$14 million is hard to spend, city says
Apr 15, 2009, Vol: 16, No: 18
An innovative law that the Seattle City Council passed in 2001 to make developers pick up the tab for low-income housing came back last week for a tune-up that the city’s Office of Housing says is needed to make the ordinance run more smoothly.
But at least one housing advocate is balking, claiming the city’s trying to pull a fast one by cutting out the lowest-income households that the ordinance serves today.
The changes would be to the city’s downtown commercial bonus program, which encourages office developers to put a certain percentage of low-income housing units into their projects. What they get in exchange – the “bonus” – is extra height for their buildings. Instead of building units into a project, developers have the option of paying $18.75 a square foot into a low-income housing fund administered by the Office of Housing.
Since 2001, the program, also known as incentive zoning, has accumulated $14 million to build low-income housing projects, Housing Director Adrienne Quinn told members of the council’s Planning, Land Use and Neighborhoods Committee in an April 8 briefing on the proposed changes. But her office has trouble spending the funds, Quinn said, because the ordinance is so complicated and restrictive.
Any bonus money a developer pays has to be divided up and spent three ways, with a certain percentage going to projects serving those making up to 30 percent of median income, up to 50 percent and up to 80 percent, according to a chart in today’s ordinance that Quinn points out involves eight digits beyond the decimal for each calculation.
The categories, she says, actually prevent providing more funding to projects serving those at 40 to 60 percent of median, the range in which the program gets the most requests from nonprofit housing developers.
To create greater flexibility, Quinn’s office is seeking is to remove the chart stipulating the three-way split of the funds, along with language calling for “housing serving each of the specified income levels.” That would be changed to “housing serving low-income households” – defined as anything up to 80 percent of median income, or slightly less than market rate.
But the same income levels would still be served, Quinn says. “Removing the decimal points actually enables us to spend more money at the lower income levels,” she says, because “the ordinance right now requires that we spend money [on the category serving] up to 80 percent” of median income.
The Housing Development Consortium, a coalition of nonprofit developers, supports the proposal, says Anna Markee, the group’s outreach director for Seattle, because it also contains a provision that would allow bonus funds to develop affordable housing outside the downtown core — a restriction in today’s law, Quinn says, that also hamstrings spending the money because downtown land is too expensive for nonprofit developers to buy.
But the Seattle Displacement Coalition’s John Fox says the flexibility Quinn is seeking would allow all of the funds to go to higher-end projects, when the need is much greater at the lower end.
“The mayor comes in with a buy-off from some of his nonprofit friends and is seeking to wipe out the [lower-income] percentages and to do so under cover,” Fox says. “It sounds like they’re deliberately trying to deceive the council and the public.” n
The proposed legislation is scheduled for a public hearing before the council’s planning and land use committee on April 22 at 9:30 a.m.
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