[...]Affordable Housing Trailblazers | hugeasscity[...]…

Jackson Street is coming along nicely and I do need to give credit to CADA. I realize that people will criticize for any number of reasons but we might just get a really nice neighborhood for an incredibly diverse population at the end of the day.

I think that it is true that there are a lot of nonprofit developers in this town and it is an ongoing and very good discussion about whether there are too many. By this I mean that to some extent, Stakeholder is right, when we subsidize a nonprofit in X community and then another in Y and another in Z, do we ever reach a point where we could achieve economies of scale in construction bidding, property management, etc. by just subsidizing one larger nonprofit to build long-term permanent affordable housing? Maybe, but then that might start to look like a housing authority, and we have one of those already.

Part of the reason we have so many nonprofits here is that they organically emerged out of disenfranchised neighborhoods as community development corporations, which was a model began in the 60s for reclaiming neighborhoods by neighborhood residents and activists. Just like our neighborhoods in Seattle have their own individual and unique neighborhood plans, some also have their own CDC (community development corporation) and most, if not all, are nonprofit housing developers. Because Seattle has been so successful and pioneering in passing a Housing Levy every 7 years since 1981, a consistent stream of funding has been available for these groups to build long-term permanent affordable housing (50+ years). This is not an argument for having a nonprofit developer in every neighborhood, but we can’t forget the history of why disenfranchised neighborhoods sprouted them.

The City of Seattle regulatory restriction of 50+ years (in exchange for Levy funds) is the reason that there are practically no private developers building affordable (80% and below) subsidized housing in Seattle. It means that you can never sell the building, or realize appreciation, or realize a lot of cash flow (by raising rents) which basically removes any incentive for private developers to build this kind of housing. (food for thought: would we want by allowing private developers to build and then sell earlier than 50 years?)

In terms of cost, I do think that sometimes we pay a premium for a variety of reasons. If you are a State and City funded project (which almost every subsidized project in Seattle is) you must pay State Prevailing Wage (always residential, sometimes commercial, depending on your building type). This increases the cost of development significantly. Other regulations that increase cost include: the requirement by the State that your project must have 10% apprenticeship participation (if you GC is a non-union shop, you will pay a premium for this); and the City also requires that your GC check-in all subs on the construction site and certify all payroll against this check-in list (due to a drywall issue a few years back) which also increases cost. And yes, lastly, there are Davis-Bacon wages, which are even higher than Prevailing Wage in many cases and must be paid if you have any federal (non low-income housing tax credit) HUD dollars in your project. This is a big deal for housing authority projects and any projects that receive federal homeless money.

I think we as a community need to continue to incentivize private developers to build long-term affordable housing through mechanisms like incentive zoning and inclusionary zoning (i.e. mandating that a percentage of every new development have longterm affordable units in it). WA is a strong property rights state and so far, this has been considered a “taking” in the City of Seattle. But I think that we need to continue to push for it as good policy. However, this is very differnt than providing a direct subsidy to a developer.

Lastly, Housing Authority HOPE VI projects are really different than what nonprofit developers do, in scale, building type, funding sources and intent. While some nonprofit developers wind up buying land and developing in or near Hope VI projects (the Gennessee on MLK by HRG is a good example) they must not be confused with one another. Most nonprofits do not have the ability to build anything the size of a New Holly or a High Point and probably would not want to. In keeping with the CDC tradition, most are focused on smaller projects in specific neighborhoods, although many are City wide. Until a couple of years ago, using Low Income Housing Tax Credits, which almost every nonprofit uses, precluded developing anything larger than 50 units on one site.

I’m just really PO’d that four low income rentals were turned into twelve townhouses across the street from me, sold only to singles and couples at very high prices. We got back a few children which was also a concern. One of them is still on the market a year later.

I would have preferred either two offered through a program for sale, or the whole thing be built as a rental apartment building with some units available to people with vouchers.

A correction regarding the Pontedera: it is not income-restricted. The income restriction is associated with the financing subsidy available to qualified first-time homebuyers in the form of 2nd and 3rd mortgages.