Charge a development fee to encourage ‘affordable housing’? Seattle City Council committee says yes

(Click the image to go to the full-size map on the city website)
Would a new type of development fee lead to more affordable housing in the city? The City Council’s Planning, Land Use, and Sustainability Committee has just voted in favor of a proposal for a so-called “linkage fee” intended to make that happen. If it became law, it would affect commercial and multifamily development in certain parts of the city, shown on the map above – including parts of West Seattle:

A City Council committee today recommended approval of a plan to create an affordable housing linkage fee to preserve and create affordable housing in Seattle. The resolution directs City departments to develop legislation whereby new construction in multi-family and commercial zones would mitigate the cost of increasing rents by funding housing affordable to those households making $45,000 – $65,000 per year, which is 60% – 80% of area median income (AMI).

“If we want Seattle to be an inclusive city for people of all incomes, then we need to see more housing produced that’s affordable to more people. Up until this point, the market has clearly not given us the housing we need,” said Councilmember Mike O’Brien, chair of the Planning, Land Use and Sustainability Committee and the legislation’s sponsor.

Developers could either pay a per-square-foot fee, which is variable based on project’s location in the city, or avoid the fee by dedicating at least 3% – 5% of the units in their project to households making less than 80% AMI. The money generated from fees would be invested in workforce housing.

“Our expert economic consultants suggest that at this fee level, development would absorb the fees without constricting new supply or significantly raising rents,” Councilmember O’Brien added.

The (above) map illustrates where the linkage fee would be applied in multi-family and commercial development in the city.

Full Council is expected to vote on the resolution on Monday, October 20. Draft legislation for Council consideration is expected by June 1, 2015. The final legislation is anticipated to gradually phase-in over a three year period and would not affect existing projects or new projects with permit applications already submitted.

Additional information about O’Brien’s proposal for an Affordable Housing Linkage Fee in Seattle is available online.

This is separate from the city’s Multi-Family Tax Exemption program, which enables a partial tax exemption on projects that commit to below-market rents for part of their units. The city’s current list of projects in that program includes nine buildings in West Seattle.

16 Replies to "Charge a development fee to encourage 'affordable housing'? Seattle City Council committee says yes"

  • Ray October 14, 2014 (2:24 pm)

    It is sad that the city council actually thinks this is going to help with affordable housing. For hot ticket properties, the developers will likely pay the fee because they will recoup it with the sale of each unit.

    And for those developers that go the 5% unit route, only those in the first go round might get cheap rent/housing. As costs rise, they will be back where they started.

    This is political grandstanding only and does nothing to solve the problem (that is not the city’s job to solve).

  • skeeter October 14, 2014 (3:41 pm)

    I agree with Ray. It really is not the city’s job to meddle in the market.

    Why single out developers to pay this extra cost?

    If we want affordable housing then we increase the sales tax or property tax that everyone pays. Then we can use that money to pay for affordable housing. It is fundamentally unfair to tell developers (and their customers) they have to pay for affordable housing but everyone else does not.

  • mpento October 14, 2014 (3:51 pm)

    This sounds pretty crappy to me. It is framed as a fee which to me suggests it is the city coming in and looking for an extra slice of pie on a project that does not include the accomadation. If I’m a developer I’m going to take the worst butthole 5% of the project and stick a dog kennel there and done, no fees. Also what is that little green spot on the southwest of the map? I wonder how it got there?

  • 33Pete October 14, 2014 (4:02 pm)

    I agree with Ray and Skeeter – this is a bad idea from the start and essentially takes the positon that “well, these people have money, so they should pay.”

    I do support development fees, but they should be aimed at making developers (and others) internalize the costs/budens they place on the rest of us. For example, if you build a project without ample parking, you should pay a transportation fee.

    The notion that people have an inherent right to live in an expensive metropolitan area is ridiculous. If you want cheap rent, check out Spokane instead of Seattle. Oh, and we have no shortage of people living in the area to fill low wage jobs (the wages for which are rapidly increasing under recent legislation that provides us with the highest minimum wage in the country).

