin a wheelchair around, plus another person, as well as a slightly tilted gurney. More importantly, they say, having a slightly smaller elevator is better than having no elevator at all.
“Perversely,” as the proponents of elevator reform at California YIMBY put it, North American rules actually make buildings less safe for people who need to be transported by gurney and less accessible for those who rely on wheelchairs.
“While larger elevator cabins make it easier to transport patients,” a California YIMBY blog post on the former issue argues, “the high costs the requirement imposes also increases the likelihood that buildings will not have any elevators at all, and that emergency responders will have to carry the patient down multiple flights of stairs.”
The CBNA report made a similar point about wheelchairs. “The United States and Canada now require the largest elevator cars in the world … a perverse disincentive that some developers respond to by simply building walk-ups.” In these buildings, people who are unable to navigate the stairs are restricted to living on the first floor.
Stephen Smith, the author of the elevator-reform report, acknowledges that he doesn’t know how many elevators aren’t getting built that otherwise would if the bespoke regulations didn’t govern the US market. But he stands by his report’s conclusion that “walk-up complexes are … being built, at a scale and to heights that are unique in the developed world.”
He explains: “I spent a lot of time poring over new apartment listings in Germany, Italy, France, and Spain and noticed that virtually all new four-story apartment buildings had elevators, and most new three-story buildings did too. In the US, virtually no new three-story apartment buildings have elevators.”
Smith says that when it comes to four-story apartments, his best guess is that it’s about “50/50” split on new apartments having elevators or not. As for the extremes,” Smith adds: “I have found examples in LA of five-story buildings without elevators, and six-story walk-ups in NYC and Seattle.”
Smith’s report does have telling data comparing elevators per capita in European and Asian countries versus in the U.S. and Canada. The difference is dramatic. Canada and the US come in last with four and three elevator cars per capita, respectively. In comparison, Switzerland, Spain, and South Korea come in at 27, 23, and 15. (Greece tops the list at 41.)
Elevator-free apartments also make housing inhospitable to the broader universe of people who can’t navigate stairs easily or at all and who are looking for affordable housing. Conversely, as I noted, if developers do include the pricey, larger elevators in their projects, it raises building costs. And this too undermines the broader universe of people seeking affordable housing by making the housing too expensive.
Certainly, developers aren’t loopy enough to skimp on elevators in tall buildings. That’s why Salomon’s bill puts the focus on allowing smaller elevators in smaller buildings; changing state guidelines per Salomon’s bill wouldn’t violate any federal rules. (Salomon’s bill doesn’t recommend any changes to bigger buildings; it simply directs the state to “support” efforts to harmonize national and international standards in the hope of beginning a multi-state effort to make North American elevator guidelines line up with the rest of the world’s.)
Fortunately, small-scale multi-family housing such as stacked flats, condos, and small apartments are exactly the kind of housing that urbanists believe will have the biggest impact on supply: Four-and six-story developments are examples of “missing-middle housing” that would fit seamlessly into traditional low-density single-family zones; these are neighborhoods that largely exclude lower-income families, renters in particular.
As Uytae Lee, a pro-city videographer who worked with Sightline to promote elevator reforms, says in his elevator-reform agitprop video: By making more neighborhoods accessible, elevators are “an essential part of our transportation network … a core part of a city’s infrastructure.”
A public commenter holds up an image of the kind of housing he warns will be everywhere if density proponents get their way.
By Erica C. Barnett
On Friday, hundreds of Seattle residents took time out of their days to comment on proposed updates to the city’s Comprehensive Plan—a document that sets the parameters for growth and development across the city.
Although the plan is supposed to go through a major update every 10 years, Mayor Bruce Harrell released his initial proposal a year behind schedule, and the City Council is currently plodding through the plan in several “phases,” starting with changes to the city’s historically single-family zones, now known as “neighborhood residential” areas.
Some of these changes are designed to implement House Bill 1110, a bill that requires cities to allow up to four housing units on every residential lot, or six if two of the units are affordable. The council, facing a deadline to comply with 111o or accept housing regulations written by the state, passed a short-term bill complying with the law earlier this year, but still has to pass permanent legislation to update zoning rules associated with the new law.
They’re also taking up Harrell’s plan to add 30 new “neighborhood centers”—areas within a 3-minute walk (about 800 feet) of commercial and frequent bus stops where 3-to-6-story apartments would be newly allowed.
