Lewis Proposal Aims to Lower Cost of Building Supportive Housing

7
Hobson Place that is a partnership between DESC and Harborview Medical Center (Courtesy of DESC)

In December, Councilmember Andrew Lewis introduced legislation that could make it cheaper, easier, and faster to build permanent supportive housing (PSH) in the City of Seattle. If all goes according to plan, PSH providers could trim about 15% from building costs.

Permanent supportive housing helps combat the homelessness crisis with an affordable, communal, and service-connected environment for unhoused people. Providers like Plymouth Housing tailor their residents’ needs with a service combination of medical, behavioral, and substance treatment, hospice care, veterans counseling, family reunification, money management programs, and community activities. PSH comes in the form of multifamily residential buildings that may have their services on-site.

Canady House, by DESC, that opened in 2010 and provides 83 studio PSH units. (Courtesy of DESC)

Currently in Seattle, PSH developers have to undergo many of the same processes and regulations that other multifamily housing developers follow. The requirements limit PSH developers’ ability to provide the housing our city and chronically homeless critically need. Lewis worked with PSH providers and city staff to craft the legislation and is hoping to change that reality.

Pinning down what PSH is

On December 15th, the Council’s Select Committee of Homelessness, City staff, and PSH providers met to discuss the bill. First topic up was the definition of PSH in the bill, and needed coordination with the Office of Housing to align PSH qualifications, as the department’s funding is omnipresent in PSH projects in the city. PSH was added to Washington’s Growth Management Act (GMA) two years ago, defining it as:

[S]ubsidized, leased housing with no limit on length of stay that prioritizes people who need comprehensive support services to retain tenancy and utilizes admissions practices designed to use lower barriers to entry than would be typical for other subsidized or unsubsidized rental housing, especially related to rental history, criminal history, and personal behaviors. Permanent supportive housing is paired with on-site or off-site voluntary services designed to support a person living with a complex and disabling behavioral health or physical health condition who was experiencing homelessness or was at imminent risk of homelessness prior to moving into housing to retain their housing and be a successful tenant in a housing arrangement, improve the resident’s health status, and connect the resident of the housing with community-based health care, treatment, or employment services

This addition made it illegal to ban PSH in multifamily and mixed-use zones. Today, the City doesn’t have specific regulations that govern PSH development. Lewis’ proposal would refine the GMA definition down to PSH as a multifamily residential use that has at least 90% of units affordable to very low-income households (a memo pins that down to under 50% of area median income or AMI), receives public funding or an allocation of federal low-income housing tax credits, and has a contractual term of affordability of at least 40 years.

The Council discussed amending the AMI figure in the definition to include a mix of 30% of AMI households and 50% AMI households. Lewis (who chairs the Select Committee on Homelessness) had wanted it to be 90% for 30% of AMI households, but the Office of Housing thinks more diversity for the figure will help developers attract low-income tax credit investors, and government aid.

Discussion of the bill

On top of setting the definition, the bill would:

  • Establish on-site supportive services as an accessory use to PSH and exempt floor area for services from floor area ratio requirements;
  • Exempt PSH from design review and long and short-term bicycle parking requirements;
  • Authorize the Director of the Seattle Department of Construction and Inspections to waive or modify specified development standards;
  • Require developers of supportive housing to submit a community relations plan; and
  • Allow PSH as permitted use in Commercial 2 zones and as a street-level use in zones where street-level uses are required.

Discussed in great detail during the meeting was the desire to relieve PSH providers from the bike parking minimums that are required for new multifamily development. Representatives from Plymouth Housing and Chief Seattle Club pointed out the demographic served leans older and disabled, lowering the need for bicycle parking per person in supportive housing. They also discussed the preference for residents who do have bikes to keep them in their homes because they may count them as some of their most very valuable possessions–equating those bikes to the value of a car to a car owner. Probably the most important arguments included the steep $300,000 to $500,000 cost per bike room, space, and funding that could be used for amenities or more housing, and the fact that it would be occupying the more expensive part of a building. Writing in Seattle Bike Blog, Ryan Packer backed the idea of dropping the requirement for PSH.

A five story building with red siding.
Plymouth Place provides 73 studio PSH units. (Credit: Plymouth Housing)

The representative from Plymouth Housing also estimated that relief from design review would speed up the permitting schedule by four to six months, a figure that the City staff couldn’t produce at the time. City staff did say that they could produce a figure on time savings because during the pandemic design review was waived for affordable housing projects, allowing staff to compare pandemic-era and pre-pandemic affordable housing project schedules. The exemption could also save PSH developers the roughly $200,000 to $300,000 cost of putting together a design review packet.

Council Central Staff believe Lewis legislation could save providers nearly $48,000 per home on average, dropping the per unit cost from about $332,000 to $284,000.
The City believes Lewis’ legislation could save providers nearly $48,000 per home on average. (Credit: City of Seattle)

Councilmember Tammy Morales expressed concerns about a PSH provider being able to waive potentially beneficial amenities. City staff, however, indicated that competition over funding would check hypothetical developer desire to not include a beneficial service for economic benefit. Councilmember Alex Pedersen decided to explore the greedy developer narrative further by discussing a scenario where a developer uses PSH design review exemptions and then decides to pivot out of PSH later. City staff pushed back on the concern with the regulatory agreement attached to City funding. All PSH projects in recent memory have City funding, so they have to meet city funding requirements. They also pointed out the difficulty of going through the whole PSH process, and litigation if a developer did betray funding requirements.

Possibility of funding from the County, rather than the City, was brought up with the recent passage of the county sales tax for affordable housing. If the County or another public source had weaker funding requirements, Pederson speculated that the legislation could be exploited. City staff responded with the need for further discussion with the Office of Housing to see what kind of amendments might be made to lock in PSH projects. Pederson also asked about an internet requirement for PSHs with City staff noting the appropriate place for that kind of regulation would be in housing funding policies and not land use regulations.

