There are so many really dubious arguments being advanced by the Wallingford Community Council (WCC) and by wannabe Councilmember Alex Pedersen against upzones in the U District, that knocking them all down could take weeks. It’d be a lot easier for them and everyone involved if they’d just say what they mean and what they want: we’re worried about the effect change and growth will have on us, make it stop. But most of the angry neighbors engage in the usual, “I’m all for growth and change, just the right kind of growth and change.” It’s the Goldilocks Principle of growth. No surprise.  I’m only here to take on one bad idea, the biggie, that developers want and will somehow benefit from upzones as part of Mandatory Inclusionary Zoning (MIZ).

Here’s the phrases embedded in an invitation to a meeting last Saturday about the proposed upzones, emphasis is mine,

The HALA Mandatory Housing Affordability program rewards developers and speculators, while Seattle residents pay the price.  This “Grand Bargain” devised by Seattle’s Mayor and City Council . .

and

 . . . learn more about the Mayor and City Council’s plans for a developer giveaway under the guise of affordability

I guess the WCC must have missed it, but for the last two years we’ve been opposing MIZ because it adds costs, slows down the development process, and contributes to higher costs and makes many projects infeasible. So, yes, it is a “giveaway under the guise of affordability,” but not a giveaway to us. There are no rewards or upsides in MIZ for builders of housing. The Mayor himself has called the fees that would be paid instead of inclusion a “penalty,” something also clearly illegal. And who gets the money collected from fees generated when builders and developers pay the “penalty?” More on that “giveaway” in a minute.

As I’ve said again and again, MIZ makes many projects infeasible, and when they do work it will be because rents rise enough to pay for the inclusion or the fees. In the end, MIZ is illegal since it is an unauthorized tax on housing not a value exchange program that would essentially sell additional square feet for housing development. And the so called Bargain was not between developers and the City, but between one developer, Vulcan, non-profit developers who get the fees, and Councilmember Mike O’Brien.

What the WCC gets right about the whole MIZ scheme is that it will raise housing prices. 

Every new MHA building will increase the cost of housing in Seattle

That, WCC, is absolutely true! And you ought tot be going after the organizations that are really pushing the MIZ scheme, non-profit housing developers that want the fees that will be collected by the upzones. 

Pedersen essentially recycles most of this language in his missive but in all caps says this,

VOICE YOUR CONCERN OVER POORLY PLANNED, PROFIT-DRIVEN UPZONES.

Poorly planned. Agreed. Profit driven? All I can do is point to the fact that we are opposed to MIZ and what the same “City Hall ideologues” who are pushing this horrible plan without any regard for the devastating consequences it will have on the housing economy in Seattle. The upzones are not profit driven from our perspective. We never asked for them! We weren’t in the room or represented when the Grand Bargain was signed. Let me remind the WCC and Pedersen what the Mayor, in an unscripted moment without legal advisors present, said about a year ago of the upzones:

The heart of HALA is you don’t get to develop housing in this city, multifamily housing, unless you build affordable housing as part of it. That is the key piece to it. We have developed . . . .We have grown as a city, but we have not grown affordably. What we are saying is, if you are going to build a multifamily unit in an urban village, you are going to build affordable housing, or you are going to pay penalties that will go into a fund for building affordable housing.

The Mayor is trying to penalize developers except for Vulcan and larger developers downtown who get to write a check and get on with their projects. Everyone else that builds housing in the city will be faced with, as I said above, infeasibility, uncertainty, and having to raise their prices to cover the costs of either upzones and inclusion or from the fees. And don’t forget the other winners in this are the non-profit developers at the Housing Development Consortium (HDC) that get those fees to build really expensive subsidized units with years long waiting lists. That’s the real giveaway here folks. 

So WCC et al, if you want to create some real discomfort, go after the organizations that signed the deal and want the cash. Those organizations (here’s a list of HDC members, and you’ll see many for profit banks, architects, and lawyers who profit from low income housing) are the ones that are pushing the whole MIZ effort along with Vulcan. We had nothing to do with it, and will likely eventually sue the City because MIZ is plainly an illegal, unauthorized tax on housing under RCW 82.02.020. This whole thing is a tragic waste of time. But don’t blame developers and builders. We had nothing to do with it.