Seattle City Council makes first move toward 20,000 affordable units

Seattle’s City Council has made its first move to create 20,000 units of affordable housing (of 50,000 total proposed new units) by 2025. The city is selling a small parcel of land corner lot to Stream Real Estate for approximately $1.4 million, or fair-market value. Stream plans to construct approximately an approximately 150-unit building on the land; the development will be affordable to single adults earning $46,100 per year, or 80 percent of Seattle’s area median income (AMI). The building will contain only one-bedroom apartments, and rent for the low-income units will remain capped at this rate for fifty years.

Proceeds from the sale of land will be used to construct affordable housing in other Seattle neighborhoods. This is part of Seattle’s recently passed Housing Affordability and Livability Agenda (HALA) that, if followed, will radically change the tenure of Seattle’s housing stock and will serve as a foundation for other cities looking to overhaul their affordable housing plans. I think it is wise of Seattle to include the private market in its development plans because the financial clout of large, private-market real estate firms far surpasses (and is independent from) city budgets. These firms, such as Stream, can offset the cost of keeping rents artificially-low with income earned from other, market-rate developments.

The discrepancy between wages and housing prices means the number of families and individuals who need housing assistance has skyrocketed in recent years. Public-private partnerships are the only way, in my mind, that the affordable housing model can survive and thrive in the current market. The government does not make housing a priority and, therefore, the housing market must be subsidized by private real estate firms and developers.

These partnerships benefit developers as well as low-income families and municipalities trying to boost their affordable housing ratio: in this current example, Stream already owned a lot adjacent to the city-owned lot. By purchasing city land they increased the size of their own holdings, created an easier parcel for building, gained a corner lot and paid a fair price. The city’s stipulation of affordability allowed Stream to amend the parcel’s zone and build an extra story. Stream now owns more buildable land, the city has another million dollars for housing and has unburdened itself of an underutilized lot, and working-class Seattle residents will have access to affordable housing. A win-win-win situation (unless, of course, you are a working class family with children, in which case this building is irrelevant and unhelpful; but that is a topic for another post).

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