HALA’s Highest Impact Recommendations: Is Anyone Working on Them?

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What bedevils the housing conversation in Seattle today is the confusion between the 65 recommendations in the Housing Affordability and Livability Agenda (HALA) Committee Mayor Murray convened last year and one of those recommendations and the most problematic, Mandatory Inclusionary Zoning (MIZ) also known as the Grand Bargain. Even last week at a panel discussion a colleague said something like “and even though you don’t like HALA.” I had to correct him. I like the HALA recommendations. My co-panelist could be forgiven that lapse since the panel was supposed to discuss HALA but spent most of its time discussing MIZ. I’ve said this is unfortunate and happening citywide. So our intern Jeremy Gleed has undertaken an effort to create an interactive tracker of all the recommendations. We’ve got a first draft of that tracker now

What I am sharing first is a three (big) page Excel sheet showing what the HALA Committee report flagged as the “Highest Impact Recommendations.”

Of the many recommendations presented in the report, the boldest and most promising ideas with the greatest potential to impact housing affordability in Seattle

How hard is the City working on these “bold” and “promising” ideas? Lots of effort and energy has been absorbed in upzones associated with MIZ and pushing those out to all the neighborhoods. Meanwhile other really great ideas that are feasible and legal aren’t getting as much attention. To be fair, momentum is strong with promoting the Levy and considering legislation to allow for more Detached Accessory Dwelling Units (DADUs), both in the “greatest potential” category. Additionally, work was done to try to change State law to allow easier use of the Multifamily Tax Exemption (MFTE) Program for existing housing.

What are some examples? Let’s look.

More Resources: Call on the State and City to Create Additional Resources for Affordable Housing

Strategy L.1 – Prioritize use of surplus and underutilized public property for affordable housing and promote co-development in conjunction with public buildings.

This is an idea, along with using City debt borrowing for financing, that has been promoted by Councilmember Savant, has broad support, but has gotten very little attention from City staff outside of them saying it won’t work. It is time to pull people off of MIZ and focus on this instead. It’s very likely that to make public financing for City owned housing on City land would require considerable effort. And maybe there are other models for financing that make sense in addition to the City using its bonding authority. But we have to do the work. The good news (see above) as that Sawant has at least made a sign about this topic. Progress!

More Supports for Communities: Launch a Proactive Preservation Strategy

Strategy P.1 – Task the City’s Office of Housing with leading an expansive preservation effort to strategically acquire existing affordable multifamily housing and provide funding for that strategy

Councilmember Lisa Herbold has started this discussion, but Councilmembers are now considering ill-advised legislation prohibiting rent increases I’ve talked about yesterday that would put the City dangerously close to rent control, a violation of State law. This approach along with financial assistance for older buildings and smaller landlords makes a lot more sense. The concern most of us share is whether the City can move quickly to acquire buildings without spoiling ongoing transactions.

Also, the City doesn’t even track or follow what’s happening with existing subsidized properties with covenants. These are buildings that have more strings attached to maintain affordability because they get government funds, but often still can’t maintain themselves and end up needing to be sold. Lots more work needs to be done here to come up with a workable program to inventory lower cost housing, maintain it, or acquire it to benefit renters and private owners.

More Resources: Recommit to and Expand Effective Existing Tools

Strategy R.4 – Renew and expand the City’s successful multifamily property tax exemption program which enlists private developers in providing income and rent restricted units in newly constructed buildings

This is the best, legal, effective, and most obvious inclusionary program there is. With 20 percent inclusion rates and thousands of units already online all over the city, it simply makes sense to expand this program. Yet the City seems to harbor resentment to the program because it doesn’t stick it to developers and builders of housing – even though many, many renters enjoy many months if not years of lowered rent in exchange for a relatively small deferral in property taxes.

More Supports for Communities: Support Vulnerable Tenants and Increase Access to Housing

Strategy T.1 – Increase fair access to rental housing for people with past criminal records through local legislation, education and technical assistance

We’ve called this out to before and I continue to hear lots of support being murmured in many quarters for better coordination of re-entry for people coming out of the prison system. But I’ve seen very little effort at the City to identify these opportunities and we’ll do what we can to work with tenant advocates and landlords to figure out what might work and push the City to do what’s necessary.

