Category: Affordability

Affordability, Development, housing, Maybe Metropolis

Seattle’s MHA Program Should Come with a Tax Break, Not a Fee
We’ll never have Portland-style density if we don’t have Portland-style incentives. Photo by M.O. Stevens, CC-by-SA 3.0 license

by Josh Feit

I have repeatedly argued in this column—and long before— that liberalizing our land use code is the best way to address Seattle’s housing affordability crisis. Summary: We need to allow apartments in the vast majority of the city where they’re currently banned. Thankfully, there’s a recent glimmer of hope. The state passed a new law last year, HB 1110, that will upzone Seattle’s neighborhoods. Thank you state Rep. Jessica Bateman (D-22, Olympia); her legislation requires cities with populations of 75,000 or more to allow four-unit buildings wherever single-family homes are allowed, and up to six units if two of the units are affordable.

This encouraging uzpone goes into effect statewide after the cities update their local comprehensive plans, as Washington cities are required to do every 10 years; Seattle’s Comprehensive Plan update is on the docket for 2024.

I have to admit, though: The fact that the bill is tied to Seattle’s Comprehensive Plan update makes me nervous. Readers may recall that we started the year with some 2024 PubliCola predictions, including my pessimistic prognostication about how Seattle will sabotage Rep. Bateman’s upzone requirement through our comp plan update.

Here’s what I wrote on January 1 (italics added this time around): Undermining the new state mandate for increasing density in traditionally single family zones, Seattle “will come up with lot coverage minimums, setback requirements, and height limits along with hefty affordable housing fees that will keep housing developers from building any apartments in Seattle’s touchy neighborhood residential zones.”

As our comp plan update gets underway behind the scenes, I’m hearing affordable housing fees are already in play at City Hall. It’s hardly surprising. One thing that unites all political stripes in Seattle—lefties and NIMBYs alike—is a call to tax developers, everyone’s favorite scapegoat. Why has pickleball colonized traditional tennis courts? Evil developers!!

Call it Funded Inclusionary Zoning, or FIZ. How would we pay for it? Portland has a smart model. Under their IZ program  they give developers a property tax break.

Seattle’s gut instinct to tax housing production to pay for housing production is a political pathology. And it stalls development, leading, ironically, to less affordable housing. It’d be like targeting Swedish, Virginia Mason, UW Medical Center, and Seattle Children’s with a special tax to pay for local health clinics even though these institutions help reduce greater health care costs down the line.

Let me be clear, I’m all for government intervention to create affordable housing. It’s precisely what governments are supposed to do: Regulate essential marketplaces. Like all good governance, ensuring universal access to life’s fundamentals—such as housing and health care—not only promotes equity, it also benefits society as whole by preventing things such as spiking health care costs en masse through widespread upstream care. Or, per UW real estate prof Greg Colburn’s 2022 book Homelessness is a Housing Problem, here’s a more germane example: Building more affordable housing helps address homelessness.

Unfortunately, when it comes to the swath of land that HB 1110 opens up to new housing development, Seattle is likely to tax it. Watch for the comp plan update to expand Seattle’s Mandatory Housing Affordability program, a quasi-inclusionary zoning program the city created in 2019. Inclusionary zoning, or IZ, is housing policy that requires developers to include affordable units in their projects. MHA isn’t classic IZ because there’s also an option to pay into an affordable housing fund rather than building on-site. But either way, MHA puts the cost of building affordable housing on developers.

Certainly, requiring developers to contribute to affordable housing stock in the city is an important step, but mandates aren’t going to create affordable housing on their own. Progressive governments also need to help pay for that housing. Otherwise, as projects become financially untenable, developers are going to build less. The best affordable housing policy would require developers to include affordable housing in projects (or an in lieu program) while also providing government subsidies to help the program pencil. Additionally, as I already mentioned, we need to upzone to allow dense housing citywide,  ending our restrictive zoning policies that perpetuate classist and racist policies of the past.

MHA, which also came with an upzone, including peripherally around the edges of single-family zones, was an earnest attempt to address the ugly legacy of Seattle’s restrictive zoning, and it got off to a good start, raising tens of millions for affordable housing (about $68 million in 2020). However, we may have already hit peak MHA; while MHA payments raised more than $70 million annually in both 2021 and 2022, the 2022 number represented a slight drop—a 1.5 percent decline in cash along with a drop in the number of affordable units developers committed to include in new buildings, from 107 to 66.

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Showing the same downward trend, and perhaps even more worrisome, as Erica reported, production of in-fill housing like townhomes has dropped in the MHA era with permits shrinking from more than 1,800 permits filed in 2018 to just 165 in the first nine months of 2023. And the Seattle Times reported that overall apartment and townhouse construction permits dropped 42 percent  and 27 percent, respectively, between 2021 and 2022.

