>>> COUNCIL MEMBER?
>> GOOD MORNING. GOOD MORNING,
EVERYBODY. TODAY IS WEDNESDAY,
AUGUST 12. THIS IS A SPECIAL
HOUSING AND HUMAN SERVICES
COMMITTEE. AND IT WILL NOW COME
TO ORDER. IT IS 10:02. I'M
DEBORA JUAREZ, CHAIR OF THE
HOUSING AND HUMAN SERVICES
COMMITTEE. WILL THE CLERK PLEASE
CALL THE ROLL?
>> COUNCILMEMBER JUAREZ?
>> HERE.
>> COUNCIL PRESIDENT NELSON?
COUNCILMEMBER RINCK?
COUNCILMEMBER SAKA?
>> HERE.
>> VICE CHAIR SOLOMON?
>> HERE.
>> CHAIR, THERE ARE THREE
MEMBERS PRESENT.
>> THANK YOU. THAT WAS THE ROLL
CALL FOR OUR STUDENTS WATCHING
TO MAKE SURE WHO IS HERE AND WHO
IS NOT. YOU GUYS ARE THE
STUDENTS, RIGHT? YES, YOU ARE.
OKAY. SO AS THE NEW CHAIR OF
THIS COMMITTEE, I'M PASSING THE
GAVEL TO MY VICE CHAIR,
COUNCILMEMBER SOLOMON, WHO HAS
GRACIOUSLY BEEN MONITORING THIS
COMMITTEE WHILE THE SEAT WAS
EMPTY UNTIL MY RETURN, AND HE
WILL BE FACILITATING THIS
MEETING BECAUSE HE WAS THE VICE
CHAIR. TODAY, HE'LL SERVE AS
THE CHAIR. SO WITH THAT, I'M
PASSING THE GAVEL TO
COUNCILMEMBER SOLOMON, WHO WILL
SERVE AS THE CHAIR TODAY.
>> ALL RIGHT, THANK YOU VERY
MUCH COUNCIL CHAIR JUAREZ. ALL
RIGHT. IF THERE ARE NO
OBJECTIONS, THE AGENDA WILL BE
ADOPTED. HEARING NONE, THE
AGENDA IS ADOPTED. THANK YOU ALL
VERY MUCH FOR COMING TO THIS
WEDNESDAY MORNING MEETING OF THE
HOUSING AND HUMAN SERVICES
COMMITTEE. GOOD TO HAVE YOU ALL
HERE. ALWAYS WANT TO THANK OUR
CITY CLERKS AND OUR COUNCIL
CENTRAL STAFF, AND OUR STAFF
FROM, YOU KNOW, THE EXECUTIVE
OFFICE FOR MAKING TODAY'S
MEETING POSSIBLE. WE WILL NOW
OPEN THE PUBLIC -- THE PUBLIC
HYBRID COMMENT PERIOD. AND
WITHIN THE PURVIEW OF THIS
COMMITTEE. CLERK, HOW MANY
SPEAKERS DO WE HAVE SIGNED UP
TODAY?
>> WE HAVE THREE IN PERSON AND
FOUR REMOTE.
>> OKAY. ALL RIGHT. WE WILL
ALLOW EACH SPEAKER TWO MINUTES.
WE WILL START WITH THE IN-PERSON
SPEAKERS FIRST. CLERK, WILL YOU
PLEASE READ THE INSTRUCTIONS FOR
THE PUBLIC COMMENT PERIOD?
>> THE PUBLIC COMMENT PERIOD
WILL BE MONITORED IN THE
FOLLOWING PERIOD, UP TO 20
MINUTES. SPEAKERS WILL BE CALLED
UP IN WHICH THEYrd OARED. AFTER
WHICH THEY WILL MOVE TO REMOTE
SPEAKERS. SPEAKERS WILL HEAR
TIME WHEN TEN SECONDS ARE UP.
SPEAKER'S MICS WILL BE MUTED IF
THEY DO NOT END THEIR COMMENT
AMONG THE ALLOTTED TIME. WE'LL
BEGIN WITH THE FIRST SPEAKER ON
THE LIST.
>> AND TO EXPEDITE THE PROCESS
FOR THOSE OF YOU WHO ARE
LISTENING TO THE PUBLIC SPEAK.
