Tenants Call on Mayor Murray to Preserve Affordability at Central District Housing Complex

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WORKFORCE HOUSING Welcome to the Central District's Squire Park Plaza. The government contributed $9.7 million in taxpayer money to build these 60 affordable housing units, according to the Tenants Union. Now, after only seven years in existence, Squire Park Plaza may be sold to a private developer who residents fear will raise rents. These folks want the mayor to intervene.

Donna Mercer works in the tech support department at one of Seattle's best-known companies—she prefers not to say which one—near downtown. Among her immediate coworkers, she's the only one who lives in Seattle, she says. Some commute each day from as far as Federal Way.

Mercer, on the other hand, is able to live in Seattle due to some precious units of affordable housing in the Central District, and she loves it. For two years, she's rented a small apartment at Squire Park Plaza on Jackson and 18th. On the rooftop, there's a gorgeous view of Puget Sound and on her small patio, she's growing fuschias and setting up feeders for hummingbirds and goldfinches. She's currently paying $1100 in monthly rent for a one bedroom, not including utilities.

But the nonprofit Central Area Development Association (CADA), the owner of Squire Park Plaza, recently signed a purchase and sale agreement with one of the largest for-profit developers in the country. The 60-unit complex was built in 2007 on government-owned land with $9.7 million in public financing, according to the Tenants Union.

The return on taxpayer investment, everyone agrees, was supposed to be the long-term provision of affordable workforce housing to people like Mercer, designed to combat the interlocking trends of skyrocketing rents and gentrification. There's a baseline affordability covenant that even a private developer must legally abide by, which lasts another thirteen years. It mandates that 51 percent of the building's units remain affordable to those who make 80 percent area median income (AMI) or below. (That's $44,750 a year for a single person.)

But it won't cover people like Mercer. CADA has gone above and beyond the minimum requirements, so that rent in an additional handful of units like hers isn't crazy expensive for those at the 60 percent AMI level. (That's $37,080 a year for a single person, which is about how much Mercer makes. According to the Seattle Office of Housing, for her monthly rent to be truly affordable, it ought to be $993, utilities included.)

Now, Mercer expects that if the sale goes through, the developer will hike rents for all of the units not covered by the covenant to market rates or higher. She'd have to look for housing elsewhere. "I'll probably be further out."

Here's where the residents of the building get really pissed: the administration of Mayor Ed Murray says it can't take a position on whether CADA should sell Squire Park into private hands or not, even though the nonprofit Low Income Housing Institute (LIHI) is eager to keep the structure in nonprofit hands. LIHI, which currently manages the building for CADA, has offered to purchase the building, pledged not to displace anyone, and intends to retain or increase the current affordability levels over the next fifty years.

Why isn't that a slam dunk deal? Two weeks ago, at the first "Find It Fix It Walk" a block away from Squire Park, the mayor told Central District constituents concerned about some of the fastest rising rents in the country that he'd work hard to increase access to affordable workforce housing.

Deputy Mayor Hyeok Kim, who's been meeting with stakeholders for months, told me this morning the mayor cannot weigh in and urge CADA not to sell Squire Park Plaza into for-profit hands. "It would be, I think, inappropriate for the city to try to tell CADA who to sell to," she says. "People may disagree on that fundamental point." When I pressed her on what she meant by inappropriate, she said, "It’s a matter of legal standing."

I've asked Kim and mayor's office to more fully explain the legal concerns. (Update: Kim says she meant that the city cannot compel CADA to sell to any particular buyer. "The City can certainly influence the process, which it has been doing and will continue to do," adds Megan Coppersmith, a mayoral spokesperson.)

Seattle City Council members Kshama Sawant and Nick Licata have no such concerns about the legality of coming unambiguously down in favor of a nonprofit solution. Both Sawant and a Licata staffer stood with a group of Squire Park tenants this morning at a press conference and demanded that CADA halt the current sale process and take up LIHI on its offer. "I don't buy it," Sawant told me, when I described Kim's position.

"That is too limited a position for the elected leadership to take," she continued. Speaking to a bevy of TV cameras, Sawant declared, "CADA does not have to sell to a for-profit entity. We know that developers do not hold the same values as nonprofits...They [developers] get a free reign in this city because the city leadership does not stand with working people."

In this case, however, the city appears to have actively encouraged the transfer of Squire Park Plaza into corporate hands. According to Sharon Lee, LIHI's Executive Director, her institute was working closely with CADA throughout 2013 on a plan to purchase the building by next month. But suddenly, at the end of the year, she says, "The Mayor's office and OED [Office of Economic Development] arrived at a decision that the building should be put on the market. And the OED was no longer recommending a sale to LIHI."

Lee gave me of a copy of a memo she said OED director Steve Johnson distributed last year (before Murray was sworn in), which enumerates potential sale prices for Squire Park Plaza on the private market. (Between $10 and $13 million.) Johnson did not immediately respond to a request for comment.

"I think they're backpedaling by saying, 'Oh, we can't tell the nonprofit what to do with their building,'" Lee says. "We think it's a travesty for it to be sold to a for-profit developer. All the public funds are essentially lost. Can you imagine? Millions of dollars, and you only get seven years of affordability?"

Update 6:22 p.m.: "We received word today that the for-profit developer CADA had been working with has decided not to move forward with the sale," Deputy Mayor Hyeok Kim tells me. "At the mayor’s direction, the Office of Housing will be working with CADA to look at alternative options, including LIHI’s proposal."