We need more evidence to see if MHA requirements are squelching development, but these are not good signs. The drag on development (and the related drop in affordable housing dollars) makes sense in an Econ 101 way—and highlights the irony I called out above: We’re taxing, thus discouraging, something we want.

Rather than discouraging affordable housing production, let’s make it easier for developers to meet the inclusionary zoning mandate by funding it. Call it Funded IZ, or FIZ. How would we pay for it? Portland has a smart model. Under their IZ program, which requires developers to include affordable housing in projects that include 20 or more units (or pay a steeper version of an MHA-style fee), they give developers a property tax break on all the units in a building. The program was initially limited to Portland’s downtown core, but the data showed it was working so well at creating affordable housing that their city council voted unanimously to expand it citywide last month.

Coupling IZ with property tax breaks is a logical next step here. Seattle  already has an optional incentive zoning program, known as the Multi-Family Tax Exemption credit, that rewards property owners with a 12-year tax break if they choose to make units affordable. There are currently 6,300 affordable MFTE subsidized units citywide, according to the most recent data.

Now that we’ve decided, as demonstrated by our MHA inclusionary zoning program, that affordable housing production is no longer optional, let’s also make sure that funding isn’t optional.

However, now that the city has decided, with MHA, that creating affordable housing should no longer be optional, let’s also make sure funding is no longer optional. A property tax exemption—for all buildings whose developers participate in the expanded program, including those where developers opt to pay a fee—would do just that by making affordable housing pencil out for developers.

There’s one asterisk. Government intervention requires more than just funding. Witness our famed Housing Levy, a property tax that’s been dedicated to affordable housing production for more than 40 years; the latest seven-year iteration will raise $970 million. Clearly, given that the root of our current housing crisis is a scarcity of affordable units, the levy is not delivering enough.

While we’re paying to build where we can, there’s not enough opportunity to build in general. Bateman’s zoning reform legislation could change that, adding substantially to the housing pipeline by allowing apartments in historically off-limits single-family zones. IZ would also help. If it’s funded!

Zoning changes in isolation won’t solve the housing problem; mandating affordable housing production in isolation won’t solve the housing problem; and funding affordable housing in isolation won’t solve the housing problem. Rather than defaulting to MHA’s unfunded mandate in our comp plan update, let’s seize the opportunity to combine all three approaches—housing production mandates, funding, and allowing citywide development—to properly address our affordable housing crisis.

josh@publicola.com

Affordability, housing, Mayor Harrell

Seattle Affordable Housing Awards Plummet Amid Economic Challenges
Office of Housing director Maiko Winkler-Chin

By Erica C. Barnett

The city will award far less money to affordable housing projects this year than it has in previous years—just $53 million, compared to $147 million last year. Those funds will pay for just four projects, including two in north Seattle, one in the Central District, and one in Beacon Hill. In comparison, last year’s awards—known colloquially as the “NOFA,” for the Notice of Funding Availability that starts the funding process each year—funded 12 projects across the city.

Another 18 projects that applied for funding this year will not receive it.

City officials, including Mayor Bruce Harrell and Office of Housing director Maiko Winkler-Chin, announced the awards yesterday at El Centro de la Raza in Beacon Hill; the event also included announcements about homeownership programs that are not part of the affordable-housing NOFA.

PubliCola reported on the reduction in funding on Tuesday; the Seattle Times had its own story on the awards yesterday.

A primary reason for the reduction, Winkler-Chin told PubliCola Wednesday, is the need to “backfill” projects that are unable to pay their construction loans due to issues like the increased cost of labor and construction materials (which went up 15 percent last year), the concrete strike, interest rate hikes, and “operational issues,” like tenants failing to pay their rent.

Typically, an affordable housing project gets a certain amount of funding from OH—say, $10 million— based on a set of assumptions about what the project will cost to build and how much revenue the project will take in from rents once it’s up and running. Those assumptions then inform the size of the loan the developer will be able to get from a bank after construction is complete and the building is leased up.

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If those assumptions are wrong—if, say, construction costs spike, there’s a concrete strike, and 20 percent of the tenants aren’t paying rent—the bank will reduce the size of the project’s “permanent” loan based on the new numbers, leaving a gap. If an expected $10 million loan gets reduced to $8 million, the Office of Housing will step in to fill that gap. And when that happens, say, 50 times, the gap works out to around $100 million—about the size of the reduction between 2023’s awards and this year’s.

