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Seattle's Uphill Challenge To Provide More Affordable Housing

The downside of Seattle's economic boom has been a shortage of affordable housing. Dealing with that challenge was front and center for the speakers at the opening panel of Bisnow's recent Seattle Multifamily event.

The struggle to build more affordable housing runs up against the drive to develop more sustainable housing. The second panel spoke about whether high-performance green buildings can be cost-effective in a high-cost market like Seattle.

Seattle's Uphill Challenge To Provide More Affordable Housing
Seattle Affordability panel: Miller Nash Graham & Dunn LLP partner Richard Mitchell, who moderated, GardnerGlobal Inc. founder and CEO Jaebadiah Gardner, and Barrientos Ryan co-owner Maria Barrientos

Affordable housing is a challenge in greater Seattle. Between 2015 and 2017, about 20,000 new households formed in the area, but only 14,000 new housing units came online. Of the area's households, 300,000 are cost-burdened, spending more than 33% of their income on housing. 

"There's a huge need, and not just in Seattle," Barrientos Ryan co-owner Maria Barrientos said.

"Our core workforce can't live near their jobs, and that affects everyone. So what do we do about it?" said Barrientos, whose company focuses on multifamily development within a two-mile radius of Downtown Seattle, including mixed-income housing.

"We've been fortunate to partner with investors who have a social mission.

"They wanted to invest in an affordable housing project, so we're about to break ground in the International District. The project will target 80% to 100% of area median income."

The Mandatory Housing Affordability program, she said, is hardly perfect — some aspects of it discourage development — but it does incentivize developers to pay the fee, rather than include affordable units.

"The city feels it can produce more units that way in lower-cost neighborhoods, leveraging tax credits, state and county funds.

"That's part of the solution. The fees are coming in, so we'll see more affordable housing in the coming years, but that's still not enough." 

Socially conscious investors might pick up some of the slack.

"There is a fear among investors now about how the market can sustain the growth in high-end units,"  Barrientos said. "That's all that can be developed in the urban core because the cost of land is so high. 

"With that fear, more investors are probing their market risk, and thinking that affordable and workforce housing are a better risk."

Seattle's Uphill Challenge To Provide More Affordable Housing

There are only 1,500 units of affordable housing built a year through incentives set up by the City of Seattle.

"That's not going to cut it," GardnerGlobal Inc. founder and CEO Jaebadiah Gardner said. "The system needs to be more efficient to create more housing.

"We don't need to bash our politicians, or the private sector. A conversation needs to be had between all the interested parties, to improve the system."

Socially conscious investment in affordable housing is part of the solution, but it takes a special kind of entity to pursue that kind of investing, Gardner said.  

"They're able to take a haircut for x number of years, because they're not in it just for the money."

Can for-profit companies and socially conscientious ones work together?

"I believe they can," Gardner said. "And public and private partnerships can happen as well. We're an example of that, working with the City of Seattle." 

Gardner said affordability is more than just a housing issue. It is also about enabling local talent to stay here.

"We have some of the largest corporations in the country here, and a lot of their talent is imported from out of the city or out of the country," Gardner said.

"A lot of people graduate from SPU or Seattle University who are highly qualified, but for some reason they aren't getting those jobs. We need to find a way for talented Seattleites to find their way into jobs that will allow them to stay in the city they grew up in."

Seattle's Uphill Challenge To Provide More Affordable Housing
Economic Viability of High-Performance Residential panel: Capitol Hill Housing Senior Director of Sustainability and Planning Joel Sisolak, King County Program Manager - Green Tools Patti Southard, who moderated, Nicholson Kovalchick Architects principal Tim Weyand and Skanska USA Director of Sustainability Stacy Smedley

Another panel took up the subject of economic viability of high-performance residential developments. The quality of sustainable features in a building — including residential buildings — is expanding all the time. But is the cutting-edge cost-effective for residential developers in Seattle?

Nicholson Kovalchick Architects principal Tim Weyand said some incentives are already in place for additional floor-area ratio and height for high-performance buildings, but there still remain code barriers to other sustainable features.

"Some of the barriers that could be relaxed have to do with thicker walls outside the setback lines, or allowing shading devices over the right of way, or photovoltatic structures to exceed the allowable height of the building." 

Skanska USA Director of Sustainability Stacy Smedley said the Living Building Pilot Program does apply to housing.

"The program goes pretty much as far as you can go with energy and water reductions, and it's beginning to be understood that residential fits well in that system of incentives."

Skanska is at work on a senior housing development in South Lake Union that is going into the Living Building Pilot Program.

"We've determined that the increase in cost in that program is about 15%, but the number of units the developer is putting in the extra story allowed by the FAR makes the development pencil." 

Smedley also said the health of building materials is a concern.

"The products a builder uses affects the long-term interior environment of a building, and it's an area that hasn't been incentivized enough. We try to choose the healthiest products in our projects."

Capitol Hill Housing Senior Director of Sustainability and Planning Joel Sisolak said his company's projects, which are affordable housing developments, conform to the Evergreen Sustainable Design Standard, which is on its third version.

"One thing that's challenging for affordable housing is that, because of our complex method of funding, we have to commit early to a certain number of units and a certain building envelope," Sisolak said.

"So it's hard to do a full-on integrated design process, which is critical to a green project. If there was a way to have a little more flexibility after the initital funding, that would help us integrate more green into the design process."

Sisolak said Capitol Hill Housing focuses on durability. "One of the things we like about the passive house standard is that the walls are thick, and moisture penetration is zero, among other things, thus making the structure more durable. We want to save water and energy in the immediate future, of course, but a durable building is greener in the long run."