Following a pattern that has defined Seattle’s housing debate for decades, last week’s hearing pitted opponents of new housing—who argued that apartments (and the renters who live in them) would destroy the “quaint” character of their neighborhoods and contribute to “clear-cutting” trees on private lawns—against density proponents, who argued that relegating rental housing to polluted, busy arterial roads is inequitable, and that prohibiting apartments in most of the city leads directly to deforestation for suburban sprawl.
Because each person had only one minute to comment, many used some of their time to rattle off a list of amendment numbers—gibberish to anyone who isn’t intimately familiar with the plan. So instead of focusing on the high-level arguments (seriously, though, you NIMBYs need to stop saying housing proponents want to murder “orca babies”), I thought it would be helpful to dive into some of the amendments that came up most frequently.
This isn’t a comprehensive look at the competing changes council members are proposing (I did that here); instead, it’s an attempt to explain the amendments people were praising or complaining about last week, and how they’re hitting with both sides of Seattle’s eternal pro- and anti-housing debate.
Eliminate parking mandates
HB 1110 forced Seattle to get rid of mandatory minimum parking requirements for new housing within a half-mile of major transit stops, making it possible to build apartments with few or no parking spaces; Harrell’s proposal would retain other parking mandates across the city, regardless of demand.
Rinck’s amendment (amendment 7) is the strongest among several that would reduce parking mandates or eliminate them across the city; it would effectively allow developers to add parking based on market conditions and demand, and could result in lower housing construction costs.
Support social housing
Proponents of social housing, which voters overwhelmingly opted to fund using a targeted business tax earlier this year, applauded two amendments incorporating social housing into the comprehensive plan. The first, from Rinck (amendment 17), expresses support for social housing as one of the comprehensive plan’s affordability goals and incorporates it into several sections on affordable housing.
The second (amendment 61), from Kettle, would change existing city law to make it easier to build dense affordable housing in all neighborhood residential (former single-family) areas, and expand the definition of affordable housing to include social housing—a substantive change in law that would take place outside the comprehensive plan itself. A similar amendment, 60, from Sara Nelson would make similar changes to affordable-housing rules but would not apply them to social housing.
Restoring neighborhood centers
Rinck’s proposal would bring back eight neighborhood centers—those locations within a 3-minute walk of commercial nodes and frequent transit stops where 3- to 6-story apartments would be allowed—that were included in an earlier “Alternative 5” version of the plan and studied as part of a final environmental impact statement for the proposal. As we reported at the time, Harrell’s initial “One Seattle” proposal eliminated half of the 48 proposed neighborhood centers included in alternative, (After widespread blowback, Harrell restored six of the centers his initial plan eliminated).
Rinck’s amendment would restore eight more of the nixed neighborhood centers, bringing the comprehensive plan closer to the alternative that nearly new council member elected in 2023 said they supported.
Single-family activists were overwhelmingly opposed to these changes, saying that they come as a complete surprise, have never been vetted, and would result in—of course—”clearcutting” of trees on existing residential lawns.
“Say no to the city overreach of our community’s character that would destroy the very charm that attracted us to our respective neighborhoods,” one speaker told the council. “Say no to those who have ramrodded this blind-sighted, misguided notion that will result in our neighborhoods being significantly impacted by upzoned, high-density monstrosities.”
On the flip side, both homeowners and renters turned out to speak in favor of the changes, arguing that the city’s renter majority should be allowed to live in more parts of the city. “We spend too much time in the city driving our children around,” one speaker said. “We need more time to walk to neighborhood amenities and also welcome more neighborhood residents into the Seward Park neighborhood with mixed housing types.. … So go as far as you can. We really need it, and if we don’t do that, plenty of trees are going to get chopped down [for] urban sprawl.”
Downsizing neighborhood centers
As I noted in my earlier coverage of the council’s amendments, several proposals would downsize proposed neighborhood centers, while others would increase them. If every single change to neighborhood boundaries passed, they would collectively increase the total size of neighborhood centers across the city, but there’s no guarantee of how each individual vote will go—and the new neighborhood centers would be located, lopsidedly, in the council districts of councilmembers who support expansion.
