Designed to meet the rigorous Living Building Challenge, Seattle’s Bullitt Center is one of the greenest office buildings on the planet. But that didn’t stop antagonists from hijacking Washington’s State Environmental Policy Act (SEPA) to stall its construction. Why? Because they didn’t like that it would provide no off-street parking and that its rooftop solar panels would block views and cast shadows.

Washington enacted SEPA—a sweeping package of environmental rules—in 1971, an era during which heightened awareness of ecology spawned stricter controls on development. In the subsequent decades, though, we’ve learned that concentrating new homes in existing urbanized areas is an ecological imperative, a critical path for both cutting climate pollution and conserving farms and forests. We’ve also learned that in prosperous cities, rules and red tape that stifle homebuilding undermine social equity by driving up prices and rents.

Today, Washington’s premier policy for protecting the environment is too often co-opted to do the opposite.

Unfortunately SEPA hasn’t kept up with the times. Today, Washington’s premier policy for protecting the environment is too often co-opted to do the opposite. Anyone averse to a proposed apartment building for whatever reason can file a legal appeal through SEPA that delays construction. The risk of appeal introduces toxic uncertainty to homebuilding, because delay, as I’ve spelled out elsewhere, can rack up costs that bleed projects into the red. The result is fewer new homes.

What’s more, since the law’s birth 46 years ago, most municipalities have added regulations that make the SEPA review process largely redundant for urban homebuilding. So SEPA delivers no upside to offset the damage wrought by drawn-out process and appeals. And affordable housing gets no special treatment: the same minefield of SEPA rules applies to subsidized homes built by non-profits.

SEPA also gives anti-growth activists an easy means to obstruct changes to zoning or other regulations intended to enable more homebuilding. Opponents can appeal under SEPA and, even if the appeals have no legal merit and ultimately do not change the proposed reform, they can still hold up progress. Which is to say, more pernicious delay: fewer homes built, a bigger gap between the number of homes available and the number of households seeking them, and higher rents and prices.

SEPA’s one-sided, myopic approach is a recipe for both obstructionism and bad urban housing policy.

At its core, SEPA has two fundamental flaws. First, it weighs only adverse environmental impacts. For example, SEPA gets all hung up over the Bullitt Center’s effect on street parking (and why is parking congestion even considered an environmental issue by SEPA anyway?), while ignoring the value of its revolutionary green design. Second, SEPA fixates on what’s immediate and localized while ignoring what’s long-term and far-reaching. For example, SEPA demands to know how many cars will come and go from a new apartment building, but it is oblivious to how increased housing density reduces car use across a metro region.

SEPA’s one-sided, myopic approach is a recipe for both obstructionism and bad urban housing policy. SEPA was created during the heyday of gas-guzzling muscle cars. And as with muscle cars, in the cities of today, the best place for much of SEPA may be the policy junkyard.

How SEPA applies to urban homebuilding

Outside of urban housing construction, SEPA is an essential set of environmental regulations. It can protect fragile natural areas and safeguard environmental justice. SEPA appeals can be potent forces for good: shutting down a coal export terminal for example.

It’s in the city where SEPA has gone off the rails. For homebuilding, SEPA mandates environmental review for all developments that exceed a threshold size based on the number of housing units. For projects that require review, the developer must complete a SEPA “checklist” that documents anticipated impacts on a long list of “elements:” earth, air, water, plants, animals, energy and natural resources, environmental health, noise, land and shoreline use, housing, aesthetics, light and glare, recreation, historic and cultural preservation, transportation, public services, and utilities (look here for Seattle’s checklist). Depending on the size of the project, the checklist might cost from $10,000 to $40,000 to prepare and add two or four months to the permitting timeline.

Based on the SEPA checklist, city officials decide whether or not any of the impacts could be “significant.” If no, they issue a “determination of non-significance” (DNS), and the project can move forward. If yes, SEPA requires a full-blown Environmental Impact Statement (EIS), a voluminous compendium of deep analysis that typically takes a year or more to complete and may cost several hundred thousand dollars in consultant fees. Most housing developments get a DNS. SEPA applies in the same way to proposed revisions to rules that regulate homebuilding such as a change to zoning: if not a DNS then an EIS.

Any interested party can appeal a DNS or EIS within a limited time period for a trivial filing fee ($85 in Seattle). For construction projects in Seattle, SEPA appeals are filed as appeals on the building permit. In 2015, some 33 of the total 797 issued permits were appealed, a rate of 4 percent (though these counts include non-residential projects so the residential percent could be lower). Most homebuilding permit appeals revolve around SEPA elements, because they tend to be easy targets. Even if the appeal percentage is in the low single digits, developers must always plan against the contingency that a SEPA-based appeal might occur, a risk that raises the cost of money for financing, and could dissuade a developer from pursuing a potential project. For changes to land use regulations, in Seattle in recent years anti-growth activists have appealed the DNS or EIS of almost every significant proposal, as I explain below.

