Outside City Hall Continued:

Vol. XXXII (May 2008): City Council considers lucrative tax break giveaways to developers:

Residential construction in our city has hit near record levels in the last year and cranes are sprouting up like weeds in our neighborhoods.  Developers are having a field day, yet are our city leaders remain determined to give them still more lucrative public subsidies and tax breaks.

City Council’s Housing Committee is mulling over the Mayor’s proposal to amend the existing multi-family tax exemption (MFTE) program that already rewards developers millions in tax breaks provided they set-aside 20 to 30% of their new units at rent levels affordable to those with incomes between 60 to 70% of our area median.  For a one-bedroom unit, for example, a set-aside could be offered under the current program at $1069 a month.  Mind you, in this town, most tenants have incomes below 60% of the area median and can only afford a one-bedroom priced under $915 a month. 

But for some reason our Mayor seems hell bent on raising the rents allowed on these set-asides all the way up to 80, 90 and 100% of median income, or about $1200-$1500 a month depending on size of the unit. Not only will these so-called "affordable" units be hundreds of dollars a month above what the average tenant household in Seattle can afford.  They exceed the going rate in our neighborhoods by an even great amount.

For example, the average rent for a studio apartment in Rainier Valley is $524 according to the April 2008 Dupre & Scott apartment report.  Under the Mayor’s proposal, the “affordable” rate that we’d subsidize with our property taxes would be $1282.  For a one-bedroom apartment, the average rent for Rainier Valley is $636 and rent on set-aside units under the Mayor’s proposal would be $1500.  And remember, most units in these new buildings would be offered well above the rents on these “set-asides”. Does something look out of whack here?

Housing Committee Chair Richard McIver has proposed making the set-aside units affordable for those making 70-80 % of median, pricing a set-aside one-bedroom unit at $1221 a month.  But that’s still almost twice the average rents in Rainier Valley and well above nearly all the city’s other neighborhoods. .

We’re not in favor of letting the housing market totally dictate housing costs, and we envision a role for government in ensuring adequate housing for all citizens.  But the MFTE is government intervention that actually promotes elimination of low-income housing. 

Whether it’s McIver’s or the Mayor’s proposal, these changes to the MFTE serve one purpose. They are designed to promote still more runaway growth in our communities – growth that already is wiping out our tree canopy, open space, greenbelts, and existing truly affordable low-cost housing stock.  Last year alone 1200 low-cost housing units were demolished to make way for new developments.   

Also, if enough developers get tax exemptions through this program, a tax burden of tens of millions of dollars would be shifted on to owners of existing older rental properties, and passed on to their tenants in turn in the form of higher rents.

Combine these tax breaks with the council's recent decision to lift SEPA thresholds, removal of parking requirements, increased heights in some areas, upzones now planned for many of our neighborhoods, and the proposed extension of the "housing bonus" program into all neighborhoods - and it basically amounts to one VERY big windfall for developers.

Of course the Mayor and his planners argue that we must offer these incentives and subsidies to generate more housing.  But the reality is that there’s no shortfall of new housing development in our neighborhoods.

Our planners in 2004 set a target as required under the Growth Management Act of 47,000 new housing units by the year 2024 to meet Seattle's allotted share of regional growth.  In just four years, we've reached an astonishing 50% of our 20-year target. Even in Southeast Seattle, West Seattle and Northgate, which until recently were considered lacking in new development, nearly all our neighborhoods are exceeding their targets.

Even if - as expected - our city's 2024 growth targets are adjusted upward, we could triple those targets and still easily meet them at current rates of new housing construction and without one single upzone, one more developer tax break or other giveaway!

So where's the need and what's the public purpose to be served here other than to reward developers with enormous direct and indirect subsidies for something they are already doing (and doing too much of)?

City staff have countered that rents on newly built units are normally offered to those with incomes at no less

than 120% of median, but under this program, they say, at least we’ll get a few units at rent levels affordable

to those between 70-100% of median.  But as we have said in previous columns, there is no shortage of rental units affordable to this group when, by contrast, there is a shortage of over 100,000 units countywide for those at or below 40% of median.  

Moreover, a close look at real estate listings in the area will tell you that as a new apartment building ages, rents

don't rise as fast as inflation and within a few years become affordable to those in the 70-100% income category.  

Our city leaders plan to give developers millions in tax breaks under the MFTE to get units that in only 3 to 6 years

would be offered at these lower rent levels anyway.  Age and market forces give us more "set-asides" than 

the MFTE ever could.  

The MFTE program, especially with the proposed changes, is little more than a massive giveaway, mostly to a handful of large corporate developers – many who just happen to donate heavily to our Mayor and City Council.

The real question is:  Where will we find real leadership to rein in or mitigate this development to ensure that the physical and social character of our city is preserved before even more growth occurs? 

