Category: Sightline

Affordability, Health, homelessness, housing, legislature, Mayor Durkan, Morning Fizz, Sightline, Urbanism

Inslee Issues Pro-Housing Partial Veto; Another Avoidable Outbreak Preempts Planned Sweep; Affordable Housing Data Supports Single-Family Upzones

1. An important follow-up story to our Olympia coverage: On Thursday, Governor Jay Inslee vetoed several sections of a supposedly pro-accessory dwelling unit bill that ADU advocates convinced him failed the smell test. A pro-affordable housing coalition starring the AARP, Sightline, the Sierra Club, and the Washington State Labor Council, initially supporters of the legislation, wrote Inslee a letter after the session ended telling him the bill would actually end up being detrimental to the pro-housing movement.

PubliCola wrote about this bill all session, noting that housing development antagonist State Rep. Gerry Pollet (D-46, Seattle), the House Local Government Committee chair, derailed the bill with, among other objections, odd complaints about “profit tourism” (a scary-sounding, but frankly meaningless epithet).

State Sen. Marko Liias (D-32, Edmonds) originally passed the bill on the Senate side, but by the time it came back from the House, thanks to Rep. Pollet and Rep. Sharon Shewmake (D-42, Bellingham), the legislation was watered down to the point that the affordable housing advocates felt compelled to send their letter urging Inslee to veto major portions of the bill, including provisions that gave cities veto power over ADU mandates.

Inslee’s message was clear: Let’s actually do something to create more affordable housing stock.

Now that the governor has weighed in, I’ll be working to pass an even stronger bill in 2022.

After Inslee’s partial veto, Liias told PubliCola:

“We need more housing options. Renters and homeowners both benefit from ADUs. I was disappointed in the House amendments. Now that the governor has weighed in, I’ll be working to pass an even stronger bill in 2022.”

A key piece of Liias’ bill did survive Inslee’s pen, a section that prohibits local rules barring non-related people (such as roommates) from sharing housing.

2. A new outbreak of an unspecified gastrointestinal illness temporarily halted a planned sweep at a homeless encampment near White Center this week, after King County Public Health recommended strongly against uprooting people with severe symptoms such as diarrhea and vomiting.

The Centers for Disease Control has recommended that cities refrain from sweeping encampments during the pandemic, because redistributing large numbers of people throughout cities causes an obvious risk of community transmission. But the city has begun ramping up sweeps of homeless encampments in recent months anyway, citing the need to keep parks and playfields safe and clear for kids going back to school, among other justifications.

“In general, we recommend taking into account potential communicable disease risks if there is a plan to move an encampment where there is either an active disease investigation or an active outbreak.”—King County Public Health

A spokeswoman for the public health department, Kate Cole, said the county is trying to figure out what pathogen is making people at the encampment sick. There have been several reported outbreaks of shigella among homeless people in the last year; the disease spreads rapidly when people lack access to sinks with soap and running water, which the city, under Mayor Jenny Durkan, has been reluctant to provide.

“In general, we recommend taking into account potential communicable disease risks if there is a plan to move an encampment where there is either an active disease investigation or an active outbreak,” Cole said. “We understand there are many health and safety factors that play into the City’s decisions about moving encampments and we maintain regular coordination with the City to address these complicated situations.”

The city identifies a list of “priority” encampments each week and directs outreach providers to offer shelter to people living at these sites before removing them. In addition the the White Center encampment, the city just placed encampments in Ballard and on Capitol Hill on its priority list.

3. We’ve got some more data to help put the city’s recent Mandatory Housing Affordability report in context. Last week, you’ll remember, we added some initial context to the report: Based on the total affordable housing dollars generated by development in the 6 percent sliver of the city’s single family zones that the council upzoned in 2019, it appeared that those areas were producing more funds for affordable housing than expected. Continue reading “Inslee Issues Pro-Housing Partial Veto; Another Avoidable Outbreak Preempts Planned Sweep; Affordable Housing Data Supports Single-Family Upzones” →

Density, Development, housing, Maybe Metropolis, Sightline, Urbanism, zoning

Maybe Metropolis: Outdated Environmentalism Stalls Pro-Housing Legislation in Olympia

Despite his old-school, anti-development environmentalism, Accessory Dwelling Units fit right into Rep. Pollet’s North Seattle district. He should stop stalling them in cities statewide.

