U District Rezone Passes

This afternoon the City Council passed into law the first implementation in the city of the MHA framework, rezoning much of the University District and adding affordable housing requirements to new construction projects.

For background, here’s a previous post on understanding the U District rezone and the issues, and here’s my most recent update when it passed out of committee two weeks ago.

The Council considered five additional amendments before voting on the final legislation. The first was just a technical update to keep the lawyers happy. The second was an important safeguard, ensuring that if the MHA affordable housing requirements were found to be unlawful and thrown out, the Council would have the ability to withdraw the upzones as well. Neither of these were controversial.

The third, however, did bring much discussion and a split vote: a proposal by Council member Herbold to exclude an area between NE 50th Street and NE 52nd Street that currently has “naturally affordable” (i.e. older) housing. On one hand, there is a concern that the affordable housing would be lost. On the other hand, there is evidence that the rents are already going up quickly in that area and because of its close proximity to the new light rail station it will be redeveloped either way. Despite Herbold’s best efforts, she only managed to get O’Brien and Sawant to back her and her amendment failed.

The fourth amendment, offered by O’Brien, was equally controversial: it would change the areas zoned as “highrise” to the highest level of MHA requirements: a set-aside of 10% of units for affordable housing (from 9%), or a payment of $22.25 per square foot (instead of $20). The argument for: this is a very large upzone, in some spots from a 65-foot height restriction to a 320-foot height, and the city has previously been clear that it intended to ask for greater MHA contributions when the capacity increase is greater. The argument against: The “M1” designation of 9% is already an increase over the standard 5-7% set-aside. Also, M1 designation is intended for areas with medium-cost housing (like the U district, currently) and the greater “M2” set-aside of 10% is intended for high-cost housing areas. And the larger argument is one over feasibility: SDCI’s analysis shows that at least for the next several years highrise projects in the U District are teetering on the edge of being financially feasible, so making them more costly might serve to delay projects (and new affordable housing). Despite an impassioned plea (actually several) from O’Brien, he too could only build a voting bloc of himself, Herbold and O’Brien and his amendment also failed.

One of the reasons it failed is that Council member Johnson, the council’s resident zoning wonk and the sponsor of the underlying bill, proposed an alternative amendment that would keep the designation at “M1” now, but in June 2018  when additional data is available on whether projects currently in the pipeline choose to opt-in, whether new projects are started, and whether the U District has shifted from medium-cost to high-cost, the Council would have the opportunity to change the designation from M1 to M2. Johnson’s amendment passed unanimously.

With these three changes, the final bill passed with a 9-0 vote.

The Council also passed two accompanying resolutions. The first recognized the U district Urban Design Framework as a guiding document and spoke to a set of infrastructure investments that the city is committing to, in order to take greatest advantage of the rezone. The second requests an evaluation of residential displacement driven by the increase in development capacity so the Council can better understand how MHA-related zoning changes affect the preservation of existing affordable housing.

Before the rezone was passed into law, developers were threatening to sue the city over the MHA requirements. Now we get to see whether they will follow through on that threat, and whether their claims stand up in court. But Council member Johnson gets to enjoy a celebratory beer tonight, knowing that he successfully shepherded through the first of several applications of the MHA framework in Seattle. (here’s his statement on the passing of the ordinance)