Ben Maritz, an affordable-housing developer whose proposal the Office of Housing did not fund this year, said unpaid rents have become “the biggest problem” for providers who need those revenues to pay their construction loans.

Rents in subsidized housing, which are set by the US Department of Housing and Urban Development based on local median, have climbed much faster than wages for low-income people, making it harder and harder for tenants to keep up, Winkler-Chin said. “A lot of people are unable to really recover and pay their rent, and that does have an impact on how much of a loan a developer can get as they’re building up their housing.”

Another reason for the lower award amounts, Winkler-Chin said, was that the city had already “forward-committed” funding from the JumpStart high-earners payroll tax and the housing levy in previous years—guaranteeing funds for projects that were in the works but wouldn’t begin construction until later. About 43 projects funded in previous rounds of funding are currently in the works, the Office of Housing confirmed.

The JumpStart fund, most of which is supposed to go toward low-income housing, has reportedly been frozen as part of Mayor Bruce Harrell’s effort to address an estimated budget shortfall of more than $220 million.

But there may be other factors contributing to this year’s relatively paltry awards.

The JumpStart fund, most of which is supposed to go toward low-income housing, has reportedly been frozen as part of Mayor Bruce Harrell’s effort to address an estimated budget shortfall of more than $220 million. Projects already funded through JumpStart will continue moving forward, but  revenues from the payroll tax are reportedly not being dedicated to new projects, reducing the overall pool of funds for affordable housing significantly. Last year’s city budget, for example, included $138 million for affordable housing from the payroll tax.

Asked about the reported freeze on the use of JumpStart funds for new projects, Harrell spokesman Jamie Housen said the City Budget Office’s “direction to the Office of Housing (OH) is to use JumpStart [Payroll Expense Tax] funds on housing. Payroll tax is one of several large revenue streams in the OH budget, and the annual NOFA opportunities are just one of the ways OH makes investments in the community. Other investments include supporting operations, maintenance, and services (OMS) for affordable housing providers—including wage increases for staff who work in affordable housing buildings—and providing support for increased costs on previously awarded projects.”

Every year since its inception, Seattle mayors have used JumpStart funds to fill budget gaps and fund priorities that aren’t in the JumpStart spending plan; last year, about $89 million in repurposed payroll tax revenues allowed the city to pile the budget with new programs (like the police surveillance system Shotspotter as well as generous police recruitment bonuses). This year, given the size of the deficit, it’s probably that the new council and Harrell will again view JumpStart as a solution to help close the revenue gap without cutting pet programs or laying off large numbers of city workers.

If the the payroll tax is converted, at some point in the future, into an all-purpose funding source for city needs, that would represent an abandonment of its official, legally codified purpose: Building new housing, funding small businesses, and supporting climate-friendly economic development.

Affordability, Elections, housing

Social Housing Backers Propose New Tax on Pay Above $1 Million
House Our Neighbors director Tiffany McCoy and social housing supporters at City Hall on Tuesday.

By Erica C. Barnett

House Our Neighbors, the group that in 2023 passed an initiative setting up a new development authority to create permanently affordable, mixed-income housing, filed a Seattle initiative on Tuesday—I-136—that would impose an “excess compensation” tax on employers with workers who make more than $1 million a year. HON’s goal is to put the measure on the ballot in November 2024.

HON will need to collect more than 26,000 valid signatures from Seattle residents to get the initiative on the ballot.

The proposal, if adopted by voters, would impose a 5 percent tax on individual compensation above $1 million, including stock options, bonuses, and deferred compensation; the tax would be paid by businesses, not employees. The proposal is modeled on the city’s JumpStart payroll tax, with at least two significant differences: It would only kick in after the first $1 million in compensation (JumpStart currently applies to companies whose workers make over $182,000), and it would apply to grocery stores and health care companies, both currently exempt from the JumpStart tax.

Also, unlike JumpStart, the social housing tax could not be raided by the mayor and city council to fill budget holes unrelated to its purpose.

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HON estimates that the tax could bring in about $50 million a year and create around 2,000 new units of housing over 10 years, through acquisition of existing buildings and the construction of apartments, including two- and three-bedroom “family-size” units.

At a press briefing outside City Hall on Tuesday, HON director Tiffani McCoy noted that an earlier version of the proposal would have involved building or buying 2,500 units, but those would be all studios and one-bedroom apartments—not the two-and three-bedroom units for which there is much greater untapped demand.

Tomorrow, the city’s Office of Housing will announce which Seattle projects will get funding through the latest annual Notice of Funding Availability (NOFA) process; this most recent round of awards, which amount to just over $50 million, represent a fraction of the $147 million the city handed out last year.

