February 22, 2006

By Adam Hyla
Real Change Editor

Last week, some of Seattle’s most prominent developers told the City Council to put away their thinking caps and take out their rubber stamps.

High-end real estate companies Samis Land Co. and Clise Properties, the Downtown Seattle Association, and the non-profit Housing Development Consortium (HDC) issued a letter to the council asking that they forego consideration of City Councilmember Peter Steinbrueck’s proposal to make downtown building codes more socially responsible.

Mayor Nickels has sold his developer-friendly agenda by promoting a vision of another Vancouver: inviting parks, sidewalk cafés, ecologically friendly gated communities soaring into the sky. There’s an ugly side to this future: increased density will accelerate the loss of affordable housing — which already disappears at a greater rate than can be replaced by the housing levy or the region’s strong non-profit sector.

Currently, Seattle collects a $10-per-square-foot fee from high-rise office developers to subsidize new rentals for low-income people. With a projected 40,000 new residents moving into Seattle’s downtown over the next 10 years, the mayor has suggested that the fee be extended to residential builders as well. Councilmember Steinbrueck is asking his colleagues to double the fee to $20 per square foot.

There is ample evidence that a $20 fee is both the right thing to do and worth the while of the builders who’ll pay it. One study last year noted that for every 100 new condo buyers moving downtown — people who will have to earn $90,000 to afford a one-bedroom — 17 new low- and moderate-wage workers will be needed to make their takeout and walk their dogs. To help offset those housing needs, the study suggested setting the fee at $22.25.

Last week’s City Council-commissioned economic feasibility study concluded that there was plenty of profit to go around, even with the higher fee. Under current zoning, developers would reap a 40 percent annual profit on a typical condo development.

Sharon Lee of the Low Income Housing Institute — which has developed more than 2,600 units of affordable housing and owns or manages 44 different properties — says that Steinbrueck’s $20 fee is the very minimum that should be considered.

Profit-driven developers and the boosters of the Downtown Seattle Association naturally want to keep the fee as low as they can. But it’s dismaying to see the Housing Development Consortium, the countywide industry association of low-income housing interests, stand with them.

HDC could have furthered its members’ pursuit of scarce public funding — and stood for its tenants’ intense demand for housing — by speaking up for the higher fees last week. Or, since the interests of its profit-driven developer friends and the interests of the city’s poor and ill-housed are evidently in conflict, the consortium could have simply stayed quiet. Instead, by issuing this letter, they have dressed up the self-interest of the city’s wealthiest developers in civic-minded beneficence.

HDC argues that the $10 fee was arrived at over six years of negotiations, and that a deal’s a deal. This ignores the fact that those talks were mostly between developers and other downtown interests and the Mayor. The process did not become truly public until the release of the Mayor’s proposal last May.

They also fear that by asking for too much, non-profit developers could lose any benefit at all. Developers have threatened to challenge any fee they deem too high in court as a violation of property rights and therefore unconstitutional.

That’s an irrelevant bogey brought to life by the real estate interests. These fees don’t depend on the principled assent of benevolent developers. They are established for a reason, and don’t apply universally — only to the builders of inordinately tall buildings.

Beyond these stated reasons, what’s at play is Team Nickels’ über alles hardball strategy. His staff called the developers together to help conduct concerted opposition to Steinbrueck’s proposals. When HDC delivered their letter on the day the City Council released their economic feasibility study, the move was calculated to inflict maximum political damage.

Councilmember Steinbrueck is not working to enrich his campaign contributors. He is working to preserve a Seattle that has room for rich and poor alike. The City Council should pass the zoning Seattle needs, and not just what some people are willing to settle for. And HDC should let the city’s for-profit real estate interests do their own lobbying.

If you can’t help people — the tenants and would-be tenants of your own buildings — at least don’t hurt them.