  • MAP October 14, 2014 (4:40 pm)

    A bad idea…let the market place dictate the housing market..if you can’t afford to live in Seattle then move where you can afford to live
    It is not a birth right that you have housing that the market does not create
    Not to mention all this density is DESTROYING west seattle

  • Peter October 14, 2014 (5:22 pm)

    This is a terrible idea. Linkage fees will suppress construction and drive up the the cost of new housing, thus forcing more people into the suburbs with all the negative health, environmental, and economic consequences that go with that.
    Seattle does need to do more to encourage affordable housing, but the city council, in their infinitesimal wisdom, has decided that one very narrow portion of the citizenry, that is renters in new buildings, should pay the entire cost. I don’t think it’s justifiable to impose this cost so narrowly.
    This is bad, un-thought out, and biased policy. I will definitely be letting the council know what I think of this turd.

  • Eric1 October 14, 2014 (8:22 pm)

    LOL. Looks like a winner week so far for the Seattle City Council. I wonder if they will do something later this week that will make a difference? Nah, why start a new trend.
    .
    I agree with the above. It isn’t rocket science on city centers being expensive places to live unless it is a slum. Guess how it gets to be a slum?
    .
    Maybe tomorrow the council will decide that the Friday after Thanksgiving should be renamed too.

  • Villagegreen October 14, 2014 (9:31 pm)

    Sigh. I should really stop reading the comments on this blog. The more I do the less interest I have in getting to know my neighbors. Whine. Whine. Whine. Self-satisfied sarcasm. Snark. Snark. Entitled self-righteousness. In my best whiney voice, ‘I don’t like the increasing density here.’ Well, then maybe it’s actually you that should move to Spokane. Not the renters who actually like it here.

  • Rick October 14, 2014 (9:54 pm)

    I believe the Friday after Thanksgiving is Native American Heritage Day,a civil holiday. Somebody done beat ’em to it. Not to worry, I’m convinced they’ll think of something.

  • JanS October 14, 2014 (10:09 pm)

    I love it…if you can’t afford to pay for housing here, get the hell out of Dodge. So, I live here for 40 years, it is home, and through no fault of my own, in my retirement , on a fixed income, prices are more than I can pay, so…my alternative is to move somewhere I’ve never been, leave my family, and live alone, knowing no one, until the grim reaper comes, because it’s cheaper? That’s what I love about the people here (like MAP above)…lots of compassion and caring for their neighbors. Yeah…..”no housing for you”, “don’t let the door hit ya”…nice..:-\

  • Brian October 15, 2014 (7:45 am)

    @skeeter: That’s not the solution at all and everyone knows it. Don’t keep jacking up sales tax and property taxes that already disproportionately affect the poorer classes.
    .
    We need a progressive income tax to start paying for all of the massive budget shortfalls occurring everywhere. The people getting rich as hell from this state need to start paying back into the system.
    .
    @Map: You are the personification of the Seattle FYGM Contingency and we could stand to do with far less of your kind.

  • John October 15, 2014 (8:51 am)

    @JanS

    I am sorry to hear of your predicament.

    But it is not unique.
    Rather it is something many of us are or will soon be facing.

    In past generations seniors often moved in with family.

    Perhaps the encouragement of ADUs and Backyard cottages will help to a small degree.

    I really don’t see how constricting and limiting housing development, as the city council has done in response to neighborhood concerns, can help.

    Besides everyone’s deserved compassion and caring, do you have any suggested actions or solutions?

  • G October 15, 2014 (9:51 am)

    What about the trillions that being passed down to heirs, including that nice West Seattle home? I know more than a few who could never afford to live in West Seattle otherwise. One can argue about double taxation, or inheritances being a family perogative, but it is not money heirs have personally earned. Needs to be mentioned to be fair, regardless of how one feels about it.

  • Mickymse October 15, 2014 (12:31 pm)

    I don’t know if this is the best solution, or won’t have unfortunate effects on the cost of new housing… BUT I’m surprised by people who don’t seem to think it makes sense to ask the developers and building projects which are responsible for much of the driving up of housing prices to contribute to solutions for addressing that crisis.
    .
    Why exactly should I be expected to pay higher sales taxes or property taxes solely because developers decided they could make lots of profits by building hundreds of expensive apartment units along Fauntleroy and California?

  • jmac October 15, 2014 (5:00 pm)

    I’m guessing many of the posters on this blog love to grab themselves a morning latte, or dine out, or see a movie, or a theater show, or stand up comedy, or whatever. Do you think the people providing those services to you should go live in Spokane? Next time you sit your self-entitled butt at your computer, try saying something that will actually make the city a better place.

  • hc November 2, 2014 (9:52 pm)

    West Seattle loses

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