Isn't it Weird That: Incentive Zoning Edition

A weird thing we've noticed about the city's incentive zoning policy to spur affordable housing.

By Josh Feit February 17, 2014

Isn't it Weird That

1. Isn't it weird that incentive zoning, the policy of making developers pay a fee into an affordable housing fund for the right to build more units (build more densely), has produced a paltry amount of affordable housing, yet it continues to be a go-to policy for lefty city council members such as Nick Licata, Mike O'Brien, and Kshama Sawant, the main advocates on the council for low-income people? 

Last year, in the debate over the South Lake Union upzone, Licata wanted to increase the fee from then-Mayor Mike McGinn's $15 fee per additional square foot of density to $96. 

And asked if she supported higher incentive zoning fees, Sawant told PubliCola recently:

"Yes, absolutely. And they should go further. Council member Licata made a very good point when he was arguing for a $99 [per-square-foot fee]. He pointed out correctly that $99 was actually at the very low end" compared to cities like San Francisco.

It might be politically popular to charge developers, but here are the stats. According to the city's own data, 62 percent of eligible developments since 2001 did not use the incentive. For example, in the incentive zoning incubator, South Lake Union, only six of 20 projects used the incentive zoning program.

What's been left on the table because developers didn't build to capacity thanks to the fee? According to the city, $49.5 million in affordable housing and day care program funding. Additionally: $74 million in sales tax revenue went poof along with $100.8 million in possible property taxes.

A Downtown Seattle Association report succinctly sums up the weirdness: "Incentive zoning taxes housing supply, ironically, in an effort to produce housing supply."

I'd add: In addition to wanting affordable housing, we also want density. But you know what else was left on the table according to the city's data? Potential residential units: 3,811 of them.

Even though the city is set on giving workers a $15 living wage, our workforce housing policy wouldn't be geared toward adding affordable housing for that group of people, but rather, to a group making about $27 an hour.

2. Isn't it weird that the same report found 83 percent of rentals are available to people making 80 percent of the city's area median income—$45,100 for a single person—yet the city is focusing its zoning policies on those making between 60 and 80 percent of the median income?

Image from Downtown Seattle Association

The real need for affordable housing is for people making 50 percent, $30,350 for a single person, and below the area median income. The city found that just 37 percent of Seattle's rentals were affordable to that bloc.

With all the focus on raising the minimum wage right now, it's worth noting that 50 percent of the median translates to about $17 an hour. That means: Even though the city is set on giving workers a living wage ($15), our workforce housing policy wouldn't be geared toward  adding affordable housing for that group of people, but rather, to a group making about $27 an hour, those making 80 percent of the area median.

For more about the odd focus on workforce housing, that is, housing for those making between 60 and 100 percent of the median, check out Dan Bertolet's piece over at CityTank.

We have a message in to City Council member Mike O'Brien, the chair of the land use committee.


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