Lot Suit: Another Builder’s Story

DELRIDGE 4 PRELIM MODEL

This is a second declaration from a builder explaining the negative effects of the City’s abutting lot rule that we’ve challenged in King County Superior Court. You can read Jon Coombes’ full declaration here. Keep in mind more risk and cost to the builder translates into higher prices both for the product but overall when production slows down and doesn’t keep up with demand. We’re expecting a decision on the suit this week.

Jon Coombes

Lot Suit: One Builder’s Story

Townhomes Seattle

I am posting two declarations we submitted as part of our law suit against the City’s abutting lot rule. The first one is from local builder Graham Black. The file is a PDF that translates as an image. So I am posting a screen shot of one key paragraph. The abutting lot rule was intended to try and stop builders and developers from avoiding design review by dividing or phasing their projects so they would have two projects with a unit count below the number, 8 units, that would trigger design review. In spite of us pointing out that this wouldn’t actually result in more design review but fewer projects, the City Council pushed ahead and passed the legislation anyway. We’ve filed a law suit against the City and asked for a summary judgment from King County Superior Court.

 

Graham Declaration

You can read the whole declaration here. A decision from Judge Barbara Mack should be made by the end of this week.

Consider Using $149 Million for Housing on City Owned Land, Not Precinct

City Owned Land

Hello Counclmember O’Brien and Sawant,

Thank you for your vote, Councilmember O’Brien, against the $149 million dollar precinct building.
I find it bewildering that the City is about to spend that kind of money on that kind of project. It is one building. 
Not that long ago, City staff found that Councilmember Sawant’s proposal to build housing on City owned land using it’s bonding authority would have an annual operating deficit of about $1.3 million. While most of us familiar with affordable housing financing found the staff work somewhat incurious and desultory (i.e. there was no effort to conceive of a Low Income Housing Tax Credits and lower AMI. And yes, I know that was not the explicit direction of the SLI) here’s the numbers on a 100 unit project.

City Owned Land

Also from the report (you can look at the report here):

A summary of the key assumptions underlying this analysis follows:

  •   100 units (20 studios, 30 1-bedrooms, 30 2-bedrooms, 20 3-bedrooms)
  •   34 units restricted at 80% AMI; 33 units restricted at 60% AMI; 33 units restricted at 50% AMI (distributed proportionally by size)
  •   Vacancy rate: 5%
  •   Annual Operating expense: $5,000 per unit (assumes property tax exemption)
  •   Per unit development cost: $231,400 to $330,750 depending on unit size
  •   Land cost: $0 ​
I find it unconscionable that at a time when we have people living under bridges and in their cars that the City is moving ahead with such a gigantic capital expenditure. I can’t think of who or what the constituency would be for doing this. Furthermore, the City is proposing and passing what I consider to be horrible legislation to wring money out of for profit development, the MHA -R, a move that will only make housing prices worse.
Meanwhile we have a proposal with wide support in the community to build housing on City owned land. As you can see, if you do the math, the $149,000,000 would build over 500 units of housing based on the City’s unleveraged pro forma. That would include currently scarce 2 and 3 bedroom units. Imagine how many we could build if we added in LIHTC, Housing Trust Fund (HTF) dollars, levy dollars and, while we’re at it, in lieu funds from Mandatory Inclusionary Zoning.
Your colleagues are behaving irresponsibly.
I would ask that you:
  • Redirect staff to complete a more thorough analysis of the use of bonding authority to build on City owned land that includes scenarios serving households earning less than 50 percent AMI;
  • Determine whether any of the resources being used for the North Precinct could be used to back bonds or in some other way be used to support building housing on City owned land;
  • Consider how any of these resources could be use for rapid response housing solutions like paying parking fines for people who’s home is their car, or solving other short term housing crises;
  • Reduce the size and scope of the precinct project and consider including housing as part of the project; and
  • Whatever resources are used for the precinct that they be conditioned on the completion of the completion of the items above by a third party not City staff.
Many people are unhappy about this decision to spend so much money on the precinct especially at a time when a judge is criticizing the actions of the Seattle Police Department. I understand that the funds being used may not be fungible. However, such a massive expenditure at this time should not be taken lightly when our city is in the middle of what people are calling a housing crisis.
Safety is part of being great city, but I don’t think your colleagues have made a very good case to the people of this city that this expenditure will help make us safer.
Again, thanks for your important vote “No” on this project. I hope you’ll consider some of these ideas.
Roger–

The Problem With the Term “Displacement”

IMG_2947

I have a post up at Forbes that lays out and refines a bit my concerns about the term, “Displacement.”

