Credit: Sound Transit

On Thursday, the Sound Transit Board approved a zero-cost land transfer to two affordable housing developers for a parcel of land in the First Hill neighborhood valued at $8.6M.

In a joint project, Bellwether Housing and Plymouth Housing Group propose building a high-rise apartment with 308 subsidized units on a half-acre parcel near the corner of Madison Street and Boylston Avenue.

“Bellwether and Plymouth deserve a lot of credit to come up with a very ambitious idea to leverage a great many affordable units,” said Peter Rogoff, CEO of Sound Transit. “If we can pull off a project this robust, at least as staff, we can recommend to you that you consider discounting to zero.”

The board also approved moving forward with two other affordable housing projects near the future Roosevelt Station and Capitol Hill Station.

A new state statute requires Sound Transit to prioritize affordable housing by offering at least 80% of a surplus property first to affordable housing projects for families making 80% or less of area median income (AMI). To accomplish this goal, the legislature allows Sound Transit to discount the price of parcels or offer a no-cost land transfer to qualified entities. All three affordable housing projects request a discount in land value to reduce the cost of the projects.

Partnering together in First Hill, Bellwether Housing and Plymouth Housing Group propose building 111 housing units for seniors making 30% of AMI or less and 197 units for households that earn between 30% and 60% of AMI, with 30 of those units family-size. Retail spaces are planned for the ground floor and no on-site residential parking will be provided. The project is estimated to cost nearly $92m assuming the zero-cost land transfer. The land was valued at $8.6M.

“Setting a property value at zero comes with big expectations that the project we end up with is worthy of the investment,” said Brooke Belman, a land use planning and development director with Sound Transit.

Rogoff told the board because much of fundraising for the project still needs to happen the decision would come back to the board if the project changes. The developers are seeking $39m in public subsidies — $30m from Seattle’s Office of Housing, $1m from King County, $3m from the state’s housing trust fund — including investments from both Plymouth and Bellwether.

“This is an exceptional opportunity for us to accelerate the creation of affordable housing in a place where it has become pretty prohibitive,” said Dow Constantine, King County Executive and Sound Transit boardmember before the vote.

Bruce Dammeier, Pierce County Executive and ST Boardmember voiced opposition against a zero-cost transfer.

“While I appreciate the ambitious nature of this project,” Dammeier said. “I think that it creates an expectation for future projects and being at the far end of the line and I am very concerned about how that is going to play out.”

“We all acknowledged that we are early in this journey of TOD (transit oriented development) and early in this journey of the process of how we resolve these things, and I think that going to no cost is a very dangerous precedent for a very noble goal,” he added.

Dave Earling, Mayor of Edmonds and Sound Transit boardmember, abstained from the vote wanting to wait until the project was further along before approving a zero-cost transfer. Sound Transit staff anticipates returning to the board in 2018 with a final agreement.

A project near the Future Roosevelt Station also moved forward Thursday after the board approved beginning negotiations with Bellwether Housing and Mercy Housing Northwest to sell the 1.2-acre parcel, valued at $18.5m, for $6.75m. The project includes 245 units affordable for households earning at or below 60% AMI. A daycare, retail space and community room is also planned.

And the board also approved entering into negotiations on a plan that includes swapping a piece of land adjacent to the Capitol Hill Station with Seattle Central College for a parcel about a block south, known as the Atlas site. Capitol Hill Housing has proposed building 78 affordable units on the Atlas site and paying the difference in the land value for the slightly bigger parcel estimated at $2.2m.

Sound Transit said this swap was a win for both parties: supporting the college’s expansion plans while gaining a site more suitable for housing, which allows for more affordable units to be built. Seattle Central College had first right of refusal on the Sound-Transit-owned property obtained during negotiations with Sound Transit over tunnel easements. The amount Capitol Hill Housing will ultimately pay for the property is still undecided.

79 Replies to “ST Plans Zero-Cost Land Transfer for Affordable Housing”

  1. We need low cost workers cleaning rooms in hotels and offices downtown, so this is a great solution!

    1. That’s why I think the hotel industry would have benefited more from building workforce housing instead of a convention center

  2. This is great news for affordable housing. But it’s worth remembering that if ST is required to pay full market value for land and/or resident/business relocation, but is then expected to dispose of the land on an under-market or zero cost basis, this will increase project costs in ways unforeseen is prior budgeting. The 80-80-80 rule will increase project budgets and reduce ST’s ability to recoup property acquisition costs. That’s commendable as social policy, but we should be clear that it’s a pass-through extraction from the agency.

    1. That budget item was never certain to begin with because nobody knew what the market price would be in fifteen years or whenever the budget was set. In fact it has gone up unexpectedly rapidly in the past six years, which means that ST’s budget would have expected to receive less than the current price, which means that the impact of not getting that income would also be less.

      This also applies to any other lots that ST has acquired but not yet accepted a specific offer on: the market price will probably rise, and so if ST sells it at a discount above 0%, it would receive more than if it sold it today or budgeted for before 2011.