The downsizing proposals would shrink neighborhood centers in Fauntleroy and Morgan Junction (amendments 35 and 37, Rob Saka), Madrona (amendment 38, Joy Hollingsworth), and Bryant, Ravenna, and Wedgwood (amendments 39, 40, and 41, Rivera).
Dan Strauss’ amendments expanding and redrawing neighborhood centers all over his northwest Seattle district (42 through 49) are the main proposals that would offset these potential losses. If all the amendments were to pass, it would mean that most of the expanded neighborhood centers would be in District 6, which includes parts of Magnolia, Fremont, Wallingford, and Ballard, while most of the reduced neighborhood centers would be in Northeast Seattle, represented by Rivera. (Bob Kettle has also proposed restoring a neighborhood center on Nickerson).
In other words, the neighborhood center-specific amendments are a product of the city’s district council system, in which individual council members have been empowered reshape the density maps in the parts of the city they represent based on their individual opinions about whether more housing is good or bad.
Corner stores, not just for literal corners anymore
A large number of public commenters expressed their support for Rinck’s Amendment 66, which would allow “corner stores” throughout residential areas, rather than just on literal corners, as Harrell’s plan proposes. Rinck’s amendment would also remove a proposed size limit of 2,500 square feet for these businesses, allow bars (not just restaurants), and remove a requirement that new businesses close at 10pm.
“It’s time to let Seattle cook, brew, and create,” one supporter said. Nelson and Strauss have amendments that would remove the “literal corner” requirement but keep all the other restrictions in place.
More transit-oriented development
Rinck’s Amendment 76 would allow denser low-income housing and stacked flats in more parts of the city, by making a technical change to the definition of “major transit” so that it includes areas within a quarter mile of bus stops that have 15-minute service on weekdays. The upshot would be that these types of housing could get a density bonus if they’re near frequent transit; in addition, they wouldn’t be subject to mandatory parking requirements.
One commenter who spoke against this change suggested it would result in “denuding all of Seattle’s neighborhoods” of trees and “subject[ing] nearly the entire city to five- and six-story developments.” Others noted that it went beyond the requirements in HB 1110—which is true; that bill was meant to represent a floor for all cities across the state, not a maximum density level for the state’s largest city.
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Rivera has a couple of amendments that would create steep hurdles for new housing. The first, Amendment 81, would direct the Seattle Department of Construction and Inspections to write rules dictating the kind of “exterior cladding” allowed on buildings in any local or national historic district, based on “objective design standards,” whatever that means.
Activists have sought and won historic district designations for neighborhoods like Wallingford with the goal of preventing demolition and redevelopment of lots developed in the 1920s and 1930s, but they might balk at HOA-style rules telling them what color they can paint their houses, or what specific type of siding they have to purchase during home renovations.
The second Rivera amendment, 102, is more insidious: It would authorize SDCI’s director, a political appointee, to require developers to come up with alternative site plans, at any point during the development process, “if the Director determines that an alternative site plan could feasibly increase the retention of existing healthy trees.”
In plain language, the amendment would give absolute power to the head of the city’s building department to kill individual housing projects on the grounds that there is some possibility a purely theoretical “alternative site plan” could protect any tree of any size or age—an absurd expansion of the city’s bureaucratic power.
As we’ve reported, neighborhood activists frequently present their own “alternative site plans” that they claim would allow developers to retain trees, usually by reducing the size and value of any future housing on the site.
Developers, who get loans to build housing projects based on future value, generally dismiss these alternative plans as unworkable (if you got a loan to build five 1,500-square-foot units with yards, you can’t pay that loan back by selling five 1,000-square-foot units with no outdoor space); under Rivera’s amendment, the city itself could use similar site plans to effectively stop housing projects from moving forward.
Lawns > housing
Other tree amendments (including 91, from Nelson; 92, from Strauss; 93, from Rivera, which would also establish new tree protection areas) would provide density incentives for developers that preserve existing trees on existing private lawns. One Strauss amendment, 100, would require developers to plant a new tree for every 2,500 square feet of lot area, in addition to other tree requirements, and another, 103, would prohibit removing large trees near the corners of any lot.
Unsurprisingly, many commenters claimed that allowing more density in Seattle’s historic single-family neighborhoods would result in “clear-cutting” the city, by eliminating the trees that homeowners and earlier developers planted in the yards of single-family houses. As one speaker argued, “We risk losing old-growth trees and wetland and bald eagle habitat ecosystems that make this area unique.” In fact, there are virtually no old-growth trees remaining on private property in Seattle, because early developers clear-cut the forest that once occupied the land now known as Seattle in order to build single-family houses.
