SEATTLE is the fastest-growing city in America and is fast becoming one of the least affordable places to live.
We hear a lot about the growth in technology jobs, and we are thankful that more people and businesses are moving to Seattle every day to call it home. But the rapid growth we are experiencing also creates new demand in our neighborhoods for lower-wage workers — people to pull espresso, work at the corner drugstore, make sandwiches at lunchtime and manage dental appointments. One-quarter of new jobs in downtown Seattle over the coming decade will be in these lower-wage positions.
Affordable is a relative term, but in housing it typically means that rent should account for just one-third of a person’s expenses. Yet, 60 percent of Seattle’s lowest-income residents pay more than half of their incomes for rent, leaving precious little for food, utilities, school clothes or any unforeseen expenses that can arise. Seattle will need to add 28,000 new affordable housing units over the next 20 years to keep up with this growth.
We tackle that gap through a variety of tools. Seattle’s voters have repeatedly shown a willingness to tax themselves to help fund affordable housing for lower-income residents. Seattle’s $145 million housing levy is one of the most generous in the country. Nonprofit affordable housing developers in Seattle cobble together resources from housing levy dollars, tax credits, the state Housing Trust Fund and private donors, and all of it together cannot meet the demand we have today and will have in the future for affordable places to live for everyone in our city.
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The Seattle City Council is now considering a new affordable housing linkage fee that would require developers of new commercial and multifamily residential buildings to help meet the affordable-housing challenge. We think this is a good step that helps new development mitigate the impacts on affordability that come with it.
Under this idea, developers would have a choice between paying the fee or providing a modest number of housing units in the new building at rents affordable to households earning no more than 80 percent of Seattle’s median income. For a one-bedroom apartment in 2014 that would mean $1,200 a month or less in rent.
We know that to many people $1,200 per month does not sound very “affordable.” We also know that many developers would elect to pay the fee instead of building new units on-site. Those fee dollars enable Seattle’s Office of Housing to invest in nonprofit affordable housing developments like Compass on Dexter, which opened recently with rents as low as $545 per month.
Some developers have argued a linkage fee would raise rents further. However, rents are determined by the market, and developers cannot simply pass on every new cost to renters. If they could charge more in rent, they would do so today, even without the linkage fee. Additionally, a team of nationally recognized experts evaluated the impact of a housing linkage fee on rents in Seattle. They evaluated the economics of development here and concluded that the projects under way in Seattle are profitable enough to absorb fees at the level we are considering, without constricting new development or significantly raising rents.
Rising housing costs are a major challenge to maintaining our quality of life in Seattle. We have done much as a city to address this challenge, but there is more that we must do. An affordable housing linkage fee should be the next step on our path to a solution.
Mike O’Brien is a Seattle City Council member and chair of the Planning, Land Use and Sustainability Committee. Sally Clark is a Seattle City Council member and chair of the Committee on Housing Affordability, Human Services and Economic Resiliency.