    2. This also creates an incentive to purchase more property knowing that it goes to affordable housing. Which ends up making ST taxes also affordable housing taxes by proxy. Leaving less money for transit.

      Both are worthy goals, this may have unintended consequences

      1. This is basically raiding 8 million dollars from Sound Transit’s budget and putting it in the affordable housing fund. This is very unwise because it establishes sound transit as a piggy bank that other agencies can raid for money.

        This money is coming out of the money needed for transit. We already have a huge hole in the budget for Lynnwood link and delays.

        If ST can’t say “no” when people ask them for money, these project budgets are going to explode.

        The NY Times just ran a story about how the MTA has gotten it’s budget by other agencies which canabalized their maintenance budget. This is the same situation.

        If we want to spend money on affordable housing, the city can put another 8 million towards this project and buy the property. There is no reason that that ST’s budget should be raided

      2. Does anyone know if ST has actually written its long-term budget based on making a profit off of increased land value for the properties it uses for construction?

      3. I generally agree with Brendan. I mean the $500 mil ransom of using ST3 bucks to fill a general fund hole by exempting WSDOT from property tax – regardless of where the money is going, that’s a bad precedent. Also a bad precedent is Sound Transit not getting at least some money back. I will spare you what Todd E Herman thinks of all of this…

        No, I want you to imagine if you’re one of these property owners I walked past with little kids in tow at the last ST Board Meeting (something I have a problem with as long as crazy people get the microphone), you rearrange your life to go to a public meeting, you see presentations about billions of dollars being tracked (start of ), and you hear various crazy people at public comment (some fans, some haters), you then hear fellow citizens very legitimately concerned about the property acquisition process, and you just want to ensure the fruits of your labor and ST taxes go to your kids. Yeah I’d be cringing and a little angry wondering who was going to get these affordable homes while my family was displaced for light rail used mostly for commuting.

        Now if ST got the money back with a low rent or something over a long term, I’m OK with that. But this is a bad idea. ST is not a piggy bank. ST is confiscating property for something I personally believe is necessary but still, confiscating property is confiscating property. ST has a contract to build out ST2 and ST3, now that Sound Move is done. ST will likely not get ST4 authority at least in the next ten years – I think that was made painfully clear this year by anybody paying attention.

        I’ve said enough.

      4. ST doesn’t need “ST4 authority” if it uses the existing tax streams. It would only need more authority if it wants to raise additional taxes. The tradeoff is that the existing tax streams will be maxed out until the bonds are substantially paid down, so no big projects will be able to start immediately in 2041, only a gradual ramping-up of small things.

    1. I would hope the project would include places to park bikes, without becoming a maze of street furniture on public sidewalks.

  3. I think that public transit should focus on delivering transit. Selling the land at the market price and adding more service or lowering fares would probably benefit more low-income households than what is, effectively, giving 8M to 300 random low-income households.
    Also, doesn’t $300K per unit in construction cost seem a tad high?

    1. A new state statute requires Sound Transit to prioritize affordable housing by offering at least 80% of a surplus property first to affordable housing projects… to discount the price of parcels or offer a no-cost land transfer

      Gee, I wonder why it’s so expensive to build light rail in Seattle? The bigger the pie the easier it is for this type of mission creep to fly in under the radar. Of course, when asked why projects are over budget giving everyone a free pony never comes up.

      1. Well, it’s also the price Sound Transit pays for having gotten every last penny of revenue authority it sought from the Legislature, isn’t it?

        Loading large projects up with add-ons is the Seattle way now. The Convention Center just accepted a more than $80 million public benefits package. All good stuff, but much of it not closely related to the Convention Center. Effectively, it’s just a way to log-roll small projects we like into big projects and fund them without too much scrutiny.

      2. I assume this law was set on the basis that ST’s policy had already changed to dedicate surplus property to affordable housing. The ST board mentioned the policy in a board meeting circa 2014 as applying to unbuilt South Link stations, and didn’t say anything about a related law. So I assume the Puget Sound legislators drafted this law to give ST greater leverage or prevent it from backing out of it, and the rest of the state went along with it because who cares what happens in Puget Sound as long as it doesn’t raise taxes.

      3. “Well, it’s also the price Sound Transit pays for having gotten every last penny of revenue authority it sought from the Legislature, isn’t it?”

        ST could have eked out a little more with a business tax based on the number of employees. (It rankles me when such a tax is called a “head tax”. England did actually pass one, resulting in riots, and subsequent rollback. We also have a de facto head tax, consisting of the skyrocketing cost of getting a state ID, and those not driving subsidizing the cost of those getting a drivers license.)

        ST could also raise fares, and did not have to have a youth or low-income discount.

        But neither revenue source would be on the same order of magnitude as the car tab, sales tax, or property tax.

      4. Well, “employment tax” if you prefer. It’s a flat tax on jobs. The tax amount is per employee, and the tax incidence (who actually pays) falls on employees, not employers, even if it is nominally paid by the employer.