By Josh Feit

Back in 2017, the environmental group Futurewise had an “OK Boomer” moment when it came to light that two of their board members, Jeffrey Eustis and Dave Bricklin, were independently suing the city of Seattle to stop two affordable housing initiatives: The city wanted to increase the production of accessory dwelling units (also known as granny flats) and upzone a small portion of Seattle’s exclusive single-family zones to accommodate more density.

The old-school, anti-development environmentalists (Eustis against ADUs and Bricklin against zoning increases) didn’t grok that Futurewise’s up-to-date vision of environmentalism now prioritized urban density as a component of equity and sustainability. After years of process monkeywrenching, Eustis, representing the Queen Anne Community Council, and Bricklin, representing the Wallingford Community Council, failed to stop Seattle’s zoning changes. In an appropriate denouement that signaled its shift forward, Futurewise replaced the anti-development pair (who were both founding board members) with new faces, including Angela Compton, the young woman who actually led the grassroots campaign to pass the city’s upzone agenda. Ouch.

Futurewise, currently advocating for a slate of pro-density bills in the state legislature, may be experiencing yet another “OK Boomer” moment, as longtime North Seattle State Rep. Gerry Pollet (D-46, Seattle) has already tabled a Futurewise-backed bill that would have encouraged more ADUs in cities statewide.

Clinging to outdated anti-development tropes, Pollet (who got some naive positive press last week for denouncing a boneheaded Building Industry Association of Washington propaganda video) has been the number-one opponent of the inclusive, pro-housing agenda in Olympia over the last several legislative sessions.

For three years straight, Pollet, the chair of the pivotal House Local Government Committee, has sabotaged a series of pro-housing bills that would have reformed ADU laws in urban areas by prohibiting owner occupancy requirements, eliminating parking mandates, loosening minimum lot size and square footage requirements, and getting rid of street improvement mandates. The urban planning nerds at Sightline get into the weeds of the latest ADU bills here.

By the way, I understand that cities need to do something more dramatic than add ADUs to housing stock if they want to successfully address the affordable housing crisis, but it’s a necessary first step to dismantling exclusionary zoning rules.

And the numbers in Seattle, Tacoma, California, and Oregon show that reforms like these  do increase ADU production. For example, after Seattle adopted new rules in 2019 to allow two ADUs per lot and eliminate parking and owner occupancy mandates, the numbers soared. In fact, ADU production grew 69 percent in Seattle in 2020 compared to 2018. The fact that this swift growth represents an increase from 227 new ADUs to 566 just illustrates the need for more far-reaching pro-density policies.

A quick history lesson: In 2019, Pollet watered down a pro-ADU bill proposed by Rep. Mia Gregerson (D-33, Kent) and supported by Reps. Noel Frame (D-36, Seattle), Nicole Macri (D-43, Seattle), and Joe Fitzgibbon (D-34, Seattle, Vashon Island)—to the point that the policy architects behind the bill, Sightline, pulled their support. After that, the legislation died.

In 2020, after Gregerson passed another sweeping pro-ADU bill through Fitzgibbon’s Environment and Energy Committee, Pollet voted against it in the Appropriations Committee (even though it was watered down), and it eventually died in the Rules committee.

The legislature did pass another pro-ADU bill that year. However, it was dramatically watered down; the original bill would have gotten rid of owner occupancy requirements, allowed two ADUs per lot, and eliminated parking requirements for ADUs within a half mile of transit. The final bill got rid of the first two reforms and sliced down the new parking rule to a quarter mile.