Next steps

Based on a May report by the Third Door Coalition, getting to 6,500 units of permanent supportive housing–an estimated $1.6 billion dollars of PSH investment–within five years would be needed to meet the demands of the Seattle and King County’s shelter crisis. The coalition of business leaders and homeless rights advocates outlined building 4,500 new units, and securing and leasing 1,000 more units in scattered sites. They believe that PSH is the best solution for neighbors experiencing chronic homelessness, and that Lewis’ proposal could save providers just under $48,000 per unit.

Councilmember Lewis hopes to get more vetting of the legislation done and perhaps a full vote on the bill this month, or at least in the first quarter of 2021. Contact your councilmembers to back the bill if you support making supportive housing development easier and less expensive.

We hope you loved this article. If so, please consider subscribing or donating. The Urbanist is a 501(c)(4) nonprofit that depends on donations from readers like you.

Shaun Kuo is a junior editor at The Urbanist and a recent graduate from the UW's Jackson School. He is a Seattle native that has lived in Wallingford, Northgate, and Lake Forest Park. He enjoys exploring the city by bus and foot.

Subscribe
Notify of
guest

This site uses Akismet to reduce spam. Learn how your comment data is processed.

7 Comments
Inline Feedbacks
View all comments
kevin

Bike parking requirement??? What an infantile idea. Adding inessential non-market-driven requirements onto housing construction is incompatible with a goal of making housing more affordable. Every cost forced into housing development, every risk added to property owners can only make housing more expensive. If you think housing in Seattle is expensive now, wait until there’s rent control. This will allow incumbent tenants to stay indefinitely in buildings that eventually will be unmaintainable due to insufficient income, but will completely stop construction of any new units that would be subject to rent control.

Daniel Thompson

Thanks Shaun for another very informative article.

Some of the proposal is good. For example, Seattle finally realizing affordable housing requires public subsidies, and the notion you can simply upzone expensive neighborhoods with expensive underlying land and it will result in builders building affordable housing without public subsidies is foolish. Instead all this accomplished was raising the price of the underlying upzoned land, for residents or Sound Transit Right Of Ways.

Also realizing subsidized housing needs to be located near existing transit, rather than another foolish idea: build density in undense neighborhoods without existing transit when transit is having trouble affording frequency on existing runs.

Another bright spot is realizing required bike storage is unnecessary for all or any multi-family construction. Only 2% of non-recreation trips are by bike, even in Seattle. If you leave your bike anywhere in the city it will be stolen, and even on Mercer Island the majority of bike thefts occur in the these common storage areas, so those with expensive bikes keep them in their apartment or condo.

The issue with design review is the real cost is meeting updated building codes. State law requires all cities to amend their codes to adopt international codes for building, residential, gas, energy, plumbing, fire, mechanical etc. effective July 1, 2021. The problem is these codes no longer exempt existing multi-family housing, which is usually the most affordable (compared to new construction), and the upgrades can be cost prohibitive. Combined with the Legislature’s relaxation of warranties on new condo construction, look for developers to buy these older multi-family buildings and redevelop them with expensive new condo construction. Seattle and the region will likely lose more affordable multi-family housing than it creates in this hot market, although more expensive new owner occupied condos will be built.

Finally the rub is cost. New subsidized construction is expensive, especially public, even with a 5% to 15% reduction in permitting costs in a very hot building market. $1.6 billion for 6500 units is pie in the sky based on Seattle’s future budgets. 1000 units is probably unaffordable over 10 years if Seattle is paying. Who pays?

Seattle would like it to be King Co., primarily through the 1/10th of one percent sales tax increase for emergency housing. Unfortunately Dow Constantine’s original proposal was to purchase distressed hotels in outlying cities and move the homeless there (which at least is expedient and removes them from Seattle’s streets before tourism resumes), without treatment or funding to the cities for health and police costs. The pilot in Renton turned out to be a disaster, and nearly every eastside city opted out of the tax and applied their tax revenue to their own housing funds, even though Seattle has the majority of low income and homeless.

Actually this new proposal is closer to how the eastside approaches homelessness and affordable housing, through organizations like ARCH. They believe the most critical step (third after shelter mat and shelter enhanced room) is subsidized affordable housing, after sobriety and work, which is nice for the other tenants. But the subsidized housing needs to be temporary and not permanent, a step to non-subsidized affordable housing, otherwise you will never build enough affordable subsidized units and it becomes a lottery. Unless the housing is for the elderly poor like Ellsworth House, which is mostly Medicaid/ARCH funded.

Daniel Thompson

Gov. Inslee today vetoed the bill extending adoption of the new international building codes until July 1, 2021, and they must now be adopted and effective by February 1, 2021.

Paul W.

Build structures like this in Aberdeen. Land is cheaper there.

AJ

What’s the rationale for exempting PSH from design review? If design review is valuable, it should be used for any large(ish) project. If it’s not worth the delay and expense it adds to a project, it shouldn’t be used.

Seems like a better step would be to drop design review for any non-profit housing development, PSH or otherwise.

Paul W.

There’s a whole lot of empty office space in the CBD and in SLU. It should be repurposed for this kind of public housing. No need to upzone more — there’s been plenty of upzoning in Seattle over the past two decades and it’s led to inappropriate TOD.

asdf2

Repurposing unused office space is certainly worth looking into, but it’s probably not going to be nearly enough. The unused office space is all privately owned, and most building owners will probably prefer to wait for the office market to improve, rather than permanently convert the space to PSA.

The city has a chronic housing shortage; the only way to fix it is to build more housing. Upzoning still needs to happen.