      5. I don’t see how the tax would fall flatly on employees. If they are already getting minimum wage, and the minimal benefits required by law, there will be no immediate impact on their wages, save for furloughs. Those in unions will certainly not see a pay decrease without getting something of equal value in return at the bargaining table.

        The effect I foresee is switching from a large force of part-time workers, getting fewer benefits, to having a smaller force of full-time workers, getting better benefits.

        Of course, Business Passport should have had a similar effect, and it would be interesting if any data is available to see if participants in Business Passport shifted toward more full-time employees.

        Full-time employment beats the heck out of two part-time jobs where each expects the employee to be flexible in their schedule.

      6. Similar to a higher minimum wage, the impact isn’t felt broadly with many people seeing slightly less in wages, but it’s felt acutely, with a few people losing their jobs as firms reduce headcount but with the majority of employees not impacted.

        On KUOW, they talked about how the Millionaires Club (a nonprofit) opposes the headtax because it will reduce the incentive for companies to higher homeless at minimum wages. These at risk employees won’t be get paid less – some of them simply won’t get paid.

      7. The Millionaires Club is basically a temp agency, specializing in providing homeless contractors for jobs for which there is little expectation of skill or quality. If they are speaking about the impact on all temp agencies, they may have a point about how temp agencies operate, depending on whether it is a tax on the number of employees or on employee hours. But customers will only be impacted if they are suddenly charged more by the temp agencies. This may induce would-be customers to shift from more contracting to more hiring, if there is any shift at all.

        As for run-of-the-mill companies’ hiring practices, hiring/contracting is pretty much a function of output needed to meet demand for their services/products. Prices could be impacted. I’m not sure if or how that translates to impacting employees’ wages, short of downsizing production. In the grand scheme of things, the size of the HOMES tax (just to name an example) is likely too small to alter production plans.

      8. “The Convention Center just accepted a more than $80 million public benefits package.”

        The benefit is meant to compensate the public for the impacts of a large building and transferring public assets to it, and to maintain some public space. When it happens with a private housing development it’s called “linkage fees” and is not so controversial.

      9. The public owns the Convention Center. When the WSCC pays for a public benefit package, that is our agency taxing ourselves to pay for benefits. We’re literally compensating ourselves via the convention center taxes.

      10. The compensation is to the community immediately surrounding the Convention Center who is directly impacted by it. It’s to make a big-ass building more pleasant and less disruptful.

    2. Compared to parking garages, this might add riders at a lower cost. For example, the Roosevelt property is being offered at a 11.75 million dollar discount. With 245 units, ST is paying ~48k per unit. Meanwhile ST is paying ~120k for some of it’s new parking spots. I bet low income units provide more off peak riders than parking. Unless these units <=40% of the riders a parking spot provides, ST is actually getting more baby for it's buck compared to park n rides.

      1. more incremental riders will be coming from the park n rides than current link riders moving into the new affordable housing units in the coming years.

      2. That’s true only because the affordable housing will need time for going through the city’s process, SEPA, SEPA appeals, getting a court to declare the appeals hogwash, appealing the court’s decision up the chain of courts, design review, lawsuits, appeals, design review, lawsuits, design review, more appeals, design review, lawsuits, design review, more appeals, design review, more lawsuits, design review, construction, lawsuits blocking the building from opening, appeals, post-construction fixes, getting court orders lifted, appeals, emergency overturning of getting court orders lifted, more appeals, getting a final decision, waiting for the US Supreme Court to tell us they are not going to review the case thus making the federal appeals’ court decision final, and then the lottery. In the meantime, the non-profit will go bankrupt, and the minority of neighbors supporting all the lawsuits will throw a party. The neighbors will then proclaim there is not enough open space next to the station, and seek to have the building razed and the property turned into a lidded parking garage, with a soccer field on the surface.

    3. If parking stalls cost $120K in the suburbs, $300K for an actual living space complete with kitchen and restroom in the City seems like a bargain. Plus, the parking space adds to peak traffic. The studio without a bundled parking spot, next to a transit station, with an abundance of orange, yellow, and lime bikes sitting around the premises, much less so.

      The only elements missing from this package is free transit passes, a subscription to the bikeshare of each resident’s choice, and free public college tuition for every resident, within reason, without an age limit. That still probably wouldn’t bump the cost of the unit up from 2.5 parking stalls to 3.0 parking stalls.

      1. Just because ST sucks at building parking garages –that I agree are a terrible idea– doesn’t excuse inefficiency in the nonprofit housing sector. This site claims that 300K would build a 2500sqft house and that it cost 85K to build an apartment. I concede that construction costs may be higher in Seattle, but not 4-5X.

      2. Just because ST sucks at building parking garages –that I agree are a terrible idea– doesn’t excuse inefficiency in the nonprofit housing sector.

