As promised weeks ago, there is a lot of ground to cover on issues impacting our region. I’ve been besieged in my brain with ideas for #Hashtag posts – from an updated series on homelessness to an analysis of the process for appointing and confirming department directors to detached single family zoning, and recently the ethical quandaries of being offered a job, being public about it, and still getting attacked. I have so many thoughts.

But one thing I keep coming back to – what does “affordable housing” mean. This is the issue that intersects with so many of the issues being discussed in our region. Whether around zoning, housing types, construction materials, homelessness, transit access, and so on, I’m not convinced we are all starting on the same page. Further, I have no preconceived notions that the collective “we” in these conversations ever will. There is so much open to interpretation, and disagreement on what that interpretation is, that we often find two groups purportedly advocating for the same thing, while actually advocating for something very different.

One thing I try to stick to is this saying: we need affordable homes for all income levels.

And I believe that 100%. The way that housing markets work: if there are not enough affordable homes for folks making 150% area median income (AMI), then they’ll “down-rent,” taking units that are affordable for households at 120% AMI, eventually driving those housing costs up, and creating a (dare I say it) “trickle-down” effect. For me, I take on the HUD definition, which itself has changed throughout the years. Today, that number: housing costs are “affordable” so long as they do not exceed 30% of a household’s income.

Of course, that wasn’t always the case. When we look at the benchmark federal housing programs, the percentage of income deemed “affordable” used to be 20%. Then, in 1969 (during the Nixon administration), that was changed to 25%. Enter 1981 (the Reagan administration), and the figure became 30%, where it has stood since. Current efforts by the Trump administration to further weaken – and increase direct cost to families – of federal programs suggest the effort to redefine affordable by the Republican Party is back in style.

Either way, the number we use today – and that I use for the purposes of my thought process for most households – is 30%.

Granted, I am probably in the minority. What most people mean when they say “affordable housing” (and I do it, too): rent-restricted and/or income-restricted housing. Typically, folks are speaking to specific income levels, and will use terms like “low-income housing” or “workforce housing” or “very low-income housing,” etc.

What is “low-income”? In Washington State, there’s an RCW for that! Revised Code of Washington (RCW) 46.63a.510(4)(b), (c), and (d) define “very low-income household,” “low-income household,” and “moderate-income household,” respectively.

Very Low Income = 50% of the median income for a county

Low Income = 50-80% of the median income for a county

Moderate Income = 80-115% of the median income for a county

Concept Art for a new rent-restricted development called “The Maddux”

Concept Art for a new rent-restricted development called “The Maddux”

I could dive into questions about “government purpose” and “gift of public funds”, but you don’t have the time (and I don’t have the time) for a long yammering about those legal issues. Instead, I’ll leave it at this: the Legislature has clearly found that we need more affordable homes, particularly for, as defined, “low-income” households in Washington State.

So back to the question at bar – what is low income, and how do we further define that in Seattle? First, let’s take a quick peek at Seattle’s affordable housing programs:

  • Seattle’s Housing Levy: the Housing Levy, which began as the Senior Housing Bond in 1982 (thanks, Mayor Charley Royer!), has been the cornerstone of local investment in our city. To date, over 15,000 affordable homes have been created as a result of this program, which often is the “first money” into a local affordable housing development. The bulk of the Levy funds rental housing production and preservation, with about 2/3 focusing on households at 0-30% AMI, and the 1/3 on households at 30-60% AMI. There is also a homeownership component targeting 60-80% AMI households. This funding is routinely braided with other funding sources, creating a financing lasagna for affordable homes.

  • Incentive Zoning (IZ): This program has been around for awhile, and provides Floor Area Ratio (FAR) and height bonuses for new developments in exchange for including affordable homes for households up to 60% AMI, or payment-in-lieu. In addition, this program allows for Transfer of Development Rights (TDRs) in exchange for preservation of historic or culturally relevant facilities, parks, and/or creation of parks/open spaces as part of a new development. IZ currently covers South Lake Union, Downtown, and First Hill. With the adoption of MHA, I believe it will only be in effect as an option to MHA in First Hill.

