Affordable Housing in Seattle

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Seattle Affordable Housing

Today's guest blog is from the Seattle Office of Housing Director Steve Walker, describing Mayor Ed Murray's budget proposals for addressing affordable housing:

Dear Friends and Colleagues: 

[September 26], Mayor Ed Murray delivered his 2017-18 Proposed Budget to the City Council, and it should be no surprise that affordable housing continues to be a priority. Thanks to the overwhelming support of the voters for the 2016 Seattle Housing Levy (over 70%!), the City will now have almost $83 million available for affordable housing investments over the next two years. Add in payments from the Incentive Zoning and Mandatory Housing Affordability programs (estimated at $50 million in 2017-18), and other funds, and the next several years are setting the bar at a new level for local investments to help meet the growing need for affordable housing.

For the next two years, here’s how these funds will be invested:

• $110 million for the production and preservation of affordable housing ($69.4 million from the 2016 Levy)

• $3.3 million for homelessness prevention and housing stability services (2016 Levy)

• $2.7 million to assist low-income homeowners and home buyers (2016 Levy)

This last year has been a hallmark for ensuring Seattle is an equitable and affordable community. In addition to the success of the Housing Levy, we have seen the expansion of the Multifamily Tax Exemption Program, passage of the Mandatory Housing Affordability program, and protections for tenants. Mayor Murray and the staff at OH will continue to work hard on many issues in the Housing Affordability and Livability Agenda during the next two years. We look forward to engaging with you in our common efforts.

Please let Councilmembers know that you support the Mayor’s investments in affordable housing by emailing the Council using the Council website or attending one of the two Council budget hearings scheduled for the following dates:

* October 5, 2016 @ 5:30pm, Seattle City Hall in Council Chambers; and

* October 18, 2016 @ 5:30pm, Seattle City Hall in Council Chambers.

Many thanks to you for your continued support of and involvement with OH, and to Mayor Murray for including these proposals as part of his 2017-18 Proposed Budget.

Sincerely,

Steve Walker, Director
Seattle Office of Housing

 Happy Investing!

ADUs vs DADUs

THE DIFFERENCES BETWEEN ADUs AND DADUs

If you’re thinking about building an ADU or DADU, there are several factors to consider. As noted above, both share many advantages, but the following are additional issues to consider:

Accessory Dwelling Unit

§ Can provide rental income

§ The space and building systems already exists - construction expense is greatly reduced

§ Does not impact scale or character of neighborhood and often goes unnoticed

§ Does not impact open space of property

§ Unit can often be directly connected to house if so desired (family members)

§ Can be a quick return investment

§ Since the unit is attached, sounds will likely be heard regardless of sound-proofing efforts

§ Privacy. You’ll likely be sharing some exterior spaces and possibly even some interior


Detached Accessory Dwelling Units

§ Can provide rental income

§ Increased privacy and no shared walls and floors/ceiling

§ Clear boundaries can be delineated between units

§ Cost. Building a DADU is significantly more costly per square foot than building a house

§ Takes away from yard and open space

§ Potential to impact neighbors open space and privacy

LESSONS LEARNED

Below are "before" and "after" floor plans of an ADU we recently completed. As with most ADUs we’ve designed, the basement was finished space and only required minor interior renovations. A small, compact kitchen was added along with a new closet for a stacked washer/dryer, and sound attenuation and fire separation was added to adjoining house walls and ceilings. In addition, access to an electric sub-panel and thermostat was added for independent control of the building systems within the unit. And the best part - no exterior work was required. This ADU has 485 SF of rentable space, will be used as a long term rental, rents for $1,200 / month and cost $35,000 which included all project costs.



DADUs are wonderful - who doesn't love a tiny house (?!) but ADUs are typically a bigger bang for the buck. Based on the ADU project we've designed, returns on investments have ranged from 2 to 4 years.

How to finance? We'll be exploring this topic in our next blog. Stay tuned!

Happy Investing!

Today's blog courtesy of David Taber, Neiman Taber Architects

Accessory Dwelling Units

We are very excited about the proposed policy changes currently under review by the City Council that would modify current development standards making it easier to construct Backyard Cottages and Accessory Dwelling Units here in Seattle. Even with the recent appeal from the Queen Anne Community Council, this new legislation is expected to pass by the end of the year. For those not familiar this housing typology, the following is a brief summary of most everything you need to know.