Outside City Hall Vol. XXXIII:

The Attack of the Townhouses

by Carolee Colter and John V Fox

City Councilmember Sally Clark has heard from the neighborhoods and they are not happy about the spate of tacky cookie cutter lot-line to lot-line townhouses now popping up with increasing frequency in our midst.  That’s why she’s holding a series of forums on townhouses, focusing on the question of how we can make them better – improve their design and better integrate this housing option into the fabric of the city.  

Her initiative has led to a number of news articles highlighting the city of Portland’s laudable attempt to promote townhouses as a denser, more environmentally friendly alternative to lower-density single-family homes, duplexes and more “sprawling” forms of development.  

Councilmember Clark seems genuinely interested in ensuring a more creative approach to townhouses. Unfortunately, as we have seen over and over again, when discussions around zoning changes begin at the community level with earnest dialogue, citizen workshops, and lofty promises about reflecting community concerns and good design and other highfalutin’ values in new zoning, once the final decisions are made, we get something quite different.  After all, that’s the very process that brought us these look-alike townhouses in the first place. 

Phinney Ridge resident and community leader Irene Wall hits the nail on the head when she says, “It’s a lot more than a question of design.”  The Mayor plans major upzones across the city using the cover that we need such density to prevent sprawl, guarantee affordability and save polar bears.  No matter that in virtually every neighborhood now, we are greatly exceeding our residential growth targets.  Citywide we’ve reached 50% of our 20-year targets in just four years.

All this brouhaha really is about the “selling” of more density to the neighborhoods.  The Mayor and most of the planners down at City Hall have drunk the pro-density Kool-Aid and they’re trying to spoon-feed it to us.  In this case, they are seeking more penetration into single-family and other lower-zoned areas, for so-called "good design" and "sustainable green" buildings such as townhouses.

Unfortunately, the result of the added density is to drive up property values and cause the loss of more existing lower-density apartment buildings to demolition, speculative sale and higher rents.  Lacking tools put into place first to ensure that developers replace all the units they remove at comparable rents, or to steer growth away from removing existing housing, the city’s approach can only mean still more gentrification and displacement (not to mention loss of tree canopy, greenery, views, open space – the physical values we all cherish and that make this city truly livable).

These added densities packaged in townhouses don't just affect homeowners, but renters, too, since 20-25 % of all Seattle’s renters live in single-family homes.  Especially impacted are the larger family households that depend on duplexes and triplexes and small older apartment buildings.  These households include many people of color in Southeast and Southwest Seattle and the Central District. The loss of these kinds of units already is forcing larger lower-income families to leave the city or to re-concentrate into remaining pockets of lower-priced rental housing in Southeast and Southwest Seattle along corridors not yet redeveloped and gentrified.  Recent news stories about the segregation of our schools ignored the degree to which resegregation is linked to housing patterns and local land use decisions that cause the loss of larger rental housing for lower-income families. 

Perhaps under an enlightened and progressive Mayor, well-designed townhouses with Below Market Rate (BMR) housing and environmental stewardship requirements built into them, could be made workable.  For example, in areas we've recently upzoned, where we've seen the effects of bad design and excessive density—i.e. loss of existing low income housing, trees, and open space--we'd downzone first and then rezone for townhouses but at lower densities than now allowed, and then set strict design principles, affordability requirements and tree preservation requirements. 

Or we'd overlay an area to reduce current allowable densities but then allow additional density where appropriate and where the community itself says it’s OK, but subject to rigorous requirements for design, siting, BMR set-asides, open space and tree preservation.

Or we’d create a neighborhood advisory committee to review each development within these overlay areas and give this group explicit authority to set the terms of each new development as it occurs.

Of course none of these approaches will happen under this administration, or under our current get-along-to-go-along City Council.  More than at any time in our decades of community and housing advocacy, land use decisions are driven by development and corporate interests that simply ask for more and more.

In this context, Sally Clark’s efforts, however genuine, will be taken by over by the status quo and will become "the selling of townhouses,” as in, “How can we make them palatable and shoehorn still more development into lower-density communities?”  

They’ll just greenwash the townhouses -- maybe plant grass on their roofs, make the pavement between the homes porous or replace it with colored brick, plant some shrubs, add swales in the front planting strips, maybe set a courtyard or modulation or set-back requirement here and there.

Our city’s neighborhoods are under assault by a pro-developer Mayor who’s hitting us with a dizzying array of all-at-once pro-density proposals.  With a compliant Council in tow, he’s recently lifted SEPA (environmental review) requirements, removed parking requirements in neighborhood commercial zones, removed essential open space requirements, pushed excessive view-blocking heights in South Lake Union and upzoned downtown for the equivalent of 12 new Columbia Towers. 

Now the Mayor is seeking multi-million dollar tax breaks for developers through changes to the Multifamily Tax Exemption program, and significant upzones through changes to neighborhood plans and the comprehensive planning process now underway. 

Unless there is change at City Hall in 2009 when our Mayor is up for re-election and several Council seats are up for grabs – well, we’re gonna lose our city – lose what makes our communities livable, truly green, truly diverse, and truly affordable.

