The Seattle City Council met yesterday afternoon for the regular full Council meeting to vote on important policies affecting housing. Sitting first on the agenda, the Council considered a resolution (Resolution 31609) to set the overarching policy framework and implementation timeline for the Mayor’s Housing Affordability and Living Agenda (HALA) recommendations, desire for new affordable housing tools from the State, and larger housing goals through 2025. An amended version of the resolution passed on unanimous consent of the Council, although amendments were limited to the Council’s HALA Work Plan itself.

Timeline for action on HALA items.
Timeline for action on HALA items.

The adopted legislation sets out three broad policy goals:

  1. Implementation of the Council’s HALA work plan, which begins with fast-tracked policy development on Commercial Linkage Fees and Mandatory Inclusionary Housing regulations this year and wraps up with legislation to allow conversion of single-family homes into multi-dwelling units and reduce and/or remove certain parking requirements in 2017.
  2. Begin efforts to lobby for new tools to provide affordable housing for households at or below 60% of area median income. Tools that the Council would like, include: authorization for a 0.25 percent increase in the Real Estate Excise Tax to fund affordable housing, increase in the Housing Trust Fund, and new preservation tax exemption to create rent- and income-restricted affordable homes in existing buildings.
  3. A concurrence with the Mayor’s recommendation that 20,000 new rent- and income-restricted housing units and 30,000 new market rate housing units be made available by the end of 2025. The Council set a goal of implementing strategies that will ensure at least 75% of rent- and income-restricted units are affordable to households earning between 0% and 60% percent of the area median income.

The Council revisited the Multi-Family Tax Exemption (MFTE) Program (Council Bill 118505) to consider some policy changes and a program extension. (The MFTE provides tax exemptions to property owners of multifamily residential projects in targeted areas of the city if 20% of units are set aside for income- and rent-restricted households. Property owners are eligible to participate in the MFTE Program for up to 12 successive years.) Three primary changes were enacted, including:

  • Establishment of different affordable unit set-asides for projects with fewer than four units with 2+ bedrooms (Small Unit Program) and projects with four or more dwelling units with 2+ bedrooms (Family Sized Unit Program);
  • Expansion of program eligibility areas; and
  • A new MFTE Program sunset provision.

The following table is a comparison of the current MFTE Program and new options available to developers and property owners. The changes bring promised revisions to MFTE Program provisions for Small Efficiency Dwelling Units (SEDUs, aka microhousing units) and the graduation of requirements by housing unit type (e.g. congregate units, 1-bedroom, studios, etc.)

Affordability
Requirements
Current ProgramNew Family Size Unit
Program (Projects
with 4 or more 2+
bedroom units)
New Small Unit
Program (Projects
with fewer than 4,
2+ bedroom units)
Affordable Unit Set-Aside20% of all unit
types, 25% for
SEDUs
20% of all units25% of all units
Maximum Area Median
Income (AMI) for
Affordable Units by Unit Type
SEDU – 40% AMI
Studio – 65% AMI
1 BR – 75% AMI
2 BR – 85% AMI
Unchanged, except:
Congregate Units – 40% AMI
3 BR – 90% AMI
Unchanged, except:
Congregate Units – 40% AMI
3 BR – 90% AMI

If the Family Sized Unit Program is chosen, fewer MFTE dwelling units are required, but a minimum number MFTE dwelling units consisting of 2+ bedrooms kicks in. O’Brien added the provision in committee to incentivize more dwelling units geared toward families. Four such MFTE dwelling units would be required as part of the first 100 units in a project. Additional 2+ bedroom MFTE dwelling units would be required depending upon the total number units in a project as shown in the table below.

Family Sized Dwelling Units required in MFTE projects. (City of Seattle)
Family Sized Dwelling Units required in MFTE projects. (City of Seattle)

Areas eligible for the MFTE Program were revised in two ways. The first change revised program eligibility boundaries as shown in the map below. The second change adds provisions to allow any land zoned in the future for multifamily housing to be included for program eligibility thereby overriding mapped boundaries of the MFTE Residential Targeted Areas.

Targeted program eligibility areas. (City of Seattle)
Targeted program eligibility areas. (City of Seattle)

Councilmember Nick Licata offered two amendments to the legislation: one to extend the MFTE Program to December 31, 2019 and another to add an annual reporting requirement to analyze rent level information for affordable units.

The amendments and ordinance passed on unanimous consent.

Separately from housing policy, a vote on the SR-520 resolution (Resolution 31618) was originally scheduled for the meeting, but was pulled last minute from the agenda. A separate vote will be set for next week when the full Council meets again. The resolution is a particularly important policy document because it is the last best chance to make the SR-520 rebuild better for people walking and biking on and near the corridor. The Washington State Department of Transportation is set to make substantial investments to build city streets, bicycle and walking, and transit infrastructure in the coming years, so getting the policy language right now is imperative.

