Seattle council OKs $29M affordable housing bond measure

Dive Brief:

The Seattle City Council approved a 30-year, $29 million affordable housing bond for the city’s 2017 budget, KIRO 7 reported. It follows a $290 million levy passed by voters in August to fund affordable housing. Council members have identified transitional housing and seismic retrofitting to convert existing buildings into homes as possible uses for the funds.
Critics contend that the plan is short-sighted, with funding not determined after the first two years, and that it would require the city to buy housing at extraordinarily high prices and then pay interest for years to come, which could add up to $29 million to the bond.
An editorial in The Seattle Times said the city would do better to encourage neighboring communities to contribute more affordable housing to the region.

Dive Insight:

Seattle is among several cities — particularly on the West Coast — struggling to keep pace with demand as job growth draws in new residents and the resulting population influx puts pressure on current inventory, pushing prices up.

According to a report last month from real-estate listing website Zillow, Seattle had one of the highest home-price appreciation rates of the 35-largest US metros in September. Overall, US home values posted their fastest appreciation rate in more than two years that month, according to the report.

Meanwhile, housing inventory fell 6.7% in the third quarter from a year ago, according to Trulia, with starter and trade-up homes particularly affected, and representing the fifth-straight quarter of decline.

The number of families spending more than one-third of their income on rent rose to 40 million in 2014, with 11.4 million allocating more than half of their income, according to a recent report from the Joint Center for Housing Studies of Harvard University. Among that group, low- and middle-income families are disproportionately affected.

Other cities are tackling a lack of affordable housing through inclusionary zoning and housing requirements. Voters in Portland, OR, recently gave the thumbs up to a $258.4 million bond aimed at funding the construction of 1,300 affordable homes in the city. It follows the implementation of a 1% construction excise tax that would raise $8 million annually to finance affordable housing.

For more housing news, sign up for our daily residential construction newsletter.