The Seattle City Council on Wednesday cut a bit of red tape for affordable housing developments, celebrating the move as a way to expedite some new housing construction amid a persistent homelessness and affordability crisis.
Two bills the council approved will allow more developers to skip a process known as design review, when city staff and volunteer boards examine proposed developments, focused largely on the appearance of new buildings.
Builders say the process, paired with high development costs and lengthy permit wait times, delays housing construction and makes it harder to fund.
“We’ve seen projects get delayed, significantly grow in costs and ultimately die because of things like design review,” Ryan Donohue, chief advocacy officer of Habitat for Humanity Seattle-King & Kittitas Counties, told council members ahead of the vote.
One condo development on Capitol Hill took eight to 10 months longer because of a design review process that focused on aesthetic issues like windows, Donohue said.
The council approved two related bills Wednesday:
First, the city will make permanent a pandemic-era policy that temporarily exempted affordable housing from design review. Housing developments are still subject to the city’s land use, health and safety regulations.
“When you add time, it adds cost to critical projects,” said Councilmember Teresa Mosqueda.
The temporary exemption in place for the last three years has had “no known adverse impacts,” according to a report prepared by the city.
The exemption will apply to rental developments where at least 40% of the apartments are affordable to people making 60% of area median income, or $74,000 for a family of three, and for-sale housing developments where at least 40% of the homes are affordable to people making 80% of area median income, or $90,850 for a family of three.
The city expects between seven and nine projects to qualify for the exemption each year, with a total of about 725 units of housing.
The council unanimously approved the bill including that change.
Second, the city will temporarily offer the same exemption to certain projects developed through the city’s Mandatory Housing Affordability program.
MHA requires developers building market-rate apartment buildings, town homes and other developments to either include affordable units on site or pay fees. Those fees are used to fund affordable housing throughout the city. The vast majority of developers opt to pay the fees.
In an effort to incentivize developers to build affordable homes on site instead, the bill would exempt MHA-covered construction including affordable units from design review.
That idea was more controversial at City Hall, with Councilmembers Kshama Sawant and Tammy Morales voting no. Both raised concerns about a regulatory giveaway to private developers without requiring additional public benefits, such as more affordable housing, in return.
Exempting some market-rate developments “gets nothing in return for working people,” Sawant said.
Councilmember Dan Strauss, who chairs the council’s land use committee and backed the proposal, emphasized that the rules for MHA projects would be a two-year pilot project. Mayor Bruce Harrell proposed both bills.
Even with looser design review rules, significant hurdles remain to building more affordable housing in Seattle: high land and materials costs, zoning restrictions and finite government funds.
Last year, the city convened a stakeholder group of developers, former Design Review Board members and others to offer feedback on the design review process for both market-rate and affordable housing.
A consultant’s report found that Seattle’s design review practices are “generally in line with best practices” in other cities, but that Seattle is one of a few major cities to use citizen review boards, rather than city staff, to review nearly all new buildings.
In interviews with seven developers, the consultant found that increased costs from design review come largely from interest they have to pay on the debt they use to finance the project, which can range from 6% to 10% monthly and “can add up significantly if a project takes longer due to multiple rounds of review.”
But other challenges remain.
“The costs directly attributable to the design review process are small relative to the costs for land acquisition, labor, and materials,” the report said. “If the share of project costs attributable to design review is relatively low, it is unlikely to have a significant direct influence on housing supply.”
A larger “top-to-bottom review” of the city’s design review process is still underway, Strauss said.
