Seattle politicians are betting the increasingly expensive city can maintain some economic diversity by awarding chunks of money each year from a special fund to organizations that construct affordable-housing projects. Voters swelled the fund with a property-tax levy not long ago, and the City Council could up the ante again Monday by upzoning 27 neighborhoods.
But understanding what Seattle stands to gain is complicated, with money flowing from developers through the city to organizations that select occupants and set rents based on income qualifications and that also use dollars from other sources.
So what exactly does “affordable housing” mean in City Hall-speak, who gets to live there and how much do the projects cost? To illustrate all that, The Seattle Times talked with residents of three projects built with money from the fund and asked officials to share some numbers.
The changes up for a vote Monday would allow developers to build somewhat taller and denser while requiring them to reserve 5 to 11 percent of the space in their buildings for low-income households or to make payments of $5 to $32.75 per square foot into the affordable-housing fund. Kirkland, Redmond, Portland and many other cities already have such policies.
The city says the Mandatory Housing Affordability (MHA) upzones should yield nearly 3,000 rent-restricted apartments over 10 years, according to estimates calculated in 2017 using a complex growth model: about 700 included by developers alongside market-rate units, and nearly 2,300 built with help from about $203 million in fund payments, assuming developers choose the payment option half of the time.
Upzones in 2017 of the University District, downtown and Uptown are supposed to yield another 3,000 affordable apartments, for a total of about 6,000. Officials assume every $80,000 from the city’s fund can be used with money from other sources to build one affordable unit.
Proponents say the MHA strategy smartly harnesses development to also produce low-income housing. Some critics say the requirements are too weak and contend the payment option could thwart economic integration; other critics describe the strategy as inefficient and unlikely to produce the promised number of units. They say developers will raise rents in their market-rate apartments to make up for money lost to the requirements.
City’s estimated results (over 10 years)
Neighborhood upzones (vote Monday, March 18): 2,986 units
- 702 included in developers’ buildings
- 2,284 built with help from $202.9 million in payments
University District (2017): 398 affordable units
- 98 included in developers’ buildings
- 300 built with help from $26.7 million in payments
Downtown (2017): 2,350 units
- 100 included in developers’ buildings
- 2,250 built with help from $200 million in payments
Uptown (2017): 305 units
- 92 included in developers’ buildings
- 213 built with help from $18.9 million in payments
“Room to breathe”
Che Sehyun’s art career took off when he turned his personal mantra, “breathe easy,” into a song and video, working with youth and community groups in the Chinatown International District to spread positive vibes.
But putting the words into practice has sometimes been challenging for the 32-year-old, who until recently was living with his partner and two young children in a mother-in-law apartment and barely making ends meet.
“She’s moved seven times in five years and I’ve moved four times,” Che said. “We just couldn’t afford to live here.”
The calculus changed in February, when they moved into the Liberty Bank Building, sited in the Central District by Capitol Hill Housing. The rents are capped and the building was designed as a neighborhood anchor for Seattle’s black community, with small businesses below 115 apartments.
That matters to Nijuana Chardonay, Sehyun’s partner, who wants their children to embrace their black identity. When the 26-year-old lived in Lynnwood, “I didn’t see anyone who looked like me,” she said.
For a couple previously in survival mode, the new building means “room to breathe,” said Che, who believes companies like Amazon, a trillion-dollar behemoth that paid nothing in U.S. federal taxes last year, should be doing more to help hardworking Seattle residents rocked by the city’s housing crunch.
“People look down on poverty, but people with money and power create the conditions for poverty,” he said. “Poverty is a systemic issue, not a personal affair. There just aren’t enough jobs that pay a living wage.”
The Liberty Bank Building serves households with at or below 30 percent, 50 percent and 60 percent of the area median income: $30,100, $50,150 or $60,200 for a family of four.
Rents for two-bedroom apartments generally are capped at $677, $1,128 or $1,353 per month.
Liberty Bank Building
• Seattle: $12.2 million
• Bank loans: $8.1 million
• Federal tax credits: $10.1 million
• State: $1 million
• Other sources: $2.3 million
• Total: $34 million
• Property acquisition: $576,000
• Construction: $20.5 million
• Taxes and contingencies: $4.3 million
• Soft costs (architectural, legal, permitting, etc.): $8.3 million
• Total: $34 million
“Close to Chinatown”
In Malaysia, Kin Foh Chong was the principal of an elementary school. When he moved to Seattle, speaking very little English, he had to learn a new job.
What was that job? Chong paused theatrically before answering the question. “I was a taxi driver!”