IF YOU WANT TO GET YOURSELVES
PREPARED AND LINED UP. I ALSO
WANT TO REFLECT FOR THE RECORD,
COUNCILMEMBER RINCK HAS JOINED
US. PLEASE BEGIN WHEN YOU'RE
READY.
>> HI, THANK YOU, COUNCIL
MEMBERS. GOOD MORNING. I'M THE
VICE PRESIDENT OF DEVELOPMENT.
WE'RE A DEVELOPMENT COMPANY
THAT HAS BEEN ENGAGING IN
NEIGHBORHOODS IN SEATTLE SINCE
THE 1980s. I'M HERE TODAY TO
ENCOURAGE YOUR SUPPORT FOR THE
MFET PROGRAM SEVEN LEGISLATION.
THE PROGRAM HAS BEEN AN
IMPORTANT TOOL FOR HOUSING
PRODUCTION AND HOUSING
AFFORDABILITY. A PORTFOLIO OF
NEARLY 1,300 UNITS WITH OVER 300
UNITS THAT HAVE EITHER JUST
DELIVERED OR CURRENTLY IN
PRODUCTION OR ARE IN ENTITLEMENT
IN SEATTLE. THIS PROGRAM HAS
BEEN CRITICAL IN HELPING US TO
BUILD NEW HOUSING BECAUSE THEY
CAN DIRECTLY SUPPORT PROJECTS TO
MOVE FORWARD THAT WOULD NOT HAVE
MADE FINANCIAL SENSE OTHERWISE.
LIKE INTEREST RATE UNCERTAINTY,
RISING CONSTRUCTION COST, AND,
OF COURSE, TARIFFS. BEYOND THE
PRODUCTION OF NEW HOUSING AND
DEDICATED WORK FORCE HOUSING,
THIS PROGRAM, IF APPROVED AS
CURRENTLY WRITTEN, WILL RETAIN
THOUSANDS OF CURRENTLY
AFFORDABLE APARTMENT UNITS IN
THE CITY. THESE UNITS ARE AT
RISK OF EXITING THE PROGRAM IF A
WORKABLE MFTE EXTENSION IS NOT
INCLUDED IN THE LEGISLATION. IN
OUR EXPERIENCE, PROGRAM SIX WAS
NOT APPROPRIATELY CALIBRATED.
YOU NOW HAVE THE OPPORTUNITY TO
TAKE MEANINGFUL ACTION TO
SUPPORT HOUSING PRODUCTION. THE
VERSION OF PROGRAM SEVEN BEFORE
YOU REPRESENTS A BALANCED
COMPROMISED APPROACH. ALTHOUGH
THERE ARE OPPORTUNITIES TO MAKE
A COUPLE ADJUSTMENTS TO PRODUCE
MORE HOUSING SUCH AS INCREASING
THE ALTERNATIVE ONE-BEDROOM
LEVEL FROM 65 TO 70% TO CLOSELY
ALIGN WITH THE CURRENT PROGRAM.
WITH THIS PROGRAM SEVEN
PROPOSAL, THERE'S A REAL
OPPORTUNITY IN FRONT OF YOU
RIGHT NOW TO EXISTING MFTE UNITS
THAT MEET THE NEEDS OF RESIDENTS
MAKING BETWEEN 40% TO 90% TO
CREATE NEW WORK FORCE HOUSING,
BUT ALSO TO SUPPORT THE
PRODUCTION OF CRITICALLY NEEDED
NEW HOUSING OVERALL. THANK YOU
SO MUCH. LOOKING FORWARD TO THE
SUPPORT.
>> THANKS.
>> NEXT UP WE HAVE NORRIS
COOPER.
>> HELLO. THANK YOU, COUNCIL
MEMBERS. I AM A DEVELOPMENT
MANAGER AT HOLLAND PARTNER
GROUP. HOLLAND PARTNER GROUP IS
A DEVELOPER, PROPERTY MANAGER,
AND GENERAL CONTRACTOR THAT IS
LOCAL TO SEATTLE AND THROUGHOUT
THE WEST COAST. WE HAVE SEVERAL
PROJECTS THAT HAVE PARTICIPATED
IN THE MFTE PROGRAM, THE HUXLEY,
AND THE FIRST ONE TO PARTICIPATE
THROUGH THE DIRECTOR'S RULE.