DEFINITIONS

An Accessory Dwelling Unit (ADU) is a self-contained living unit located within a single family house and is often referred to as mother-in-law suite or granny flat. They are typically constructed within basements, attics and attached garages additions. And along with DADUs, they have a separate entrance and their own living space, a small kitchen, a bed and bathroom.




ADU in attic or basement







ADU addition


A Detached Accessory Dwelling Unit(DADU) is a separate living unit located on the same lot as a single family home and is often referred to as backyard cottage or carriage house. They are typically separate, free-standing structures or constructed within or on top of a detached garage.






DADU garage conversion and 2nd floor addition

FYI - in most cities throughout the country, other than Seattle, an ADU is defined as a 2nd separate living unit located within, attached to, or detached from a single family house. Seattle however, has decided to make the distinction between an attached (ADU) and a detached (DADU) accessory dwelling unit - so if you're doing research, keep this in mind.

Happy Investing!

Today's blog courtesy of David Taber, Neiman Taber Architects

More Affordable Housing

According to David Neiman, micro-housing advocate and architect, every year our current Seattle micro-housing policies remain in effect:

• 1300 people pay an average of $261 more per month in rent.
• 345 fewer units are built, pushing up prices by adding to the city's production shortfall and increasing economic displacement of low income renters within our existing housing stock.
• 97 units of 40% AMI housing are not created (affordable to someone making $25k/yr).
• 753 units of 55% AMI are not created (affordable to someone making $34k/yr).

Multiplied over ten years, this represents the loss of 8,500 units of affordable housing, a 25% rent hike for 13,000 people, and 3,450 units of housing production lost. We could fix this with a couple of administrative actions and a minor change to the zoning code. Specifically, the mayor would need to roll back the new directors rule that makes small housing larger and the Office of Housing needs to do a market rent study to set a realistic rent level for SEDU MFTE rent.

For more details on this analysis, please contact David Neiman at david@neimanarchitects.com

If you agree with this recommendation, be sure to contact your Seattle City Council.

Happy Investing!

Seattle Down Payment Assistance

The Seattle Downpayment Assistance Program is a second mortgage loan program that combines with the Home Advantage first mortgage loan program.  This program is for qualified borrowers purchasing within the city limits of Seattle. This program allows up to $45,000 in downpayment assistance with payments deferred for 30 years, at 3% simple interest. 

There is Shared Appreciation required for the first 9 years.  

Due to federal guidelines, the home must not have been occupied by a tenant within 90 days of the purchase and sale agreement.  

You must be a first-time homebuyer and the home you are purchasing must be your principal residence and owner-occupied. The definition of a first-time homebuyer is that you have not owned a home anytime in the past three years.  

You must attend a free Homebuyer Education Seminar sponsored by the Washington State Housing Finance Commission and receive your certificate. The seminar will provide you with the information you will need to purchase and maintain your first home. Online Homebuyer Education will not meet the seminar requirement for this program.

USE OF FUNDS

Funds may be used for downpayment and closing costs based upon need. The Borrower’s downpayment requirement is 1% of the purchase price or $2500, whichever is greater. Gifts are allowable up to 25% of the Borrower’s portion of the required downpayment.

MAXIMUM INCOME LIMITS

To be eligible for the Seattle Downpayment Assistance Loan Program, your household income must not exceed these limits:

1 person $46,100 | 2 person $52,650 | 3 person $59,250 | 4 person $65,800
5 person $71,100 | 6 person $76,350 | 7 person $81,600 | 8 person $86,900

MAXIMUM PURCHASE PRICE as of 06/01/2015

New & Existing Construction Home limit $354,000

If you are an eligible first-time homebuyer interested in purchasing a Seattle home, please contact me at HomeLandInvestment@gmail.com or call 888-621-4999 and leave your contact information.

Happy Investing!

Seattle Housing Affordability

1)      In 1995, the affordability ratio was 53%

a.       Affordability was calculated by average monthly US mortgage payment in 1995/average monthly income.  Translation:  % of the average monthly income spent on a mortgage payment.

