How many affordable housing units will HALA Recommendations produce?



On Wednesday, July 20, 2015, I asked representatives from the Department of Planning and Development and the Office of Housing to provide Councilmembers with an accurate accounting of the net number affordable housing units that will result from the implementation of the HALA Committee’s recommendations.

The HALA Committee had announced that their recommendations would either produce or preserve 20,000 affordable units over 10 years. But they did not factor in projections for currently affordable market-available units that will be demolished or become unaffordable over the same period. We will not have an accurate assessment of the impact of the HALA proposals if we do not account for the epidemic of economic evictions currently under way in Seattle. Below is the email I sent asking for a study to address this accounting issue. 


 

Dear Geoff, Diane, Emily, Steve, Leslie, and Robert;
CC: Councilmembers

Thank you for all your ongoing work on the HALA committee’s recommendations.

I am writing to follow up on a question I posed at the last meeting of the Select Committee on Housing Affordability (video). As we evaluate Seattle’s ability to provide affordable housing for all, it is important we have reliable estimates of the effects of our policies on the magnitude of Seattle’s affordable housing stock.

The goal presented by the HALAC is 20,000 affordable units built or preserved over the next ten years. At the meeting, you clarified that this is not the net number, because it only accounts for the loss of rent-restricted units (for example, MFTE rent-restricted units that revert to market rate), and not the loss of market units that used to be available at affordable rents.

There is no reason to believe that the current trend of rapid loss of market affordable-rent units will not continue. For instance, in 2014, investors spent an unprecedented $3.8 billion buying apartment buildings in the Seattle metropolitan area, raising rents, and depleting the number of market-available affordable units. The net number of affordable units created over the next decade needs to account for these dynamics in the housing market.

Here is a hypothetical scenario: There is an older apartment building with 30 units all rented out at an affordable rate, not because they are part of any government program, but because they are older, and the market rates for this building are in the affordable range. These old buildings often make up the majority of the affordable housing stock in a city. A developer who wants to maximize profits is likely to buy the building. They might demolish it to allow for the construction of a much larger and brand new 100-unit building. Even if this happened years from now when inclusionary zoning has completed its SEPA review and is fully in place, the inclusionary zoning proposal at its high end of 7% would only result in seven affordable units.

In this hypothetical example, the HALA committee’s methodology would count this as seven affordable units being created even though in reality there was a net loss of 23 affordable units.

Another likely possibility is that the developer refurbishes the units (even minimally) and rents them out at rates that are now unaffordable. In this case, it would represent a net loss of 30 affordable units.

In this deep housing crisis, vague accounting that obscures the magnitude of Seattle’s housing crisis will not help in meeting the urgent needs of tenants facing skyrocketing rents throughout Seattle. As I mentioned in the committee meeting, I request that your departments analyze not only the gross impacts of the housing proposals that will come before council, but also their net impacts.

This will allow the Council to make an informed decision about policy impacts on affordability, and on whether the proposals are sufficient to meet Seattle’s needs. Please let me know if you can begin to look into the necessary accounting in the coming weeks. If not, the Council could commission a study from independent affordable housing experts.

I expect that, with the more accurate accounting, the net number of affordable units will be smaller than previously reported, but that can be addressed with more robust housing policies of maximum linkage fees with no phase in, rent stabilization, and one-to-one replacements of lost market-available affordable units.

Thank you in advance for all your help.

Sincerely,
Kshama

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