Murray, O'Brien Champion Affordable Housing Plan

Murray unveils housing recommendations and another big compromise

By Josh Feit July 13, 2015

The mayor's affordable housing committee, known as the Housing Affordability and Livability Agenda (HALA) released its recommendations today; there are 65 specific recommendations, including everything from getting rid of parking requirements for accessory dwelling units, to developing Sharia-compliant loans for religious Muslims who are prohibited from paying interest, to encouraging pod apartment developments through the multifamily tax exemption credit program.

The big recommendation, though, was this: The HALA committee dropped the idea that the city council had passed under the lead of Mike O'Brien last year for an affordable housing fee on all new development, the so-called linkage fee. Instead, the mayor’s committee, with O’Brien’s blessing actually (he was a featured speaker at Murray's press conference today), recommended a commercial-only affordable housing linkage fee plus a mandatory inclusionary zoning program. Mandatory inclusionary zoning means all new development (in 12 percent of the city, in this specific case—urban villages, downtown, mixed-use and multifamily zones, and development near transit) must make five to seven percent of units affordable (or a pay into an equivalent affordable housing fund.) An additional four percent of the city would be upzoned as part of the program as well: a sliver of the 65 percent of the city that’s zoned exclusively for single-families—the parts that are already on the edges of multifamily zones and/or near transit and already in the middle of urban villages, like the Crown Hill neighborhood, for example. All these zones, the urban villages along with the single-family turf, would be upzoned one story (lowrise two zones, for example, would go from 30 to 40 feet.)

“We’re adding value (for the developer),” mayor Ed Murray’s policy shop director Robert Feldstein said, “and we’re taking some of it back.” The combo of the commercial linkage fee and the mandatory inclusionary zoning program  will fund 6,000 units, according to Murray, affordable at 60 percent of median income ($37,680 for an individual.)

The mayor has actually called for building 20,000 affordable units over the next 10 years, and the committee’s recommendation counts on the housing levy—a citywide property tax (which the committee recommends doubling from $145 million to $290 million)—as well as asking the legislature for a .25 percent real estate excise tax and an increase in the state’s Housing Trust Fund to fund the other 14,000 units, which would largely be affordable at 30 percent of the median income.

Asked about the switch from his original linkage fee proposal on all new development to a commercial-only linkage fee, O’Brien said today: “The ultimate goal for me has always been a mandatory program that required all new development to provide affordable housing, and whether we use the title ‘linkage fee’ or ‘mandatory inclusionary,’ I was less concerned about the title and more concerned about the outcome. And I believe what we have here today, the framework in front of us, is actually going to provide more affordable housing at a deeper subsidy level than the linkage fee we proposed last fall.”

At the 5 percent the council’s original linkage fee proposed charging (on average, over the different zones in the program), it would have raised $546 million and produced 5,660 units over ten years, according to the city. The new proposal, the mandatory inclusionary zoning program and the commercial linkage fee combo, will raise $541 million and produce 6,043 units, the city says. More units for slightly less money, they say, because the zoning changes create more development opportunities and the majority of housing will come from on-site production rather than paying into a fund. (It costs the developer more to pay into the fund than to build on site in most of the upzoned zones—with the exception of downtown highrises, where they’re expected to go with the pay option.)

Murray, who name checked O’Brien several times during his speech, flaunting his success at crafting compromise solutions, said today: “At the heart of our plan is a grand bargain between developers and housing advocates that will build 6,000 units of housing for low-income residents.”

He then paused to point out the competing interests in the room that were on hand to cheer the proposal—low-income housing advocates and for-profit developers, saying that the city was ending a “two-decade war about how we move forward with affordable housing.” He said his “grand bargain” showed that Seattle could be “a model for the rest of the nation” getting “progressive results by working together," and boasted, referencing the scale of the zoning changes: “For the first time, through mandatory inclusionary housing, we will require market rate developers to build a minimum number of affordable units of any new construction of multifamily housing.”

There were some dissident voices, however. Tenants rights advocate Jon Grant, a city council candidate and a task force member who abstained on the proposal, held a press conference after Murray’s announcement today alongside council member Kshama Sawant, to say the committee’s proposal didn’t go far enough. “We want developers to pay their fair share,” he said, “and this proposal falls a little bit short.” Grant and Sawant stood by the broader linkage fee that included residential construction. He also called for rent control. However, Grant made it clear the mayor’s proposal “was a great step in the right direction.” He said his alternative plan “was not an attempt to sink the mayor’s proposals, but an effort to improve it.” Grant said his plan would focus on housing for those making 30 percent of the median income, $18,850 for an individual, and estimated his linkage fee plan would put $1.2 billion into affordable housing.

In response, Murray’s spokesman Viet Shelton said: “We’re going to move forward on a proposal that has widespread support on the HALA panel.” (The panel voted 19-2 to approve the proposal; not all 28 members were present for the vote.) “The mayor, council member O’Brien, and the majority of the council think this is a realistic way to build 50,000 new units and 20,000 new affordable units.”



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