Our Comments on Seattle’s Draft Environmental Impact Statement on MIZ

The following is our comments on the City’s Draft Environmental Impact Statement (DEIS) for the proposed Mandatory Housing Affordability (MHA) Program.

In testimony before the Seattle City Council the City’s planning staff have said that 120,000 people will be moving into the city of Seattle in the next two decades, creating a demand for at least 75,000 new units of housing. Other versions of this the story of growth suggest that about 1,000 people are moving to the city every week. No matter the source or the number it is clear that every measure points to job growth (unemployment is at a historically low 3 percent) and high demand for housing. People want to live in Seattle.

The City of Seattle should be developing policy that supports the building of a supply of housing that can accommodate new people moving here. The City’s version of Mandatory Inclusionary Zoning (MIZ), the MHA program will render many new housing projects infeasible, will increase prices to rationalize fees and mandated inclusion of rent restricted housing, and is illegal based on the State’s prohibition of taxing new housing construction (see RCW 82.02.020).

The impact of this proposal will result in new significant adverse environmental impacts as to transportation, as more new regional residents are forced to find housing further from, and commute longer distances, to their jobs. Some of this transportation and transit impact will fall inside the City of Seattle and some will fall outside the City borders. The City must meet its obligation and identify and evaluate these internal or extra-jurisdictional impacts on the environment.

The DEIS states

Housing costs will continue to be a burden for a segment of the Seattle’s population due to high demand and competition for housing generated by a strong job market and attractive natural and cultural amenities. Therefore, even with implementation of MHA in the study area, Seattle will continue to face a significant challenge in the area of housing affordability. This condition is a result of market and economic forces, however, and not an impact of MHA (emphasis mine).

This last statement is false.

On the contrary, an analysis done by our own builders and by the Sightline Institute has found that the fee structures for the program will harm housing production in areas best suited to accommodate new growth, the city’s low-rise zones. Fees from MHA will make many projects infeasible and thus reduce supply or the price will increase to absorb the additional costs. And by its previous actions, the Seattle City Council has already lowered capacity in those zones in legislation it passed in 2015. And it is currently considering imposing impact fees, a move that would add even more costs to the production of market rate housing.

The City is creating both an economic and environmental disaster, and the DEIS fails to assess this damage. The City needs to take responsibility for the its continued actions to thwart the production of housing even while its elected officials and staff say publically that rising prices are created a “crisis.”

When taken together with numerous other mandates, fees, taxes, and restrictions (e.g. decisions to impose building code standards that push up the size of small apartments, mandates to extend unnecessary water mains and drainage, a failure to clarify existing exemptions for parking in areas with frequent transit etc.), the City Council is already engaged in what might appear to be a wide ranging strategy to actually suppress housing supply in the face of rising demand.

At the same time the City appears to be imposing more costs and constraints on the production of market rate housing, it is also engaged in an effort to channel more and more capital to subsidized non-profit housing, a needed product in a time of high demand; however, the costs to develop these units is climbing as land and labor costs along with the many transaction costs associated with Low Income Housing Tax Credits (LIHTC) consume more and more subsidies.

The City, whether intentionally or blindly, is constraining the production of market rate housing, pushing up its price, then rationalizing the imposition of more constraints through the illegal extraction of value from new construction to pay for subsidies because of rising prices. The City is rigging the system in a way that ensures higher prices and thus a swelling demand for subsidies that it will wring from market rate housing, a recipe for perpetual increases in housing prices and thus more and more pressure on people with fewer resources to find housing elsewhere.

The City is creating both an economic and environmental disaster, and the DEIS fails to assess this damage. The City needs to take responsibility for the its continued actions to thwart the production of housing even while its elected officials and staff say publically that rising prices have created a “crisis.” The crisis, to the extent there is one, is entirely self imposed, and the DEIS should assess the quantitative impact of its actions on housing prices and how that will contribute to environmental impacts.

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