City could use own properties to boost affordable housing stock

Seattle City Councilmembers Teresa Mosqueda and Sally Bagshaw are sponsoring legislation that would boost the availability of affordable housing by revising policies around disposing of surplus city properties.

The legislation, which passed out of the Finance & Neighborhoods Committee on Sept. 12, would revise the city’s policy guidelines for reuse or disposal of properties owned by the city to prioritize using unneeded properties for affordable housing, and dedicate 80 percent of the proceeds from those sales — not counting those for affordable housing — into the Low-Income Housing Fund or Equitable Development Fund.

A review of the affordable housing priority in property disposals would be reviewed in 2023.

“This isn’t a forever priority,” said Central Staff legislative analyst Traci Ratzliff, “because we do know things change.”

The Office of Housing would work with the Real Estate Services Division of the Finance and Administrative Services department to determine what properties are suitable for affordable housing development for households making 80 percent or less of the area median income. Properties that could support affordable housing would be considered for sale below fair market value.

Ratzliff said fair market value would be determined through an appraisal of the property, which would need to have taken place within six months of negotiating a sale.

The Office of Housing would also need to report on what surplus properties were transferred for affordable housing and the number of units for all such projects, as well as any other facilities that may end up being erected using disposed of properties in its Annual Investments Report.

All proposals would need to be at the recommendation of the mayor.

Mayor Jenny Durkan announced in January that $11 million from the sale of city-owned property in South Lake Union would be used to address affordability and homelessness through her “Building a Bridge to Housing for All” plan.

The legislation being sponsored by Bagshaw and Mosqueda would not include City Light properties, which have their own separate policies and procedures that were adopted in July.

Under the revised procedures for evaluating the reuse and disposal of city properties, Seattle staff would also look at new models for generating affordable housing units for households at 0-30 percent AMI, including potentially maintaining ownership while providing affordable housing developers with long-term leases at least up to 50 years.

In neighborhoods at a high risk for displacement, the Office of Housing would look to partner with nonprofit housing organizations with roots in those communities; an amendment to the original resolution proposed by Mosqueda based on past conversations with community organizations interested in creating affordable housing, she said. Because it can take several years for an affordable housing developer to secure the necessary funding for a new project, the city would retain ownership during that time under the revised policy.

Bagshaw introduced some clarifying amendments of her own, as well as one that would let the city explore alternative housing models that might be more cost-effective and quicker to construct.

“I’m not wanting to cut corners on quality, or cut corners on viability, or how long a home will last,” she said.

Another amendment by Mosqueda commits the city to continuing to explore a community-driven antidisplacement program that prioritizes quality labor standards, apprenticeships and community workforce agreements.

The committee approved the resolution and amendments, which will be folded into a new resolution to be considered for full council approval on Oct. 1.