        ST isn’t building the “affordable” housing. They’re giving the land to a non-profit that then contracts out the bacon to the mega-construction firm that will rake in the obscene profit at public expense. One question to ask it what are the salaries of the directors of the non-profit. I bet they don’t qualify for the housing! For extra credit, fact check their donations to local politicians that crafted this policy.

      3. The mega profits aren’t to the construction firms but to the owners who can just sit back and rake in a windfall after year. Construction labor and material costs have remained pretty flat; it’s the value of the land that’s skyrocketing.

    4. That’s a reasonable argument, Chris, but consider a couple of things:

      1) We live in a state with a bizarre tax policy. In most states, the elected officials would simply raise taxes and use the money to pay for public housing. But you can’t do that here. So using “transit money” to pay for housing is a very reasonable thing to do, given the constraints on taxation, and the housing shortage in the area.

      2) Sound Transit doesn’t even charge for parking! If Sound Transit is really interested in making the most money off of it’s assets, it would charge for parking. In a lot of case, it would charge a bundle. Northgate is a great example. I could easily see parking there going for ten, maybe even twenty bucks a day. If people are willing to pay extra to drive in a lane that gets them to their destination just a bit faster, than you can bet people are willing to pay more to park at Northgate. But that simply isn’t how they roll.

      So, until Sound Transit charges rich people a bit extra to park at their extremely valuable parking lot, I won’t worry about them allowing poor people to live closer to the train.

      1. Truly rich people won’t pay $5 or $20 to ride the bus. They’ll just drive (or Uber) directly to downtown.

      2. This whole thinking where ST is a source of money for other projects is incredibly foolish. They are already over budget and delaying projects (Lynnwood link).

        Are you comfortable with them axing or delaying the Ballard line? This money comes out of that pot.

        Money doesn’t grow on trees. 8 million here comes out of other transit projects or delays them.

      3. >> Are you comfortable with them axing or delaying the Ballard line? This money comes out of that pot.

        It isn’t coming out of any pot. It is money they could otherwise make. Well the same is true of parking. They could make a bundle off of parking, but they aren’t going to, because that would upset the folks that drive.

      4. “Truly rich people won’t pay $5 or $20 to ride the bus. They’ll just drive (or Uber) directly to downtown.”

        Depends on what you define as “truly rich”. In New York, a lot of people use public transit even if they make six figures. Buses/trains from the suburbs cost over $10 each way. Sure, some drive, but parking is expensive and traffic is horrible, so there’s a huge time (and often cost) benefit to transit.

      5. The most interesting thing in the video about unreliability on the NYC subway was that a pastor or hospice worker uses it to visit his homebound clients. That’s the kind of thing that happens only in cities with comprehensive transit and a strong non-car tradition like New York and London. In other places like Seattle they would have to drive to houses that are inaccessible from transit or require an hour trip each way or a 3-4 seat ride. (This includes even trips within Seattle!) Or they just don’t bother to check if a bus is feasible because half the time it isn’t so they drive anyway. And they have a car because transit is not comprehensive.

      6. One question to ask it what are the salaries of the directors of the non-profit.

        So, nowhere in the blog post do I find reference to Bellwether Housing or Plymouth Housing Group being non-profits. Bellwether doesn’t appear to have a Form 990 on file and their website makes no mention of being a non-profit. Plymouth Housing Group does file form 990 listing $44,695,626 in total assets (2015). It lists a total of 209 paid staff at a salary of $6,167,349. Of that six million $630k goes to 3 people (individuals not listed). That’s actually pretty lean for an organization with an annual operations budget of $28M; likely a result of it’s ties to Seattle’s Plymouth Congregational Church. Likewise, advertising ($17k) and fundraising expenses ($35k) are very low.

      7. Searching another database I found Bellwether Housing. At $96,721,507 roughly twice the total assets of Plymouth. 135 is just over half the number of employees drawing virtually the same $6M in compensation, A bit more top loaded with six employees drawing just under $1M in total compensation; the “Executive Director – Retired” the highest making $220k. Upper middle class but not really that high for an organization of this size (i.e. they’d likely make more, maybe a lot more, in the for profit sector).

  4. My only gripe is that none of these are condos for those looking to buy a “starter home” near transit to lock in the housing price and avoid skyrocketing rents. Of course I’m a bit outside of being able to qualify for “affordable housing” anyway (ok, gripe #2: is it really all that “affordable” for the income range it is limited to???). But it looks like I have to go to Lynnwood or Tukwilla to find a condo starter home, which most likely means buying a car, which is unfortunate.

    1. When there’s such a great need for apartments we can’t expect starter condos. Apartments can turn over and somebody else can benefit from the discount, but if a condo is bought subsidized and later sold at a market rate, the owner makes out like a bandit on the backs of the poor and taxpayers. There are various arrangements that could be used to protect the land from speculation — by putting the land rights in a trust and selling only the building rights, or giving a lifetime lease on the building with the ability to sell but not at an exhorbinant price, or a land value tax in exchange for a lower or zero property tax — but all of these require legislation at a level beyond ST.

