December 14, 2015

Dear Mayor Murray and Members of the City Council,

In the days and weeks since the announcement of the Grand Bargain, concerns and uncertainty have grown among people who build housing and mixed-use development outside of Downtown and South Lake Union about how mandatory upzones associated with the Bargain will be implemented.

Far from clarifying implementation, the City seems to be introducing more uncertainty into the discussion. Recently Councilmember O’Brien said on the Seattle Channel that,

We need to go into each community where we’re thinking about zoning changes and have discussions. Now some communities might say ‘we want a couple extra floors on this corridor, but nothing over here.’ The 16′ setbacks [passed in low-rise legislation] may or may not be on the table. We haven’t drafted the legislation yet.

In a press release the Displacement Coalition announced that Pete Holmes, the City Attorney, “expressed his strong interest” in what the Coalition calls a, “displacement risk analysis” of proposed upzones associated with the Bargain.

Other Councilmembers and City staff has variously expressed the idea that neighborhoods will be able to influence the nature and location of upzones through a process that would happen in each and every neighborhood all across the city.

Is each of these true? Is there any effort to review these comments in light of what was supposed to be a deal, signed by the participants and binding to those parties?

A proposal that was hailed as a bargain has become an imbroglio, with varying opinions about what the upzones are, mean, where they are, and how they will be implemented.

Let me also add, unequivocally, our skepticism of the underlying economics and legality of a proposal that, based on our preliminary analysis, will not generate enough value in increased zoning to even offset construction costs and rent restrictions part of the Bargain, a clear violation of most interpretations of State law for mandatory inclusionary housing programs.

Additionally, no builders of housing outside Downtown or South Lake Union, the ones not incidentally expected to produce 6000 units, signed the Framework document that underlies the Grand Bargain. Still, if such a scheme can work and allow the financing of new construction, we’re willing to work on that proposal. While City staff has made promises to meet and work with us on feasibility issues, that promise has yet to be fulfilled.

Finally, we embrace the notion of consensus and compromise. But if the stated problem being addressed by the HALA effort and the Grand Bargain was housing price, we have yet to see any metric established for determining how these interventions (regardless of our skepticism) would reduce overall housing prices, the very worry that inspired the creation of the Housing Affordability and Livability Agenda Committee.

Therefore we ask that City staff meet with our representatives to discuss feasibility as soon as possible, and we urge City leaders to reconvene and address the following questions before moving forward with any legislation or legislative process, including SEPA review or drafting of legislation for zoning changes or new inclusion requirements.

1. Are the proposed rezones to be implemented “zone-wide” and as stated in the final framework document?

2. If rezones will not be broad legislative rezones consistent with the City’s Comprehensive Plan, how does the City plan to process quasi-judicial contract rezones to reach the stated goal of 6000 units in 10 years? How will the City avoid spot zoning to implement Bargain upzones?

3. Has any third party economic analysis been completed to determine where and how rezones would produce the most housing for the value of proposed rezones? If not, what are the plans for completing that review?

4. On what data was the City’s goal of 6000 units based? Can we please see that data?

5. If a third party review indicates that economic value is not created by proposed upzones when costs for construction and lost rent revenue are considered, what is the City’s plan to proceed.

6. What City department will be responsible for drafting legislation?

7. Is there any precedent in other City’s for this kind of broad mandate for performance across multiple zones? Have those programs reduced overall housing prices?

8. What performance measures are in place to fairly and objectively measure meeting the City’s goals?

9. Will the mandatory inclusion requirement remain in place after the City’s goals are met (e.g. if the 6000 goal was met sooner than 10 years)? Why or why not? What are the provisions for adjusting the goals based on changes in the housing market over 10 years?

10. Why has the City not consulted the regions experts in local housing markets to seek their advice on the future of Seattle’s housing market overt the next decade? Will the City consult those experts to help resolve these questions?

We understand these questions and seem nettlesome and, in the words of some, driven only by the pursuit of profits. That isn’t true. Our people build housing because it is their calling, like yours is to elected office. Certainly those proposals can make that calling easier or more difficult, less or more expensive, but they will build because it is what they believe in and do; it is their vocation. And people moving to our region will continue to need housing. You can make meeting that demand easier and in so doing reduce costs, prices, and increase housing opportunity for everyone who wants to live in Seattle.

In closing, it is often asked, “what is the development community prepared to do to solve the housing crisis?” That answer is simple: build more housing!

Yes, there are people and families in our community that can’t afford rent each month and we should find solutions and fairly extracted subsidies for those families. Nobody in our community should live without a home or fear losing the home they have.

Instead, everyone, from a young entrepreneur fresh from the sale of her first company to a poor family finding its way to our city on their last tank of gas, should be able to find a place to live in our city. That would be truly a grand bargain if we could do that. But imposition of infeasible, punitive, and confusing policies won’t get us there. Please work with us as avidly as with neighborhoods to implement or find effective alternatives to the Bargain.

Sincerely,

 

Roger Valdez
Director