McCoy called social housing a way to provide permanently affordable housing outside the existing affordable housing market, which relies on complex funding streams and can be sold off if a nonprofit housing provider is short on funding. While “we have tremendous affordable housing partners” in the city, McCoy said, “there is no level of government that has a plan to address our housing crisis at scale. There isn’t a plan from the private sector. And the affordable housing sector is constrained by what the Housing and Urban Development Department decides year to year.”

Unlike traditional affordable housing, social housing would be funded, in part, by rents from tenants at higher income levels; the buildings would be open to people making up to 120 percent of the Seattle area median income, who would pay rents closer to market rates than lower-income tenants.

Additionally, “social housing will not be vying for the limited funds of the housing levy or JumpStart,” said Ben Maritz, the affordable-housing developer who drafted HON’s high-level business plan. Tomorrow, the city’s Office of Housing will announce which Seattle projects will get funding through the latest annual Notice of Funding Availability (NOFA) process; this most recent round of awards, which amount to just over $50 million, represent a fraction of the $147 million the city handed out last year.

Affordability, housing

No, Renter Protections Aren’t Driving out “Mom-and-Pop” Landlords
This was one of the first images that popped up when we Googled “mom and pop landlord.” Renter advocates say the term itself is fraught, suggesting an older white couple relying on rental income to stay afloat and at the mercy of their tenants.

By Katie Wilson

As housing costs have soared over the past decade, many Seattle renters have found themselves cost-burdened and vulnerable to displacement and homelessness. Spurred to action, renters’ rights advocates have notched some big victories: New laws governing tenant screening, evictions, and what landlords can charge, including caps on move-in costs and late fees, 180 days’ notice of rent increases, and landlord-paid relocation assistance in some cases of “economic displacement.”

Landlord organizations like the Rental Housing Association of Washington (RHAWA) and some individual landlords have fought back with lobbying, lawsuits, and attempts to shape public opinion. Their opposition narrative routinely centers around small landlords.

“In virtually every policy debate, opponents of new regulations on the housing market claim that adding new regulations will create new burdens that will drive ‘mom-and-pop’ landlords out of the market, and that this will have the unexpected consequences of higher housing costs and reduced access for renters—especially vulnerable renters,” Dr. Kyle Crowder, Chair of the Department of Sociology at the University of Washington, said.

I got embroiled in this debate in 2021 when I responded to two pieces in The Seattle Times, by inveterate landlord lobbyist Cory Brewer and that paper’s editorial board, with a series of articles in Crosscut. They argued that rental regulations were eroding the single-family rental house supply. I argued that they probably weren’t; that renter protection laws should not exempt small landlords; and that even if small landlords were exiting the market, it’s not clear that we should care. Brewer then doubled down on his position with a fusillade of misinformation, and The Seattle Times refused to make corrections. Fun times!

The following year, the RHAWA engineered another media blitz, this time pointing to data from the Seattle Department of Construction and Inspections that showed a decline in the number of rentals that had been registered or reregistered with the city during the COVID-19 pandemic. At the time, I was working with the Transit Riders Union and the Stay Housed Stay Healthy coalition to pass renter protection laws in multiple cities around King County, and we found ourselves having to reassure worried elected officials: Numbers had fallen in part because Seattle paused outreach and enforcement of the registration requirement; and if rentals were being sold, that was more likely due to soaring property values and the extraordinary financial strains of the pandemic than the kinds of permanent renter protections cities were considering.

The researchers concluded that “in Seattle there was no increase in the likelihood of small rental properties being sold following the passage of these ordinances, even after a period of court limbo ended and both ordinances’ constitutionality was eventually upheld.”

All these debates between dueling narratives have been frustratingly inconclusive, partly because there’s been little reliable evidence to point to. If only there was some actual research that could resolve this dispute!

Now, there is. A new study co-authored by Crowder, “Mom-and-Pop” Landlords and Regulatory Backlash: A Seattle Case Study, tackles these questions head on. It examines the “mom-and-pop” landlord narrative against the backdrop of Seattle’s First-in-Time and Fair Chance Housing ordinances, passed in 2016 and 2017.

“Given how common these arguments are in policy debates, we felt it was important to objectively interrogate the two underlying assumptions—that small landlords tend to offer more accessible, lower-cost housing for renters with limited incomes or facing other barriers to access, and that new regulations will drive these small landlords from the market,” Crowder said. “Seattle provided a strong case for us to study because we have unusually good data on the practices of different types of landlords and because we could track sales before and after the ordinances passed by the city in recent years.”

