City Developer Balks at Affordable Housing Requirements
posted by October 7 at 15:45 PMon
While the country obsesses over tonight’s presidential debate, some developers and local residents will have another debate. At a public meeting in City Hall at 5:30 p.m., they will oppose and advocate for a proposal to add “workforce” housing around the city. Here is how it would work: As the city increases height limits in neighborhood centers, developers could build taller buildings (thereby making more money) as long as they include a set amount of affordable housing in the additional space. Sounds like a winner for everybody, right? Not so fast.
Led by City Council Member Sally Clark, the council is attempting to push through two ambitious plans before the end of the year. The first is related to the affordable housing package described above; the other would increase the height limits and allow residential development in the Interbay neighborhood. Both jibe with the city’s vision for a denser city. But some people say that Interbay—a hodgepodge of industrial and big-box retail between Queen Anne and Magnolia—cannot support the affordable housing requirement.
The map to the lower right is a proposal for height increases and changes from commercial to mixed-use development on certain blocks of Interbay.
“It becomes counter productive,” says Jeff Thomson, a partner of the Freehold Group, which owns two acres in Interbay. Bruce Wynn, director Interbay Neighborhood Association, agrees. Under the affordable housing program being considered by the council, rents for 10 to 20 percent of the new floors gained from an upzone would be affordable to those making 80 percent of the King County median income. More info, and the pro-affordable housing side, is here. That means a one-bedroom “workforce” apartment would rent for $1,153 a month.
“When you rent below 80 percent, rents are so low relative to costs of creating the building that it loses money,” says Thomson. If the council does push an affordable housing requirement on Interbay, he says, “I think you are going to find that it develops out with one- and two-story retail.” In other words, a Target or a Fred Meyer. “We want them to approve the upzone without the incentive housing tax on top of it.”
A second opinion after the jump
Of course, developers often claim additional costs or fewer units will prevent them from building housing. But when a similar program was applied downtown in 2006, construction continued. The affordable housing program has worked in towers downtown because those high rises charged exorbitant rents that, in essence, subsidize the lower-income rents.
Can this affordable housing program work in Interbay and other neighborhoods with lower land values?
Dan Rosenfeld, co-owner of the QFC and Rite Aid site on Rainier Avenue South, says, “I just don’t know yet. Talk to us in a year.” He is working with the city to bump up heights limits and density around the light-rail station in the Rainier Valley. “It is easier to [build affordable housing under the incentive program] in a wealthy neighborhood, no question,” he says. “The affordable housing requirement coming down the road creates some new challenges.”
The city council’s public hearing on the Workforce Housing Incentive Program is tonight, October 7, starting at 5:30 p.m. The Planning, Land Use & Neighborhoods Committee will consider the legislation for workforce housing and the Interbay rezone at committee meetings on October 8, 9 a.m. and through the fall. More info here.