A city hearing examiner adjudicates appeals, and the process typically takes several months, including one or more public hearing. Upon weighing the evidence, the examiner may throw out the appeal, revoke a DNS and mandate an EIS, or land somewhere in between, for example by mandating modifications to the proposal to justify a DNS or requiring expanded EIS analysis.

How anti-housing activists hijack SEPA to kill homebuilding projects

Seattle’s Housing Affordability and Livability Agenda (HALA) identified SEPA review as a cause of rising home prices and rents because it imposes cost, delay, and uncertainty. Further, the HALA report calls out why SEPA provides little benefit to offset its drag on affordability (emphasis added):

As the City has developed more specific codes, the importance of SEPA has diminished. Existing regulatory requirements… address most of the issues in a SEPA review. Today, SEPA analysis rarely changes the outcome of development within urban areas. Research on development in Seattle from 1995-2010 found few examples of mitigation required through SEPA that was not already required by other codes. SEPA is used more often to obstruct rather than promote sustainable development. SEPA challenges can increase the cost of housing by raising development costs and knocking some proposed new buildings out of the permitting queue.

Here are some recent Seattle examples of SEPA hijacked to sabotage homebuilding:

Phinney Flats

In a previous article I described Livable Phinney’s SEPA appeal of this 57-unit urban infill apartment. Four months passed between appeal and hearing, and the only part that stuck was over a technicality in the definition of frequent transit that exempts projects from off-street parking requirements, still unresolved at the time of this writing. (Seattle recently proposed a fix.)

Fort Lawton homeless housing

In 2006, the City of Seattle and the Seattle Housing Authority began working on a redevelopment plan to build 125 market-rate and 85 subsidized homes for the homeless on land surplused from a mothballed military base (see image at the top of the article). Some residents of the affluent surrounding neighborhood hated the idea, and in 2009, the Magnolia Neighborhood Planning Council appealed the DNS. King County Courts ruled that the city would have to conduct an EIS, and the city lost its appeal of that ruling. In other words, wealthy obstructionists used SEPA to block a project that would provide homes for some of the city’s most vulnerable people. The project sat on the shelf until this year when the city initiated the EIS process. It will spend $250,000 on EIS consultants and conduct a year-long process just to demonstrate to the courts that it has adequately reviewed the environmental consequences of allowing 210 new homes in the Pacific Northwest’s largest city. Local opponents have vowed to continue fighting.

Eastlake microhousing

In May 2014, the Eastlake Community Council appealed the city’s SEPA DNS for a 103-unit microhousing project located on the main arterial of the Eastlake neighborhood commercial center. The group’s apparent strategy: throw everything at the wall and see what would stick. The appeal names fire danger from people cooking, on-street parking, loading, traffic, poorly located bike parking and mailboxes, the site’s slope, and last but not least, a complaint about who would live in the small apartments:

Public safety and neighborhood impacts from the transient nature of many of the proposed building’s residents. The city has erroneously accepted the proponents’ claim that all residents would be “non-transient.”

Yes, apparently opponents believed that the state’s backbone environmental regulation was intended to keep short-term renters away from them. Perhaps realizing its appeal would flop, the Eastlake Community Council withdrew it in July 2014, but not before it had added two months of process and uncertainty to the homebuilding project. (Microhousing has been a popular target for appeals.)

West Seattle apartment building

In March 2014, the Morgan Neighbors appealed the DNS for a proposed three-story, 30-unit apartment building located on a busy arterial street in West Seattle. The appeal cited no issues other than “inadequacy of review of project.” In June 2014, the Morgan Neighbors withdrew the appeal after reaching a settlement in which the developer agreed to write a $25,000 check to be donated to a not-for-profit entity selected by the Morgan Community Association. In other words, the neighbors used SEPA for a shakedown. The agreement also stipulated that the developer would add two or three surface parking spaces and would provide the Morgan Neighbors “an opportunity to express their preference for exterior paint colors.” This case illustrates how appeals can be used to extract concessions not required by code because homebuilders decide it’s better to settle up front than to get dragged through an appeal process. The shakedown is all the more ludicrous when you see the relative size of the apartment buildings right across the street.

Repeat: neighbors used the state’s premier environmental law to slow down in-fill housing construction during a housing crunch. Their appeal was not a demand for solar energy or low-water landscaping or cutting-edge green-building practices. They demanded more parking spaces, a say over paint color, and a $25,000 pay off. Not exactly what the framers of SEPA had in mind!