Two proposals that didn’t come up much, if at all, during the public hearing are also worth flagging. The first, Kettle’s amendment 32, would add an entirely new “public safety element” to the comprehensive plan—effectively adding goals like crime reduction and improved 911 response times to the city’s foundational zoning document.
The second, which spans two amendments (21, from Nelson, and 22, from Saka and Mark Solomon), would “discourage the concentration of human services facilities” for “low-income populations” in downtown Seattle. As the brief staff summaries of these amendments notes, the city frequently has no say in where services for low-income people are located; one reason a lot of services are downtown is because downtown is the city’s most central and transit-accessible neighborhood.
The comprehensive plan committee will take up all the amendments (plus, god help us, any new ones) on September 17 and 18, with a final council vote on the Phase 1 changes likely later this month.
Welcome back to us! PubliCola went on a brief summer break, but we returned this week with news about the mayor’s race, the comprehensive plan, the expansion of police surveillance, and much more.
More Seattle neighborhoods will be under 24/7 live police surveillance after the Seattle City Council voted 7-2 to expand police cameras into three additional neighborhoods. Council camera supporters claimed the near-universal opposition among civil rights groups and public commenters didn’t represent a silent and unseen majority of city residents who support surveillance.
Opponents and fans of a program that gives tax breaks to developers who set aside some affordable apartments had their say before a briefing on amendments to the plan. Opponents called the changes a giveaway to developers that won’t produce truly affordable housing, while proponents said the changes would make it feasible for them to build affordable housing at a time when development is slowing.
For months, councilmembers have claimed the Office of Housing is “sitting on” hundreds of millions of dollars they should be spending. A hearing where city staff explained why housing grants take time turned into a free-for-all for the council to criticize all sorts of housing policies, from the lack of a real-time vacancy database for affordable buildings to the purported presence of “rat’s nests” at an unspecified building.
In a debate on the Seattle Channel, Mayor Bruce Harrell went on the offensive with his challenger, labor activist and Transit Riders Union founder Katie Wilson, while also suggesting Wilson is racist for opposing police surveillance, a view she shares with civil rights groups across the city as well as the city’s own Community Police Commission, Office for Civil Rights, and surveillance working group.
For months now, Seattle City Council members have been insinuating that the city’s Office of Housing, along with other departments, has been “sitting on” unused money year after year that could and should be spent on other purposes. Back in July, for instance, Councilmember Maritza Rivera suggested the council should borrow money from the voter-approved housing levy to pay for unrelated city services, given that this money was “not being used” at the moment.
The theory, which is based on a misunderstanding of how funding for housing projects works, is that the city should not be holding on to money it collects for planned housing projects for as long as it does. When it comes to the full budget, the city has an “initial underspend” that includes all the money that hasn’t been spent by the end of the year, currently 9.9 percent; however, that total consists primarily of funds already allocated to specific projects, so the “true” underspend—the amount that goes back into the general budget—is consistently around 2 percent a year.
In addition to that “underspend,” every year, tens or hundreds of millions of dollars in housing funds (and funding for other projects that span multiple years) is “carried forward” to the following budget year, because the projects that money will eventually fund have not received the funding from other sources they will need to actually get built. Because the city is typically the first funder for housing projects—other funders, including the county and state, contribute to full funding for projects later—there’s no way to spend this money until the rest of the funding is in.
However, because the funding is all allocated to specific projects, it isn’t available to use for other purposes; dipping into money that’s already dedicated to specific housing projects (or simply using housing levy funds for non-housing levy purposes, as Rivera previously suggested) would be fiscally irresponsible, to say the least.
Nonetheless, the council is still set on the idea that the Office of Housing—along with other city departments—is twiddling its thumbs instead of getting money out the door. On Thursday, Nelson’s governance committee held what amounted to an interrogation of OH and the city’s budget office about why they aren’t spending money faster. The specific purpose of the meeting was to review the two departments’ response to a council directive requiring them to report on why the city underspends its budget every year.
“I’ll just say that this is this is accountability, full stop,” Nelson said to set the tone. “This is all about our role in in making sure that the things that we allocate money to are actually benefiting from those decisions[.]”