      Usually “affordable housing” is tied to a percent above the poverty rate, which is like $16,000 for an individual, so not just poor but severely destitute. “Workforce” housing is the level above that, for those that don’t qualify for affordable housing but can’t afford market rate at a third of their income, or $55,000 currently. However, this program ties it to the median income rather than the poverty rate, and it goes all the way up to 60% of the median income. The median income in Seattle is around $80K, so 60% of it would be $48,000. That’s not far below the ideal level, and a MAJOR improvement over a $16,000 cutoff that most previous affordable programs have been. So it’s going in the right direction. It’s similar to ORCA LIFT or the Obamacare subsidies in that respect, that go beyond the poor into the lower middle class, which are also cost-burdened but usually ignored.

      What we need is more of these types of programs outside Sound Transit, in Seattle and Bellevue and the rest of King County and the region. And focused on areas near frequent transit.

    2. Perhaps unintended, or perhaps not, the net result is incentivizing income disparity. Market distortions are also guaranteed to lead to “gaming the system” and reinforce social divisions.

      1. I think he’s talking about the property “haves” becoming increasingly more wealthy over the “have-nots” over the long term simply because their property value appreciates, and they can will their property to their children thus accumulating multigenerational wealth, and after a couple generations you’ll have an entrenched aristocracy again like in the 1800s. Thomas Picketty’s “Capital in the 21st Century” talks about this.

    3. ” But it looks like I have to go to Lynnwood or Tukwilla to find a condo starter home …”

      Don’t worry. Even if this was a condo, and you did qualify, chance are, you wouldn’t get the place. That is part of the problem with public housing. It is a lottery, and most qualified applicants simply don’t end up with a place.

      But several do, and it puts downward pressure on the market. So the idea is that while a handful come out better, a lot of other people (people who lost out) still come out ahead, because market rate housing is a bit cheaper.

      “… all of these require legislation at a level beyond ST.”.

      Exactly. You are really getting into the sticky issue of whether it makes sense to have public housing for renters or owners, and that gets extremely complicated. For ST, it makes sense to just go the simple route, and sell these to agencies that rent them out.

    4. Actually, from what I’ve read the bigger issue with condos here is that there are some weird state laws that basically guarantee that every condo project will result in lawsuits. Apartments end up being more profitable for developers and the few condos that do get built are towards the higher end.

      1. The laws exist because developers were building shoddy mold-prone leaky condos with little or no warranties, and then skipping away with the profit while the owner had a huge repair bill. Often they copied designs from California without taking into account that we have a wet and moldy climate. This happened egregiously in Vancouver and apparently it happened in Seattle too.

      2. Many of those apartments (in Seattle at any rate) are built to comply with the state’s Condo Act (specifically RCW 64.55). This gives the developer – or those they sell to – flexibility to convert to condos at a later date, which increases value. The building quality is higher; materials, detailing, and construction administration by building envelope consultants is more stringent. I’d be far more likely to rent in or buy an apartment or condo if I knew that it was built under these provisions. It makes a difference.

        Mike is not incorrect in his statement, although it wasn’t “apparently” a problem in Seattle – an entire downtown high rise had to be demolished due to this and a whole lot of buildings pre-dating the Act have problems to this day. I deal with these design issues for a living and they are real; the laws are not “weird.”

  5. Who put Tacoma at the end of what line? Anybody but me think these apartments are exactly the precedent Seattle needs in the most desperate way possible.

    My only gripe is that, considering the storm-surge of money and its general aroma blowing out all our sewage treatment plants (truth about Magnolia) only question: whose well-tailored pants pocket could the change fall out of to pay for this one and may more?

    Straight or sarcastic, Hank, easy answer. Pay people you mention the wages their work should earn them, and they’ll be able to pay their own rent, with enough left over to help others work their way into their same bracket as fast as possible. And, willingly, taxes for transit.

    And an electorate to create a system that won’t ever punish anybody whose work earns them too MUCH money for help to remain productive. The Democratic Party will again deserve to hold office when nobody connected to it ever says those words again. Just, please, anybody sharing that experience….this time vote for your cat instead of Mike Pence.

    But transit advocates who don’t believe that the Boom’s chief Beneficiaries Need to Pay their Bills for what their own enrichment has done to every corridor within a hundred miles of Seattle- do me one favor.

    When you personally get priced out of Seattle with two weeks’ notice, if your moving truck can still make it down I-5 to Olympia, at least register and vote local to get Thurston into Sound Transit. Because there’s a waiting list for the basement of every existing railroad bridge and highway viaduct. For which transit lanes will create more roof-space.

    Mark Dublin

  6. Some affordable housing might be tied to the poverty level. But more typically it’s tied to the median metropolitan area household income, usually graduated by size. If I’m looking at the right number the median is about $75,000, which would be a household of about three. So if it’s affordable at 50% of median (considered “very low income”) the target would be a household with an income of around $37,500. Maybe not destitute, but not a ton of money to live on in an increasingly expensive place like Seattle.