Alki townhouses

In December 2016, a single-family homeowner filed both a SEPA appeal and a Shoreline appeal on this seven-unit townhouse project located next door to his house in the Alki neighborhood. The SEPA appeal cited steep slopes, impacts on sensitive or endangered species (such as herons), and the impact of pile driving on nearby buildings. In March 2017, the hearing examiner upheld the DNS, ending the SEPA appeal. Subsequently, the neighbor agreed to drop the Shoreline appeal in exchange for the builder adding higher fences and other screening elements between their two properties. While this appeal may seem like a relatively minor nuisance, delay and cost inflict a proportionately greater encumbrance on small-scale homebuilding projects like this one.

Bullitt Center

While not housing, I include the Bullitt Center here because it is such an over-the-top example of SEPA undermining sustainability. Completed in 2013, it was the first project in Washington State to pursue the Living Future Institute’s Living Building Challenge, one of the world’s most demanding green building standards—among the requirements: 100 percent on-site generation of all energy and water used in the building. The Bullitt Center also supports sustainability by locating jobs in a dense, transit-rich urban neighborhood. Filed by the owners of an adjacent apartment building, the SEPA appeal’s main complaints concerned parking and the overhang of the solar panels. The hearing examiner overruled the appeal, but not until almost a full year had passed from when the project submitted its SEPA checklist. (Full disclosure: the principal developer of the Bullitt Center is the Bullitt Foundation, which has supported Sightline Institute over the years. But that has nothing to do with why I included this example.)

How anti-housing activists hijack SEPA to perpetuate exclusionary zoning

A second, related way that SEPA can harm affordability is when anti-growth activists co-opt it through appeals to block changes to zoning and other regulations intended to boost homebuilding. Such appeals rarely result in substantial modifications to the proposal under question; they do delay and extend the process. The appeals not only waste city staff time and public funds, but in booming, housing-short cities such as Seattle, they also postpone rule reforms that would help keep citywide rents under control and reduce displacement. Here are some recent Seattle examples:

Accessory dwelling unit rule changes

In a previous article I told the story of how the Queen Anne Community Council won its SEPA appeal of Seattle’s proposed changes to rules governing in-law apartments and backyard cottages (ADUs), forcing the city to go back and conduct an EIS. In October 2017, the city launched the EIS process and expects to issue the final EIS in the summer of 2018. The appeal will set back the changes by a year or more, and the EIS is unlikely to lead to any major changes to the proposal. Considering the higher rates of ADU production in Portland and Vancouver, BC, that delay will likely deprive Seattle of at least 500 ADUs.

2010 lowrise update

In April 2010, the Seattle Community Council Federation appealed the DNS for the city’s proposal to update rules in lowrise zones, where townhouses and other small-scale multifamily buildings are constructed. The culmination of a process that began in 2007, the proposal introduced simpler, more flexible rules, new design standards, and modest increases in height and density. The appellant claimed that the city’s DNS analysis was flawed on parking, fire hazards, trees, water quality, development capacity, and impacts to affordability and historic resources. After requesting additional analysis on growth estimates, the hearing examiner dismissed all of these claims and affirmed the DNS in October 2010. Although the appeal changed nothing, it delayed adoption by as much as seven months, likely holding back the construction of hundreds of new dwellings.

Microhousing rule changes

In October 2013, a coalition of Seattle neighborhood groups appealed the DNS for the city’s proposal to modify rules for microhousing—a bizarre angle, given that the proposal tightened restrictions. Nevertheless, the appellants’ objections filled a long but typical anti-housing activist laundry list, expanded to include speciously presumed impacts specific to microhousing such as overcrowding and crime, and even going so far as to make the preposterous claim that microhousing exacerbates global climate change! In February 2014, a hearings examiner rejected the appeal’s arguments and affirmed the DNS, noting the absurdity of the appeal that pointlessly held up the rule changes by four months: “It would seem more likely that the proposal’s addition of new requirements… would tend to discourage new [microhousing] development.”

5th and Virginia tower

In January 2015, developers proposed a 47-story hotel and apartment tower in downtown Seattle across an alley from the 31-story Escala condominiums, leaving a gap as narrow as 18 feet between the two towers. Escala residents banded together to stop the project, writing dozens of letters, descending on design review meetings, and hiring a consultant to make their case. Not getting the results they wanted, in June 2016 they filed a SEPA appeal—not against the project but against the city’s proposed Mandatory Housing Affordability Program. They stated that they would drop the appeal if the city would meet their demands for increased tower separation. In other words, using SEPA, they held the city’s affordable housing rezones for ransom. Three months later, the group dropped the appeal, and the city adopted tower spacing incentives in August 2017.