First-in-Time requires landlords to publicize their screening criteria and rent to the first qualified applicant; Fair Chance Housing prevents landlords from unfairly denying applicants housing based on criminal history. (Just this year, in a rare legal reverse, the U.S. Court of Appeals for the Ninth Circuit struck down one element of the Fair Chance Housing law: landlords are no longer banned from asking about a tenant’s or applicant’s criminal history, but they still can’t require disclosure or take an adverse action based on that history.)

Among all the renter protections passed in Seattle, these two provoked more than their share of apoplectic rage among landlords.

The researchers used a combination of consumer data and parcel records to look at patterns of small rental property sales before and after these laws took effect, comparing Seattle to areas outside the city without such laws. They concluded that “in Seattle there was no increase in the likelihood of small rental properties being sold following the passage of these ordinances, even after a period of court limbo ended and both ordinances’ constitutionality was eventually upheld.”

Additionally, the researchers found, there was a “declining probability of sale of small rental units” both in and around Seattle after the new rules went into effect—”a general dynamic inconsistent with the broader narrative about mom-and-pops exiting the market.”

Data shows that Seattle landlords didn’t sell off their properties en masse after renter protections passed, and that property sales were actually higher in areas outside the city.

In other words, Seattle’s small landlords did not, in fact, sell off their properties en masse. This revelation suggests, among other things, that we should be skeptical about some of what landlords say about their own actions. The 2018 Seattle Rental Housing Study (of which Crowder was also the lead author) asked landlords and tenants about the same ordinances through surveys, focus groups, and interviews. According to an online survey of more than 4,000 Seattle landlords:

About 40% of landlords have sold, or plan to sell, property in response City ordinances governing the housing market, with long-term landlords and those managing large numbers of buildings especially likely to report that they plan to sell. About one-third report that the First-in-Time ordinance is a major reason for the decision to sell. A similar proportion of landlords report that the decision to sell is at least partially motivated by changes to rules about the use of criminal records.

These are astounding claims, especially in light of the new research. The RHAWA and the Washington Multifamily Housing Association actively promoted the survey to their members via email and in their organization newsletters, and later heavily promoted the results to members, claiming landlords justly felt “vilified” by the city. Clearly, a city-sponsored survey about laws that many landlords find obnoxious invites responses with a political valence, adding to the general unreliability of human beings reporting on their own motives and intentions.

So much for mass selloffs of small rental properties. The new study also tackles the second part of the “mom-and-pop” narrative: The notion that policymakers should coddle small landlords for the sake of their renters. According to the study, landlords of small rental properties “do not neatly fit the theorized expectations of ‘mom-and-pops’ in terms of who they tend to rent to, the affordability of housing they offer, or the friendliness of their practices towards tenants.”

While these landlords might be less likely than corporate landlords to raise rents or terminate their tenants’ leases, they also “tend to rent to higher income households and are less likely to rent to vulnerable tenants than large landlords. Meanwhile, over three-quarters of small and large landlords alike reported charging rents above fair market value. Overall, these results challenge the rhetorical depiction of small landlords as the last bastion of affordable housing for the city’s most vulnerable renters.”

The paper cites other research suggesting that small landlords’ lower eviction rates don’t necessary mean that they provide more secure housing. They may simply have fewer tenants who fail to pay rent because they rent to more financially secure people; and they may more often use informal or illegal eviction methods that don’t show up in court records. Some large landlords also use eviction notices as a routine tool to collect late rent, inflating the averages.

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There’s a strong racial undercurrent to the “mom-and-pop” narrative and the two laws that were the focus of this study. The laws are intended to prevent discrimination, both systematic—as in blanket refusals to rent to anyone with a criminal record—and informal, as when a landlord selects among a pool of applicants based on a gut sense of who will be a “good” tenant. Both these practices can enable landlords to reject applicants based on race without having to acknowledge, even to themselves, what they’re doing.

The very phrase “mom-and-pop” is fraught. Michele Thomas, Director of Policy and Advocacy at Washington Low Income Housing Alliance, calls it a racist dog whistle. “I really do think the image it invokes is heterosexual white older couple, and they’re trying to say, ‘Think about these people and think about who a tenant is, and who do you think needs protection?’”

At least part of that stereotype is accurate, when it comes to the Seattle landlords who responded to the 2018 survey: Demographically, according to the survey report, they’re “overwhelmingly white.” Almost 82 percent of the respondents who identified their race said they were white, followed by Asian and multi-racial landlords. Renters, meanwhile, are disproportionately Black and brown, especially lower-income renters and those who carry other baggage, like past evictions or a criminal history, that make it harder to compete in a tight rental market. Thanks to this new research, we now know that these vulnerable renters do not, as a class, owe all that much to the beneficence of small landlords.