In the first half of the meeting, city budget staffers explained why the city doesn’t always spend 100 percent of funds for multi-year or complex projects, such as executed contracts for human services, in exactly 365 days. In addition to projects that carry over from year to year, the city ends each year with an “underspend” of about 2 percent, which goes back into the general budget. “This is a feature, not a bug,” budget director Dan Eder said. “Those are committed dollars that that were always intended to be spent several years later.”
In its memo explaining why the budget works this way, the budget office noted that forcing departments to spend their budgets down to zero every year would lead to wasteful spending, illustrating the concept by linking to an episode of The Office.
Rivera pushed back on Eder, saying she felt “angsty” about her inability to get questions answered to her satisfaction. “Every time we ask a question, it’s really hard to get a response, and that doesn’t inspire confidence in the fiscal responsibility part of the city,” Rivera said. “So I’d love to have some fiscal systems put in place where every time we ask a question, we should be able to readily get to the answer.”
“Councilmember, I just want to assure you that we absolutely do have a system in place, and we can report out chapter and verse on every one of the grants from 2023 if that’s your interest, or 2025 if that’s your more updated focus,” Eder responded. “I’d love to get that,” Rivera said, but what she really wanted to know was “not just about grants,” but “information about vacancies, about just how much [housing] is being created and how vacancies are being filled. I just feel like every time we have this conversation, there isn’t a one stop shop to get all this information.”
That off-topic grievance—the meeting, again, was ostensibly why the city doesn’t spend money for housing and other priorities faster—set the tone for the rest of the discussion, in which the council grilled OH staff about issues that had essentially nothing to do with whether the department was sitting on money the city could be using elsewhere. Bob Kettle started off down this road, musing (as he has many times in the past) that the housing office should create an easily digestible “housing plan” for the whole city, the same way SDOT consolidated all of its modal plans for bikes, pedestrians, freight, and transit into a single, overarching “Seattle Transportation Plan.”
“You know, there’s [the JumpStart tax], there’s [Mandatory Housing Affordability], you mentioned the Housing Levy, but now we have the social housing levy, we have all these different funds,” Kettle said. “So as you know, there’s permanent supportive housing, there’s affordable housing, and it’s different bands and so forth. There’s social housing and the like. We need to have a comprehensive look.”
As Winkler-Chin gently reminded Kettle that social housing is a separate government entity, he cut her off, saying “I recognize that, I recognize that,” but “if they’re not in sync with what we’re doing, or what [the King County Regional Homelessness Authority] is doing on permanent supportive housing, that’s a problem, and the public should know it.” KCRHA does not directly fund the construction of permanent supportive housing; OH does.
Piling on, Nelson said OH should be familiar by now with the “new council’s concern that it appears that we’re stockpiling housing funds during a housing crisis. … Clearly, if we have these questions, and they’re not going away, it is a call for perhaps a database that tracks every single award, what is happening with that award, and when it’s finished, how are we monitoring the performance of that award? What are the vacancy rates? What the impacts to neighborhoods, et cetera?” It’s hard to imagine how such a database would work (the “impact to neighborhoods” of affordable housing is completely subjective, for example, and vacancy rates fluctuate on a daily basis), or what kind of resources it would require.
Switching topics, Nelson mentioned recent media reports that some housing providers are selling off properties; couldn’t the city think about buying some of those? And then there was the recent audit about waste and potential fraud in King County’s Department of Community and Human Services grants; was OH sure there weren’t similar problems happening with the housing providers it funds?
Piling on, Kettle turned to people who hang around at Third and Pike and use drugs; between 15 and 40 percent of them, he said, actually have homes and use “day tents” to do their business before going home. He then complained about an unspecified public housing building “where there’s an active rat’s nest around it. … On the public safety side, if you have a problematic housing situation because there’s a rat’s nest or there’s other maintenance issues, that’s part of the dynamic that we see on the public safety side in terms of what’s happening on our streets.”
Rivera, riffing on Kettle’s comments, said, “And also, just as a city… we should know what other the other organizations, like the [social housing] PDA and the King County Housing Authority, are doing as part of this overall plan. … I understand that OH is focusing on the funding to build the projects, and you don’t necessarily have oversight of the projects, but I do think that we need to create an expectation with the projects… and the not for profits.”