This year, Pollet’s committee tabled yet another best-practices ADU bill that was proposed by Gregerson and supported by Seattle progressives like Macri and Kirsten Harris-Talley (D-37, Seattle). And then, last week,  Pollet and his committee gutted SB 5235, an additional pro-housing bill, this one sponsored by Sen. Marko Liias (D-21, Mukilteo); Liias passed the legislation out of the senate 46-3 with support from Seattle progressives such as Rebecca Saldaña (D-37, Seattle) and Joe Nguyen (D-34, Seattle).

Continue reading “Maybe Metropolis: Outdated Environmentalism Stalls Pro-Housing Legislation in Olympia” →

Affordability, Featured, housing, Sightline

Nonprofit Housing Providers Struggle to Pay Bills In COVID Crisis

This is an excerpt from a piece that originally appeared at Sightline.org, where you can read the entire story.

It’s the first of May. As another rent day arrives, tenants aren’t the only ones seeking relief from the financial fallout of COVID-19, which has led to widespread job loss in nearly every economic sector, and the highest unemployment rate since the Great Depression.

Cascadian affordable housing providers that receive funding through the federal Low Income Housing Tax Credit (LIHTC) program, which helps to fund about 90 percent of all new affordable housing in the US, have also been hit hard by the crisis. Nonprofit providers of subsidized housing for low- and moderate-income wage earners report unpaid rent rates of 20 percent or more, a shortfall that has left many struggling to balance their books.

“Our delinquency rate shot way up, and we are now accepting partial payment for rent and doing some payment plans,” said Sharon Lee, the director of the Low Income Housing Institute, which serves communities throughout the Seattle metro area and in Olympia, Washington. “We’re working with tenants and doing partial payment plans for people who’ve recently become unemployed.”

In Oregon, about half the tenants in buildings owned by REACH Community Development earn income from wages. Anthony Petchel, REACH’s philanthropy and public relations director, says about 10 percent of their tenants had asked for rent forbearance as of late April, but he expected that number to go up as people continue to weather the economic collapse. “[The issue] is having the cash to manage the cash flow disruption” from missed rents, and “how long can all the organizations manage that,” Petchel says.

Daniel Delfino, the program and planning development director for the Alaska Housing Finance Corporation, said that once the 60-day rent and mortgage freeze ordered by Gov. Mike Dunleavy ends, there are few protections for struggling tenants or for nonprofit housing owners with mortgages to pay.

Currently, nonprofit landlords are working out arrangements with tenants on a “case by case basis,” he said, but with more than 40,000 Alaskans unemployed, it’s unclear when or whether rent payments will get back to normal. “There are usually reserves that are put in place to handle four to six months of operating expenses and debt payments. Those aren’t set up to handle something like COVID-19, when the economic occupancy”—the percentage of people who pay their rent—”goes down from 93 percent to 40 percent.”

Enterprise Community Partners, a national low-income housing advocacy and funding group, estimates that a 10 percent income loss among renters could add up to $238 million per month in losses to groups like these that run LIHTC-funded buildings across the US. That’s based on an average loss of $792 in monthly rent from the three million tenants in LIHTC buildings that Enterprise estimates could miss rent payments if they don’t get assistance.

Susan Boyd, the executive director of Seattle nonprofit provider Bellwether Housing, said wage earners had a delinquency rate of about 21 percent as of mid-April, up from 2 to 3 percent in a typical month, as “about 30 percent of the people who were wage earners have lost all or a part of their income.” Likewise, Chris Persons, the director of Seattle’s Capitol Hill Housing, said April rents are falling about 22 percent short.

It’s easy to see why. With a patchy social safety net, hourly wage earners were already on the precipice of financial disaster before a nationwide economic shutdown led to mass unemployment.

A full-time worker making minimum wage in Oregon earns just over $23,000 a year; in Washington, that number is just over $28,000. According to the Urban Institute, the median income for US renters in low-income tax credit buildings was $17,470 before COVID, and about four in ten of these renters spent more than 30 percent of their income on housing.

