Seattle Passes Affordable Housing Legislation

Early last week, the Seattle City Council passed new legislation that will add affordable housing to the city. The new rules require apartment and condo developers to build and fund housing that will cost less for those that can’t afford to pay high prices. The law was passed with overwhelming support (8-0), and will be implemented by developers over the next year.

The new legislation is historic because for the first time developers will be required to include affordable units in their projects or to pay a fee that will be used to fund affordable units elsewhere. Over the next ten years, the city expects that about 1,500 new affordable units will be created, or the city will receive $176 million in fees to build 2,200 units. The specific details about how many units each developer will be required to include, or how large of a fee developers will be required to pay, will be figured out at a later date.

The new law comes after similar legislation last year that required commercial builders to pay into the affordable housing fund. That law placed a fee on construction projects based on the zoning maps. Projects in lower cost areas will pay $5 per square foot while fees in high-cost areas will reach as high as $17.50. Seattle city officials expect to generate $196 million from that project and to build 2,400 affordable housing units.

The reason for Seattle’s focus on affordable housing is the current crisis the city faces. Mayor Ed Murray told the Puget Sound Business Journal, “Seattle faces our worst housing affordability crisis in decades.” Year after year home prices and rents have risen at the same time that the incomes of lower wage earners have stagnated. The reality is that 38% of Seattle households are cost burdened by their house and 40,000 households pay more than half their income in rent.

The new affordable housing units will be available to people who make 60% of the area’s median income, or $43,380 a year for a family of two. This is good news for MBAs looking to study and live in Seattle as it will mean less student debt.

regions: Seattle

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