2)      In 2005, the affordability ratio was 70%...meaning homes were much less affordable in 2005 versus 1995.  BUT, thanks to some pretty lenient lending guidelines, more people were owning homes.  ICYMI, things didn’t work out with the super lenient lending guidelines

a.       NOTE:  The LEAST affordable year was 2007, when affordability was 77%!  That means in 2005, 77% of the average US monthly income was spent on a mortgage payment.  That’s CRAZY!

3)      In 2015, affordability has fallen back to 66%. 

So, homes are more affordable in 2015 than they were in 2005, but only by 4%.  So what else is going on?  Well, the largest crop of incoming homeowners are being absolutely crushed by student loans.  That’s what’s up.  Home’s may be more affordable on the metric of payment/income compared to 2005…but what that ratio doesn’t take into account is the average student loan debt.  Check out this graph below.  It doesn’t go all the way to 2015…but I think we get the point. 

In the end, homeownership is falling because the new generation of homebuyers simply can’t afford a home PLUS pay all their other debts…like student loans (car payments, cell phone bill, health insurance, credit card debt…you name it, life is considerably more expensive for the millennials than it was for generations previous). 

   

Stats and Graphs below are for Seattle proper

On to Interest Rates…

Weekly Interest Rate Recap for the week ending 2/12/16

The week started off with rates continuing their fall.  Right now we’re experiencing a very anxious worldwide stock market…the data hasn’t come out yet to support everyone’s worst fears, BUT the data is pointing towards everyone’s worst fears.  As oil prices fall, more and more oil companies are forced into bankruptcy and layoffs; European banks are getting hammered on fears over the ramifications of negative interest rates; Japan’s markets are getting crushed on GDP concerns; and lastly China…Just…China.  Enough said there. 

On Wednesday, Janet Yellen spoke and gave her testimony to the House Committee on Financial Services.  It was a different tone than the last few, but that shouldn’t be a surprise with all that’s going on in the world markets.  Instead of addressing whether or not the Fed would continue to raise interest rates throughout the year, she stated that they are not prepared to lower the rate.  “There is always a risk of a recession…and global financial developments could produce a slowing in the economy…[but] I don’t think it is going to be necessary to cut rates.”

Mortgage interest rates have been steadily falling for the last month+ as a flight to safety has investors selling out of world stock markets and purchasing US Mortgage Bonds.  However, a little bit of good news broke into the market on Friday the 12^th.  Not only were there rumors that OPEC might actually cut world oil production (which would help to raise oil prices); but retail sales for January were slightly above estimates, showing that at least on the home front the US Economy is resilient in the face of world market turmoil.  This news caused the mortgage bond to reverse trend, and it looks like we will end the week with interest rates ticking slightly higher.

Happy Investing!

Norm Rice First Citizen

Then-Mayor Norm Rice brought me to Seattle in 1992 to head up his Seattle Arts Commission. He was the best boss, manager and visionary for whom I have ever worked. I am so proud of what he has accomplished here in Seattle, and his latest honor here.

Broadcasting, banking, academia and politics are part of this retiring CEO's career, but it is "the values he carries in his heart" that help distinguish him. To honor decades of service and devotion to the quality of life in the region, Norman B. Rice has been named the 2014 recipient of Seattle-King County First Citizen Award.

Norm Rice

Rice, the retiring CEO and president of The Seattle Foundation and a former mayor of Seattle, has a legacy of "firsts" plus legions of admirers from both his private and public sector positions. He will be honored as the 76th recipient of the prestigious First Citizen Award at a civic banquet in June.

Rice joins an elite group of honorees - including his wife -- who have been singled out for the annual award and celebration of community leadership, volunteerism and civic engagement that enhances the region's quality of life. The banquet is a not-for-profit event presented by SEATTLE KingCounty REALTORS®.

Colleagues from various aspects of Rice's life praise this year's honoree for his aptitude in "stimulating new ideas and promoting effective strategies," as well as for his "warmth, humanity and humor." He "leads with his heart," said his wife of 41 years, Constance W. Rice, Ph.D. Known as a tireless activist and civic volunteer, Dr. Rice was honored as the 1993 First Citizen.

"Norman Rice is a remarkable leader who has served this community superbly in many roles," said civic volunteer Bob Watt. Commenting on Rice's selection as the newest First Citizen, Watt added, "His willingness to lead on tough issues while never losing sight of the social equity and environmental stewardship values he carries in his heart is an amazing demonstration of love translated into action."