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        Outside City Hall Vol. XXXIV (July 2008): Coalition responds to councilmembers defense of their vote to approve millions in developer tax breaks    - by Carolee Colter and John V. Fox

         Two months ago in this column we wrote about a pending City Council vote on the Mayor’s Multi-Family Tax Exemption (MFTE) plan.  We objected to it because it would give millions of dollars of tax breaks to developers who’d only were required to set aside 20% of their new units at rents levels slightly below market rate but hundreds of dollars above what most Seattle’s tenants could afford.

         Despite our concerns and those of hundreds of others who emailed and called City Council, last week the Council approved the Mayor’s MFTE plan by a 7-1 vote.  Only Councilmember Licata opposed the measure (with Councilmember Rasmussen out on vacation). 

         Leading up to last week’s vote, the P-I editorialized against the new MFTE plan. Fearing still more runaway development spurred by these subsidies, dozens of neighborhood activists stood up at hearings and testified against it, too. Even apartment building owners decried it because millions in additional taxes would be passed on to them.

        It’s not new to see Councilmembers ignore citizens and kowtow to the Mayor and his developer pals.  Nor is uncommon on controversial issues for Councilmembers to launch into a rhetorical flourish just before voting the wrong way when the public is so opposed to their action. It’s called damage control.  What was particularly telling, though, was the rationale Councilmembers used to justify their action.

        While each Councilmember gave it his or her own twist, their arguments were simply variations on the same theme:  we are becoming a city of haves and have-nots, rich and poor, with no housing in the middle for folks like firefighters or teachers.  Each councilmember argued that without this subsidy, developers would not offer any new units affordable to those at 80 to 90% of median income.

        However, none of them could point to any supporting data.  When Councilmember Licata asked for evidence of a lack of older existing (or even relatively new) units at these income levels, Councilmembers just fell back on quoting the developers’ complaint," We just can't build anything in the middle.”

        In contrast, the Displacement Coalition produced reams of material (accessible on our website) showing that proposed rents on the set-asides in the MFTE program are $200-$500 above the average rent in most Seattle neighborhoods.  We also provided data from King County's comprehensive housing report showing that 92% of all Seattle and county rentals are at or below what would be affordable to people making 80% of median income - roughly the price of the set-asides under this new MFTE plan.

        We even went to craigslist and called some of the new buildings and found they were offering right now rents at 80-90% of median income on some of their units – the ones without views, on the alley or in the basement.  So again why give tax breaks to these developers?

        Licata mustered testimony from teachers that rents on the proposed set-asides were well above what a starting teacher could afford.   He also presented data that the proposed rents were hundreds above what daycare workers, janitors, nurses aides and restaurant employees can afford, forcing these folks to live in the suburbs.

        As for the “new kids on the block”, Councilmember Tim Burgess claimed his support of the Mayor’s plan was the sign of a true progressive committed to “equality and justice”.  Bruce Harrell simply lashed out at opponents, claiming he was as committed to the poor as anyone else in the room.  Just saying it, Bruce, doesn’t make it so.

         Councilmembers bristled at the notion that approval of the MFTE plan was simply a giveaway to developers.  When you get nothing in return that the market is not already providing without the subsidies, well, that's called a giveaway.

         If, as they anticipate, this program produces 6000 units in 12 years or 500 a year, that would represent a tax shift of $100-130 million.  That ain't small change and it’s passed on in the form of higher taxes for the rest of us--higher rents, too. It's one more "small hit" on top of many other small hits on the average taxpayer, or small owner of existing lower priced apartments, who gets stuck paying for one more stadium, one more underground car tunnel, one more expensive six-lane 520 bridge, one more Mercer corridor, one more Vulcan streetcar.

        Councilmembers also said that these changes to MFTE would not detract from the city’s other housing efforts, but would be simply one more tool “in the city’s quiver,” this one designed for moderate-income folks.  For low-income people we have a housing levy, they say.  No matter that the levy barely allows us to build a fraction of the existing low-income units lost every year citywide due to runaway growth and redevelopment.

         Licata pointed out that under the current MFTE program we get units at 60% of median income--it's working.  But with the changes, developers setting aside units at 60% will switch and do their set-asides at 80%.  This means we get less of what we really need at the lower levels.

        The Council actually could have improved on the existing MFTE program by crafting a proposal that gave away these tax breaks only to non-profits, allowing them to layer on other subsidies, provided that all of the units they offered were at or below 50% of median.  The for-profits could have been involved, but only in partnership with non-profits and at those rent levels.  (There are for-profits doing this already.)

        Had the non-profits stood up and called for this kind of plan, our City Council might have responded, but in the “get along and go along” world of Seattle politics, most non-profits simply sided with the Mayor and the for-profit developers they sometimes "partner" with. The Mayor holds the purse strings to their funding sources and after all, they too get a piece of the action under the Mayor’s plan.

        That’s what the council’s vote was all about – passing out favors to friends.  It’s the taxpayers and low-income people who will suffer.

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