    It’s becoming increasingly common for transit agencies to have affordability requirements tied to their property disposition. LA Metro and BART in the San Francisco Bay Area have them. There are multiple rationales. One thought is that without requirements all the housing around stations would go to high income households.

  7. Sound Transit should be getting something for the land. It’s Taxpayer funded after all and we voted to build a train but the proposal wasn’t completely clear on what these add-ons would be. They should respect taxpayers by selling land for some money that can be channeled into the project. The developer will make money regardless.

    1. As I said above, let’s start talking about getting market value for the land after we charge market value for the parking. Parking is a luxury, housing isn’t.

      1. +1 RossB! ST could sell the land proposed for parking garages and get a huge return on investment. And less ridership than if they sold it to a nonprofit housing developer.

        If ST is about ridership, the TOD makes sense. The free parking does not.

      2. That is a really rediculous response.

        No one is talking about building parking on this property, If sound transit sells the property for market rate, the same number of housing units will probably go in.

        As it is sound transit is just blowing an 8 million dollar hole in their budget for Seattle area projects. That money comes out of other transit projects or it delays them.

      3. The City could double the number of affordable units really cheaply by allowing twice as much height if the property owner is a housing non-profit. It doesn’t need to spend millions to convert it to affordable housing. It just needs to incentive affordability for free.

        Sadly, some members of the city council are too busy trying to regulate and filibuster housing into not being built.

      4. @Brendan — How much does the parking cost? How much could they make off of the parking? My guess is quite a bit.

    2. They’re not selling it to a for-profit developer at a discount, but only to a qualified non-profit to be used for affordable housing. So the developer will not make the full amount of money a regular developer would make, and they can’t extract profit from it because that contradicts their non-profit status.

      1. But those building the housing, and the Director of the non-profit, would be making a family wage! That’s corruption, I tell ya!

  8. In Hong Kong and I think Japan, the rail agencies use land development to subsidize transit. I guess the model here is to use transit to subsidize land development.

    The greatest thing we can do to make Seattle affordable is to zone for dense, car-free, market-rate housing. But good transit is a precondition for building that in much of the city. Handing out a handful of apartments via a lottery is getting in the way of that over-arching goal. Eye on the prize people!

    1. While it is true that many of them make a lot of money and generate ridership from property development on their lines, the real estate does not subsidize transit operation. Hong Kong’s and many of Japan’s rail services cover their own operating costs through fares because they efficiently carry large numbers of people.

  9. Questions abound for me on this issue.

    1. How much did ST pay for what ultimately became “surplus property”?

    2. Where in the Sound Move proposal, voted on by us residents/taxpayers living within the agency’s district back in 1996, did it state that ST would be using collected funds to subsidize affordable housing through such arrangements with developers as described in the piece above?

    3. Why are the surplus properties being targeted instead of creating the affordable housing units above the transit stations themselves?

    I have many others but I’ll just start with those. I for one hope that this issue gets much more scrutiny and media coverage as these plans move forward. (And, yes, I’m well aware of the new statute cited in the article. It too deserves similar scutiny.)

    As I’m not a fan of the way emminent domain is used to create such surplus properties to begin with, I have strong reservations against the scheme outlined in the orginal piece. The agency shouldn’t have to give away parcels to effect such a scheme, the good intentions (of creating the requisite affordable housing) notwithstanding.

    1. The reason the agency acquired the property in the first place is to have room to do all the construction work.

      If you are suggesting that the previous owner have first right of reacquisition (at least in the case of eminent domain), that too, will get much less return than simply auctioning off the property to the highest bidder, since the value of the land will have increased significantly with the opening of a transit station.

      1. Other than telling me things I already know, you haven’t answered any of the questions I posed. (I’m pretty well-versed in the area of eminent domain and condemnation actions having gone through the process with a partial taking of my own property.)

      2. Since questions 1 and 2 are rhetorical, I’ll skip to question 3.

        There will be housing built above some stations, where feasible.

        In the case of Capitol Hill Station, I don’t know why housing can’t be built above the station.

        In the case of UW Station, the upstairs footprint is rather narrow, and nevertheless owned by UW.

        In the case of the U-District Station, neighbors insisted on preserving a business that would ruin north access to the station. The business will probably eventually be sold off, but the damage is already done, and building on top of it is an architectural nightmare.

        ST has gone through an arduous process of asking neighbors what they want above Roosevelt Station (spoiler: They don’t want renters above it.)

        The stations north of that are tottering over a freeway. Not an easy place to build high-rises. And now neighbors are concern trolling building next to freeways anyway, for health reasons they say, while relieved the stations are next to freeways and not in places where TOD can be built on top.

        Northgate Station will also be surrounded by parking garages, even though the neighbors actually wanted TOD concentrated there, because the mall is also a neighbor and wants to stay in business. The mall’s spread shopping model will eventually not work, and be shuttered. But we’ll still be stuck with the parking garages.

