Today Mayor Ed Murray and Councilmember Mike O’Brien introduced legislation that will create 6,000 units of affordable housing throughout Seattle. The proposal comes from the Mayor and City Council’s 28-member Housing Affordability and Livability Agenda (HALA) advisory committee, and has been hailed as a “Grand Bargain” between affordable housing advocates and real estate developers.

“Seattle is experiencing unprecedented growth, and our challenge is to build fairly and affordably. We want sustainable, socially inclusive and economically diverse neighborhoods that are walkable, close to transit and job centers. To build these equitable communities, we must ensure that our teachers, nurses, hotel and restaurant workers who work in the city can also afford to live here,” said Mayor Murray. “With this legislation, Seattle – for the first time ever – will require that all new development in the city will pay for affordable housing. This is a bold, progressive proposal where growth itself will support affordable and environmentally sustainable neighborhoods. I am eager to work with the Council as we engage the public on this proposal as it moves through the legislative process.”

“I continually hear from people in our city struggling to keep up with rising rents. The Grand Bargain represents 6,000 desperately needed, new affordable units that we cannot build fast enough—especially not for those in need today,” said Councilmember Mike O’Brien, Chair of the Select Committee on Housing Affordability. “I will be working with my colleagues on the City Council to act as swiftly as possible on the legislation behind the Grand Bargain.”

There are two major components to the “Grand Bargain.” The first establishes an Affordable Housing Impact Mitigation Program (AHIMP) – commonly referred to as a commercial linkage fee – that will directly fund the construction of new affordable housing by requiring developers to pay a fee on every square foot of new commercial development. The linkage fee will range from $5 to $17 per square foot, based on the size and location of the commercial development.

The second part of the “Grand Bargain” calls for Mandatory Inclusionary Housing (MIH) for new multifamily developments, requiring five to eight percent of units be affordable for residents earning up to 60 percent of the Area Median Income (AMI) for 50 years. In 2015, 60 percent of AMI is $37,680 for an individual and $53,760 for a family of four. As an alternative to on-site units, developers can pay a fee to construct new affordable housing offsite.

“The Grand Bargain is evidence that people across sectors – public, nonprofit and for-profit – all want this city to be a place of opportunity for people of all income levels and all walks of life,” said Susan Boyd, Director of Real Estate Development for Bellwether Housing. “Development can be both a tool for economic growth and a tool for accomplishing equity and justice.”

In exchange, the City will look to increase development capacity in various ways throughout the city. New developments in downtown and South Lake Union will be allowed an extra 1,000 square feet per floor. Outside of the downtown core, new buildings will be allowed approximately one additional story in height. These changes will be subject to program design and the existing legislative rezoning process. The full chart of proposed changes can be viewed here.

“The legislation being announced today is an important part of a much larger strategy to address housing affordability in Seattle,” said Touchstone President A-P Hurd. “This approach is much more predictable for the City and developers. Downtown and SLU development have contributed fees toward the production of affordable housing in Seattle for years through the City’s Incentive Zoning Program, but this represents both an increased commitment from developers, and an increase in the City's overall capacity to build more housing, which is a critical part of any successful housing strategy in a growing city."
The “Grand Bargain” will be phased in over a number of years. When fully implemented, it will create at least 6,000 new affordable homes over 10 years.

Current market rates for a newer one-bedroom unit range from $1,399 to $1,887. The table below shows average monthly rent rates by neighborhood for buildings built since 2010:

Ballard
$1,769

Capitol Hill/Eastlake
$1,887

Green Lake / Wallingford
$1,671

Queen Anne
$1,694

Rainier Valley
$1,399

West Seattle
$1,615

In comparison, the affordable rate (30% of a household’s monthly income) for a one bedroom unit for an individual earning 60 percent AMI is $1,008. Under the proposed “Grand Bargain” framework, rents for new affordable housing units would be set at this price or lower.

“Seattle is where I work, but I can’t afford to raise my family here,” said Brittany Johnson, a homecare worker. “This plan would allow me to have a home in Seattle for what I’m already paying in Renton – giving me back the hours I lose on the bus to have with my toddler. That would be a dream come true.”
Over 45,000 households spend more than half their incomes on housing in Seattle.

In July, the HALA advisory committee delivered to the mayor 65 recommendations after 10 months of work. The consensus-driven proposal was crafted by affordable housing advocates, community voices, developers and housing experts appointed by the mayor and Seattle City Council in September of 2014.