‘It doesn’t make sense to build here’: KIRO hosts dig into Seattle’s broken affordable housing pipeline

Seattle has about 30 housing projects stuck in the pipeline, and KIRO fill-in host Angela Poe Russell said the numbers explain why builders are walking away from the city.

“Second-quarter housing permit applications are down 94% from the same period in 2020,” Angela said on “The Gee and Ursula Show” on KIRO Newsradio. “They have to do something. This isn’t working.”

Seattle City Councilmember Dionne Foster is proposing an 80% reduction in Mandatory Housing Affordability (MHA) fees for stalled projects, according to PubliCola. Developers would have two years to reach the foundation inspection stage so they can’t pocket the discount and sit on the land. Some new projects in 2027 could receive a 60% reduction if at least a quarter of apartments have two or more bedrooms.

“We are at an extreme low in terms of how many permits are in the pipeline,” Angela said. “Builders are saying it doesn’t math anymore to build in Seattle. They’re going other places or not building at all. And so that’s why the city’s under pressure to do something, because it doesn’t make sense to build here.”

Angela, who has family in real estate, laid out how the math breaks down for builders.

“If you can imagine buying a piece of land, you take out a loan, and the longer it takes for you to build and sell the home, you’re paying interest on that loan,” she said. “Meanwhile, you’re getting a permit. Permits are still taking six months to a year.”

On top of interest and permitting delays, Seattle charges developers MHA fees, which fund affordable housing elsewhere. Angela said that fee alone can run $160,000 for a five-home project.

The fee gets passed to buyers

KIRO producer Andrew Lanier put a finer point on the cost.

“That’s like $30,000 extra added onto the cost of a new home just for the affordable housing fee,” Andrew said.

And that’s before permits, realtors, and the months of accumulated interest. KIRO host Ursula Reutin summed up the cycle.

“We have a housing crisis, we have a lack of affordable housing, but to build more affordable housing, there are more obstacles to go through that make it no longer affordable housing,” she said.

Builders are leaving Seattle

Angela said she knows builders personally who have stopped working in the city entirely.

“They’re going to Edmonds, Arizona, other places,” she said.

A listener named Dave in West Seattle backed that up. He texted the show saying every project he’s built comes with a hefty $100,000-plus MHA fee, and while the building department has sped up slightly, every other department is extremely slow.

“SPU takes forever, side sewer permits take forever, water permits take forever,” Dave wrote. “It takes about a year to get anything done, and it’s expensive, and it’s discouraging, and I’m probably not going to do this for much longer.”

Angela recalled one project funded by a mix of local, state, and federal money but said it came with problems of its own, including no parking and no outdoor gathering area.

“People are just standing in the street and standing in people’s yards,” she said. “It’s a hot mess.”

A mayor could cut prices overnight

Andrew argued that a mayor serious about affordable housing could make an immediate difference.

“A mayor who really wanted to tackle affordable housing could cut the price of a new home by $30,000 to $100,000 or more at the stroke of a pen by getting rid of MHA fees,” he said.

Angela agreed and said the deeper issue was the culture inside Seattle’s city departments.

“There is an energy in Seattle when you work for these departments that we’re not in service to you,” she said. “As opposed to when you go to other places, they’re like, ‘Wow, we’re happy that you’re here. What can we do to help you? How do we make sure you’re successful?'”

Ursula asked whether employees in those departments are even working in the office yet. Angela let the question hang.

“I think you know the answer,” she said.

Watch the full discussion in the video above.

Listen to Gee and Ursula on “The Gee and Ursula Show” weekday mornings from 9 am to 12 pm on KIRO Newsradio.