Seattle Too Easy on Developers? (Hint: that’s not the right question)

Since I’m the token real estate professional in this group, I’ve decided to comment on Friday’s article in the PI entitled, “Is Seattle too easy on Developers?” The issue at hand is the proposed incentive zoning that would offer additional height allowances in exchange for 3-7% of affordable (i.e., workforce) housing. This proposal has sparked a considerable amount of debate within the real estate community. At heart for many is the hidden message that development is somehow negative by nature and must be mitigated through fees/penalites assessed to the developer. The City of Seattle has identified urban density as a key strategy in creating a sustainable region; so why are developers asked to pay a fee for the public benefit they are creating, ask some. Others argue that any fees are merely passed on to the buyer, and so, in essence, buyers are subsidizing affordable housing.

I recognize that frustration that developers feel with proposals such as this one. It engenders a paradigm that is, at heart, polarizing and counter-productive (developers are conniving capitalists looking to make a quick buck and it’s the city’s job to reign them in). Developers become the enemy, not the partner. That being said, there are times that philosophical arguments must be put aside and stakeholders must find ways to solve a problem. This is one of those times. The bare fact is that affordable housing is vanishing from our city. With 10-12% annual rental hikes forecasted for the next 2-3 years, more and more middle income workers will be driven further and further away. What we need now are tools to prevent, or at least mitigate, this exodus, and the more the better. The incentive zoning ordinance is modeled on a program that has worked in other cities, and I think can work here. But here’s the thing. It is one small tool in what should be a large, broad based strategy (with diversified funding sources) in creating workforce housing. Many of the cities cited in the PI article where inclusionary zoning has worked also have much broader constitutional leeway in encouraging the creation of workforce housing. Tax increment financing has been a powerful tool for many cities, as has a broader mandate to partner on urban infill developments. But Seattle is seriously hampered by dated, reactionary limits within the state legislation and can’t be as proactive as it needs to be. The real question here isn’t whether Seattle is being too easy on developers. It is, instead, this: What is Seattle doing to create a sustainable, broad based approach to affordable housing?  And that begs another question: What is the state legislature doing to ensure that Seattle (and other cities) has the tools it needs to create this strategy?

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