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This page lays out Councilmember Mike O'Brien's proposal for an Affordable Housing Linkage Fee in Seattle. In the South Lake Union rezone, I led the effort to increase the in-lieu fee because it was clear that it was too low - too few units were being created and projected for the future, and almost no developer was building affordable units on site. After the South Lake Union rezone, the Council adopted Resolution 31444, which calls for a comprehensive review of our workforce housing programs and a specific look our programs aimed at households with income levels in the 60-80% of area median income (AMI) range (see this chart for AMI levels in Seattle).
The following series of charts is taken from an analysis conducted by Council Central Staff to help provide baseline of existing availability of workforce affordable housing. Part of the answer for this cost burden lies in the fact that, while the market does provide some affordable studio and one-bedroom units, there are very few affordable family-sized units.
We also know from our baseline data report that we need a significant increase in the number of affordable units we need in the city to meet the projected need based on our city's growth. The baseline data is clear, if we want Seattle to be an inclusive city for people of all incomes, than we have to do a lot more than we are now in order to produce more units that are affordable to more people. To help Council grapple with how to meet this affordability challenge, we hired a team of expert consultants to conduct research and provide recommendations.
On February 13, 2014 the City Council hosted a half-day forum featuring experts from around the country discussed best practices in affordable housing production in growing urban centers like Seattle. In June of 2014 we held a listening session to hear from residents here in Seattle about their experiences in finding housing that fits their budget. City Council is currently considering a new way to help fund workforce affordable housing in Seattle. In order to explain how the change to a linkage fee will bolster our resources for affordable housing in the city, we need to start by explaining how our current incentive zoning program works.
The consultant found that while the IZ program has provided significant resources for affordable housing ($31 million from 2001-2013), the program is limited in its ability to provide significantly more affordable housing because (a) IZ is geographically limited in scope and (b) it is a voluntary program even in the areas it applies. Second, the economic analysis conducted by DRA shows that Seattle's jobs, real estate and development markets are so strong that we could raise our fees significantly without halting the growth we are experiencing.

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It includes the background information on where this proposal comes from, findings from the expert consultants Council enlisted to help analyze our affordability challenges we face in Seattle, a summary of the public engagement on the issue to date and the proposal that Councilmember O'Brien is now advocating for. There are a few tools available to the City to help maintain the affordable housing stock that exists today and produce more affordable housing. In that process, we learned that our current tools were producing too few new affordable units for the population growth we were seeing and expecting in that neighborhood, so I helped lead the effort to strengthen our incentive zoning program. The theory goes that if we have the in-lieu fee at the right price, there is no economic incentive to pay the fee and we will see affordable units built into ongoing projects. But in the context of housing, the federal government has set the standard that affordable means that your rent that does not exceed 30% of your income.
This means that low-income families are faced with committing more of their precious resources to housing (and less on food, utilities and other necessities), or they have to move outside of Seattle. As Seattle grows, there is greater demand for housing affordable to all levels, including more lower- and moderate-income households.
The forum drew about 250 attendees to City Hall to learn more about what is going on in Seattle and what we can learn from other cities going forward. We heard a number of concerns from people struggling to find affordable places to live and still have money available to spend on food, utilities and school clothes for their kids.
We had presentations on the economic analysis and draft policy recommendations for strengthening our affordable housing efforts in the city.
For the shorter version that just focuses on the proposal, please see Councilmember O'Brien's recent blog post on the Affordable Housing Linkage Fee. New studio and one-bedroom condos are going for $1,500 to $2,000 per month, hardly affordable to a recent college grad with tens of thousands of dollars of student debt, but nicely affordable to a newly employed software engineer in our growing tech sector.
I think everyone agrees that Seattle should be a family-friendly city, and not just for the affluent. In order to meet the need for affordable units, about 28,000 of those new units (40%) will need to be affordable to people making 80% or less of AMI. The basis of the proposal is that the rapid growth and new development we are experiencing in Seattle is causing an even greater need for more affordable housing.
The fee would be based on the square footage of the project and would be set at the level required to produce 3%-5% of the units being created at an affordable level.

But the economic analysis is convincing - if we get the price right we won't hinder development and we will significantly increase the resources we have to help meet the growing demand for housing at all levels of affordability. At Sunny Seattle Landscaping in Everett, WA, we specialize in irrigation systems, and we're dedicated to creating long-term relationships with our clients through hard work and affordable service. We're open during standard business hours, and we offer a comprehensive range of landscaping services that will transform the look and feel of any lawn regardless of size or layout. But it does mean that there is less affordable housing for the people who can truly only afford lower rents. This new fee asks new development to help pay to mitigate the increasing demand on our affordable housing stock.
After the South Lake Union rezone, the Council adopted Resolution 31444, calling for a comprehensive review of our workforce housing programs, with a particular look at 60-80% AMI households, to better understand how we were meeting the need in Seattle.
Developers will still have the choice they have today - produce 3%-5% of the units in the building as affordable units (with a 99-year period of affordability) or pay the housing linkage fee. Sunny Seattle Landscaping offers hardscaping services designed to improve the aesthetic appeal of your property's exterior. I am proposing that we replace our current incentive zoning program with this new housing linkage fee program, which has the potential to significantly grow our resources for affordable housing in the city. Looking just at the bar on the right, which represents units affordable to people making more than 80% of AMI, we can see that 60% of those units are occupied by people making more than 100% of AMI. But some 25% of our households are in the 30%-80% of AMI range, and we have previous few resources to address the need for housing affordable to those households. Just half of the units affordable to people making between 50%-80% of AMI are actually occupied by people in that income range (second chart from the right).
The numbers get better the further down the level of affordability you go, but the take away is clear - there is insufficient access to workforce affordable housing in Seattle for the people who need.

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