THESE PROJECTS TOTAL ROUGHLY
1,500 UNITS. WITH 300 OR SO
BEING MFTE UNITS. WAS ABLE TO
PARTICIPATE THROUGH THE
DIRECTOR'S RULE, WHICH WAS
HELPFUL, GIVEN THE GAP IN RENTS
AS YOU GO UP THE TOWER. OVERALL
THE MFTE PROGRAM IS A GREAT
PROGRAM THAT ALLOWS WORK FORCE
HOUSING TO BE INCLUDED IN MARKET
RATE HOUSING AT LOCAL, DOWNTOWN,
AND THE CORE NEIGHBORHOODS LIKE
BALLARD, FREMONT, SOUTH LAKE
UNION. IT'S A WIN-WIN PROGRAM,
AND IT HELP ESPECIALLY DURING
ECONOMIC CHALLENGES, INTEREST
RATES, YOU KNOW, SOARING,
UNCERTAINTY. THERE'S
CONSTRUCTION COST ESCALATION AND
INFLATION THAT WE'VE
EXPERIENCED. AND SO IT CAN HELP
THE RETURNS OF OUR PROJECT TO
MEET WHAT THE EQUITY PARTNER
WANTS, WHICH PRODUCES MORE
HOUSING OVERALL, AND RETAINS
AFFORDABLE HOUSING WITHIN THE
CORE OF SEATTLE MARKET. THE MFTE
PROGRAM IS A VOLUNTARY PROGRAM,
AND I'M HERE TO SUPPORT PROGRAM
SEVEN. THE NEW LEGISLATION IS A
WIN/WIN. IT WILL HELP MORE
PROJECTS TO PARTICIPATE. AS IT
CURRENTLY SITS NOW, PROGRAM
SEVEN HAS SOME CHALLENGES. AND
SO, YOU KNOW, PROGRAM SEVEN IS
GOOD OVERALL, BUT WE ARE A
LITTLE BIT CONCERNED WITH THE
ALTERNATIVE BEDROOM APPROACH.
THANKS.
>> GREAT, THANK YOU.
>> NEXT, WE HAVE RANDY.
>> MR. CHAIR, MEMBERS OF THE
COMMITTEE. WELCOME BACK
COUNCILMEMBER JUAREZ. NICE TO
SEE YOU. I'M HERE ON BEHALF OF
THE SEATTLE KING COUNTY
REALTORS, AND I'M HERE TO
STRONGLY SUPPORT COUNCIL BILL
121039, WHICH ESTABLISHES VITAL
CONSUMER PROTECTIONS FOR
HOMEOWNERS TARGETED BY
UNSOLICITED OFFERS TO PURCHASE
RESIDENTIAL PROPERTY. THIS
LEGISLATION IS A THOUGHTFUL AND
NECESSARY RESPONSE TO THE
GROWING PREVALENCE OF PREDATORY
HOME BUYING PRACTICES THAT
DISPROPORTIONATELY AFFECT
VULNERABLE HOMEOWNERS,
PARTICULARLY SENIORS, THOSE
FACING FINANCIAL DISTRESS, AND
COMMUNITIES OF COLOR. AS
PROFESSIONALS COMMITTED TO THE
ETHICAL REAL ESTATE PRACTICES
AND THE PRESERVATION OF
GENERATIONAL WEALTH, WE COMMEND
THE CITY FOR ADVANCING POLICY
THAT REQUIRES CLEAR, DISCLOSURES
TO HOMEOWNERS BEFORE A PURCHASE
CONTRACT IS SIGNED, INCLUDING
NOTICE OF THEIR RIGHT TO AN
INDEPENDENT APPRAISAL, LEGAL
COUNCIL, AND REPRESENTATION BY A
LICENSED REAL ESTATE BROKER. IT
ALSO PROVIDES A MEANINGFUL
CANCELLATION WINDOW, EMPOWERING
HOMEOWNERS TO RECONSIDER OFFERS
MADE UNDER PRESSURE OR WITHOUT
FULL MARKET EXPOSURE. ALSO
ESTABLISHES ENFORCEMENT
MECHANISMS AND A PRIVATE RIGHT
OF ACTION, ENSURING
ACCOUNTABILITY FOR BAD ACTORS
WHO EXPLOIT GAPS AND CONSUMER
AWARENESS. THE BILL COMPLIMENTS
EXISTING STATE LAW, WHILE
TAILORING PROTECTIONS TO
SEATTLE'S UNIQUE HOUSING MARKET
AND EQUITY GOALS. IT ALIGNS WITH
SEATTLE'S BROADER
ANTI-DISPLACEMENT STRATEGY, AND
REINFORCES THE IMPORTANCE OF
INFORMED DECISION MAKING IN
RESIDENTIAL TRANSACTIONS. WE
ENCOURAGE THE COUNCIL TO ADOPT
THIS ORDINANCE AND CONTINUE
WORKING WITH INDUSTRY
PROFESSIONALS TO PROMOTE
TRANSPARENCY, FAIRNESS, AND
HOUSING STABILITY ACROSS ALL
NEIGHBORHOODS. THANK YOU.