More Innovation: Create Efficiencies in Housing Production

Strategy RP.1 – Improve predictability and timeliness and thus reduce construction costs by reforming City design review and historic review processes

Strategy Rp.2 – Reduce the number of projects required to undergo SEPA review by raising SEPA thresholds

What else can I say but, “Amen,” to both of these, and, that in spite of an exhaustive review and proposal to do just what this recommendation suggests, no action is expected on changing the City’s cumbersome and unsatisfactory design review program.

Design and SEPA review remain needless a speed bumps utilized by NIMBYs to appeal projects they don’t like, even when there is hardly any basis to do so. In both cases, design review and SEPA, most people agree that building dense housing in areas with really great transit access more than offsets any of the downsides that both design review and SEPA were intended to stop or mitigate.

We’ll have a more comprehensive review of some of the sleeper recommendations in the HALA document next week.

 

 

On the Radio: More Discussion on New Effort at Rent Control

I was on local National Public Radio station KUOW last week pointing out the flaws of the latest efforts to control rent by the City. We put out a statement to the media last week with the Rental Housing Association of Washington explaining why Councilmember Savant’s proposed legislation to limit rent increases sounds like a great idea, but will actually disincentivize important improvements and add more bureaucracy and costs to a department that is already struggling to implement the existing rules they already have in the Rental Inspection Ordinance (RIO).

Also, there is a more positive and sensible solution to addressing repairs and keeping rents low. Low interest loans could help out older, smaller buildings make improvements and the savings could be passed on to both the landlord and the renter. That would mean no increases in the rent and a some funds to make repairs. The good news is that this idea is already in the Mayor’s Housing Affordability and Livability Agenda (HALA) recommendations:

I’ll quote it again. Recommendation P4 reads, in part

As part of expanding its preservation efforts, the City should develop and market a low-cost rehab loan program to complement its existing weatherization grants. This program would provide a compelling incentive for existing owners to improve their properties in exchange for an affordability covenant. Effective outreach, marketing and technical support will be critical components to the success of the program. The City should build on the success of its weatherization program by helping owners through the contracting process and with ongoing program compliance (page 32).

 

Urban Forest Symposium: Grow Neighborhoods AND Trees

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Yesterday I presented on a panel at the University of Washington’s Urban Forest Symposium. I’ve embedded my graphically challenged power point presentation below. The bad news is that tree issues continue to constrain housing production, which adds to costs, limits supply and therefore boosts overall housing prices. The good news is that we have grown neighborhoods and trees. Our tree canopy has increased as we’ve seen big increases in new housing development and construction. The increase in tree canopy is a real example of where we might be headed in a positive direction with regulation.

I did learn some things. First, tree advocates aren’t really all that happy with the methodology the City uses to calculate canopy. Is canopy really the right measure to be using. I can sympathize. I said that my frustrations with the City’s poor use and slack methods for quantifying things both “good” and “bad” is leading to really bad policy outcomes. For example, some advocates don’t think laurel trees should count in the canopy count. And deciduous lose their leaves for part of the year. I told someone how much this reminds me of the sloppy way we have been measuring housing cost burden using old census data and the normative standard that households should spend exactly 30 percent of monthly income for housing.

Second, there are interesting ideas about how to better quantify existing tree inventory and value; how much is that exceptional tree worth to the community? I countered that lost housing is also a measurable loss that can and should be offset for saving a particular tree. How do we balance those competing values of tree preservation and housing. Nobody at the City in an elected leadership role seems to be interested in answering that question. Instead we muddle along battling over every tree on every site rather than collaborating on a methodology that would capture the value of trees and housing as they relate to each other. But it was a good day of learning for me.

UW Urban Forest Symposium Presentation 05172016 from Roger Valdez

U District Upzones: Herbold’s Modest Proposal

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I stopped by a meeting organized by the Displacement Coalition last night about the proposed changes in zoning to the University District. The meeting was what we call in the business a “Twist and Shout Meeting,” a gathering to vent and blow off steam about a civic issues. Nothing is decided and the City isn’t officially listening or gathering input, the get together is really more of a pep rally to keep people emotionally charged about an issues. So the comments were mostly negative, decrying the ugly townhouses cropping up with no parking and people demanding a stop to all zoning changes, period. Then there was Councilmember Lisa Herbold’s comment. Herbold said that she hadn’t seen any official proposal yet from the Seattle City Planning and Development office, but she was proposing a new policy.

