Seattle Mayor Ed Murray, along with City Council member Mike O’Brien, rolled out what some are hailing as the “Grand Bargain” between affordable housing advocates and real estate developers.
The Mayor introduced legislation to create 6,000 units of affordable housing throughout the city over the next 10 years.
The first component of the “Grand Bargain” include the establishment of an Affordable Housing Impact Mitigation Program (AHIMP) — also known as a commercial linkage fee. It requires that developers pay a fee on every square foot of new commercial development. The funds raised will pay for the construction of new affordable housing. The linkage fee will range from $5 to $17 per square foot.
The second component calls for Mandatory Inclusionary Housing (MIH) for new multifamily developments. It requires 5 to 8 percent of units be affordable for residents earning up to 60 percent of the Area Median Income (AMI) for 50 years. This year, 60 percent of AMI is $37,680 for an individual and $53,760 for a family of four. Rather than include units on-site, developers can opt to pay a fee to construct new affordable housing offsite.
The second part of the “Grand Bargain” calls for Mandatory Inclusionary Housing (MIH) for new multifamily developments, requiring 5 to 8 percent of units be affordable for residents earning up to 60 percent of the Area Median Income (AMI) for 50 years. In 2015, 60 percent of AMI is $37,680 for an individual and $53,760 for a family of four. As an alternative to on-site units, developers can pay a fee to construct new affordable housing offsite.
“With this legislation, Seattle — for the first time ever — will require that all new development in the city will pay for affordable housing,” Murray said. “This is a bold, progressive proposal where growth itself will support affordable and environmentally sustainable neighborhoods. I am eager to work with the Council as we engage the public on this proposal as it moves through the legislative process.”
O’Brien, chair of the Select Committee on Housing Affordability, said that he hears all the time that people in Seattle are struggling to keep up with rising rents.
“I will be working with my colleagues on the City Council to act as swiftly as possible on the legislation behind the Grand Bargain,” O’Brien said.
In exchange for the two components, the city will investigate increasing development capacity. New developments in downtown and South Lake Union will be allowed an extra 1,000 square feet per floor. New buildings outside the downtown core will be allowed approximately one additional story in height.
Under the “Grand Bargain,” rents for new affordable housing units would be set at $1,008 or lower. The number is based on the affordable rate (30 percent of a household’s monthly income) for a one bedroom unit for an individual earning 60 percent AMI.
The city estimates more than 45,000 households spend more than half their incomes on housing.
“Seattle is where I work, but I can’t afford to raise my family here,” Brittany Johnson, a homecare worker, told the Seattle Mayor’s Office. “This plan would allow me to have a home in Seattle for what I’m already paying in Renton — giving me back the hours I lose on the bus to have with my toddler. That would be a dream come true.”
The City Council’s Select Committee on Housing Affordability will now review the mayor’s “Grand Bargain.”