During his two-term tenure as mayor of Seattle (1990 to 1997), Rice drew praise as a consensus builder and peacemaker, eventually acquiring the nickname "Mayor Nice."

Before beginning a 19-year stint in elective office, starting with the Seattle City Council in 1978, Rice managed corporate contributions and social policy at Rainier National Bank.

"When Norman first came to work at Rainier National Bank, it soon became clear that he was an individual who would be moving into positions of greater authority and responsibility," recalled John Mangels, retired CEO of that bank.

Mangels admitted it was disappointing when Rice announced plans to leave the bank to run for office, but noted, "It wasn't long before he was recognized for his abilities and practical approach to issues, his sound judgment, integrity, and his ability to bring together people of differing views and aims. These qualities were among many that made Norman such a successful mayor and brought him widespread approval and recognition, locally, regionally and nationally."

Commenting on the selection of Rice as "First Citizen," Mangels also stated "In the long run, Rainier Bank's loss brought even greater rewards for our community and its citizens. Norman's efforts since leaving public life have continued to enhance his positive influence on those around him. I am proud to call him my friend."

"No one deserves the recognition of being named Seattle's First Citizen more than Norm Rice," exclaimed Martha Choe, CAO at the Bill & Melinda Gates Foundation. In elaborating, she said few leaders in the community "are as beloved as Norm Rice because of what he's done to improve the lives of so many people in our community. The values of social equity, economic opportunity and love of his community have guided Norm in everything he has done. His warmth, humanity and humor make people feel special and convey a deep, genuine caring."

Choe also commented on Rice's legacy: "Everywhere you look, you can see Norm's legacy, from the leaders he's mentored, to the vibrant and electric urban core he helped rescue, to a city that understands and values diversity, to those who are gainfully employed and able to provide a future for themselves, their families and their community."

As mayor, Rice received national acclaim for revitalizing Seattle's downtown and strengthening city neighborhoods through public-private partnerships. Among achievements while in office, he advocated for an improved public school system. A citywide education summit he convened is credited with helping pass a $69 million levy for the Seattle Public School District (since renamed and renewed as the Families and Education Levy). He is also praised for rejuvenating retail districts, housing and civic buildings, and implementing a model welfare-to-work program.

From 1995 to 1996, Rice served as president of the U.S. Conference of Mayors, the official nonpartisan organization of the country's largest cities. He was the first mayor from Seattle to serve in that position since the group's formation in 1933. Another "first" for this year's First Citizen was his 1989 election as Seattle's first African-American mayor.

Following his second term as mayor, he joined the Federal Home Loan Bank of Seattle, serving as its top executive from 1998 to 2004. In that position, he worked with more than 375 financial institutions and brought his passion and commitment for housing and community development to the private sector.

In 2006, Rice became a distinguished practitioner-in-residence at the Evans School of Public Affairs at the University of Washington, his alma mater. He joined The Seattle Foundation (one of the nation's largest community philanthropic organizations) in mid-2009. His achievements while there include the launch of GiveBIG, the highly successful day-long online giving campaign that has raised more than $25 million for King County nonprofits in the last three years. Under his leadership and quest to build healthy communities, the Foundation also created a Center for Community Partnerships. Its goal is to advance collaborative, systemic change to achieve greater economic and racial equity in King County.

As a child, Rice once expected to become a minister. Instead, his calling became public and community service. Early in his career, he was a broadcast reporter and then worked at the Seattle Urban League and the Puget Sound Council of Governments.

This year's First Citizen sometimes refers to himself as "cautious Norm," but acknowledges a few failures during his 40-years of service to the region and nation, including a couple of unsuccessful political campaigns, and a business setback. Reflecting on those during an interview with The Seattle Times, he said making mistakes is OK, but added, "It's how you handle yourself afterward that matters." You don't penalize failure, he suggested, you penalize blindness to what went wrong.

Among numerous community service activities, Rice has served on several nonprofit boards, including Casey Family Programs, the Enterprise Community Partners, the 5th Avenue Theatre, HistoryLink, the King County Committee to End Homelessness, Northwest African-American Museum, United Way of King County, Washington STEM, Year Up and the YMCA of Greater Seattle. He and his wife chaired United Way's campaign in 2006. The couple also led a fundraising drive in 1999 for First Place, surpassing the goal by more than a half-million dollars.

