REALTORS® respond to Seattle’s Housing Affordability
REALTORS® respond to Seattle’s Housing Affordability recommendations
Seattle’s housing market is hot. Inventory is at or near record low levels within the central Puget Sound area, resulting in keen competition among home buyers and escalating prices. According to the Northwest Multiple Listing Service report for June, Seattle has less than one month of inventory. Four to six months of housing inventory is considered to be a balanced market.
Prices from a year ago are up about 10 percent countywide, but closer to 15 percent (or higher) in many Seattle neighborhoods.
“Seattle expects an influx of 115,000 new jobs and 120,000 new residents over the next two decades,” says Tyler McKenzie, president of the Seattle King County REALTORS®. “This growth creates both opportunities and daunting challenges that require action. Increasing our supply of housing must be a priority. Creating housing supply near job centers has been a consistent objective of REALTORS®.”
Mayor Murray and the Housing Affordability and Livability Agenda (HALA)
Earlier this year, Mayor Murray commissioned the Housing Affordability and Livability Agenda (HALA), a 28-member advisory committee, with recommending ways to meet the Mayor’s pledge of creating 50,000 new housing units in the next decade, with 40 percent of those (20,000 units) designated as income restricted or subsidized. The remainder would be market-rate homes.
The HALA committee’s proposed initiatives include a mandatory inclusionary housing program requiring affordable units in new residential developments and a commercial linkage fee imposed on commercial developers to fund the production and preservation of affordable housing. Other strategies involve doubling the Seattle Housing Levy, and maximizing surplus and underutilized public property for affordable housing.
“Realtors have pushed for many of the strategies in the HALA report for several years. We agree affordable housing is essential to preserving our city’s diversity,” McKenzie states, but added, “Our approach to getting there is based on principles of fairness, flexibility and incentives.”
The real estate industry Coalition for Housing Solutions
Seattle King County REALTORS®, along with a coalition of real estate industry partners known as the Coalition for Housing Solutions, have worked for months with Mayor Murray and representatives of HALA to craft a series of proposals that will increase the supply of housing for the city.
Shortly after the mayor announced his unprecedented goal of 50,000 units, the industry coalition issued a statement supporting the goal, but saying a robust housing strategy must be rooted in how private and supported markets deliver affordable housing. The alternatives suggested by the Coalition for Housing envisions developing solutions to the housing affordability crises that do not merely establish new sources of revenue for subsidized housing, but instead emphasizes the need to increase housing supply and offers incentives for such production.
“Our coalition’s proposals are rooted in market based solutions,” McKenzie emphasizes. “Our approach includes increasing residential density through appropriately targeted upzones and expanded residential development flexibility. New development fees should be considered when accompanied by an increase in zoned capacity that creates added supply and increased value for the project. In addition, expanding the voluntary Multifamily Tax Exemption program will offer tax relief for on-site affordability.”
Next steps in the process for Seattle
The HALA recommendations include many of the strategies suggested by the Coalition and compromises on others. The Seattle City Council now has the task of acting on the recommendations by choosing which ones to implement by City ordinance. Seattle King County REALTORS® intends to be engaged in every step of this process.
“The HALA report is not perfect, but it is vastly superior to the original linkage fee proposal that would tax all new development. Such taxes are likely to severely chill the market and preclude housing opportunities so desperately needed by consumers,” says McKenzie. “We will continue our advocacy efforts to ensure that housing opportunities exist for our growing region.”
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