In King County, which includes Seattle, about 77,000 people making less than $40,000 a year had lost their jobs as of April 16; in Multnomah County, which includes Portland, about 38,000 low-income jobs had vanished. The pandemic puts the US housing crisis on steroids. Low-income renters often live paycheck to paycheck, and if they lose their jobs they simply can’t pay rent. The eviction moratoriums enacted in many jurisdictions throughout the US only grant a reprieve.

Even organizations whose revenues don’t rely primarily on renter incomes—groups like Plymouth Housing and the Downtown Emergency Service Center in Seattle, whose tenants pay their rents using federal vouchers and stable income sources like Social Security Insurance (SSI)—are struggling.

“We rely a lot on local dollars, most of which come from specific local taxes and fees like the [state] document recording fee for housing and homelessness, and of course those could go down if real estate transactions slow down, which seems likely,” DESC director Daniel Malone said. “And as local government taxation goes down, there certainly could be some squeeze on what they choose to fund and what they choose to cut.”

On April 21, Seattle’s City Budget Office released a worst-case revenue forecast that predicts a 2020 funding shortfall of up to $300 million, with some of the biggest revenue losses coming from the construction, retail, and food service sectors. In Portland, a smaller city, the shortfall could be as much as $100 million.

Read the entire story here.

Affordability, Density, Development, housing, land use, Sightline, Urbanism

Getting Smarter About Public Land: Lessons from Across the Northwest

The full version of this story is available at Sightline.

As cities across Cascadia look to technological solutions, such as modular construction, to help address the region-wide shortage of affordable housing, one of the biggest factors currently driving up costs is also one of the most resistant to intervention: Land prices, which can add tens of thousands of dollars to the cost of producing a single subsidized apartment.

Cities don’t have a lot of tools for lowering land costs, but they do own a lot of land—Seattle, for example, is sitting on more than 180 excess or underutilized parcels, many of which are well-suited for homebuilding.

To maximize taxpayer value, most cities usually auction off their excess land to the highest bidder, just like any private landowner would do. But in cities with hot real estate markets, affordable housing developers typically don’t have the financial resources to compete for land with market-rate developers. So publicly-owned land ends up in private hands, forever forfeiting its potential to help overcome one of the biggest barriers to the construction of subsidized homes: acquisition of land to build on. The backers of Seattle’s Rainier Valley Food Innovation Hub, for example, have been repeatedly outbid by private developers.

But what if local governments viewed surplus land not as a revenue generator but an opportunity to reduce displacement and stabilize communities? Several Northwest cities have begun asking that very question. The result is a growing string of affordable housing projects stretching through Cascadia—from the largest one-time investment in housing on city-owned land in Canada’s history, to an affordable housing and preschool development on the site of a former fire station in Seattle.

How much publicly owned land is there?

Enterprise Community Partners’ interactive mapping tool shows publicly owned properties.

Until recently, if you wanted to know what public land was available in the Seattle area, there was no central database—no way to easily find out, say, if a certain fenced-off plot of land that looked ripe for development was owned by the city or Sound Transit or King County, whether it had the right zoning, and whether it was up for sale. In 2015, newly elected King County Assessor John Arthur Wilson decided to do something about that; he directed his office to create a map of every piece of publicly owned land inside county limits.

The nonprofit Enterprise Community Partners expanded on Wilson’s effort, recently launching the beta version of an interactive tool that allows any interested party to use filters to narrow down a list of about 10,000 developable public properties according to specific characteristics, such as zoning, square footage, and eligibility for tax credits.

“In high-cost cities, it’s really becoming impossible for nonprofits to develop on privately owned land,” James Madden, the Seattle-based senior program director for Enterprise, says.  “The average land price, as a percentage of the total cost of development in Seattle, is about 10 to 15 percent, and if land continues to get more expensive, [nonprofits] will be priced out completely. Once you’re paying more than $30,000 a door [for land], it gets very hard for a public agency to justify spending beyond that level on acquisition.” Market-rate developers can charge higher rents to compensate for high land costs—an option not available to affordable housing providers.