OH policy and planning director Kelli Larsen assured Rivera that the city does monitor its investments after the fact, prompting Rivera to go on a riff about a recent Seattle Times article that found issues at several housing projects. When Larsen noted that the city didn’t fund those projects—King County did—Rivera quickly pivoted, saying, “we shouldn’t just focus on the units that we’re funding and then not look at the big picture, because what we’re doing will have an impact on the big picture, and vice versa. And then when those types of articles come out, and you just said those weren’t our projects, no one knows that, and we didn’t. I didn’t know that.”
Nelson summed up the discussion by expressing skepticism that “things are going pretty well,” criticizing the budget office for the high “initial underspend” number CBO director Eder explained in detail at the beginning of the meeting.”I see that the … net underspend for the general fund, average [s] 2.1 [percent] per year,” she said. “But then lower on the memo, it says actually … [that] the initial underspend, excluding the impact of carryforwards, average 9.9 percent. That gives me personal pause.” In other words: Don’t be surprised if the council raises these exact same questions again, no matter how many times the city’s budget professionals answer them.
After this story posted, Ryan Packer pointed out on Bluesky that Nelson sent out a campaign mailer focused on the meeting, claiming (falsely) that the city’s spending on housing is “routinely delayed for years” (instead of being spent the year it’s allocated) by “bureaucratic delays.” The meeting did not reveal any “bureaucratic delays”; instead, city staff explained repeatedly that housing cycles take more than a year, and that there would be major negative consequences if the city started backing out of its commitments (including contracts and the voter-approved housing levy) in order to use dedicated housing dollars to pay for other general fund priorities like transportation or police.
Note: The original version of this story misstated the percentage of public drug users Bob Kettle estimated have homes and use “day tents” that make them appear to be homeless.
City Councilmember Sara Nelson said expanding eligibility for tax-exempt housing will benefit moderate-income renters.
By Erica C. Barnett
As the Seattle City Council prepares to update a program that gives tax breaks to developers who set aside apartments for low- and moderate-income renters, opponents of the changes called them a giveaway to developers for housing that will still leave its residents burdened by excessive rents. Proponents, including Habitat for Humanity and for-profit developers, said the changes would make it feasible for them to build affordable housing at a time when development of all kinds is slowing across the city.
The 12-year tax exemption program, called the Multifamily Tax Exemption or MFTE, currently has to be renewed every four to five years. The most recent renewal, in 2019, imposed new affordability requirements and restrictions on rent increases—making higher-income renters ineligible to rent MFTE units and imposing a 4.5 percent annual cap on rent increases, among other changes.
The latest iteration, known as “Program 7,” would bump up the cap on annual increases to as much as 10 percent a year and make higher-income renters eligible for some units, a change opponents say will make MFTE apartments unavailable to lower-income tenants.
Earlier this week, two dozen affordable housing providers and advocacy groups sent an open letter to the mayor and council objecting to the proposed changes, arguing that if the council approves them, “the purpose of the MFTE program would no longer be to ‘increase affordable multifamily housing opportunities … for households who cannot afford market-rate housing in Seattle,’ and would instead focus on increasing multifamily development in exchange for a modest share of MFTE units and no guarantee of rents meaningfully lower than market rate.”
At a meeting of the council’s housing committee on Wednesday—where the committee also took up 14 amendments aimed at various aspects of the program—renters’ rights advocates urged the city to reject the proposal and keep the existing program in place another year while the city comes up with a more equitable plan. (The MFTE update has already been delayed twice, and expired yesterday.)
Miram Roskin, the former deputy director of the city’s Office of Housing, said the program removes about $20 million in “invisible” dollars from the city’s budget every year in the form of foregone property taxes, in exchange for very limited benefits for lower-income renters.
“At the margin, there are certainly financially feasible, on the bubble projects that benefit and come to fruition thanks to the tax exemption. However, this is speculative. It is unquantified, it’s anecdotal. This is why the affordability component of the program matters so much,” Roskin said. “In many cases, rents would be indistinguishable from the market. And in fact, in some cases, the affordable rent would even be higher than the market [rent].”
For example, under the new proposal, renters making up to 50 percent of Seattle’s median income would be eligible to rent small studios (less than 320 square feet); the proposal bumps up the maximum rent for these units to $1,375 a month, just $91 less than the median similar apartments rent for on the private market. The maximum rent for a standard one-bedroom would increase to $2,209, or about $395 less than market rent.