Unless and until there is a quantitative definition and measurement of displacement we ought to stop using the term. Compassion? Absolutely. Many people in our local economy are suffering. In fact, tonight, thousands of people within close distance to where I am writing this will sleep in cars, tents, or in doorways. The stubborn resistance to the simple fact of supply and demand and the argument that building new housing displaces people is slowing production by promoting policies that further restrict new housingThat is harmful to poor people. What is also harmful is the blithe disregard by people who ought to know better that taking the term seriously in the name of “acknowledging the problem” is certainly not adding to the discussion or making life better for anyone.

“Displacement” has been a hot topic lately, even inspiring an amendment to the Mandatory Inclusionary Zoning (MIZ) proposal to charge more fees for new housing in areas “at-risk” of displacement, even though there really isn’t any definition or measurement of it retrospectively. Like it or not, the term is going to continue to influence the housing discussion in the months ahead even though nobody really knows what it means or how to measure it.

 

Chaotic Council Meeting Includes Low Key Passage of Mandatory Inclusionary Zoning

Members of the Seattle City Council sat motionless for about two hours yesterday while they were bombarded by an overflow crowd demanding that the City not build a new $160 million dollar precinct building in north Seattle. After completely losing control of the meeting on more than one occasion, Council President Bruce Harrell shut the meeting down. After the meeting reconvened, the shouting, yelling, and hectoring by opponents of the precinct resumed. Interestingly, most of these people are great allies of the Council on minimum wage legislation, controlling how private employers schedule their employees, and on Mandatory Inclusionary Zoning (MIZ). Somewhere between the boisterous crowd’s protests and the Council voting 7 to 1 to build the precinct anyway, the Council passed the Framework of MIZ.

I’ve been watching the Council for 20 years now, and I’ve seen it debate a lot of issues. But the last few years have seen Council meetings flail about and get shouted down by angry lefty groups. What’s so odd about yesterday’s meeting is that these angry people opposed to the precinct (I don’t think it’s a good idea either at this point and I’d have voted “no” if I was on the Council) are the very ones pushing terrible housing policies like MIZ and rent control. The Council can’t seem to meet their whims fast enough on those things, yet on an issue with such a huge price tag and opposed by so many, the Council sort of waved it through. Strange.

It’s worth scanning through the first part of the video.

Also strange is that Councilmember Rob Johnson spent less than 5 minutes addressing the passage of the legislation. He pointed out that some people had concerns (i.e. making sure housing built with in lieu fees is near the project paying for it and extending rent restrictions from 50 to 75 years) and those concerns had been addressed with amendments. Councilmember Herbold hailed the fact that now there is a way to offset displacement caused by new development (something that is not really happening) and that her amendment will somehow help poor people. It won’t.

It was irritating to see the Councilmembers and press parroting the line about the passage of legislation “historic” because for the “first time ever” developers will have to include affordable housing in their projects. Not true. The Multifamily Tax Exemption (MFTE) Program requires performance at a higher rate that MIZ would and it creates more rent restricted housing more effectively.

At no point did any Councilmember acknowledge or refute any of the points we’ve made about the inflationary nature of MIZ (adding costs will boost overall prices) or those of neighborhood groups who are already opposed to more housing in their back yards or even down the street. It’s mystifying what political calculus, if any, is at work on the Second Floor of City Hall. The Council today set up the newspaper and gasoline to ignite inflation in the housing economy and angered Black Lives Matters and many other progressives. All I can say is, “I don’t get it.”

Our next steps will be to get prepared for the many battles over the various zones that the Council will have to upzone in order to wring fees and units out of new development. That’s not likely to happen until next year.