‘It’s an incentive, not a penalty’: Jake contrasts Bellevue’s affordable housing approach with Seattle’s

Talks to reduce Seattle’s Mandatory Housing Affordability (MHA) fee have fallen through after proposals to cut the fee by 80% to encourage new construction were rejected by low-income housing developers who feared reduced revenue.

Since 2010, the MHA has brought in roughly $350 million and funded about 5,000 affordable homes. The MHA was put in place during Seattle’s tech boom to address housing affordability by requiring developers to either dedicate a portion of their units to affordable housing or pay a per-square-foot fee.

Jake Skorheim and Spike O’Neill, co-hosts of “The Jake and Spike Show” on KIRO Newsradio, noted that the tech boom is now over and that developers wish to adjust to the market rather than work through outdated requirements. Further stating that cutting out excessive fees would make building cheaper, thus adding more housing, and eventually lowering the cost of everything around it.

“They were looking at adjusting the market to encourage building, because we can’t live under the conditions of a white-hot real estate market in the mid-2010s that gave us this pool of money to build affordable homes,” Spike said. “That doesn’t exist anymore. People can’t afford to build anymore, and maybe this relief would help encourage more people to build some housing. More housing helps with the affordable housing issues. It doesn’t have to be assisted living, section eight type housing.”

“More housing makes everything cheaper,” Jake responded. “More options make everything cheaper.”

Jake points to Bellevue’s approach as a model Seattle could follow

Jake took a look at Bellevue and compared how it incentivizes developers to include low-income housing rather than penalizing them for its absence.

“People decided that that was something they could live with at the time, because they had a boom in business, but now that boom has gone away,” Jake said. “We have seen now that all that money has dried up. It’s drying up because it’s very expensive to build. One of the groups said, ‘What if you gave us a little cut on the fee, and it would encourage us to start building more? Those talks were going pretty well, and then they just shut down. Now the mayor’s office and everybody are saying it won’t happen now.

“Look at Bellevue, Bellevue doesn’t have this fee,” Jake continued. “Bellevue, if you want to donate some of your housing to low-income housing, Bellevue will give you 12 years tax-free. It’s an incentive, not a penalty. Seattle does it differently, and now they’re losing a ton of money. We’ll see how that works out, but those talks are shut down.”

Watch the full discussion in the video above.

Listen to “The Jake and Spike Show” weekdays from noon to 3 p.m. on KIRO Newsradio 97.3