Median incomes, and—indirectly—maximum rents are set by a federal formula that includes both homeowners and renters. The Seattle Renters Commission called out this issue in its own letter opposing the new program, noting that the median Seattle renter makes around $79,000, compared to about $181,000 for homeowner households.
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Developers, in contrast, said they the current standards have made them opt out of the tax exemption program, and argued that the changes would spur them to build more affordable apartments at a time when building permits have slowed down dramatically, a trend that will likely make Seattle’s housing crunch significantly worse over the next several years.
“We are evidence that the program currently is not working,” Kamiak Real Estate founder Scott Lien told the committee. “We rescinded our MFTE applications on four of our last five projects prior to occupancy, and now we have six buildings with 1,100 units in our pipeline, and have no plans to participate in MFTE for most of those” under the current program.
Developers also argued that the MFTE program was never designed to provide housing to low-income residents, but is supposed to create “workforce” housing for moderate-income renters.
A 2024 University of Washington study found that the MFTE program does cost the city money every year, but noted that developers won’t use the program if they can’t make a profit. The study also found that the city has historically seen a benefit of about 50 cents on the dollar, in the form of lower rents, over the life of the program, except under the most recent iteration, where rents decreased and the benefit to the city increased more dramatically.
Over the life of the program, which began in 1998, developers have built more than 7,000 affordable housing units, mostly studios and one-bedrooms, but those lower rents “may only represent a modest discount” compared to the rest of the market, the UW study found. Apartments in areas where rents are already higher, like South Lake Union, are more affordable relative to other available units than they are in areas where rents are lower, like South Park or Rainier Beach, where “there may be negligible differences between the rents of restricted and unrestricted units.”
“Some of the wealthiest neighborhoods in the city,” the study notes, have been categorically exempt from MFTE because they’re zoned for single-family houses. Given that most MFTE units are in three-to-five-story apartment buildings, this isn’t likely to change much, even with zoning changes that allow between four and six units per lot in these areas.
Several of the 14 amendments councilmembers introduced Wednesday would lower the income eligibility thresholds for various types and sizes of apartments, prompting Council President Sara Nelson to object that new affordability restrictions could force renters out of their homes. “We don’t want to be displacing people,” Nelson said. Making people who make more money eligible for MFTE units, she added, “means more access, not higher prices.”
Although a central staffer assured Nelson that the program has a “grace” component that lets existing tenants stay in their homes as their income rises (under the program, existing renters retain their rent discounts until their income rises to 150 percent of the eligibility level, and pay market rent after that), Nelson raised the exact same objection a moment later.
“There are people already living in these units, so what’s going to happen to them if you lower the income per unit? Then the person’s going to have to move out. … I feel like this is going to displace people and in fact that’s what happened to my friend.”
Councilmembers also proposed amendments to allow developers with projects already in the pipeline to opt in to the new, more developer-friendly program, a change the housing advocacy groups called “a bad deal for Seattle” in their open letter. Other amendments would require regular reporting on which developers are participating in the program and what kind of housing they’re building, and reinstate a sunset clause that would require the city to update the program again in 2029, which the original legislation eliminated. Rob Saka, the cosponsor of the sunset amendment along with Alexis Mercedes Rinck, said revisiting the program regularly was a matter of good governance.
“Deleting a sunset date whatsoever, in perpetuity, for something of this significance, and greater scale, and subject to fluctuating market conditions—I don’t know if it’s the best, most appropriate, prudent course of action,” Saka said.
Another amendment sought by developers, from Mark Solomon, would eliminate the requirement that developers who are replacing older, “naturally affordable” housing with (typically denser) new MFTE units add one new unit that’s permanently affordable to renters making 50 percent of median income to their new buildings for every tenant in the demolished building who qualifies for relocation assistance under the city’s Tenant Relocation Assistance Ordinance. Developers argue that this permanent affordability requirement has stopped the development of dense new housing under the MFTE program.
Councilmember Debora Juarez complained that the 14 amendments (including one that was so new it didn’t show up on the council’s online agenda) had been “dropped on us” at the last minute, with little time to analyze or understand them. The committee didn’t vote on the proposed changes; they’ll do that on September 22, with a full council vote likely on September 30.
