Marion West hold 49 units for homeless young adults and low-income workers. The Low Income Housing Institute used funding from nine different sources to develop this project. Rendering courtesy Michael Walmsley.

People filed into the Magnolia United Church of Christ one February evening to hear five panelists discuss a potential affordable housing project: 238 units of affordable housing — some to rent, some to own and some specifically for seniors — adjacent to Discovery Park, one of Seattle’s stunning natural features.

The project, planned for a parcel on an abandoned U.S. Army base known as Fort Lawton, had become the newest battle in a culture war between two of Seattle’s most passionate interest groups — the NIMBYs (“not in my backyard”), who vocally support density as long as it’s far away from them, and their opponents, the YIMBYs (“yes in my backyard”), who believe that maximizing the number of units in a project is the only way to protect current and future Seattleites who might otherwise be forced out by skyrocketing home prices.

Some audience questions forced panelists to speak broad strokes or wade further into the weeds about the realities of what it takes to create affordable housing in a city of skyrocketing prices.

What made the 34-acre parcel on a former base, somewhat distant from bus lines and other transit options, so crucial for an affordable housing project? Why not sprinkle smaller projects throughout the city, housing people without disrupting the fabric of a neighborhood? How, exactly, can you say that a project will serve veterans or elders without running into some kind of discrimination issue?

The answers come down to the nature of affordable housing production, a years-long process in which organizations cobble together land, develop programming and seek out funding, hoping that the fundamentals of the deal do not shift.

Affordable housing projects depend on skill, luck and tenacity to move forward with little margin for error.

Affordable housing projects depend on skill, luck and tenacity to move forward with little margin for error.

Getting an affordable housing project through to completion is difficult and riddled with pitfalls, a problem in cities like Seattle that need the units more than ever.

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Trading spaces: Washington uses land transfers to help support the construction of affordable housing

A property like Fort Lawton is enough to make an affordable housing developer salivate. It’s large, it’s contiguous and there’s not a whole lot there to complicate new development compared to a built-out urban environment. Residents of the community will have access to amenities like Discovery Park, and the somewhat secluded nature of the site could appeal to families looking for a bit of quiet in an urban context.

That’s not the kind of property that Jill Fleming, deputy director at Capitol Hill Housing (CHH), works with often.

The affordable housing development organization takes what it can get when it comes to property in Seattle, with its high property and construction costs. Ideally, CHH acquires property as cheaply as possible in areas that are perhaps less desirable to market-rate developers, but also meet the needs of low- and middle-income people who will live there.

“We want to have affordable housing in high opportunity areas,” Fleming said. “Our Liberty Bank project is quite close to downtown and a high number of jobs.”

That property was a gift — Key Bank, the former owner, sold the site to CHH for $560,000, the price the bank originally paid for the property, Fleming said. According to the King County Assessor’s Office, the site last appraised for $2 million.

In some cases, municipalities will offload old properties that they no longer need or will be expensive to maintain. The city of Seattle has one such program, which is how the Phinney Neighborhood Association applied for the Greenwood Senior Center. The building needed investment, and the PNA needed control of the property to raise the necessary funds.

The Low Income Housing Institute (LIHI) has acquired a number of properties in Washington by working directly with cities that have land to spare. Seattle officials sold a former fire station in Lake City to the organization to develop into affordable housing, and the city of Olympia transferred an old parking lot to LIHI for $100,000, said Sharon Lee, executive director of the organization.

These kinds of deals are crucial to the development of affordable housing, and there’s some evidence that the city of Seattle has properties that could fit the bill. An analysis conducted by King County Assessor John Wilson in conjunction with Councilmember Sally Bagshaw in 2016 identified 300 city-owned parcels that were close to public transit and a minimum of 4,000 square feet.

“Those often are good parcels of land and we look forward to those being made available to the affordable housing community,” Fleming said. “Land is just the first step.”

Traditional development opportunities are comparatively straightforward. A developer needs to show that their project will pencil out and be profitable enough to attract investors.

Affordable housing development can be a bit more complicated.

Government intervention is necessary to build units that low-income people can afford or to help bridge the gap between their earnings and their monthly rent.

Government intervention is necessary to build units that low-income people can afford or to help bridge the gap between their earnings and their monthly rent.

It’s not a new idea, and it wasn’t a particularly controversial one until the 1980s when President Ronald Reagan halved the budget for public housing and Section 8 vouchers to $17.5 billion, according to scholar Peter Dreier.

Reagan, famous for being unable to recognize his own HUD secretary at a public event, changed the landscape of affordable housing production and housing subsidies in the United States, devolving fiscal responsibility to state and local government.

