Seattle may ease rules to encourage affordable housing downtown

Two programs designed to bring affordable housing to downtown Seattle have fallen short of expectations, with officials spending just $5 million of the $20 million collected from developers.

The legislation — passed in 2001 for commercial buildings and 2006 for residential buildings — requires developers who want to build taller buildings to pay into an affordable-housing fund. The developers paid in, but officials now say there were too many restrictions on how to spend the money.

First, the money must be used for new construction downtown — where space is limited and land prices are high. And the funding formula is so complex it includes numbers taken out to eight decimal points.

"It's like if somebody gave you $100 and said, 'You can only use this on a Tuesday, when it's raining, and you can only use it to buy a pink purse,' " said Adrienne Quinn, director of Seattle's Office of Housing.

As Seattle grows, Mayor Greg Nickels and the City Council have sought ways to make housing more affordable for middle-income people. One method is allowing developers to build taller if they set aside some money or some units for affordable housing.

This month, the City Council voted to expand that policy beyond downtown. As council members, developers and housing advocates hashed out the details of the expansion, some questioned whether the existing program is even working.

The money from developers was expected to create 900 new homes for people of low and moderate incomes by 2011. But on the eve of 2009, only about 300 have been built.

The City Council will consider loosening the restrictions early next year, said Councilmember Sally Clark, who chairs the Planning, Land Use and Neighborhoods Committee.

"The original intent of the program was to make sure that people who were going to work in these huge new commercial office buildings downtown would be able to live downtown," said Sarah Lewontin, executive director of the Housing Resource Group, a nonprofit that helps develop low-income homes.

"The challenge that we face today is that there really isn't property available in downtown Seattle ... that's affordable or that allows us to build projects."

The Housing Resource Group built the Gilmore Apartments on Third Avenue using money the city charged the developers of the Washington Mutual Tower. The tower's developers got additional height, and the Housing Resource Group built 65 apartments for people like Ann Evans.

Evans, 31, moved to Seattle from Phoenix a little more than a year and a half ago, and struggled to find an apartment she could afford on her $1,600-a-month salary as a delivery driver. One-bedroom apartments on Capitol Hill cost almost $900 a month, she said.

She ran into the Gilmore building manager downtown, and when he told her about the low-income apartments he had available, she said, "I was thinking, 'Yeah, I'll look at it, but it will probably be crappy.'"

But the apartment was nice, and she could afford the $735-a-month rent, especially because she didn't need a car to get to her downtown job.

The Gilmore is considered a success story, but the city has struggled to find other projects that meet the fund's criteria.

When Inter*Im Community Development was negotiating to buy property for a moderate-income housing development in the Chinatown International District, the city offered an $800,000 low-interest loan from the housing fund.

In the past, it's been hard to get government subsidies for housing programs that serve people who make moderate wages, said Hyeok Kim, executive director of Inter*Im Community Development. Now government agencies are more open to it, and it fits into her group's goal of building a community with "a continuum of housing options."

Quinn has asked the council to simplify the restrictions on the housing fund, allow developers to use the money outside of downtown and on redevelopment, not just new construction. They're "technical fixes," she said, that she thinks will restart the flow of money.

"We just want to make it easier to use the money for really good projects," she said.

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com