In recent weeks, a controversy has emerged over what to do with three blocks of city-owned land along the Mercer Corridor. In the early 2000s, the city exercised the threat of eminent domain to acquire those properties to make way for a $250 million reworking of that street.

Now that the project is finished, the three sites used as a staging area for construction equipment can be sold off to the highest bidder. Mayor Jenny Durkan is in negotiations with a for-profit developer and has set a condition that 175, or 13 percent, of the 1,300 units that zoning will allow there must be offered at “affordable” rents. 

Meanwhile, an alliance of labor, homeless and housing groups are calling instead for all or a portion of the land to be “gifted” to a nonprofit, so as many as 500, or 40 percent, of the units could be offered at “affordable” rents.

We’re very wary of both options, and here’s why: No one has made explicit what they mean by “affordable housing.” Nor has it been made clear where any proceeds from the sale would go or for what purpose. 

The state Legislature last year passed a new law allowing gifting or sale of public land at below-market value to either a nonprofit or for-profit developer provided the land is used for a “public benefit,” meaning affordable housing. But the language of the finally approved bill allows a developer to offer all the so-called “affordable” units at rents priced all the way up to 80 percent of area median income (AMI). 

There’s a heck of a difference between rents affordable to those earning at 30 percent of median, estimated to be about $600 per month for a 2-bedroom unit, and those at 80 percent of median, more than $1,800 a month. In fact, more than half of Seattle’s rental stock is offered at rents at or below this higher threshold. And since most renters in Seattle earn below 60 percent of median, where exactly is the public benefit requiring a developer to “set aside” units at this higher than average rent threshold?

By contrast, there are now more than 30,000 tenant households citywide earning less than 30 percent of area median who pay 50-60-70 percent of their income on rent and are at risk of rent increases and demolition gentrifying them out of their homes. And there are another 20,000 households earning between 30 and 50 percent of median that also lack an affordable unit.

Unless municipalities, the state and counties affix their own rules to bring the price of the so-called “affordable” units down below 50, and in some cases below 30 percent of AMI, the Mercer project could wind up being a humongous developer giveaway.  

We’re already seeing that at Northgate. King County, Seattle and Sound Transit are planning to give away land assembled at Northgate that’s no longer needed now that the light rail station there is nearing completion. This land would be offered to a private developer at substantially below full value, provided that the developer then offers a chunk of the land to some nonprofit entity that would create 200 “affordable” units.

However, the request for proposal that went out to developers bidding for the site requires that only 20 of those 200 “affordable” units be offered to those earning less than 50 percent of AMI. So it’s not even clear that any of those 20 would be priced below 30 percent of median —serving those truly in greatest need in our city.

Since the site likely will be rezoned soon for 24-story highrises, the developer probably will be given the privilege to build perhaps as many as 800 market rate and expensive units. And the city and county could chip in $20 million for the project, including possibly half that from housing levy dollars.

Does this make any sense? The private developer walks away with a bundle. A nonprofit gets to add another “affordable housing project” to their portfolio, and rake in developer fees. But all we’ll get is 20 units for those truly in need or about 2.5 percent of all units on the site. This is a rip off pure and simple. And such a possibility exists at the Mercer site in the event the land is gifted to any entity, for-profit or nonprofit.

So what should be done with the Mercer properties? We would recommend the city retain the land and lease it to a nonprofit for a tenant-owned co-op serving primarily those at 30 percent and 50 percent of median. If indeed any part of the land is sold, proceeds not needed to cover debt from the city’s original purchase of these sites should go for housing serving those below 30 percent of median.

No doubt when they break ground at Northgate or the Mercer site, our mayor, councilmembers, and other assorted poobahs will be there with golden shovels to turn the first spade of ground.  But like so many of their actions, will substance give way to appearance?