The First Citizen Award is the latest in a number of professional and community recognitions given to Rice for leadership, contributions to advancing human rights, and other achievements.

Rice holds a bachelor's degree in communications and a master's degree in public administration from the University of Washington, and received honorary doctorates from Cornish College of the Arts, Seattle University, University of Puget Sound and Whitman College.

The announcement of his intention to retire from The Seattle Foundation prompted an editorial writer at The Seattle Times to state, "Rare is the public leader who manages to be highly effective and well-regarded. Rice has been both."

Although retiring from his CEO position, Rice, 70, expects to remain active in his commitment to foster the development of vibrant, diverse, self-sustaining communities through service on some boards and committees.

Past First Citizens

1939 Richard Eugene Fuller
1940 Dr. Wendell Fiield
1941 William O. McKay
1942 Kenneth Colman
1943 Phil Johnson
1944 Children's Orthopedic Hospital
1945 W. Walter Williams
1946 Royal Brougham
1947 John H. Reid
1948 Ernest Skeel
1949 Dr. Raymond Allen
1950 Thomas M. Pelly
1951 George Gunn, Jr.
1952 Henry Broderick
1953 Frank E. Holman
1954 William M. Allen
1955 Deitrich Schmitz
1956 Rev. A.A. Lemieux
1957 Gordon N. Scott
1958 Nat S. Rogers
1959 Mrs. A. Scott Bullitt
1960 Michael Dederer
1961 Ben E. Ehrlichman
1962 Joseph E. Gandy
1963 George F. Kachlein, Jr.
1964 H.W. McCurdy
1965 Edward E. Carlson
1966 Milton Katims
1967 Mrs. Henry B. Owen
1968 James R. Ellis
1969 William B. Woods
1970 Norton Clapp
1971 Glynn Ross
1972 John D. Ehrlichman
1973 Dr. Dixy Lee Ray
1974 Ned and Kayla Skinner
1975 Dr. Wm. B. Hutchinson
1976 Rabbi Raphael Levine
1977 W.J. "Jerry" Pennington
1978 John M. Fluke
1979 Gordon H. Sweaney
1980 James M. Ryan
1981 C.M. "Mike" Berry
1982 Dr. Dale E. Turner
1983 T.A. Wilson
1984 Victor Rosellini
1985 Fredric A. Danz
1986 Robert W. Graham
1987 John W. Ellis
1988 Samuel Stroum
1989 R.C. "Torchy" Torrance
1990 The Rev. Wm. J. Sullivan, S.J.
1991 Buster and Nancy Alvord
1992 Lester R. Sauvage, M.D.
1993 Constance W. Rice, Ph.D.
1994 Phil M. Smart, Sr.
1995 Mary Gates & Family
1996 Stanley O. McNaughton
1997 Walter B. Williams
1998 Jack A. Benaroya
1999 Paul Brainerd
2000 The Bullitt Family
2001 Herb M. Bridge
2002 Scott and Laurie Oki
2003 Dan and Nancy Evans
2004 The McCaw Family
2005 Jeffrey and Susan Brotman
2006 Dale Chihuly
2007 James and Sherry Raisbeck
2008 Paul G. Allen
2009 Gerard Schwarz
2010 Hon. Slade Gorton
2011 Jamie and Karen Moyer
2012 Rotary International Dist. 5030
2013 Lenny Wilkens

About the First Citizen Award and Banquet

Since its inception in 1939, the First Citizen Award continues to celebrate community leadership, volunteerism and public service. Past recipients hail from humanitarian organizations, charitable, health and educational institutions, arts groups, environmental causes and various civic endeavors.

The Seattle-King County First Citizen Award and civic banquet, believed to be this region's oldest such recognition, has no fund-raising expectation, but instead is designed solely as a not-for-profit celebration of community involvement.

Recent past recipients include Rotary International District 5030 (in 2012), former Seattle Mariner Jamie Moyer and his wife Karen (2011), U.S. Senator Slade Gorton (2010), retiring Seattle Symphony conductor Gerard Schwartz (2009), and Microsoft co-founder Paul G. Allen (2008).

Happy Investing!