Could "incentive zoning" solve Seattle housing woes?

The Seattle City Council votes Monday on what could be a solution to one of the city's most difficult problems: the struggle to find affordable housing.

Under the proposal, developers could build taller residential buildings if they agree to build some cheaper apartments or condos on-site.

It's a voluntary program that would work best with support of both developers and housing advocates. Instead, after a year of work to hash out the complicated law, neither side is happy. Low-income-housing advocates say it requires too little of developers. Developers say it's too expensive, especially in a recession.

City Council members, however, appear to support the proposal, called "incentive zoning," and are poised to approve it Monday.

"Incentive zoning ends up being one modest tool that we can use and trade the developers for something," said councilmember Sally Clark, whose committee approved the legislation last week.

The new program would help shape development in Seattle's neighborhoods. If it's successful, neighborhoods would get taller buildings with condominiums and apartments that teachers, paralegals, firefighters and other middle-income professionals could afford.

If it doesn't work, developers would build the big, flat buildings currently allowed — what developers call "breadboxes" — and charge the market rate for housing.

Under the new proposal, developers could build extra floors, but they must devote 17.5 percent of that additional space to affordable housing. If their building is higher than 85 feet, they could instead pay into the city's affordable-housing fund.

The new guidelines could soon be on the books, but it will take years to know whether they have worked.

Even with the recent housing boom, City Housing Director Adrienne Quinn says it's too early for a verdict on a similar program the city applied to downtown in 2006. That program requires developers to put 11 percent of their extra space toward affordable housing.

Clark said consultants hired by the city determined that developers can turn a profit under the program, but Lyn Tangen, director of government and community relations at Vulcan, a major property owner in South Lake Union, said the program is too complicated and expensive.

"If it doesn't improve the developer's bottom line, why would the developer do it?" she said. "My fear is that we are not going to be able to get the kind of development either aesthetically or the kind of density that we all say we want."

She points to a 2007 city-sponsored study of the Northgate area, where a consultant determined such a program wouldn't work. Another city-funded study said developers would make about the same on a project with or without the extra height.

But low-income-housing advocates say the council's proposal should ask even more of developers, who can make a lot of money by building taller buildings. It's a "developer giveaway," said David West, the executive director of Puget Sound SAGE.

One advocate questioned whether the program would even help the right people. The program is meant to create housing for people who make 80 percent of the area's median income or, according to the Seattle Housing Authority, about $43,000 a year for an individual.

"We feel that there's no real shortage of housing for people who make that," said Josh Okrent, a fund developer for the Low Income Housing Institute.

Other advocates who testified before the City Council wanted the city to add requirements that developers hire union workers or provide apprenticeship programs for low-income people.

"We'd rather see as much affordable housing as possible," said Anna Markee, Seattle outreach director of the Housing Development Consortium of Seattle. "We know growth is coming, and we want to make sure that a portion of that growth is set aside for moderate- to low-income families."

Even with Monday's vote, the discussion isn't over. The guidelines allow developers, in some cases, to set aside less space for affordable housing.

At any rate, with the economy at a near-standstill, no one is building much, affordable or not. Five condo projects and three downtown hotel projects are on hold, and fewer than half of 2,300 new condos scheduled to be completed in the next year in Seattle and Bellevue are sold.

"It's sort of irrelevant and meaningless if we don't have any development activity, then we're not going to have any developers participating in an incentive zoning program," said Jon Scholes, the policy director for the Downtown Seattle Association.

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com