Tech and business leaders in the Seattle region are proposing a new plan to build middle-income housing and alleviate the city’s affordability crisis.
They laid out their proposed solutions in a report published Wednesday by Challenge Seattle, a group representing the CEOs of Microsoft, Amazon, Boeing, Marona Venture Group, Zillow, and other companies in the area. Former Washington Gov. Christine Gregoire leads Challenge Seattle as CEO.
The report includes 15 recommendations that its authors say would “materially move the needle” on affordable housing in the Seattle area. They include preserving existing affordable housing, acquiring land to develop, making capital available to finance new projects, rezoning neighborhoods, and implementing tax credits to spur affordable housing development.
For the past decade, the Seattle region’s booming tech economy has attracted thousands of newcomers, bidding up the cost of housing and squeezing out low- and middle-income residents. King County, which contains Seattle and surrounding cities, added jobs at twice the national rate, growing the population by about 300,000 over the past decade, according to the Challenge Seattle report.
The Seattle region has added 90,000 new households since 2010 but just 11,000 of them are middle-income families. As the cost of housing pushes the middle class farther out, commute times are rising. Since 2010, an additional 40,000 King County residents have started commuting more than an hour each way, the report says.
Challenge Seattle found that 40 percent of middle-income households in King County are “cost-burdened” by housing, a term that means housing costs more than 30 percent of their monthly income. The median home price in the region is about seven times the median household income. Median rent is 35 percent the median household income.
“If we want to provide more options for middle-income households, it will take new sources of capital and land from the private sector, smart policy changes and public investments, and a community willing to embrace change and make room for new neighbors,” the report says.
Earlier this month, Microsoft announced a $500 million fund to finance affordable housing projects through loans at market rate returns or lower. Some of the funds will also be donated as grants to organizations grappling with the region’s homelessness crisis.
Madrona co-founder Tom Alberg worked with Challenge Seattle on the report. He’s particularly interested in rezoning the neighborhoods south of downtown Seattle because they were recently designated Opportunity Zones by the federal government. The program allows investors to defer capital gains tax when they put their money into projects in Opportunity Zones.
“The city should selectively rezone SoDo to increase the availability of land for the development of thousands of additional housing units in Seattle,” Alberg said in a statement. “SoDo is also an Opportunity Zone under new federal tax laws and rezoning would make available tax incentives for equity investments in homeless and low and middle-income housing projects.”
The report is the latest sign that the Seattle region’s tech industry wants to more actively address the region’s housing crisis. Although few companies have made financial commitments on the scale of Microsoft, many in the tech industry are becoming more vocal about the issue. It’s the next chapter in an often fraught debate over how to address housing in the area.
That debate reached a boiling point in May when Seattle passed, then repealed, a tax on large businesses to fund affordable housing development. The Seattle City Council said it couldn’t afford an ongoing fight with the business community.