Everyone old enough to pay rent knows that the lack of affordable housing in Seattle has reached crisis proportions.
Yet in response to the removal of several thousand low-income housing units in our city to condo conversion, demolition, speculation and redevelopment, the mayor wants to give subsidies and incentives that will spur still more of the very kind of development and speculative activity that has caused this loss in the first place.
If the mayor has his way, a program now limited in scope called the Multi-Family Tax Exemption Program (MFTEP), would be extended to nearly every neighborhood of the city and renamed the Seattle Homes Within Reach Program.
A BAD PLAN
The old plan was bad enough. Even though the majority of renters in Seattle need housing priced at or below one third of their monthly income or 60 percent of median - roughly $890 a month for a one-bedroom unit - the MFTE gives away 10 years of lucrative tax breaks in selected areas of the city while requiring developers to set aside only 20 to 25 percent of these new units for households at 70 percent of median income - about $1,040 per month for a one-bedroom unit. That cuts out a lot of Seattle renters right there.
But under the mayor's new proposal, developers need only set aside 20-30 percent of their new units at rent levels affordable to those with incomes between 90 and 100 percent of median. With vacancy rates now expected to drop to record lows of 2 percent, our mayor is going to reward developers who set aside a handful of units at $1,490 a month for a one bedroom unit. That cuts out a whole lot more Seattle renters.
On a 100-unit apartment, a developer would receive about $3 million worth of tax subsidies for renting out 20 to 30 percent of the units at these unaffordable rates - all in the name of "affordability." Even the housing market without government interference does better than that.
Much has been made of the teachers and firefighters who live outside Seattle because they can't afford homes in the city. Without discounting this problem, we still wonder about the vast majority of tenants in Seattle who have incomes at or below 50 to 60 percent of median. For them, the set-aside apartments subsidized with our tax dollars are indeed "beyond reach."
A recent meeting in Ballard to discuss this program drew over 150 people. When the crowd was asked who in the room could afford one of these so called affordable set-aside units, not one hand went up.
There are less obvious, but more invidious, problems with this program than the unaffordability of these so-called affordable apartments. By offering this subsidy, the Homes Within Reach program gives developers an incentive to tear down existing lower-density apartment buildings and replace them with larger, much more expensive units.
The result is a net loss of lower-cost apartments and more displaced tenants left to compete with other low-income tenants for a dwindling supply of units. Moreover, the proposed tax breaks for new high-end development pass added taxes onto existing lower-priced rentals.
It's all part of the mayor's larger strategy of promoting runaway development throughout Seattle. He recently proposed removal of extensive environmental review for market rate housing developments up to 80 units in size (the subject of a recent Geov Parrish column in this paper).
And he'll move soon to add still more allowable residential density in all our neighborhoods via what he's calling "incentive zoning." This scheme would reward developers with significant increases in the bulk and height of their buildings, if they agree to "set aside" some of their units at so-called affordable levels - again at 80 percent of median or more - and well above what most current tenants can afford.
A SHAM AND A SHAME
Ultimately, the Multi-Family Tax Exemption Program in its present and proposed incarnations makes a mockery of Seattle's 10-year plan to end homelessness by emphasizing the needs of people with higher incomes over those with much less. The upshot is to shift increasing shares of the city's housing funds to higher-end and mixed income development and away from those at lower income levels, who currently receive the bulk of those dollars.
It's not that we're unsympathetic to the difficulties of families at the median income to find houses they can afford to buy. But they don't live on the ragged edge of homelessness if their apartment gets converted to a condo or torn down to make way for a more profitable development.
As we've noted before in this column, according to the 2006 King County Housing Benchmarks Report, there is a shortage in the county (including Seattle) of over 70,000 rentals affordable to those with incomes at or below 40 percent of median - a monthly rent level of about $600-$800 depending on the size of unit. By contrast there is a surplus of over 100,000 rentals affordable to those making between 80 and 100 percent of median income - the type of housing the mayor's tax break plan would subsidize.
The mayor's tax break giveaway plan should be spiked by our city council right now so we can get on with the business of addressing our housing crisis at the root, by adopting laws aimed at limiting conversions and stopping demolition and the gentrification of our neighborhoods.
John Fox and Carolee Colter lead the Seattle Displacement Coalition and may be reached at editor@ capitolhilltimes.com.
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