I’m paraphrasing, but Herbold said that she’d demand that any housing that demolished or replaced by new construction be accounted for and replaced. And if there was too much existing housing taken down or the kind of housing met some kind of criteria (Herbold didn’t say what that would be), she’d propose disincentives to build new housing.

That’s right. Disincentives for new housing.

I thought I had heard it all, from the idea that more housing means prices will go up to the notion that new housing is an impact that has to be offset with fees, fines, and taxes to generate money to build, yes, more housing.

Now a sitting Councilmember is proposing legislation or implementation of a policy somewhere in the City to create disincentives for the production of new housing. Just think about that for a minute. At a time when City officials wave their arms about a “housing crisis” Herbold is proposing less housing.

Make no mistake, the displacement myth is just that, a myth. So here’s a big fat chart based on data from the City:

New and Demo

We’ve said this over and over again. As a city, we are not plowing over thousands of units of subsidized housing or even lots of cheaper housing. And to the extent that housing units are being taken away, the ratio of replacement is huge, 40,000 units of new to less than 5,000 units “lost.” And remember, few if any of those 5,000 were subsidized and many were simply older single-family homes in low-rise zones being replaced with lots more multifamily housing.

Things at City Hall have taken a Swiftian turn again. First, more new housing to meet surging demand is an impact that has to be slowed down with taxes to punish developers for building what people want so the City can give money away to the non-profit sector to try and meet that need less efficiently. Now, we’re going to penalize and discourage lots of new housing to meet rising demand when it removes far fewer units. It’s not just cutting more, smaller slices of the housing pie, it’s actually making the pie smaller. It’s hard to believe we’re any closer to rational housing policy when there is a determined and studied effort at the highest levels of City Government to actually suppress housing supply.

If it wasn’t so serious, it might even be funny.

 

Statement on New Rent Restriction Legislation

RHA SGS Statement

New legislation will be proposed this week on controlling when landlords can raise rents. This is a joint statement prepared by Smart Growth Seattle and the Rental Housing Association of Washington. 

At a time when there is deep concern about housing prices in Seattle, the City Council and Mayor should use every available existing tool and new ones to address rising rents. Unfortunately, the recently proposed Tenant Protection Ordinance (the so called “Carl Haglund” law) does neither, creating a new bureaucracy, costs, and confusion for renters and landlords. And the proposal was crafted with absolutely no communication with or advice from landlords or developers.

Existing Tools Need Improvement 

The existing Rental Registration and Inspections Ordinance (RRIO) Program allows for inspection of units in any building for substandard conditions and creates an avenue for tenant complaints – and holding building owners accountable for substandard conditions. However, only a third of rental properties have been registered for the program. The City should continue to refine and improve this program.

It’s worth noting that the apartments in the building that spurred this legislation actually passed an RRIO inspection before it was sold.

Creating New Problems 

The new program would,

  • Create a parallel reporting process for tenants along side the existing programs;
  • Involve the City in legally allowed and even small rent changes all across the city;
  • Disincentivize repairs and improvements, ensuring some lower rents but at the expense of making the unit or building better;
  • Dramatically increase the work load of already thinly stretched City staff; and
  • Expose the City to legal action for violating the State’s preemption on rent control.

Taken together, this legislation will simply add confusion for tenants and housing providers, more costs for the City, and big disincentives to take on improvements to older, more affordable rental properties. This proposal has been made with no data to support it, only anecdotes, and without the involvement of people who own and operate rental housing in the city.

Solutions

A real solution would be to provide help with financing improvements to older buildings; this would lower costs and the savings could be passed on to renters. This solution would both incentivize improvements and preserve existing affordable housing. This proposal made by Smart Growth Seattle has tentative public support from the Tenants Union. Even better, it’s an idea in the Mayor’s Housing Affordability and Livability Agenda (HALA) Committee recommendations. Recommendation P4 reads, in part

As part of expanding its preservation efforts, the City should develop and market a low-cost rehab loan program to complement its existing weatherization grants. This program would provide a compelling incentive for existing owners to improve their properties in exchange for an affordability covenant. Effective outreach, marketing and technical support will be critical components to the success of the program. The City should build on the success of its weatherization program by helping owners through the contracting process and with ongoing program compliance (page 32).

The Rental Housing Association of Washington and Smart Growth Seattle would like to work with the City on solutions, but oppose this ordinance; it is unnecessary and doesn’t solve a problem but makes things worse.