>> WE WILL NOW MOVE TO REMOTE
SPEAKERS. FIRST UP WE HAVE
MARIA.
MARIA, PLEASE PRESS -- YOU GOT
IT.
>> YES. GOOD MORNING, MY NAME IS
MARIA. I'M ASKING THE COUNCIL
TO SUPPORT THE MFTE PROGRAM
SEVEN PROPOSAL IN FRONT OF YOU
TODAY. I'VE BEEN BUILDING
HOUSING IN SEATTLE FOR OVER 35
YEARS. WHEN IT WAS FIRST
ENVISIONED IN THE LATE 1990s.
IT'S SAD I'VE BEEN DEVELOPING
THAT LONG. I WAS INVOLVED
BECAUSE IT IS VERY IMPORTANT TO
ME. SEATTLE DID NOT HAVE A TOOL
TO PROVIDE BELOW MARKET UNITS IN
THEIR BUILDING. AND WHAT A
SUCCESS IT HAS BECOME. IT HAS
CREATED A LOT OF AFFORDABLE
UNITS. TODAY, I BELIEVE THERE'S
MORE THAN 6,000 MIDDLE INCOME
INDIVIDUALS AND FAMILIES ACROSS
THE CITY BECAUSE OF THIS
PROGRAM. MFT, MAKING SURE THEY
DON'T BECOME INCREASINGLY COST
BURDEN, TRYING TO AFFORD MARKET
RENT PLACES TO LIVE IN. A LOT
HAS CHANGED IN OUR CITY SINCE
THE LATE 90s. AND OUR NEED FOR
MORE TOOLS IN THE TOOL BOX TO
CREATE HOUSING AT AN AFFORDABLE
LEVELS HAS GROWN. PLEASE KEEP IN
MIND ALSO THIS PROGRAM IS
VOLUNTARY. AS WE SAW IN PROGRAM
SIX IT IN PLACE DURING ONE OF
SEATTLE'S MOST EXPENSIVE
HOUSING BLOOM, IT BECAME A
BURDEN TO HOUSING OWNERS AND WAS
NO LONGER AN INCENTIVE. TOOLS
LIKE THE HOUSING BUILT BY OUR
NON-PROFIT HOUSING DEVELOPMENT
COMMUNITY IS GOING TO CONTINUE
TO PROVIDE THE LOWER HOMES IN
OUR CITY. SO WHAT I'M ASKING IS
YOU SUPPORT THIS APPROACH IN
PROGRAM SEVEN, ENSURING IT'S
GOING TO RETURN AS A STRONG
VOLUNTARY PROGRAM FOR MARKET
RATE DEVELOPERS TO USE TO CREATE
MORE AFFORDABLE HOUSING. THANK
YOU.
>> NEXT UP WE HAVE IRENE.
>> GOOD MORNING, COUNCIL
MEMBERS. THERE ARE MANY PROBLEMS
ASSOCIATED WITH THIS MFTE
PROGRAM. TOO MANY TO TALK ABOUT
IN A FEW MINUTES. BUT I WANT TO
BRING UP A COUPLE OF POINTS.
