Seattle opened 1,750 subsidized, affordable apartments in 2023

At a July 24 City Council committee meeting, Councilmember Rob Saka pointed out that increasingly, developers are choosing to build affordable housing on site rather than pay the fee to satisfy MHA requirements, a change from past practice. It’s something Saka wants to see more of in the future.  

Winkler-Chin explained that the city had recently passed a law exempting developers from design review when they include the MHA units in their project, which was likely a factor in the shift. Design review can add delays and cost to a project.  

Winkler-Chin told Cascade PBS that it’s also likely a result of high interest rates and a more challenging housing market. When developers pay the in-lieu fee to the affordable-housing fund, they must do so at the front end of a project. When they incorporate affordable units into their project, they delay the cost until construction actually begins.  

Those same challenges in the market — inflated construction costs and higher interest rates — are sure to have an impact on how much affordable housing gets built with Office of Housing funds in the coming years.  

Affordable-housing projects work on long timelines and can take more than five years from conception to resident move-in. Kelli Larsen, the Office of Housing’s head of strategic initiatives, said Seattle is seeing an unprecedented number of new units open right now because the projects got started years ago. But she expects that today’s market conditions and the slowdown of new development will cause a future drop in the number of subsidized apartments built, though she couldn’t say how significant a drop it might be.  

Historically the Office of Housing has focused on subsidized rental apartments. The city has long had a down-payment assistance program that helps low-income residents purchase homes on the private market, but the Office wasn’t investing in the construction of subsidized housing for ownership.  

Last year, however, Office of Housing investments helped nonprofits pay for the construction of three affordable homeownership projects, which opened last year with 20 units of housing. The previous year, four subsidized homeownership projects with 21 homes opened using funding from the city.   

Councilmember Cathy Moore, who chairs the Council’s Housing and Human Services Committee, wants to see the city increase its investments in affordable homeownership.  

“How can we really shift to providing more homeownership opportunities rather than just continuing to build out rental apartments?” she asked at the July 24 meeting. “While [apartments] create housing, they don’t create long-term stability that I think is important to have in our community, nor do they create property taxpayers.”