Sometime early in 2016 after the Grand Bargain — a deal between large developers like Vulcan who build in downtown and South Lake Union, the City, and non-profit developers — I scheduled a visit with Seattle’s smartest Councilmember, Lisa Herbold. Surely she’d get that the so called Bargain was letting downtown developers like Vulcan off the hook; in the Bargain they’d pay basically what the previous voluntary program of fees and incentives would charge. This fee is low enough that it means that Vulcan would just write a check and walk away. Everywhere else in the city, people who build housing would be saddled with an unworkable regime of fees that are, quite literally, all over the map, changing from place to place and from building type to building type. Oddly, Herbold didn’t seem to care. “We still get those fees, and I’m ok with that.” I had hoped Herbold would break that Bargain by boosting the fees. Well, now she’s trying.

From a recent blog post from the Councilmember:

So Herbold has come through in the end. Why would I support more fees Downtown and South Lake Union? Well, from the very beginning this has always been about the city’s tail that wags the city’s development dog, Vulcan and the desire to shake them and the broader development community down to give money to non-profit developers. I’ve said over and over and over again, that we were never involved in the discussions around the Grand Bargain. The fees and inclusion rates set for the rest of the city were arbitrary, while Vulcan was at the table bargaining based on their own portfolio of projects. They cut a deal that they new would work for them and non-profit developers get more cash. And based on Herbold’s estimates of leverage from fees, the non-profits wouldn’t make 1200 units but more like 500 based on the high unit costs I’ve cited before.

Political pressure is building however, as people are realizing that Vulcan et al are essentially getting a pass from the arbitrary fees and imposed on everyone else in town. In a Seattle Weekly story headlined, “Mayoral Challenger Calls for Rent Control, ‘More Aggressive’ Affordable Housing Demands on Developers,” reporter Casey Jaywork details Nikkita Oliver’s demands for more fees and inclusion from the City’s version of Mandatory Inclusionary Zoning (MIZ), the Mandatory Housing Affordability (MHA) program. Oliver is quoted quoting Jon Grant, a candidate for City Council.

As Jon Grant brilliantly noted, if we want to make housing affordable, it should be affordable to at least a quarter of all new apartments. Again, although Seattle purports to model certain programs after other progressive cities, it extracts the soul out of those programs. To wit, whereas San Francisco will require 25% affordable housing for new developments, Seattle’s can be as low as 3%.

Mark this on your calendar, because it’s the day you first read that Oliver has a very real chance of being elected this city’s next mayor. Let me say that again: Nikita Oliver has a very good chance of being elected Seattle’s next Mayor. Through a combination of being intimidated and just plain having no vision for the city, the Mayor and City Council have unleashed a mob that wants more and more and more cash for their notions of social justice. Some Councilmembers, like Lorena Gonzalez, have made their whole career on Council about trying to get in front of the mob. Others, like the Mayor, agree from the sidewalk. But the bottom line is that Dan Bertolet’s notion that, “MHA is a great idea if the fees are low enough!” is rather quaint. The fees will never be enough. The inclusion rate will never be high enough. We know this. When given an ATM card with no limit, the gambler will go back to the cash machine again, and again, and again.

The political pressure will continue to build on the Council to improvise higher fees and inclusion (as I’ve warned before), both because it apparently punishes greedy developers and creates the illusion of doing something about housing prices (prices will just get higher).  If Herbold is able to convince her colleagues, and she’s just the one to do it, to push up the fees it might snap the Grand Bargain and force the big developers down town back to the table and maybe into court with us. And more importantly, it simply isn’t fair that our people build most of the housing in this town, take most of the risk, and work the hardest to deliver an array of housing product to the market while Vulcan builds just a tiny fraction of housing supply. I always remember that when I asked Vulcan to weigh in on our battles to expand single-family housing supply with small-lot legislation or to defend microhousing against regulatory overreach, Vulcan’s lobbyist would tell me, “We don’t build single-family housing or microhousing.”

Well good luck Vulcan. We don’t build housing Downtown or in South Lake Union.