Changing the rules that have prevented public land from supporting affordable housing

Wilson, the assessor, says the mapping tools might have been merely informational—a database of public land for sale at prices out of reach for most nonprofit housing builders—if the state hadn’t taken the next step, by giving local governments the authority to sell their land below market value or give it away for free. “We raised this issue with [state House speaker Frank Chopp] last year,” Wilson says. “After we pulled together the list of publicly owned land, we said, ‘Here’s the problem: A lot of this land is owned by agencies that have to sell it for fair market value,” putting even public land out of reach for many nonprofit agencies. In response, Chopp supported, and the legislature passed, a bill allowing state and local agencies to transfer land to affordable housing developers at little or no cost.

Local leaders quickly took notice. Seattle city council freshman Teresa Mosqueda, who campaigned on the need to build more dense, affordable housing, proposed and passed two pieces of legislation this year designed to encourage the city to give away its surplus property for free. The first, which passed in July, made it possible for Seattle’s electric utility, Seattle City Light, to dispose of its excess land at little or no cost—a major departure from its previous policy, which required the utility to sell property at fair market value.

The second, which the council passed unanimously earlier this month, requires the city to consider whether surplus land can be used for affordable housing and, if so, to make it available for that purpose. The legislation also allows the city to hold onto land while a nonprofit housing partner secures financing; directs the city’s Office of Housing to partner with “culturally relevant and historically rooted” nonprofits in areas where residents are at high risk of economic displacement; and mandates that 80 percent of the funds from any outright sale of city property go into one of the city’s affordable housing funds.

Read the whole piece at Sightline.

Affordability, housing, Sightline

Modular Construction: A Housing Affordability Game-Changer?

Is the future of apartment construction indoors?

That’s the bet a number of modular construction companies in the Pacific Northwest are making. Building in Cascadia is expensive. Labor is scarce, and rents have surged since the last recession. Firms like Blokable, Katerra, and OneBuild say that by moving much of the process off building sites and onto factory floors, they can cut the cost of constructing multifamily housing by over half. They also say they can finish projects in half the time. If these claims prove true, these companies and other like them could shake up the housing industry in cities like Seattle, where the total cost to produce a single apartment home can surpass $300,000.

The costs of physical construction—the “hard costs”—are the single biggest determinant of the selling price or rent of a new home. If modular construction slashes hard costs, homebuilders will make more homes—precisely what’s needed to control rising rents in cities facing housing shortages. Cutting hard costs also makes it possible to stretch public funds further, yielding more subsidized homes for low-income families as well.

So modular construction could be a housing affordability game-changer.

Modular construction is hardly new. Mobile homes, a type of modular housing, have been a popular form of inexpensive housing for decades, and single-family modulars have become a relatively cheap option for first-time homeowners and empty nesters who don’t need lots of space. What is new is the idea that modular construction methods can be used to revolutionize the entire construction industry. This could be especially true for apartments and condos—the productivity of which has barely increased since 1945, according to the McKinsey Global Institute—and bring down the cost of housing in the process.

To understand why multifamily housing construction is so expensive, it helps to know how it’s usually built. The orchestrator of the whole process is the developer—the business person who puts the deals together, securing funds from a bank or investors (or government or charitable agencies, for subsidized housing), and hiring professionals to design and construct the building. Typically, the developer selects a general contractor, and that contractor, in turn, hires subcontractors, who then often hire sub-subcontractors, and so on. Eventually, the contractor at the bottom of this chain actually does the work. Every layer of subs takes on some of the huge risk of a giant construction project but also drives up costs.

Meanwhile, construction labor is at a premium nationally in the United States, and even more so in Cascadia’s booming major cities. According to a recent analysis of affordable and market-rate multifamily construction costs in Portland, “a severe shortage of both skilled and unskilled labor in the PDX construction market” has led to cost escalation greater than the rest of the country.

