I Agree With Herbold: What is the Value Exchange with MIZ?
Councilmember Lisa Herbold has proposed some amendments to the Mandatory Inclusionary Zoning (MIZ) scheme being considered by the Planning, Land Use, and Zoning Committee on Tuesday. In the simplest terms, these amendments are asking a value exchange question: is there enough public benefit coming from the upzones that are proposed. Remember, MIZ is a mechanism that is supposed to grant more square footage in exchange for including rent restricted housing or paying a fee. Herbold’s amendments are about pushing for more public benefit and asking whether the City is getting enough value or public benefit from the up zones:
The Council intends to consider whether to include higher performance and payment amounts for those areas that have been identified . . . as having a high displacement risk.
I wrote about this a while ago in the context of Herbold’s statements at meeting about upzones in the U District. What Herbold wants to consider is whether fees should be higher in places where there is a lot of naturally occurring affordable housing. I’m not going to get into the details of this other than to point out what I said earlier. This is about value exchange.
And consideration of value exchange is exactly what has been missing from the whole MIZ discussion. In our view and the view of an attendee of the City’s focus groups on MIZ, there isn’t nearly enough FAR as it is to cover the impacts of increased costs and surpassed rent revenue. Here’s what Matt Hutchins said on City Builders Facebook page:
I was struck by how out of balance the the FAR bonus is relative to the MHA burden, and that the FAR bonus is too little to actually take advantage of the extra height.
For example, one small project shown was 8 units before and after (no additional units just slightly bigger ones) because the FAR bonus is only .1, but the MHA payment was up to a quarter million dollars. For a small project like this, it doesn’t make sense to perform because you haven’t got enough FAR bonus to create that extra unit.
So there it is. Herbold is smart enough to ask the basic question: are we getting enough. That’s the same point Hutchins is making too: is the builder getting enough. The legislation has no numbers in it at all. I have a deep and longstanding disagreement with Herbold and her supporters. They think there is lots of profit to ladle out of development projects to pay for subsidized housing. I believe that just makes all housing more expensive, making the problem worse, and creating a spiral of legislation adding even more costs in the name of affordability.
The Herbold amendment question isn’t at all about ideology, it’s about math. And there is no math covering the exchange in the MIZ legislation. That’s why this whole MIZ thing needs to stop turning until there are numbers. I believe we, not Herbold, would be right: whether or not additional FAR can pay for fees or inclusion is going to vary project by project, and usually the FAR grant doesn’t create enough value. But how can we know without any numbers? We can’t.
That’s what makes a letter form Jack McCullough, well known Grand Bargaineer, so ironic. He is threatening the collapse of the Bargain if Herbold’s amendments pass.
The Coalition for Housing Solutions has maintained its commitments through the Grand Bargain. We have and will continue to advocate in the Washington State Legislature to further the City of Seattle’s legislative agenda as it relates to housing affordability. We have provided financial support measured in six-figures to the Seattle Housing Levy campaign and to the operations of Seattle for Everyone – a broad coalition of business, non-profit, social justice, labor and environmental interests working together to support implementation of the HALA plan. The Grand Bargain also produced a standstill agreement on the Koontz Coalition litigation and withdrawal of a separate SEPA appeal on the Affordable Housing Mitigation plan, paving the way for implementation of MHA-Commercial and MHA-R.
Some of the amendments under consideration by the Planning Land Use and Zoning Committee would constitute a material change in the “Grand Bargain” if implemented.
As I pointed out to Councilmembers in an email this weekend, McCullough is rattling more sheath than saber here. He can’t single handedly create “a standstill” on legal action. Any builder in town can sue if they feel they haven’t gotten due process from MIZ or if their project fails because of it. So the idea that if Herbold’s amendment is squashed means no law suits is completely false. Anyone can sue and someone probably will at some point if MIZ goes forward because McCullough and his clients are pushing so hard to get the framework passed as is.
What’s frustrating about this is that it is so complicated and nuanced. In many ways I agree with Councilmember Herbold: what is the exchange of value here. She wants more fees. We say the fees will make things worse and push up prices. Who’s right? Shouldn’t we have that debate in public with calculators? I think so, and I hope that Herbold’s amendment gets the PLUZ Committee to slow down and NOT pass anything until these issues can be dealt with.