        But the larger answer is that the housing crisis can’t be handled even if skyscrapers could be built above the stations. Some might then disingenuously argue “So why try?”

        The TOD being built next to stations is pathetically small, because of antiquated zoning that is not up for rethinking, even though we know it is a relic of days when racial covenants had just been thrown out.

        The real question I wish people would ask is why so little affordable housing can be built on these parcels where there ought to be high-rise housing. Even if only 25% of the units were able to be set aside for residents below a certain income level, that would do a lot more to make housing affordable for everyone.

        Since, the neighbors will never allow towers anywhere north of First Hill, building all “affordable” housing on some of the parcels around the station is the next-best option.

      3. A small tidbit about Northgate.

        “The mall’s spread shopping model will eventually not work, and be shuttered. But we’ll still be stuck with the parking garages.”

        When the mall closes its parking needs will go away too. The only plausible future for the mall block is multistory mixed-use buildings with their own parking. It’s already zoned highrise; the only reason it’s not happening now is the mall owner doesn’t want it. Or if it turns out that no company wants to pay for multistory buildings on the mall lot, it will turn into a recycled ghost mall with low-budget businesses, restaurants, and community organizations. In that case it won’t need as much parking either because people won’t be flooding the lots for Christmas shopping at nonexistent department stores. Some of the northern garage is for transit; the rest is for the mall. So it could be demolished and replaced with something else, and any remaining transit parking needs creatively integrated. ST has long talked about how the P&Rs at TIB, South Bellevue, and ST3 stations are made to be convertible to something else if parking diminishes over the long term; the low-hanging fruit is buildings in the surface lots, and after that demolishing or converting the garages. The small P&R at 130th Station in Bellevue is a placeholder until the Spring District is ready to expand.

      4. Brent, sorry but I just can’t take your reply seriously. Questions #1 and #2 are hardly rhetorical questions. Let me guess. You weren’t around as a taxpayer/voter back in 1996.

        The cost ST paid for these proposed giveaway parcels matters. These parcels, acquired as part of the ROW acquisition for Sound Move, need not and should not be disposed in such a manner to effect a policy outcome that addresses a very real problem but isn’t the agency’s core mission.

        Can you imagine if Sound Transit had stated something akin to the following in their Sound Move proposal?

        “In order to build this 25-mile starter electric light rail line, along with its 26 stations, the RTA will need to procure hundreds of properties along the line for the placement of the guideway and construction of the aforementioned stations. Some of these parcels will only be needed during the construction phase and will ultimately become excess properties for which the agency will later develop a disposition policy. This policy could include scenarios whereby the RTA receives no compensation for the excess property.”

      5. I assume the ballot measure did not specify how surplus property would be disposed of, or the agency would not have changed the policy. In any case, it’s one parcel out of hundreds, so a rounding error in a billions-sized budget. Even if ST gives away all future surplus properties, that’s still a small fraction of the total properties. But it won’t give away all of them because we can’t assume that most other deals will be as highly-qualified as this one. Otherwise ST would be announcing several deals now.

        And it does relate to ST’s core mission because there will be transit-motivated passengers in those buildings, and they may not be able to use transit at all if they live wherever they’d be without this building, which is likely because the lowest rents are in the most isolated unwanted apartments in the fringes. Just as ST considers how well an alignment serves poor/minority areas as a factor in its decisions, it might consider this for surplus land too.

      6. Mike…

        “I assume the ballot measure did not specify how surplus property would be disposed of, or the agency would not have changed the policy.”

        Why do you make that conclusion? For a case in point, I simply need to remind you about the agency’s reversal on conducting annual performance audits.

        “In any case, it’s one parcel out of hundreds, so a rounding error in a billions-sized budget.”

        Lol. I have to laugh whenever I hear this particular argument. It’s nothing but a cop-out. In this particular case, the giveaway here is hardly a “rounding error”. Some background:

        ST purchased the two parcels on FH back in 2001 for about $3.2 million. The 1014 Boylston parcel was acquired for $1.044 million and the 1400 Madison for $2.160 million. In 2016, ST declared these two parcels as surplus property (R2016-06).

        The board granted approval for the original purchase back in 2000 under R2000-04. In said resolution, the staff reported to the board the figure from the 2000 budget for the total for all North King Sub-area real estate acquisitions for the northward extension from the Pine St stub as $139.8 million in YOE$.

        As such, this $3.2 million puchase of these parcels represented 2.3% of the total ROW costs for this segment. I’d hardly call that a rounding error.

        There was no agency policy for real property dispositions prior to the Sound Move ballot measure passage. ST finally adopted their official real property disposition policy, procedures and guidelines in Jan 2000 on R1999-35. (I would strongly suggest reading the resolution and the attached policy.)

        There is a provision in said policy for the handling of dispositions of non-federally assisted surplus properties with regard to non-profit entities that assist the poor and/or infirmed (section 4.b(iv)). There is also a carve-out for said entitites in regard to all disposed properties getting fair market value considerstion (section 4.c(i)).

