The Seattle City Council is scheduled to vote by the end of the year on a proposal that would allow developers to build taller in the Ballard neighborhood commercial district in exchange for providing some residential units below market rate or other types of public benefits like open space.

Late last year, the council received Mayor Greg Nickels' plan to expand the downtown Seattle incentive zoning program citywide. For much of this year the Planning, Land Use and Neighborhoods Committee has been reviewing the proposal and chair Sally Clark has recommended a revised version, which differs from the mayor's in a few major ways.

Nickels' plan calls for 11 percent of the bonus floor area in new development be set aside as housing affordable to those earning 80 percent of area median income for rentals and 100 percent of area median for condo units. Clark's proposal includes a jump to 20 percent with the same income requirements, but builds in a deeper affordability level of 50 percent of area median income in exchange for a reduced set aside.

The city calculates that 80 percent of area median income is about $42,000 to $56,000, annually depending on household size, and 100 percent of median to be roughly $57,000 to $65,000, also depending on household size.

The mayor's plan would not replace existing housing if it's demolished, while Clark's revision would if the units being demolished is displacing a tenant that requires relocation assistance.

If developers opt out of providing reduced-cost housing, they could instead pay a fee for bonus floor area. Under the mayor's plan that would vary between $15 a square foot to $18.94 under a tiered cost system by floor. Clark has set no maximum or minimum fee and a flat $18.94 rate with fee escalation that would begin in 2010.

The downtown incentive zoning program that was implemented in 2006 changed the zoning for the downtown core to allow taller buildings, but the expansion plan would serve as a framework for any future rezone proposals in neighborhoods.

Clark said it's important to discuss the impacts on each individual neighborhood as they come up.

The next rezone the council is considering that could be the first to use the incentive zoning program outside of downtown is in the Dravus/Interbay area, where the council is considering rezoning land in the West Dravus commercial area from Industrial General 2 to Industrial Commercial, increasing building heights from 45 feet to up to 65 feet in some areas.

But Clark does not favor a sweeping plan that doesn't consider the varying characters of Seattle's neighborhoods.

"It is part science, it is part art and it is part seeing what the economy is going to do," Clark said last week in a committee meeting when real estate developers were asked to comment on the proposal.

Hal Ferris, a principal with the Seneca Real Estate Group, encouraged the council to "be brave" and pass the legislation to help stop the trend of pushing working families out of the city as rents here continue to rise. Ferris said incentive zoning works well for mid-rise, wood frame construction developments (about a 75 foot tall building) because those projects cost less to build than steel and concrete high-rise projects. But the plan isn't a fix-all for affordable housing issues in the city, he added.

"This is not a panacea," Ferris said. "It will not solve all of our problems for affordable housing."

Seattle apartment rates rose 7.1 percent in the last half of 2007, greater than anywhere else in the country, according to a recent report in the Puget Sound Business Journal.

The pressure on the council to pass a fair bill was evident last week at the council's first and only scheduled public hearing on the issue.

Many came in support of an incentive zoning philosophy, but said the income level requirements were set too high and didn't reach the workforce in Seattle - teachers, retail and trade workers - who are increasingly moving out of the city in search of affordable housing.

Elana Dix, lead organizer for Puget Sound Sage, a partnership between labor, religious and community organizations to improve living conditions for low-wage workers, told council member's the plan should aim to create a more "just community" and not "widen the gap between rich and poor."

That means creating housing affordable to people already living in Seattle communities, she added, many who earn wages far below the income targets.

"We are not against development, but we want development with justice," Dix said.

While some worried the plan would lead to "rampant upzones" across the city, others said it would choke development.

President of the Greater Seattle Chamber of Commerce Steve Lahey said he doesn't think the plan will create neighborhoods with residents from diverse income levels and will do much to discourage development.

"We're really concerned that what you think might be an incentive may in fact be a disincentive to development," said Lahey.

The council expects to vote on a final plan in December. For more details on the two proposals, visit http://www.seattle.gov/council/clark/workforce_housing_ip.htm.

Rebekah Schilperoort can be reached at 783-1244 or rebekahs@robinsonnews.com.