Three brand-new buildings near downtown Seattle with 165 studio apartments that were supposed to be rented at market rates will instead house people leaving homelessness and people at risk of becoming homeless.

The nonprofit Low Income Housing Institute will buy the buildings on Capitol Hill for about $50 million, with city and state housing programs splitting the cost equally. Seattle is using federal COVID-19 relief funds, Mayor Jenny Durkan said at a news conference Monday next to one of the buildings.

Two of the buildings, on Boylston Avenue East and on Harvard Avenue East, will be managed by LIHI for adults. The third, on 10th Avenue East, will be managed by YouthCare for young adults. There will be a live-in case worker at each building, said Sharon Lee, LIHI’s executive director.

The deals will house people quickly and cheaply, relative to the time and cost required to develop low-income projects from scratch, Durkan said, calling the approach “almost like a microwave oven for housing.” The three buildings should be occupied by the end of the year, according to the city.

“This is the fastest we have ever brought housing online,” Lee said.

Tent encampments in public spaces like parks and greenbelts have grown in Seattle during the pandemic partly because the city has lacked shelter and housing spots, Durkan said outside the Boylston Avenue East building, near the Broadway Market shopping center.


LIHI will move people into the new buildings from the tiny house villages it manages for the city, which should open up more of those houses for people now living on the streets, Lee said. To address encampments, “we have to have somewhere for people to go,” Durkan added. Her administration has come under pressure in recent months from advocates who want to see more tiny house villages sited and other advocates who disagree.

Durkan later Monday joined a call with other mayors and U.S. Department of Housing and Urban Development Secretary Marcia Fudge. Seattle will take part in Fudge’s new House America initiative, which will push cities across the country to reduce homelessness with funds allocated by the American Rescue Plan Act that President Joe Biden signed in March, Durkan said.

City Hall is contributing about $25 million for the Capitol Hill purchases, using American Rescue Plan Act funds. The Washington State Department of Commerce also is contributing about $25 million.

Each of the three Capitol Hill buildings has extra-small units, also known as micro-apartments, and each was permitted in 2019, before the pandemic hit.

Since COVID-19 emerged, shaking up the economy and the real estate landscape, City Hall has been hunting for opportunities to help nonprofits convert just-completed apartment buildings into low-income housing.

The transactions announced Monday hew to a model established in February, when the Durkan administration helped LIHI acquire the Clay apartments, a new Capitol Hill building with 76 units. That sale was about $18 million.


Seattle rents have been climbing this year after plummeting in 2020 but have not quite returned to pre-pandemic levels, according to data from the online service Apartment List. The city’s median rent for studio apartments was $1,523 in March 2020, $1,194 in January 2021, and $1,500 last month.

The buildings that LIHI is buying with taxpayer dollars were designed in 2017 and 2018, as Seattle’s tech industry boomed and young workers moved to the city in droves, driving up demand for apartments near downtown. They’re located near jobs, stores, social services and transit options, Durkan noted.

Workers hammered and clanged Monday inside the Boylston Avenue East building, which rises seven stories above Capitol Hill’s western slope. Some units boast postcard views of the Denny Triangle skyline and Elliott Bay.

When a nonprofit develops low-income housing from scratch, the process can take several years and cost as much as $350,000 per unit, said Emily Alvarado, Seattle’s housing director. The city and state are spending an average about $305,000 per unit on the three Capitol Hill buildings, she said.

LIHI negotiated the deals with the developers of the buildings, then applied to City Hall for the funds, Alvarado said. Before granting approval, her office had the buildings appraised to gauge their market value, she said.

“This is real estate, so it’s not unreasonable to think the sellers are making a profit. But our job is to steward public resources in a way we feel we’re getting a good deal,” Alvarado said. “We have said ‘no’ to some developers who have come to us with prices in excess of what we feel comfortable with.”

Each of the three buildings that LIHI is acquiring is still under construction but nearly complete, said Stephanie Velasco, a spokesperson for Seattle’s housing office.

Some apartments will be reserved for people at or below 50% of the area’s median income ($40,500 annually for an individual) and some for people at or below 30% ($24,300 annually), she said. Rents will be subsidized and capped, leaving tenants to contribute no more than about $600 or $1,000 monthly