Home Residential As HALA Takes Shape, Funding Highlights the Challenges of Increasing Affordability in...

As HALA Takes Shape, Funding Highlights the Challenges of Increasing Affordability in Seattle

Prologis, DCT Industrial Trust, logistics real estate, San Francisco, modern distribution facilities

One of the more pressing issues a growing city like Seattle can attempt to resolve is surrounding housing affordability. The economic engine of the region has spurred innovation and brought jobs to our region in record numbers. Often the price of such progress is traffic congestion and a housing crunch, both issues that seem to affect the incumbents disproportionally, and neither of which can be solved quickly. But if planned with an outlook into the future, these initiatives could set up the city well for future growth. Enter Seattle’s Housing Affordability Livability Agenda, or better known as HALA, an initiative born out of a need to address to the housing crisis in Seattle and one that may set a precedent for similar initiatives around the region.

HALA and its set of recommendations have already been widely distributed throughout the community, but the status on the initiative and the way forward was the topic of an event held earlier this week in Seattle and jointly organized by NAIOP Washington State Chapter and ULI Northwest. Titled Seattle Housing Affordability and Livability Panel: The Path(s) Forward, the event featured Seattle Council member Rob Johnson (Planning, Land Use & Zoning Committee Chair), Gabe Grant of Spectrum Development Solutions and a member of the HALA Advisory Committee and Jill Fleming, the CEO of Capitol Hill Housing. The event was moderated by Ian Morrison of McCullough Hill Leary.

We have to plan and prepare for 125,000 new jobs in the city and over 70,000 residents over the next 20 years

Since the Great Recession ended, Seattle has been one of the fastest growing cities in the country, yet one out of seven households is facing extreme housing challenges, where as much as 50 percent of a household’s income goes to providing housing, stated Morrison in his opening remarks.

“People are moving out of communities, and the communities are not equitable, but the reality is we have to plan and prepare for 125,000 new jobs in the city and over 70,000 residents over the next 20 years,” Morrison added.

The HALA mandate was to come up with a set of recommendations for 50,000 new units of housing over a 10-year period of time. 20,000 of those units need to be affordable units and 30,000 market rate. The city of Seattle has never in its history produced that number of housing units said Gabe Grant. “It’s a really, really ambitious goal that was set out by the mayor,” he said.

Grant was one of 28 members representing a broad spectrum of stakeholder groups that formed the HALA Advisory Committee, which came up with 65 recommendations for the city to enact in order to achieve these ambitious goals.

“The HALA committee and the recommendations that were put forward, that’s the beginning, that’s the starting line of all of this,” Grant said.

Jill Fleming, the CEO of Capitol Hill Housing, a non-profit housing developer, expressed concern however over the affordable housing goals and if they could be achieved at the current level of available funding. She explained that the city has $34 million in housing levy funds at the moment that can be applied to affordable housing development, but there is over $100 million in demand.

“That’s about 1,150 units if we funded all of that, and we have $34 million, so maybe we get 400 units,” she said. The 20,000 unit goal over 10 years means on an annual basis, the city could be 1,600 units short each year of achieving that goal. Fleming applauded the initiative, but she sees the funding as major hurdle going forward. “OK, that’s great, but where is the money?” she asked.

Council member Johnson acknowledged the shortcoming and focused on the issue of displacement as a result of the growth in this region. “We’ve had about 50 people move here a day, over the last five years. We’ve added about 35 jobs a day; we’ve only build 12 housing units a day. So, when you think about the basic supply and demand of that, it’s no surprise that we’re seeing so much economic displacement or gentrification,” he said.

Grant agreed and explained that the job growth is not necessarily at the top level of the pay scale, therefore the higher end housing supply does not necessarily meet the demands of the growing population. “The 35 jobs that we’re creating aren’t all Amazon, $150,000-a-year starting salary jobs. Very few of them are. Most of them are working class jobs, for which we’re not creating housing,” he said.

In the nine months that Johnson has been on the city council most of the HALA work has focused around the mandatory housing affordability residential framework. “Following HALA recommendations, the first major piece of legislation that was adopted was a commercial framework that required all new commercial developments to pay into a fund into the Office of Housing to build affordable housing,” Johnson said of the scheme that has helped generate the $34 million in available funding.

“That’s been the biggest item negotiated over the last few months, and it was successfully adopted by the council just last month. I’m proud to say that now that framework is in place, we’re moving on to the implementation stage, which is now we have to have the upzones that go along with that so we can actually have the resources,” Johnson added.

While funding will likely continue to be the top priority of the initiative and a considerable hurdle for increased affordability, it is the collective impact of all 65 recommendations that will influence the success of HALA, and prioritizing them is no small task.

One of Fleming’s top priorities would be for the city-owned land to provide an opportunity for development at below-market rates. “The government-owned land and transferring that and being able to transfer that not having to pay market value,” she said would be her top priority from the list of recommendations.

As a secondary priority, she would like to see more streamlining in parking zoning and the creation of parking benefit districts, all of which would help reduce the cost of construction because it would eliminate parking requirements in developments.

Grant’s focus would be on mandatory housing affordability, which he sees as having the broadest possible impact. “By far and away the most impactful thing is the MHA. I think that there is a reason that’s the headline issue, because that has the potential to be transformative,” he said.

In addition to these, streamlining design review and allowing micro housing, which he described as being “vilified,” to play a role in absorbing some of the housing needs was also very important.

Johnson highlighted parking and design as his top two initiatives, underscoring the priorities of the other two speakers and perhaps outlining the complexity that follows such a large issue like housing affordability in one of the nation’s fastest growing regions.