And the list goes on…

The cost to taxpayers of this river of SEPA appeals over the past several years is easily in the millions of dollars.

Recent Seattle land use proposals appealed under SEPA include rezones in the University District, Uptown, South Downtown, and Mount Baker neighborhoods, and the Comprehensive Plan. Seattle will soon publish the Final EIS for its proposed citywide Mandatory Housing Affordability (MHA) upzones: all bets are on at least one, if not several, SEPA appeals. The cost to taxpayers of this river of SEPA appeals over the past several years is easily in the millions of dollars.

How cities can fend off SEPA hijackings

Dial back SEPA review on homes

As recommended by Seattle’s HALA plan, cities can lessen SEPA’s harm to affordability by “reducing the number of housing projects subject to SEPA.” The simplest way to accomplish that is by raising the housing unit threshold that triggers SEPA review. The state sets the baseline standard at 20 units, but it allows local governments to adjust it.

In April 2017, Seattle raised its SEPA thresholds to 200 units but only for projects located within one of the city’s five designated Urban Centers and only if the Urban Center’s growth targets are not exceeded. The former limitation was a political choice made by Seattle’s elected officials to avoid controversy by confining the reform to only the highest density areas of the city.

Washington State law stipulates the latter limitation, based on the presumption that SEPA review becomes more pertinent when growth outpaces what cities have planned for. But that rationale is flawed. First, growth targets are often arbitrary. Second, even if a Seattle Urban Center exceeds its targets, continuing to add more homes would still cultivate nets gains in both equity and the environment over the long haul. In fact, there isn’t a single urban area in the state of Washington in which more housing would not help advance widely shared sustainability goals, regardless of what the growth targets happen to be.

Find this article interesting? Please consider making a gift to support our work.

The ideal fix would be to remove the growth target caveat from state law. In the meantime, Seattle could elevate SEPA thresholds citywide. In that scenario, the higher thresholds would remain in place until the entire city exceeded its total growth target, and faster growing neighborhoods wouldn’t lose their elevated SEPA thresholds as soon.

Seattle planners are currently evaluating the impact of SEPA review throughout the city to inform future decisions about expanding the elevated exemptions beyond Urban Centers. It’s an overly cautious approach given that development regulations are similarly thorough in all zones throughout the city. The city has no defensible excuse for subjecting homebuilding projects outside Urban Centers to greater scrutiny under SEPA.

Eliminate the ‘Department of Redundancy Department’

As noted above, SEPA review for homebuilding can be redundant with local development rules. In fact, Washington law includes provisions known as “functional equivalence” to handle such cases:

The municipality can issue a DNS if “all adverse environmental impacts will be mitigated below the level of significance” by local regulations.

The municipality can identify questions on a SEPA checklist that are “adequately covered” by local regulations and therefore don’t need to be answered by the developer .

However, these provisions are rarely employed by cities, and a DNS issued through functional equivalence can still be appealed.

Do the homework to satisfy SEPA in advance

Washington law also authorizes “upfront SEPA,” a process in which a city conducts an EIS on the regulations that govern development in specified area—the city’s downtown, for example. Once this “non-project” EIS is finalized, any proposed project that is consistent with area’s regulations is SEPA pre-approved—that is, no SEPA review is required. One specific type of upfront SEPA—“Transit-Infill Review”—goes a step further and disallows SEPA appeals. As of June 2017, the “Planned Action” type of upfront SEPA can be approved through DNS without an EIS if the area is within one-half mile of a major transit stop.

Recognizing the power of non-appealable SEPA pre-approval to jump start homebuilding, the city of Tacoma conducted Transit-Infill Review for its downtown and one of its urban centers. In place since 2014 in downtown, it has pre-approved SEPA for a six-acre mixed-use development and at least seven apartment buildings, as well as a YMCA building, a hotel, and a shared-use trail. Seattle has one Planned Action under its belt for the redevelopment of Yesler Terrace, a 28-acre 1940s-era public housing project. Several smaller cities have conducted upfront SEPA over the past decade.

But good tools don’t help if they’re not used

The catch with the above-described tools for counteracting the excesses of SEPA is that they rely on local bureaucracies taking proactive steps and committing extra resources—not likely without a strong push from elected leaders. Through these SEPA tools municipalities shoulder some of the regulatory burden and accountability that otherwise would fall on the homebuilder. But that’s not an easy political sell in most places. For example, Seattle is about to issue an EIS for Mandatory Housing Affordability that applies to most multifamily zones in the city, but city planners had no directive to explore modifying the process so that the EIS would satisfy upfront SEPA.

