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Seattle's Affordable Housing Developers Need City's Support

In Seattle, where the growing homeless crisis gets more dire by the day, the lack of affordable housing is a glaring issue. Units as small as 500 SF rent for $2K a month (or more), while hundreds of people spend the nights on the streets.

Whether or not the increase in homelessness is linked to a lack of affordability is the subject of much debate, but many in the commercial real estate industry say that it is difficult to produce affordable housing projects in the Seattle area due to outdated rules and constraints.

This topic was discussed at length during Bisnow's Multifamily Annual Conference last week.


Indigo Real Estate Services President Chris McEver, Eagle Rock Ventures Managing Director Scott Shapiro, Cairncross & Hempelmann attorney Lindsay Pflugrath, Spectrum Development Solutions principal Jake McKinstry and Seattle Housing Authority Executive Director Andrew Lofton discuss Seattle’s affordable housing crisis.

Spectrum Development Solutions principal Jake McKinstry told the audience at the Bisnow Multifamily Annual Conference event last week that the most affected group is what he calls “the missing middle.” 

“These are the teachers, the nurses, first responders that can’t afford to live in the city because it’s too expensive,” he said. “It’s those making 60% to 80% of the area median. There is a lack of workforce housing for those in that range."


Former Seattle Mayor Charley Royer chats with Daniels Real Estate’s Kevin Daniels.

That target salary continues to rise. Just last week, census numbers revealed that Seattle's median household income has soared to $93,500 per year, according to a Seattle Times report. That is a $7K year-over-year bump. 

Those in the 30% to 50% of AMI range qualify for low income, which the city also lacks. The Yesler Terrace redevelopment promises more housing for low-income families, such as families of four that bring in about $45K, said panelist Seattle Housing Authority Executive Director Andrew Lofton.

“We really cater to those at the bottom of the income ladder because of how we are structured and funded,” Lofton said.  

The city's 30-acre affordable housing complex Yesler Terrace, originally developed by the Seattle Housing Authority in the 1940s, is undergoing a redevelopment that will more than double its current unit count from 561 to 1,800.


Stay Alfred’s Mike Wilson, Fetch’s Matt Greene, Encore Architect’s Bryan Bellissimo and OpenSquare’s Nyles Scott discuss how to think ahead to meet a resident’s needs.



Revolve Development’s John Schack, Thrive Communities’ Rose O’Dell and Greystar’s Lisa Nerheim also share thoughts on the subject.

While the Seattle Housing Authority works with federal funds appropriated by Congress, workforce housing developers are left to get creative with their own ideas. 

Spectrum is working with Seattle Children’s Hospital on developing the Orendo project at Othello Square. The hospital is making an impact equity investment of up to $8M, which will double the number of housing units for those making 80% of AMI. The rest of the units will be available to those who make less than 120% of AMI.   

Indigo Real Estate Services President Chris McEver said creative financing packages for affordable housing helps, but there aren’t enough of those programs. Most developers need to go the traditional financing route — and that isn't easy.

VIA Architecture’s Wolf Saar, The Schuster Group’s Holly Gardner and Realogics’ Matt Van Damm discuss condos at BMAC.
Polaris Pacific’s Paul Zeger and Terrene Ventures’ Wade Metz share thoughts on the condos.

The demand for units reserved for 60% of AMI is huge, McEver said. Several people apply for each open unit. 

Affordable housing fits well in areas close to services, he added. Grocery stores and transit lines are important for those living in these properties.

“People look at our properties and they can’t believe its affordable housing,” he said. “We have indoor pools and dog-walking areas. The same amenities as market rate.”

Skipstone’s A-P Hurd, Nitze-Stagen’s Peter Nitze, Cairncross & Hempelmann’s Lindsay Pflugrath and BRIDGE Housing’s Cynthia Parker talk about how to build better cities.

Eagle Rock Ventures Managing Director Scott Shapiro said his firm isn’t working on any new affordable housing projects in Seattle because it's difficult to work with the city.

“People have to be willing to talk,” he said. “The people on the council now have an agenda and they don’t want to talk to us. But we are the ones building the housing. We want to be engaged and listened to.” 

McKinstry added that the city erecting barriers to obstruct affordable housing won’t help solve the problem.

 “Houston reduced its homeless population by 75% by eliminating barriers to production of that housing,” he said. 

There, the city focused on getting people into housing rather than shelters, according to a report in the Seattle Times.


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Shapiro said the city has all the resources it needs to address the problem, but the community needs to start making some hard decisions. Eliminating the parking requirement is one step that would make building affordable housing more cost-effective.  

Indigo Real Estate continues to produce units despite the challenges, McEver said. Fifteen hundred units will be delivered by the end of the fourth quarter and another 1,500 will come online in the first half of 2020. 

“We find there is a significant demand,” he said.