  • Multi-Family Tax Exemption (MFTE): NOT pronounced “muftee,” this is a tax abatement program authorized by the State Legislature, allowing for a 12-year property tax exemption for new development, so long as a certain amount of units are set-aside with rent “affordable” at certain income levels, with income qualification. The set-aside percentage is 20-25%, depending on unit type, with income restrictions of 40-90% AMI, depending on unit type (SEDU, Studio, 1BR, 2BR, 3BR). This is best explained in the Central Staff Memo detailing the impacts of (adopted) amendments from the last MFTE renewal.

  • Mandatory Housing Affordability (MHA): Seattle’s version of Inclusionary Zoning, this concept has been in the works for years, most recently has part of the Housing Affordability and Livability Agenda recommendations made in 2015. At its most basic, this program includes modest zoning changes in select parts of the city (primarily urban villages, and only impacting 6% of single-family zoning, which makes up 86% of residential zoned land in Seattle) in exchange for production of affordable homes on-site, or payment-in-lieu. Each percentage of performance (or cost for pay-in-lieu) is determined by a series of factors, including increased capacity and risk of displacement. Despite claims that this is a “one-size-fits-all” approach, it is anything but, with meticulous effort having gone into block-by-block analysis and zoning proposals. Currently MHA is in place in a few neighborhoods, with legislation expanding the program “city-wide” before City Council on March 18, following years of process and public engagement.

  • Seattle Housing Authority (SHA): Seattle Housing Authority is Seattle’s local authority that essentially manages federal Section 8 vouchers, and federal investment in affordable homes. SHA owns and operates more than 8,000 rent- and income-restricted homes in Seattle, and provides rental assistance to more than 17,000 households. SHA is probably most known for its Yesler Terrace housing development, which is currently undergoing a massive redevelopment, with 1-for-1 replacement of the 591 units serving 0-30% AMI households, 290 new homes for households making up to 60% AMI, and 850 new homes, marbled with 3,200 market-rate homes, for households making up to 80% AMI, which they refer to as “workforce housing.”

So, at its most basic, our city is generally focusing housing initiatives on 0-80% AMI, with some toes in the water for up to 90%. Direct subsidy is typically limited to 60% AMI (levy funds, pay-in-lieu funds), and indirect subsidy focused on 60-80% AMI (tax abatements). And yet, we are nowhere near having a meaningful impact on the need, either at the city- or county-level.

Additionally, state and local governments simply cannot do this alone. Public investment in rent-restricted homes is not a game we can win, and anyone who tells you otherwise is lying. We can’t “tax the rich” out of our affordability crisis. As contemplated by the King County Affordable Housing Tax Force, King County needs 244,000+ homes affordable to households making up to 80% AMI by 2040. The Seattle Chamber of Commerce’s McKinsey study suggests that the need for permanent supportive housing is upwards of 3,400 units today. For an idea of what that means in dollars and cents: at an average cost of about $300,000 per unit, we would need over $1 billion to meet the supportive housing construction costs in King County. For the 244,000 units, averaging $325,000 per unit (more family-size units), the total capital costs would amount to approximately $79,300,000,000. For reference, the City of Seattle 2019 budget, from non-restricted funds, is about $1.3 billion.

So our affordability crisis, created by land-use and zoning policies designed to keep people out, now leading to keeping people outdoors, has ballooned into a massive cost-issue. To mitigate this problem, it will take a myriad of approaches. Challenge Seattle recently released a set of ideas focusing on “middle-income housing,” which followed Microsoft’s Impact Investing announcement. These both follow 2014-2015’s HALA committee, which was designed to look at affordability for all income levels, and One Table, which focused on homelessness but incorporated a lot of exacerbating issues (notably lack of affordable housing for low- and very-low-income households). Seattle Mayor Jenny Durkan has added to the process with yet another task force, dubbed the “first ever affordable middle-income housing advisory council” (first of this administration, perhaps) to replicate/update/localize the work of Challenge Seattle, HALA, One Table, and so-on.

That myriad of approaches, with an eye on mitigation of displacement for communities that have historically seen – and continue to see – disinvestment will be the focus of upcoming #Hashtag posts under my byline. Because at the end of the day, we must ensure we are producing affordable housing for all income levels. Because when we don’t, higher-income households will always win.