Mandatory Housing Affordability Legislation Passed by Seattle City Council and Signed by Mayor Durkan

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On Monday, March 18, 2019, the Seattle City Council passed and adopted legislation which brings widespread zoning changes to 27 designated areas in the city. Mayor Durkan signed the legislation on March 20 and the bill will take effect on April 19. The new zoning updates are designed to increase housing density and affordability in neighborhoods primarily clustered around existing and anticipated future transit hubs. This hotly contested legislation has been several years in the making, and comes on the heels of much more geographically limited upzoning changes in 2017.

The new Mandatory Housing Affordability legislation (“MHA”) will allow denser and increased capacity to residential and commercial development in 27 designated neighborhoods and commercial areas spread throughout Seattle. In exchange for increased density, MHA will require developers to contribute to affordable housing in one of two ways – either by allocating a certain percentage of new units for affordable housing (the performance option), or payment of square footage based fees to a City fund that will be used to fund affordable housing (the payment option). Specifically, developers will be required to devote 5 to 11 percent of residential developments to low-income housing units, or pay from $5 to $32.75 per square foot to the City fund. The ratio of low-income housing or fees required will be determined based upon the neighborhood where the development is located and the amount of upzoning and increased development capacity allowed by the zoning changes.

The City expects MHA to generate approximately $380 million in revenue for affordable housing projects over the next 20 years. The City projects that this increased revenue along with the creation of affordable housing units under the performance option will result in the creation of 6,000 rent restricted units for low-income residents over the next 10 years. City Council also passed a concurrent resolution containing additional measures designed to complement MHA and promote livability and equitable development.

While MHA has been passed by the City Council, an appeal to the Washington State Growth Management Hearings Board is quite likely, especially given the number of neighborhood coalitions, developers and other opponents to the legislation throughout the process thus far. City Council also inserted a “clawback” provision into the legislation that will revoke the upzones in the event a court invalidates the MHA affordability requirements. Further, there figures to be continued debate and potential legislation regarding the development of other residential areas in Seattle as the city continues to grow.

The figurative jury is still out on how MHA will affect the purchase and sale, development and utilization of land in Seattle. Helsell Fetterman’s Land Use and Real Estate attorneys expect that MHA will significantly affect the Seattle real estate and development market. We encourage you to contact one of our attorneys for more information.

Helsell Fetterman’s Land Use and Real Estate Group will be discussing the new changes in depth at our upcoming Spring Breakfast, Tuesday, April 16th, and invite you to join us to learn more!


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