        So while it may within the agency’s own stated guidelines to donate these parcels to the non-profit developers referenced in the original piece, I don’t believe it’s an overall effective policy to do so, particularly given the stated goals of resolution 1999-35 that adopted said policy. As a reminder, the number one goal of that resolution was as follows:
        –Allow flexibility to realize the greatest possible return on the public investment

        Whether taking such actions to try to effect the desireable outcome of a non-profit developer building x number of affordable housing units, and by extension, additional transit demand, is part of the agency’s core mission is debateable. We obviously have different points of view on the matter.

        (Apologizing in advance for any typos, etc. I’m a little under the weather.)

  10. The lottery system for who gets to move into the housing misses multiple opportunities.

    What if priority were given to:
    1) homeowners who have had their land taken by, or sold their land to, Sound Transit? (I don’t expect many will take the offer, but it would be a nice gesture, nonetheless.)
    2) renters who have been displaced from apartments or houses demolished for ST construction;
    3) life-long members of the Duwamish Tribe (or various other tribes in the ST District) and their families;
    4) any other renters who have been displaced from apartments or houses being demolished within the ST District/City of Seattle/King County’s urban growth corridor?

    The Duwamish have a cultural center (The Longhouse), but still no residential community in which to preserve their culture, that I know of. They are still not recognized by the federal government, and this might help get that recognition. I don’t think they have the money to buy any of the parcels, but it would be nice for them to get at least one prime plot of land back to begin some long-awaited healing for over a century and a half of injustice.

    1. Brent, personally hate lotteries for any purpose- because they’re not only heartless, but also a lazy official’s excuse for lacking the knowledge, understanding, and guts to make a decision. But strongly support your priorities. Couple thoughts today.

      Supplement tenant’s rent money enough to let them stay where they’ve lived for twenty years. Likewise, instead of evicting people and leaving their vacant houses to rot, pay them to stay on as care-takers.

      And let people pay for their own new homes by picking up tools and building them. For themselves, or even better, in cooperation with their neighbors. Very old American tradition. Used to be called a “House Raising.

      City, and real-estate beneficiaries who can certainly afford it, can also pay unemployed skilled workers not only to build new homes, probably pre-fab, but also bring in young people to learn in the whole construction trade. My own first approach to the problem of “Homelessness”.

      Man, I hate that word, because it implies that everybody living under a bridge or in their car is same as someone addicted to drugs and alcohol, or mentally ill. In other words, self-impoverished and deserving only to be Swept.

      But do think that one approach is to let both residents and others, especially high school aged young people, participate in building homes where it makes sense. One thing might provide a critical rationale for, and also make use of a wasted funding source.

      Think of these projects as disaster training for the earthquake that’s inevitable here, or for things like land-slides from no longer unusually rainy weather. [OT]


  11. There’s a fundamental problem here, in that taxpayer-funded housing just doesn’t scale well. However you slice and dice it, housing is too expensive on a per-person basis to provide for more than a fraction of the low-income population (at least, without massive tax increases) so you end up with a lottery system where a few people get a home for dirt cheap that they can live in forever, while everyone else gets nothing. Not surprisingly, once people get it, they don’t want to give it up. So, even if they later get a job out in Lynnwood, they’ll still live in their affordable housing in Seattle and reverse-commute because they know, once they leave, it will be next to impossible to ever move back. The result is that you pretty much have to wait for someone to die in order to get an opening.

    As a rough idea of what affordable housing would cost for everyone that needs it, let’s assume for the sake of gross, back-of-the-envelope calculations that the percentage of the people that would qualify is roughly comparable with the percent of people that qualify for social security, and that the monthly per-person subsidy would be roughly comparable with the average monthly social security check of $1200. Under these assumptions, you could you the amount of social security tax withheld from your paychecks as an approximation of what a tax to pay for affordable housing for all that needed it would cost you. For the average Seattle income of $80,000/year, this works out to just under $5,000/year, or about 80% of the entire 2017 property tax for this3,700 sq. ft. home in the middle of Capitol Hill, currently listed at $900k.

    Bottom line: it just won’t work.

    1. Other countries have affordable housing. Germany has more public housing, and market-rate apartments are affordable because the states have statewide rent control, so it’s not just units for the lucky few but enough units for everybody. DP says Boston doesn’t have homeless people because the Massachusetts state constitution guarantees a right to housing so the cities have been building it all along, and I read Salt Lake City eliminated homelessness by just building enough housing for everybody. The problem is in land speculation, zoning, taxes, etc.; we just need the right policies and the will to do it. And because we’ve let it get out of hand for so long there’s a huge backlog that will take time to whittle down. If we had started an adequate housing policy in 2000 we wouldn’t be in this jam now, at most we’d have just a little jam. Since the 1970s wages have stagnated and all the increases of productivity have gone to the rich. If we just taxed that at the rate we did in the 60s, we’d have enough to solve most if not all of our socioeconomic problems.

Comments are closed.