South Downtown's biggest challenge is that much of the area lacks the full spectrum of uses that make up a complete neighborhood. Most importantly, there is a shortage of housing, and in particular, market-rate housing. The city is considering new zoning to help change that; but the proposal may not reflect local economic realities.


View of South Downtown and beyond from the Bank of America Tower

Seattle's South Downtown is a complicated place.

With access to light rail, commuter rail, Amtrak, buses, ferries, and a future streetcar, it is the most important transit hub in Seattle, if not the entire Pacific Northwest. It is located next door to the region's largest job center to the north, and to Seattle's central waterfront to the west. It encompasses the Chinatown/International District, the social nucleus of multiple Asian cultures in Seattle. It is home to a disproportionately high concentration of low-income housing and social services, as well as Seattle's largest aggregation of historic buildings.

South Downtown's biggest challenge is that much of the area lacks the full spectrum of uses that make up a complete neighborhood. Most importantly, there is a dearth of housing, and in particular, market-rate housing.

In recognition of all this richness and potential, Seattle's Department of Planning and Development conducted a planning process for South Downtown that began in 2005, and has culminated in a proposal for a set of  zoning changes now being reviewed by the City Council (see maps at the bottom of the post). For those interested in commenting on the proposal, the council's Committee on the Built Environment is holding a public hearing tonight, Monday, November 22, 2010, at 5:30 p.m, at the Wing Luke Museum Auditorium, 719 S. King Street.

The "Livable South Downtown" planning study is a valuable and comprehensive piece of work with a wide range of constructive ideas. But in the end, for most people, the meat of it comes down to building height. As shown in the maps below, the proposed zoning would significantly increase allowed building heights in most areas, and that makes sense if the goal is to stimulate development that will bring new housing to South Downtown neighborhoods.

But it's not that simple, because one of the key strategies invoked by the plan is incentive zoning---a mechanism by which the city grants developers a building height bonus in exchange for providing public benefits such as affordable housing, open space, and historic preservation (see this pdf for details).

The tricky part of incentive zoning is determining the sweet spot where the tradeoff between the incentive and the cost of the public benefit makes financial sense to developers. The relatively large height bonuses offered in many of the proposed zones in South Downtown would appear to be a strategy to make the incentive irresistible.

But still, there is skepticism within the development community about whether the proposed incentives would really pencil out in South Downtown. Given local economic realities, the risk is that developers would leave the incentive on the table and only develop to the base height. And for the most part, those base heights are inappropriately low for such a key location in Seattle.

That dynamic exposes some fundamental flaws with incentive zoning. If the desired outcome for South Downtown is new buildings that reflect the upper ranges of the incentive-based heights, then we shouldn't be setting ourselves up for failure by relying on the vagaries of financial feasibility in the private market to make that happen.

More generally, the subtext of incentive zoning seems to be that taller buildings are a bad thing, and so we should only allow developers to produce these bad things if we can squeeze something good out of them to make up for it. The reality is, however, development of high-density market-rate housing in South Downtown neighborhoods would actually be a public benefit in itself.

So how could the current zoning recommendations be improved to be more effective at catalyzing the housing that everyone wants to see in South Downtown? There's no blog-sized answer to that. The South Downtown study is five years in the making. Is it time to say good enough and approve it, or should we heed the skeptics and try to make it better reflect realities on the ground? I'm agnostic.

In the bigger picture, what we're up against is the need for a public sector powerful enough to steer market forces such that we get development where it will provide the most public benefit. High-capacity transit station areas are perhaps the best example, and we are still struggling with a dire lack of investment all along the new Sound Transit Link light rail line in southeast Seattle. In these cases where the development economics are borderline to begin with, the public sector needs to step up---we can't hang it all on extracting public benefit from developers.

Ultimately, public benefit takes public investment.


Proposed zoning for South Downtown (click image to enlarge)

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Existing zoning for South Dowtown (click image to enlarge)