This study is timely, as the Seattle City Council is about to lose several members who have consistently gone to bat for renters. Despite all the debate, the laws passed in the past decade—in Seattle, around King County, and statewide—have, almost without exception, applied to small landlords as well as large. If the incoming council changes course, at least it will be harder to argue they’re doing so because they care about the renters who now constitute a majority of Seattle’s population.

Affordability, City Council, Density, housing

Ruling Moves City One Step Closer to “Transportation Impact Fees” on New Housing
Rendering for a planned building on South Jackson St. that its developer said would not have been feasible with millions of dollars in new transportation impact fees.

By Erica C. Barnett

The city’s hearing examiner, Ryan Vancil, just denied an appeal by housing developers seeking an environmental review of a proposed comprehensive plan amendment that will, if passed, begin the process of imposing “transportation impact fees” on new development across the city, adding to the cost of new housing in Seattle. The comprehensive plan is the city’s long-term guide for housing, transportation, and economic investments.

The decision, which upholds a previous “determination of non-significance” for the transportation impact fee amendment, comes one day before the city council holds its first and only public hearing on the proposal at 2:00 Tuesday afternoon. The determination of non-significance, or DNS, means that the city believes that the amendment, if adopted, will have no significant adverse environmental impact.

“As a broad coalition of housing advocates have urged, the City Council should decline to rush forward on such a serious policy initiative that would undisputedly raise the cost of housing—with the impacts being felt most by those in need.”—Seattle Mobility Coalition

The appellants in the case, a group of developers organized as the Seattle Mobility Coalition, argued that imposing more fees on new development would reduce housing production, increase housing costs, and “undermine the goals of the Mandatory Housing Affordability (‘MHA’) program,” which allows denser development in some parts of the city and requires developers to either build affordable units on site or pay to build them elsewhere.

In a statement, the Mobility Coalition said it would be seeking reconsideration of the decision, noting that Vancil “acknowledged the evidence that adding transportation impact fees will make building housing in Seattle more difficult, resulting in fewer new homes, fewer contributions to the City’s Mandatory Housing Affordability framework, and the City’s affordability goals slipping further out of reach. As a broad coalition of housing advocates have urged, the City Council should decline to rush forward on such a serious policy initiative that would undisputedly raise the cost of housing – with the impacts being felt most by those in need.”

In his ruling, Vancil said the developers only demonstrated an “economic,” rather than an environmental, impact from the potential new fees, and that they had failed to prove the city had failed to do an adequate review under the State Environmental Policy Act. According to a potential fee schedule the city introduced as part of its defense, the new fee could cost five to six times as much as annual property taxes on larger, denser apartment buildings.

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As PubliCola reported last month, the city council decided, at the behest of outgoing Councilmembers Alex Pedersen and Lisa Herbold, to fast-track this significant change to the city’s primary planning document, bypassing the council’s land use committee after the chair of that committee, Councilmember Dan Strauss, canceled an earlier committee hearing on the proposal and said he would schedule a new one after the hearing examiner, Ryan Vancil, issued his ruling.

“I believe it is important that we receive the hearing examiner’s decision and have the time needed … to understand the policy” and hold a public hearing before voting the changes through, Strauss said. Although the comprehensive plan changes are only the first step (of two) toward passing the fees, the fees themselves could cost housing developers significantly more than the Mandatory Housing Affordability fees the city imposed in multifamily areas back 2019—and those fees only passed after more than a year of public hearings, focus groups, and at least 20 committee meetings.

In his ruling, Vancil noted that “there is no imperative or requirement that Comprehensive Plan policies be implemented through subsequent regulations”—in other words, the council could decide to allow impact fees but never impose them. Why the council would fast-track  legislation to allow new fees on housing and then just abandon the concept is a question the hearing examiner did not address.

Vancil sidestepped the environmental implications of future transportation impact fees themselves, agreeing with the city (and Councilmembers Pedersen and Herbold) that amending the city’s comprehensive plan to allow transportation impact fees was basically a minor procedural change. On Monday, Herbold’s office said she plans to introduce an amendment to change one of the policies in the proposal to say that the city will “consider” impact fees, as opposed to “use” them.

In his ruling, Vancil noted that “there is no imperative or requirement that Comprehensive Plan policies be implemented through subsequent regulations”—in other words, the council could decide to allow impact fees but never impose them. Why the council would fast-track  legislation to allow new fees on housing and then just abandon the concept is a question the hearing examiner did not address.