This secular deism has had its impact — officials estimate that it would take $3.2 billion just to develop enough affordable housing to meet the needs of the Puget Sound Region, and more resources on top of that to provide the required supports to new residents.

Those resources are not available from any one place. Washington state’s own Housing Trust Fund, an essential source of public dollars used to create affordable housing, only released $106 million in its last round of funding for the entire state, Lee said.

A typical LIHI project may require the organization to stitch together as many as nine separate funding streams to get a project through.

A typical LIHI project may require the organization to stitch together as many as nine separate funding streams to get a project through.

What makes that even more challenging is that different investors may have strings attached to their money. Foundations may want to target units to a specific income level, certain tax credits require affordability for varying amounts of time. They all want to see some kind of proposal before offering up cash, turning the application period into a dialectical process of creation and revision.

“You’re constantly adjusting,” Fleming said.

Public funding cycles tend to be regular, but that can mean waiting years to secure the money needed to start a project. In that time, things change — perhaps construction is more expensive or materials more in demand to feed the dozens of cranes in the Seattle skyline. Did the property get upzoned, allowing for more units? If so, that could ameliorate the added costs by pumping up the number of units in a project.

If not, a developer engages in “value engineering,” aka “cost cutting.”

Developers expect a given project to take two or three years just to get to the point of breaking ground, but sometimes it’s considerably more.

“The 12th Avenue Arts project took 13 years and four mayors,” Fleming said.

The process may get harder before it gets easier. Affordable housing developers and the Washington State Housing Finance Commission sounded the alarm over the massive tax cut pushed through Congress in 2017. The dramatic reduction in the corporate taxes means that certain programs meant to incentivize private investment in building projects like affordable housing by lowering their tax burden are less attractive than they once were.

Developers saw the effects even before the tax cuts passed — institutional investors ghosted on talks after the election of Donald Trump on the assumption that their taxes would soon be reduced. That means less private money in the pipeline, devastating in a state where it’s difficult to boost public coffers without further disadvantaging people who can least afford it.

So the basic tenets of affordable housing production look like this: get the land that you can, tailor your programming to the available funding and pack as many units as is reasonable onto the property to increase economies of scale and decrease the cost per unit.

Once a project breaks ground, you hope that there are no new surprises dredged up by bulldozers, Fleming said, and while you wait, another arm of the organization begins its work.

Buildings pre-lease even before they are open to tenants, beginning the careful screening process to ensure that the individuals and families that receive housing meet the characteristics determined by the funders. Units can target income levels, household types and even ages — one swathe of units at the Fort Lawton property will be specifically for folks aged 55 and up.

Under certain circumstances, usually in conjunction with the federal government, organizations can tailor their programming specifically for veterans.

Managing this process upfront and over the life of the project is one more reason that affordable housing developers tend to target medium-sized developments rather than smaller buildings that may be less controversial to neighbors.

Not only does it cost more to invest in “scattered-site housing,” as it’s known in the industry, it complicates the logistics of property management, Fleming said.

It’s probably an unsatisfying answer for people who oppose dense developments in areas that haven’t seen that type of building in the past. Until the realities of affordable housing development change, the desires of funders and the necessity of economies of scale won’t either.

Projects like the one planned for Fort Lawton will help ease the affordable housing crisis in Seattle and the region at large, but an extra 238 units here and 100 units there will not solve it.

Activists with the Housing for All Coalition estimate that the city needs 24,000 units affordable to people at or below 30 percent of the area median income over the next 10 years. Current development plans could produce 6,000, according to estimates from the city of Seattle.

Activists with the Housing for All Coalition estimate that the city needs 24,000 units affordable to people at or below 30 percent of the area median income over the next 10 years.

More broadly, the Seattle-Tacoma-Bellevue metro district is short over 100,000 units affordable to people at or below 50 percent of the area median income (AMI), according to a report by the National Low-Income Housing Coalition. That’s $33,600 for a single adult and $48,000 for a four-person household.

These staggering numbers represent decades of neglect that has entrenched homelessness as a feature of urban life in the United States, a reality made more visible as economic inequality continues to rise and low-income, marginalized communities struggle to hang on to what they already have, much less make gains.

Opponents of the Fort Lawton project want the 34-acre parcel to become park land, adding to the natural beauty that is Discovery Park. Marco Vargas, who manages a supportive housing project at First Hill, responded to the suggestion with empathy.

“Really all that this is coming down to is deciding once and for all that this is one Seattle,” Vargas said. “We are one Seattle and we have to make the city work for all of us.”

Ashley Archibald is a Staff Reporter covering local government, policy and equity. Have a story idea? She can be can reached at ashleya (at) realchangenews (dot) org. Twitter @AshleyA_RC

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