Unfortunately, Washington law offers no tools for avoiding SEPA appeals on proposed changes to land use regulations. Cities can minimize the damage by providing resources to quickly dismiss baseless appeals (which are common). Otherwise, progress hinges on state legislation—a heavy lift.

How the state can make SEPA work for cities long term

To work for cities, SEPA ultimately needs major surgery at the state level. The local workarounds described above are just Band-Aids. The surgery’s success hinges on adoption of the core principle that SEPA must account for the environmental benefits of urban homebuilding.

The typical adverse impacts tracked by SEPA—such as shadows or views or parking—are mere nitpicks compared the far-reaching, long-term benefits of more equitable access to housing, lower carbon emissions, and less sprawl.

Current Washington law stipulates that SEPA “shall not balance whether the beneficial aspects of a proposal outweigh its adverse impacts.” But that approach becomes dysfunctional when the benefits dwarf the adverse impacts yet are still excluded from informing policy decisions. Homebuilding in urban areas is that very scenario: the typical adverse impacts tracked by SEPA—such as shadows or views or parking—are mere nitpicks compared the far-reaching, long-term benefits of more equitable access to housing, lower carbon emissions, and less sprawl.

The essential first big first step Washington can take is to redefine SEPA review for urban development so that it devotes equal attention to both positive and negative impacts, and also weighs long-term impacts on the surrounding city, region, and even the entire planet. Building on this foundational revision, Washington can:

Provide a simple process for cities to exempt all homebuilding from SEPA review if the city already has commensurate regulations; alternatively, allow cities to exempt all housing projects located within an urban growth boundary designated through the state’s Growth Management Act; at minimum, remove the growth target caveat on exemptions.

Cut back SEPA review of changes to land use regulations that allow more homebuilding, for example by raising the threshold of “significance” that triggers an EIS, or by restricting the grounds for appeals of DNSs, or by exempting SEPA review altogether.

Disallow SEPA appeals of land use regulation changes that are consistent with previously adopted plans such as a city or county comprehensive plan or a regional plan such as the Puget Sound Regional Council’s Vision 2040.

Establish a method for weighing positive and negative impacts against each other, and for applying those results to SEPA decisions. Consider whether it may be in the public interest to use public funds to mitigate minor adverse impacts caused by homebuilding.

Eliminate SEPA review elements that have no bearing on urban homebuilding in previously developed urban areas, such as air, noise, or plants, or that are subjective, such as aesthetics.

A better SEPA is possible

Here’s the rub: Washington’s State Environmental Policy Act often works against protecting the environment. By enabling dysfunctional process and time-sucking, groundless appeals, SEPA impedes homebuilding. In booming cities such as Seattle, and increasingly in metros throughout Cascadia and the US, a shortage of homes is creating a crisis of affordability that hits the poor the hardest, fuels sprawl, and thwarts efforts to cut carbon pollution.

The solution in short: SEPA needs to back off on urban homebuilding. Cities can help make that happen by raising the thresholds that trigger review and by conducting area-wide analyses upfront to grant SEPA pre-approval to homebuilding projects. But the necessary structural fix will ultimately take action at the state level. By redefining SEPA at its core to account for the profound environmental benefits of putting more homes in urban areas, Washington can unleash the power of its cities to advance the true mission of SEPA.

NOTES

For an example of how an assessment of positive impacts might look, several years ago I worked with a group of property owners in Seattle’s South Lake Union neighborhood on a thought experiment we called an “Environmental Benefits Statement.”

Relatedly, the California Environmental Quality Act—the Golden State’s version of SEPA—has come under increasing fire for undermining both affordability and climate goals. Put succinctly: “The problem is that CEQA applies the same process to putting housing on an urban parking lot as in a coastal wetland.” The law firm Holland & Knight recently published a pair of damning reports on CEQA finding that “projects in infill locations—in our existing communities—are the overwhelming target of CEQA lawsuits.”

In rare cases SEPA’s fixation on negative impacts could be exploited to challenge the tightening of restrictions on homebuilding—that is, downzones. I know of one example. In 2014 Seattle proposed a partial rollback of an upzone enacted in 2010. In a brilliantly creative move, the advocacy group Smart Growth Seattle appealed the DNS for the downzone, arguing that the city did not adequately assess the adverse impacts associated with the loss of future housing. But even though that argument was entirely consistent with the city’s own adopted policies and goals, the hearing examiner denied the appeal, essentially because SEPA was not conceived to handle our current urban realities.