Transportation impact fees are themselves based on the idea of impact—specifically, that dense, urban living causes negative impacts on the city’s transportation system that housing developers must pay to mitigate. As Josh argued in a recent column, however, housing scarcity—not housing abundance—is the real threat to Seattle’s livability. And rising housing prices in Seattle have had a demonstrable environmental impact, as more people have been forced to leave the city for sprawling, car-dependent suburbs.

“The regressive status quo forces renters to bear the carcinogenic brunt of the car culture that our suburban-style homeowner zoning promotes; and, because bus routes don’t pencil out in the vast majority of our low-slung city, we’re stuck with an inefficient transit system,” Josh wrote last week. “Indeed, the best thing we could do for transit isn’t levying a tax on development, but adding more development that would support robust transit.”

Affordability, Density, Development, housing, Opinion

Are Fourplexes Real?
A historic 1911 fourplex in Portland, OR

By Erica C. Barnett

On the local campaign trail this year, you can’t go to a debate without hearing multiple candidates profess their support for “Comp Plan Alternative 5″—the densest potential option currently on the table for the city’s comprehensive plan update, which will serve as a framework for Seattle’s future growth and development for the next 15 years.

It’s a kind of proxy for an urbanist (or urbanist-lite) position on development that fits neatly into a 30-second debate response: Supporting Alternative 5 signals that you support housing as dense as fourplexes (or even sixplexes!) in areas that were previously zoned exclusively for detached single-family houses—a marked departure from the bad old days when even backyard or basement apartments were a third rail for the homeowner activists who dominated the public debate over density.

We’ve expressed optimism in the past about the way the Overton Window has shifted on density and housing. This, at least, is undeniable: Polls show that Seattle residents are increasingly receptive to the idea of “more housing in my neighborhood,” and politicians have come along, including many on the left who have come to support density coupled with anti-gentrification measures, like targeted investments in affordable housing, homeownership, and preservation.

But lately, I’ve started to think that my optimism may have been misplaced. This is because while the concept of “more housing” is generally popular, the kind of housing people say they support is actually a very specific type: Modest density that looks like the rest of an existing neighborhood—the kind of inoffensive density you don’t even notice if you aren’t looking for it. Ask a moderate candidate what they mean when they talk about density in residential neighborhoods, and they’ll often describe a fourplex built about 80 years ago— the type that blends in to a single-family neighborhood because it looks an awful lot like the the single-family houses that surround it.

When pressed, candidates are often explicit about this preference. Take Maritza Rivera, running in District 4. When David Hyde, moderating a debate at Roosevelt High School, asked the candidates what they thought of a new state law that allows fourplexes in formerly exclusive single-family areas, Rivera said she supported increasing density “gradually” in a way that preserves “the character of the neighborhood…  for instance, on north Capitol Hill, you can see there are some places that look like mansions, but they’re actually fourplexes.” Or Maren Costa, in District 1, who talked about creating a set of pre-approved architectural plans that homeowners could use to convert their property into a fourplex while adhering to the current neighborhood vibe.

Just look at Minneapolis, which, in 2019, made nationwide headlines as the first city to “eliminate single-family zoning” outright by allowing triplexes everywhere. Fast forward to 2023, and just 17 triplexes have been built in areas previously zoned for single-family use in Minneapolis, a blow to the idea that cities can encourage “gentle” density by gingerly increasing what’s allowed in formerly redlined neighborhoods.

It’s thoroughly unrealistic (and, I would argue, a form of creeping architectural fascism) for a big city to dictate what housing in a neighborhood must look like. But the problem goes deeper than aesthetics, and gets to the question that has been nagging me for months: Are fourplexes real? That is: If we zone the whole city to allow fourplexes everywhere, will they get built? To drill down even further: Will developers find it possible–in other words, profitable— to build four-unit rental housing developments on single-family lots?

My belief, increasingly, is that fourplexes are not a viable option for replacing single-family houses in Seattle—but apartments are. Which is why it’s time for urbanists to stop conceding this point. We have to stop settling for “plexes”—and start advocating for apartments everywhere.

This doesn’t mean allowing high-rises in Laurelhurst, or eliminating tree protections (which, by the way, are easier to follow when housing can go up instead of sprawling out). But it does mean allowing regular old apartment buildings (not “sixplexes”; not “stacked flats”) in a lot more places, and allowing taller, denser apartment buildings everywhere short, stumpy apartment buildings are currently allowed.

I’m not a developer, and I don’t pretend to have the precise zoning formula for what will pencil out for builders and actually create housing in the city, rather than just on paper. (I mean: No zoning at all works pretty well in Houston, but I’m not a lunatic. I know where I live.) What I do know is that when other cities have tried to go for modest, tentative density, it hasn’t worked out the way they hoped.