This shortage boosts construction wages and the cost of housing. On top of that, many construction workers cannot afford to live in the expensive cities that most need more housing, creating a vicious circle of rising rentsexacerbated by a lack of a local workforce to build homes, and so on.

Modular housing minimizes the layers of contractors, putting most or all of the construction processes under the control of one company. It also standardizes everything it can, making home construction more like a modern, automated clothing factory and less like a tailor shop, where each garment is made by hand to custom specifications.

Read the rest of this story at Sightline.

Development, gentrification, housing, labor, Sightline, Urbanism

Is It Time for Mixed Industrial-Housing Zones?

 

The Fair-Haired Dumbbell building, on Portland’s Central Eastside.

The full version of this story is available at Sightline. 

Seattle’s Interbay industrial district is a landscape dominated by warehouses, small manufacturing plants, and parking lots, with hardly a sidewalk to be found. Unlike other former manufacturing districts in Cascadia’s first city, like Amazon-occupied South Lake Union, Interbay has very few buildings that would qualify as “mixed-use,” and that’s by design; for decades, the district, like Seattle’s other industrial areas, has been “preserved” by zoning that prohibits most non-industrial uses, including office space, large retail stores, and housing.

In recent years, though, the city’s housing shortage has led developers to take a new look at the city’s previously sacrosanct industrial areas and ask: Why couldn’t people live here? Jeff Thompson, president of the Freehold Group, owns several properties in the area. A couple of years ago, he did some back-of-the-envelope math and discovered that by taking just five percent of the city’s vacant industrial land—about 28 acres—and rezoning it to allow six-story buildings, the city could accommodate 6,800 new apartments, without touching Seattle’s famously development-averse single-family neighborhoods. It’s a possibility relevant not only in Seattle but across Cascadia and beyond, everywhere housing shortages are escalating rents and pinching off opportunity for urbanites.

“Most of our industrial areas are derelict—full of potholes, with streets that were never meant to be places for people,” Thompson says.

Developers could improve those areas, adding sidewalks and paving crumbling streets themselves at a lower cost (and a lower lifespan) than expensive, heavy-duty reinforced concrete pavement typically found in industrial areas. In exchange, they would be allowed to build housing for some of the thousands of people who continue to pour in to Seattle every year—more than 100,000 of them between 2010 and 2017 alone.

Yes, those new residents might find themselves living next to warehouses where trucks go in and out day and night. Yes, they may have to get used to the sound of railroad traffic. But how is that different, Thompson asks, than living in the middle of any big city?

“You can go to Brooklyn or Chicago and find an apartment next to an elevated rail line,” Thompson says. “Is it inhumane of us to provide housing like that?”

Like Seattle’s evolution from sleepy outpost to big city, the definition of “industrial” has been quietly changing for at least the past several decades. Instead of factories spewing toxic fumes and “enormous vats of splashing and spluttering metal,” Thompson says, the term now encompasses firms that make software that enables customers to make their own robots at home, or labs where food production companies test new products. Or companies like Interbay’s Thermetrics, which makes mannequins that measure how fast an air conditioner cools down a car, or how effectively a sleeping bag retains a person’s body heat.

The idea that people might choose to live in an industrial area is no longer revolutionary. At the TAXI development in Denver’s River North industrial area, a company that manufactures boots for snowboards sits cheek to jowl with an outpost of the international advertising firm Saatchi and Saatchi. The firm is just downstairs from 48 units of housing, which overlook a pool built from recycled shipping containers that offers a view of an active railroad line. Also on site: Business incubators, a pot shop, design and architecture studios, and several software firms. Several nearby developments follow a similar mixed industrial-housing model, and developers have proposed hundreds of units of affordable housing as part of a future project in the area.

The success of the TAXI project, Thompson says, proves that industrial areas are compatible with housing. “It’s an industrial area, and it is a popular, cool place to be,” Thompson says. “People may say, ‘No one will want to live [in an industrial area]—well, they do want to live there.”

Read the rest of the story at Sightline.org.