HALA MF8: Remove Recently Created Barriers to the Creation of Congregate Microhousing.

Ethan Phelps Goodman wrote a piece over at the Urbanist this week confirming the trend on microhousing that I wrote about last year:  Since passage of restrictive new legislation in late 2014, development of small housing units has continued, but production has shifted over from congregate housing into a Small Efficiency Dwelling Unit (SEDU) format that produces larger units with correspondingly higher rents.

The HALA committee saw the preliminary data on this trend and responded by including a goal in the report for the city council to revisit the new zoning rules that have radically reduced the production of congregate housing.

Congregate housing development is widely recognized as the least expensive form of housing that the market can produce. Rents typically range from $700 to $1000.  For projects that participate in the MFTE program, 25% of the units are locked in at $628 rent, including utilities. As a point of reference, $720/month* is affordable rent for someone making $15/hr minimum wage.

Before the 2014 rules curtailed the production of congregate housing, Seattle was producing over 1000 units per year, all of it affordable at 40%-65% AMI. Since the new rules came into effect, production has slowed to a trickle. Neiman Taber currently has four congregate housing projects in the building permit review process, which represents the entire current production for the whole city.

Seattle is embarking on a major initiative to try to enact a Mandatory Inclusionary Housing (MIH) program and the city-wide upzones that go along with it. This process will entail years of public hearings along with the customary resistance and rending of garments from neighborhood and homeowner groups. Politically, it is a huge lift, one of the more ambitious changes that the city has ever contemplated.

If we manage to pass the MIH program into law, it aims to produce 600 units per year of 60% AMI housing. By contrast, congregate micro-housing could produce almost twice that number of units, at deeper levels of affordability, with no public subsidy whatsoever, and all we need to do to achieve it is to remove the handcuffs.

* The definition of affordable is when housing cost is less than 30% of household income. $15 per hour x 1920 hours per year x 30% ÷12 months = $720/month.