Just look at Minneapolis, which, in 2019, made nationwide headlines as the first city to “eliminate single-family zoning” outright by allowing triplexes everywhere. The city was seen as a model for the kind of modest, infill density known as “missing middle” housing, including by hopeful urbanists in Seattle. The housing advocates at the Sightline Institute, for instance, argued that by allowing triplexes, cities could start to undo the “ugly legacy of economic and racial exclusion” and break “the entrenched stranglehold of exclusionary zoning.”

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Fast forward to 2023, and just 17 triplexes have been built in areas previously zoned for single-family use in Minneapolis, a blow to the idea that cities can encourage “gentle” density by gingerly increasing what’s allowed in formerly redlined neighborhoods.

One reason triplexes didn’t catch on in Minneapolis is that formerly single-family areas retained their old envelope (height and lot coverage) limitations, which means that the new three-unit buildings can’t take up much more physical space than the houses they replace. If you allow developers to build more units but don’t let them build up or out, it turns out they decide to build housing that’s more profitable—like $950,000 townhouses, or 100-unit apartment buildings in the narrow slivers of the city, generally along multi-lane arterials, where renters are mostly allowed to live. You can argue that this is developer greed or unwillingness to get creative or rapacious gentrification all you want; what matters is that this kind of housing, though now legal in Minneapolis, isn’t getting built.

Seattle is facing a similar path. Although the city hasn’t released all the details of the five comprehensive plan options yet—an environmental impact statement that will include this information has been delayed from April to November of this year—a high-level “scoping” document says that new, market-rate “plexes” will have to fit within current height and zoning limits for single-family areas, which means Seattle will likely run into the same problem as Minneapolis.

Paradoxically, if we do increase Seattle’s theoretical zoning capacity without actually increasing the amount of housing, urbanists could end up playing directly into NIMBY hands.

The city’s Mandatory Housing Affordability Program, which allows developers to build more density in small portions of formerly exclusively detached, single family homes, in exchange for building affordable housing (or paying for it elsewhere) provides a local example of what happens when the city plans for a type of development without considering whether it’s practical for developers to build.

Townhouses, which were the city’s dominant low-density development type before MHA passed in 2019, have all but dried up, shrinking from more than 1,800 permits filed in 2018 to just 165 in the first nine months of 2023. This isn’t because people weren’t buying townhouses; it’s because developers can’t make them pencil out now that they have to either build one or two affordable townhouses per four- or six-house development or pay tens of thousands of dollars in MHA fees.

Paradoxically, if we do increase Seattle’s theoretical zoning capacity without actually increasing the amount of housing, urbanists could end up playing directly into NIMBY hands. For decades, traditional neighborhood activists have argued against upzoning by pointing out that there is already “plenty of zoning capacity” in Seattle to accommodate future growth; in other words, if every parcel of land in Seattle was built out to its maximum allowable density, there would be enough housing for everyone.

Let’s stop equivocating, or using euphemisms, to describe the changes we must make in order to have any hope of being the kind of city where working people can afford to live. We need apartments where people can live—not imaginary plexes that “fit in” to our existing suburban-style neighborhoods.

The problem with this faux density argument is that capacity isn’t housing until someone builds it. Until then, it’s existing housing that people already live in—from the  affordable dingbat apartment building that’s been hanging around since the 1960s to the Craftsman bungalow that could be, but hasn’t been, replaced by a triplex. This “capacity” argument has lost currency in the face of Seattle’s growing affordability crisis, as Seattle residents have generally come to accept that we probably could stand to add a bit more density. Adding more theoretical  capacity—even, perhaps especially, in the absence of actual housing—will only give NIMBYs another reason to argue that Seattle has plenty of room to grow.

I’m not completely giving up hope on the possibility that Seattle may yet build more rental housing, and even affordable housing, in its traditionally single-family areas. But I am going to start looking beyond “fourplexes” and “sixplexes” as that housing solution, because I don’t believe it’s going to happen—at least, not in a way that meaningfully makes a dent in the 112,000-unit shortfall we’re expected to face over the next 21 years. Instead of “plexes,” we need apartments—and that means building densely, not tentatively, everywhere in the city.

We could start by re-legalizing small, aPodment-style apartments and bringing back single-room occupancy units—housing types that may shock the sensibilities of people who think everyone needs two sinks in their 180-square-foot microunit but that will be popular among people who don’t have a lot of stuff, or those who would otherwise be unsheltered.

So let’s stop equivocating, or using euphemisms, to describe the changes we must make in order to have any hope of being the kind of city where working people can afford to live. We need apartments where people can live—not imaginary plexes that “fit in” to our existing suburban-style neighborhoods.