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Seattle council in accord on housing fees for developers
The Seattle City Council has reached a consensus on the difficult question of what to charge South Lake Union developers per square foot for projects built above certain height limits. The money will finance more affordable-housing units.
Seattle Times staff reporter
The Seattle City Council has reached agreement on contentious affordable-housing fees for developers in South Lake Union, supporting a blend of proposals by Mike O’Brien, Tim Burgess and Sally Clark.
A majority of the nine-member council stands ready to support the consensus plan, according to several members, including Richard Conlin, chair of the South Lake Union Committee.
The plan includes a key figure from O’Brien’s proposal — a fee of $21.68 for every gross square foot of space residential developers use above existing height limits.
Those fees would be effective when the council approves new zoning, expected next month. Burgess and Clark had wanted to phase in the fees to cushion their impact, and their fees only went to $18.34.
In the city’s incentive zoning program, buildings can go to certain heights above current limits if there’s payment for public benefits, such as affordable housing.
The council was divided last week between O’Brien’s pitch and the more conservative Burgess-Clark joint proposal.
“We came close last Monday,” O’Brien said. “We also heard from others that they want more affordable housing. In their hearts, they wanted to get there in the end.”
And, O’Brien noted, Burgess and Clark didn’t have five votes for their proposal.
The consensus plan uses a couple of elements from their proposal. For office development it phases in the fees, which would be $24.43 when the new zoning is approved. The fees would climb at the start of next year and again in July 2014, reaching $29.27 per square foot, plus the inflation rate for 2013.
“I’m very comfortable we will have a majority” supporting the blended plan, Burgess said.
All fees are higher than those proposed by Mayor Mike McGinn, who recommended $15 on residential projects and $22 on office towers.
All of the council fees are based on adjusting them upward to account for inflation in recent years. The city has not changed fees since 2006 on residential projects, and 2001 for office buildings.
O’Brien noted his fee would produce about 140 more affordable units over two decades than Burgess and Clark’s. More important, he said, his fee would likely produce more of those units in the fast-growing South Lake Union neighborhood, where rents are high and climbing.
The city’s zoning program gives developers the option of paying a fee for every square foot of bonus space, or providing an equivalent amount of affordable housing within their projects.
The city’s fee has been so low in other parts of the city that almost no affordable apartments have been produced within projects using the extra height. Instead, developers have paid into a pool of funds that the city has used to build affordable housing, often for very poor people, around the city.
O’Brien said his fee is high enough that it hits the tipping point where developers would create the units within their projects.
He arrived at it by adjusting for inflation, then applying a 20 percent premium to nudge developers toward setting aside about 5 percent of a residential tower’s apartments at rents affordable to people making up to 80 percent of the area median income. That’s about $45,000 for a single person.
Bruce Harrell, a mayoral candidate like Burgess, suggested last week that he would try to bridge the gulf between the competing proposals. Harrell couldn’t immediately be reached Friday evening, but Conlin said Harrell was involved in discussions this week.
Developers have warned that high fees might stymie building. But O’Brien said analysis by a council consultant showed that fees would amount to roughly 1 percent of a project’s cost and developers would still make a healthy profit.
“It’s probably OK,” said Conlin, who has generally been more sympathetic to developers in the debate. “Nothing is certain. But I think it’s going to be workable.”
Bob Young: 206-464-2174 or email@example.com