Durkan, Herbold take on displacement

This morning, Mayor Jenny Durkan and Council member Lisa Herbold announced some specific actions they are each taking to address displacement in Seattle.

Durkan announced that she was signing an executive order directing city departments to take several actions to combat residential, commercial and cultural displacement, particularly in parts of the city designated “high risk of displacement.”

Many of the items in the Executive Order are continuations of things that the city is already doing, but there are some new items in the order as well. Those include:

• Directing the Office of Housing to propose and implement a “community preference” policy, as discussed in a March 2018 memo presented to the City Council, that would set aside a percentage of the units in a new affordable-housing development in a particular community for residents of that community. The memo provides background on how other cities such as San Francisco, Portland, and New York City have implemented community preference policies.

  The memo notes that the New York City policy has been challenged in court; the plaintiffs argue that it promotes segregation by reducing opportunities for people to move between neighborhoods. The U.S. Department of Housing and Urban Development found similar issues with San Francisco’s implementation.

• Directing hte Office of Housing to maximize home ownership on publicly owned sites, through flexible funding accounts and public-private partnerships.
• Directing the Office of Housing to collaborate with the Seattle Housing Authority (SHA) to use loan funds to acquire and preserve expiring subsidized buildings to prevent the displacement of those buildings’ low-income residents.
• Expanding the scope of the Office of Housing’s Home Repair Program .
• Developing policies for implementation of the MHA program to encourage more developers to opt for the “performance” option instead of in-lieu fees. Durkan noted today that as originally envisioned, there would be about a 50/50 split between performance and payment, but so far in practice it has resulted in far more payments than performance. Both options have benefits: performance embeds affordable units into buildings with units at other price-points, but in-lieu payments are both higher than the equivalent cost of “performance” units, and can be leveraged by the city with other sources of funding to build more affordable housing units than the performance option would create.
• Directing the Office of Civil Rights to work with numerous partners to recommend changes to the city’s Just Cause Eviction Notice to strengthen tenant protections. The state legislature is also working on this.
•  Renewing the Multi-family Tax Exemption program this year.
• Leveraging a tax incentive in Trump’s 2018 tax cut bill to increase capital investments in housing and commercial developments in designated Opportunity Zones. Currently the city has twelve Opportunity Zones, in Chinatown-International District, Little Saigon, Judkins Park, Othello, Yesler Terrace, First Hill, the Central District, Rainier Beach, SODO, Pioneer Square, and Beacon Hill.
• Directing the Mayor’s “Affordability and Livability Subcabinet” to include anti-displacement efforts in its 2019 workplan. The subcabinet includes representatives from OPCD, the Office of Housing, SDCI, the Department of Neighborhoods, and HSD. As part of that work, it will monitor and track residential, commercial, and cultural displacement trends in Seattle.

Council member Herbold followed Durkan’s announcement with her own, saying that she would be introducing legislation that would authorize displacement mitigations for housing projects located in South Park, Rainier Beach, Othello, Bitter Lake, and Westwood-Highland Park (the “low opportunity-high displacement risk” quadrant of the chart above). Herbold intends to ask her Council colleagues to consider this ordinance simultaneously with the city-wide legislation currently under review. The MHA program has been criticized for underestimating the amount of existing affordable housing that will be demolished in order to build new residential and commercial buildings, with some people arguing that it will result in a net loss of affordable housing (the counter-argument is that those buildings will be demolished and redeveloped anyway, and MHA simply ensures that those redevelopment projects create new affordable housing).  Herbold’s bill would more directly ensure that existing affordable housing is replaced.

The draft version of the legislation that she released today allows developers two options for projects in those five neighborhoods that demolish units affordable to households with incomes up to 80% of AMI:

1. increasing the performance or payment obligation under the MHA program to the amount equal to zones with an “M2” suffix in the same area; or
2. replacing the demolished units within the new development.

Herbold’s bill is expected to be on Monday’s Introduction and Referral Calendar.