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August 11, 2008
Creating affordable housing has become an obsession of Seattle city officials. Their central question has been: Can profits generated from new development make it cheaper for people to buy or rent in Seattle?
Developers have been skeptical but patient as the city debates ways to change zoning so privately funded projects fulfill city housing objectives. But there are limits to what market-driven ideas like incentive zoning can do to create affordable housing.
First, we know growth is good. Accommodating people in the city is more sustainable than sprawl, but sometimes neighborhoods resist growth. That resistance works to limit supply by making permits more expensive and time-consuming. Welcoming growth can help increase supply, which can reduce prices.
Second, investors put money into new development with the expectation that the product can be sold for more than the costs of production. Reduce costs, including the time it takes to get a permit, and the product can be more affordable.
Unless the city becomes a housing developer (banking land and building units), or provides down-payment assistance or rent subsidies, affordability will always depend on available supply and development costs.
There is no magic formula for affordability. Someone has to pay for it.
Seattle can't have it both ways. Sharing in increased profits from more development capacity also means sharing the risks. Also, affordability can't be the city's only guiding principle on new development.
Livability and sustainability are values that are just as important as affordability, and need to inform decisions on land use.
Incentive zoning can work. But there should be a menu of developer incentives (like reduced costs, more density or less parking) as well as a menu of public benefit options (like providing affordable units, open space or street improvements along with a project).
Such a program can only succeed with support from developers and neighborhoods.
Developers can help make incentive zoning work. Calling incentives “zoning for sale” or “a tax on new development” is unhelpful, untrue and contributes to the myth that developers care only about profits. By getting to know neighborhood groups, developers can change that perception. Collaborating with neighborhoods will yield long-term benefits for both.
Neighborhood advocates can't behave as if new development is an impact that has to be mitigated. New development is not always a bad thing that should be taxed. The challenge is finding innovative ways for new development to compliment and enhance existing neighborhood character. As Seattle learns to welcome growth, everyone will have to give up a little comfort and certainty. Any new project can't solve every problem. But incentives that allow every project an opportunity to flexibly support the values of livability, affordability or sustainability should be part of the city's plan for new development.
Roger Valdez is a former city council and legislative staffer. Currently, he is a consultant with an interest in using zoning to support neighborhood arts and cultural organizations.
The Daily Journal of Commerce welcomes your comments.