The memory delights Chong, 83, but his driving days are long over. That’s why Hirabayashi Place, steps away from shopping and socializing, is so convenient for him and his wife.
“We live very close to Chinatown,” he said. “We don’t have a car, but we go out to walk every day.”
The couple once owned a house in West Seattle. Now they pay $815 per month in rent and rely on Social Security benefits and help from their adult children, Chong said.
“I came here so my children could have good educations in the U.S.,” he said. “Now they have good jobs.”
Kang Lin Liu Chong, who in Malaysia was a teacher at her husband’s school, practices tai chi and attends cooking classes in the Hirabayashi Place community room.
Their grandsons live miles away and visit only on weekends and holidays, she said in Cantonese, speaking through an interpreter from InterIm Community Development Association, which built Hirabayashi Place.
“But there are lots of kids here on the second floor,” the 79-year-old said.
The building’s 96 apartments are for households making at or below 40 percent, 50 percent and 60 percent of the area median income: $32,100, $40,100 or $48,150 for a family of two.
Rents for one-bedroom apartments generally are capped at $752, $940 or $1,128.
• Seattle: $5.7 million
• Bank loans: $3.3 million
• Federal tax credits: $10.5 million
• State and county: $3.3 million
• Other sources: $5.9 million
• Total: $28 million
• Property acquisition: $2.6 million
• Construction: $18.9 million
• Financing: $1.6 million
• Soft costs: $3.4 million
• Operating reserves: $590,000
• Other costs: $1.3 million
• Total: $28 million
Five years ago, Lisa Smith was homeless and struggling with addiction on the streets of Seattle.
Today, she lives in a University District apartment with a peekaboo view of Mount Rainier and attends North Seattle College.
For the turnaround, Smith credits her 4-year-old daughter, Penelope, and Arbora Court, which Bellwether Housing opened last spring.
Penelope was her motivation to become sober, and Bellwether welcomed her family when other landlords wouldn’t, said Smith, 31.
Her partner had a felony drug-possession conviction and they rely on a Section 8 rent voucher, so they had trouble competing in the crowded rental market. But Arbora Court was built for families like theirs. Nearly half of its 133 apartments for low-income households have two or three bedrooms.
With their voucher, Smith and her partner, whose last job was seasonal work for Seattle Parks and Recreation, pay a third of their income on rent. Closing in on an associate degree, Smith intends to become an ultrasound technician.
“We don’t want to just reap the benefits of affordable housing forever,” Smith said. “We want to step up. For us, this is another chance.”
Arbora Court serves households earning at or below 30 percent, 50 percent and 60 percent of the area median income: $27,100, $45,150 or $54,150 for a family of three.
Rents for two bedrooms with occupants not using Section 8 vouchers generally are capped at $677, $1,128 or $1,353 per month.
• Seattle: $6.8 million
• Bank loans: $7.6 million
• Federal tax credits: $22.3 million
• State and county: $2.9 million
• Other sources: $2.7 million
• Total: $42 million
• Property acquisition: $4.3 million
• Construction: $30 million
• Design and engineering: $1.4 million
• Permitting and sewer fee: $1.3 million
• Financing: $1.5 million
• Soft costs: $2.1 million
• Operating reserves: $517,000
• Total: $41 million
Upzones in context
Since 1981, more than 300 affordable-housing projects totaling about 12,000 rental apartments have received contributions from the Seattle Office of Housing, a spokeswoman said. Some projects cater to low-income households, like those in this story, while others support specific populations, such as people leaving homelessness and people struggling with addiction.
Such projects are different from public-housing complexes such as Yesler Terrace and Rainier Vista that are owned and operated by the Seattle Housing Authority, the independent corporation mostly funded by the federal government. They’re also different from affordable apartments included in buildings alongside market-rate units by developers in exchange for property-tax breaks.
Seattle’s Office of Housing last year awarded about $75 million for about a dozen affordable-housing projects, turning down about $200 million in requests for additional projects. The $290 million housing levy approved by voters in 2016 is supposed to yield more than 2,000 such units over seven years.
Because more than 45,000 households in Seattle spend at least half of their income on housing and because the average apartment rent in the city is $1,924, competition for the housing is fierce. Some organizations hold lotteries to choose occupants.
To satisfy the developer requirements accompanying the city’s MHA upzones, affordable apartments must serve households earning at or below 60 percent of the area median income, which would range from $42,150 for a single person to $79,450 for a family of eight. The units also must be kept affordable for 75 years.