At last week’s Transportation Committee meeting, eight amendments were proposed by Councilmember Rasmussen and Councilmember Mike O’Brien — with seven gaining approval. One amendment proposed O’Brien stirred a prolonged discussion on the merits of requiring protected bike lanes directly on Montlake Boulevard from E Roanoke St to the University of Washington Station. Rasmussen suggested that the amendment be put on hold pending feedback from the Seattle Bicycle Advisory Board (SBAB), leaving the amendment without a vote in committee. On Friday, the SBAB produced a letter giving their full support for the concept saying:

The Bicycle Advisory Board has consistently advised having Protected Bicycle Lanes on Montlake Boulevard from East Roanoke to the Montlake Bridge as a direct access route for people of all ages and abilities riding bicycles in addition to the other bicycle facilities in the SR520 project. Separated, protected bike lanes are an imperative in this location and in other city locations to meet the Bicycle Master Plan Goals of Safety and Connectivity. The Bicycle Advisory Board has been advising and will continue to advise Protected Bike Lanes throughout the city, including Southeast Seattle, West Seattle and Downtown, to address all high needs of safety improvements for people of all ages and abilities riding bicycles, to achieve the goals of Vision Zero and to insure that the Bicycle Master Plan Goals of Equity, Connectivity and Safety are met.

With this kind of unequivocal support from the SBAB, the O’Brien amendment is likely to find friends on the Council for adoption.

10 COMMENTS

  1. Has anybody done a financial analysis of the MFTE program? I’d like to know how much tax revenue is lost to government vs. the amount of rent revenue lost to building owners. I’m sure lost tax revenue is greater, but by how much?

    Would it be smarter to just collect all the property taxes owed, and then dedicate the additional revenue to rent subsidies to low-income tenants?

    And another question. Is it just the City portion of the property tax that is exempted, or do the school district, king county, state of WA, etc. also lose their property tax revenue on MFTE buildings?

  2. Regarding ADU changes, the linked PDF says “Council will consider include eliminating or allowing waiver of parking requirements, eliminating owner occupancy requirements[…]”

    So they officially decided to start considering?

    As a homeowner who would like to convert an underused basement to an ADU, I’m very interested in having those rules removed, because I can foresee a day in which I may want to rent the upstairs as well (if my job forces me to move, etc).

    • That’s correct. If you support that element of the policy framework, you should let Council know. This topic will occur later in the process according to the approved work plan.

    • We should be very cautious before eliminating the owner-occupancy requirement. ADUs and DADUs were created as a means to enable property owners to stay in their homes in the face of rising costs, not as a means for housing investors to increase their profit margins. We already hear stories about families being outbid by housing corporations; allowing investors to add units without living there would just make that competition even worse for families.

      • ‘allowing investors to add units without living there would just make that competition even worse for families’

        couldn’t be further from the truth. ADUs and DADUs do little to enable financially strapped property owners to remain in their homes in face of rising costs.

        the onerous owner-occupancy requirement is the sole reason there are asininely few DADUs being built – less than 22 per year.

        the owner-occ and parking requirements need to be abolished, need to allow both ADUs and DADUs, and need to relax height constraints.

        which are exactly what HALA recommended. the only reason to prevent eliminating the owner-occ is to ensure that few units get built.

        one wonders why incumbent homeowners would want to ensure fewer units get built?

        • Well then let’s find ways to support homeowners’ efforts to build ADUs and DADUs. Yes, let’s remove the off-street parking requirement on blocks where parking is not a problem.

          Surely there’s a better way than turning it all over to investors and developers. I haven’t yet given up on the idea that middle-income families can continue to buy and own SF homes in Seattle. And that’s more likely to occur when families are not bidding against investors, who will always have deeper pockets.

          Incumbent homeowners aren’t wanting fewer ADUs and DADUs, but I’m sure they do want neighboring homes owned by their occupants, rather than investment corporations.

          I’m sure your way would result in more business for local architects.

          • yes, let’s subsidize homeowners even more, at yet greater expense to tenants.

            who built your home, roger? why do you get to reap the benefits of greedy developers, whereas middle class families that come after you don’t?

            incumbent owners don’t want fewer DADUs? is that why nearly every neighborhood group fought to make the regs even tougher, or to outright ban them?

            your revisionist history is hilarious. your generational warfare is just tragic.

            btw, architects working w/ developers earn way less per unit than custom projects. but we absolutely should encourage developers to build more DADUs. there aren’t many who will touch them because they’re small, but it’s the only way vancouver’s gotten to 320 DADUs/year. and every bit matters.

          • Not allowing investor-owned DADUs and ADUs = subsidizing homeowners? More urbanist fantasyland.

            I’ve been around this city longer than you have, and yes many people did oppose ADUs and DADUs when they were first proposed. But that was then and this is now — homeowners and others seem quite willing to loosen up the rules now for ADUs and DADUs, and I’ve heard nothing to the contrary.

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