The city of Seattle owns 210 properties deemed surplus, excess or underutilized. Some say the city should use these for affordable housing.
You see them all over Seattle and wonder how they could be improved.
They seem almost a waste — underused, short of their potential, perhaps available to offer others some help.
The city of Seattle owns 210 such properties deemed surplus, excess or underutilized.
What Is affordable housing?
City, state and federal policies on affordable housing start with the premise no one should spend more than 30 percent of their gross income on housing.
Policies then focus on area median income (AMI). Let’s say a policy is aimed at tenants below 60 percent of the AMI. For a single person that means income below $37,680.
That translates into an affordable rent of no more than $1,008 for a one-bedroom apartment, including utilities.
If two or more people make up a household, or if a household needs two or more bedrooms, the incomes and rents change accordingly.
Advocates with divergent politics are pushing City Hall to use these orphan properties for affordable housing.
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In response, members of Mayor Ed Murray’s staff say they’re doing it to some degree and will consider using more surplus parcels for housing. But they are skeptical about the advocates’ more ambitious ideas, such as using the city’s credit card to build affordable housing on orphan lands, or reinstating the city’s Growth Fund, which once dedicated a portion of new construction taxes to low-income housing.
Sharon Lee, executive director of the Low Income Housing Institute (LIHI), is still pushing. Lee said she was scrambling on a recent Friday to find weekend shelter for a family with a 3-day-old infant. City and King County officials told her in emails they were sorry, but they had nothing to offer.
State Rep. Sharon Tomiko Santos, D-Seattle, and LIHI architect Mike Pyatok personally paid to put the family in a hotel for the weekend, Lee said. “That’s a totally unacceptable situation,” she said.
Murray’s 28-member Housing Affordability and Livability Agenda (HALA) committee recommended the city prioritize its surplus properties for affordable housing. The city could develop housing on the properties, the committee said, or sell them and steer proceeds to affordable housing.
Lee, City Councilmember Kshama Sawant and Roger Valdez, an advocate for builders, have called for a bolder step. They argue the city should use its borrowing, or bonding capacity, to finance affordable-housing developments on its underutilized land.
Some of these lands are undeveloped and intended for landscaping, drainage, green space and roadways never built. Others have structures once or still used as fire stations, sign-making shops or senior centers.
But a recent report to the City Council cast doubts on that idea.
The city now has bonding capacity of $1 billion, budget director Ben Noble said. But borrowing that amount could hurt the city’s AAA bond rating, he said. That could lead to higher interest rates on city debt.
And, the city would still need to find funds — new or redirected from existing uses — to pay off the debt. Rents from affordable apartments would not cover the costs of developing and maintaining new buildings.
Using the model of a 100-unit building, with rents affordable to incomes ranging from low to moderate, rents would cover just 47 percent of the project’s debt and operating costs, according to the report. That would leave such a building needing an annual subsidy of $1.4 million.
A smaller building could be used as a model, Noble said, but some cost efficiencies come with buildings closer to 100 units.
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Land for such projects isn’t as plentiful as you might think. The city’s Office of Housing screened out parcels smaller than 15,000 square feet, reasoning that a 100-unit building needed about that much space. It also excluded parcels owned by Seattle City Light and Seattle Public Utilities because assets of those ratepayer-funded agencies can’t lawfully be used for purposes such as housing without the city paying fair-market value for the land.
That leaves just 33 of the city’s 210 underused properties that could be considered for sizable apartment buildings, according to city officials. “The point is, there’s not ginormous amounts of free land out there,” said Miriam Roskin, Office of Housing deputy director.
Some of those 33 sites may not be suitable because they lack access to public transit, or are in areas not zoned for housing, Roskin said.
Lee believes the Murray administration skewed its review of the proposal.
Financing models need not presume all apartments in a building would be subsidized, she said. A project could mix market-rate and affordable units, to increase rent revenues and decrease subsidies.
The city could also look at much smaller buildings, including existing single-family homes, as a way to cut the costs of affordable housing, she said. She pointed to a city-owned vacant four-bedroom Capitol Hill house, which had housed teen parents, as an example.
And, she said, Murray has not advanced one of the HALA recommendations calling for the city to reinstate its Growth Fund, which was eliminated in 2002. The fund used a formula to calculate tax revenues tied to new construction downtown and used a share of those revenues to rehabilitate and develop low-income housing.
Murray staff members say they’re looking for more creative ways to fund affordable housing, and making progress. Only Los Angeles and New York have more housing for the homeless than the Seattle area, said Viet Shelton, the mayor’s spokesman.
With a “linkage fee” on development and a proposal to double the city’s $149 million Housing Levy, Murray is seeking new and expanded sources of funding for affordable housing, Shelton said, “in a way that doesn’t threaten, or isn’t at the expense of general fund programs.”
The mayor’s proposed fees on development alone are estimated to collect about $540 million over 10 years, Shelton said.
Although the City Council and mayor have not set a policy of prioritizing surplus lands for affordable housing, the city has been doing it in practice, Shelton said.
Murray announced in August the city had sold a parcel at Sixth Avenue South and Yesler Way for $1.4 million to a developer. The developer agreed to keep all the apartments in the building affordable to moderate-wage earners for 50 years.
The city is now selling the house on Capitol Hill that Lee pointed to as vacant. The council voted to dedicate proceeds from the sale to affordable housing.
As for the Growth Fund, it was eliminated after the city was constrained by a law limiting property tax increases to 1 percent a year, unless otherwise approved by voters, said Robert Feldstein, Murray’s top policy adviser.
Murray’s new development fee and his proposed inclusionary zoning — which requires new residential buildings to either include affordable units or pay a fee in lieu — are carrying out the goals of the old Growth Fund, but without using city tax revenues.
HALA members were told to consider all ideas, Feldstein said. But they did so “without making tough choices” about competing interests for city funds, he said.
“The question now is what are the available tools we have to shrink the gap between rents and city debt obligation,” Sawant said. “And my office will be looking at these closely.”