LEAVING OUT VERY IMPORTANT
NUANCES AND DETAILS, INCLUDING
IT IS IMPOSSIBLE TO PROVE MFTE
IS OR WAS A NEEDED INCENTIVE TO
DEVELOPMENTS. IT ALSO LEAVES OUT
THE FACT EVEN WITH THE GENEROUS
TAX EXEMPTIONS, 85% OF RENTERS
IN MFTE UNITS ARE STILL HOUSING
COST BURDENED. IT DOES NOT
MENTION THIS CONCLUSION. WHEN
COMPARED TO THE GENERAL RENTAL
MARKET, INCOME RESTRICTED MFTE
UNITS MAY ONLY REPRESENT A
MODEST DISCOUNT. IN SOME CASES,
MFTE RENTS EXCEED AVERAGE MARKET
RATE RENTS. MFTE IS A FAILED
PROGRAM THAT ONLY SERVES A TINY
MINORITY OF RENTERS AT A HUGE
COST TO OTHER TAXPAYERS AND A
HUGE LOSS OF REVENUE TO THE
CITY. ASK YOUR STAFF WHETHER
FISCAL NOTE DOES NOT MENTION THE
$80 MILLION SHIFTED TO OTHER
TAXPAYERS LAST YEAR OR THE
NARROWLY $40 MILLION IN FOREGONE
REVENUE LOST IN THE CITY. WITH
THE BUDGET DEFICIT, HOW DO YOU
TURN YOUR BACK ON THE HUGE SUM
OF MISSING REVENUE? A FEW MONTHS
AGO, YOU RECEIVED A FIVE YEAR
REPORT ON MHJ. THAT REPORT
INCLUDED AN INTERESTING FACT.
DEVELOPERS EXPECT A 15% TO 25%
PROFIT RETURN ON INVESTMENT. IS
YOUR RETIREMENT ACCOUNT GETTING
20%? I DOUBT IT. THE OFFICE OF
HOUSING SPENT MONTHS TRYING TO
FIGURE OUT WHAT TO DO WITH THIS
PROGRAM. THEY HELD ZOOM MEETINGS
AND INVITED DEVELOPERS AND
PROPERTY MANAGERS TO OFFER THEIR
OPINIONS, AND THEY MOSTLY JUST
WHINE AND COMPLAIN. THEY ASKED
TENANTS IF THEY LIKE THEIR RENT
REDUCTIONS IN THEIR NEW
BUILDINGS, BUT THERE WAS NO
OUTREACH TO ANY OF THE TAXPAYERS
WHO ARE FUNDING THIS. WHY ARE
THE TAXPAYERS NOT CONSIDERED
EQUAL STAKE HOLDERS IN THIS
SCHEME?
>> THANK YOU.
>> NEXT UP, WE HAVE DAVID.
>> HI, THANK YOU. REMEMBER WHEN
CITY COUNCIL TOOK AWAY THE
INCENTIVES FOR DEVELOPERS, AND
THEN SAID OKAY, YOU CAN JUST PAY
A FEE? THEN THEY ALLOWED THE
SAME NON-PROFITS THAT ARE GOING
TO BE GETTING THE MONEY FOR
SOCIAL HOUSING TO JUMPSTART, TO
ACCESS $1.3 BILLION, AND TO HIRE
SOMEBODY WHO IS FOR PROFIT, TO
BUILD SOMETHING THAT'S MODERN,
THIRD WORLD, THAT'S WAREHOUSE
ECHO? WE STILL HAVE A DESPERATE
HOUSING AND HOMELESS CRISIS, AND
WE'VE GOT A CONFLICT OF
INTEREST ON THE COUNCIL, THE
CONSPIRING LANDLORDS WHO ARE
GETTING IN THE WAY OF
LEGISLATION THAT WOULD HELP US
SOLVE THE SUPPLY AND DEMAND
SQUEEZE AND ALLOW FOR THE
DEVELOPERS TO BUILD HIGHER WITH
AFFORDABLE HOUSING BUILT INTO IT
WITHOUT ONLY ALLOWING
NON-PROFITS THAT ARE POLITICALLY
CONNECTED THAT ARE UNQUALIFIED
TO BUILD. YOU KNOW,
CONGRATULATIONS FOR RETURNING TO
COUNCIL. I HOPE YOU'RE MORE
SUCCESSFUL. I WISH YOU WOULD
REALIZE THAT IF YOU LED THE
SOLVING OF THE HOMELESS CRISIS
BY GOING TO THE WHITE HOUSE AND
MEETING WITH TRUMP IN A
PROFESSIONAL MANNER, AND LET HIM
REALIZE SEATTLE NEEDS A BILLION
DOLLARS OF THE ORIGINAL $50
BILLION OF THE AMERICAN RESCUE
PLAN MONEY THAT WAS SUPPOSE TO
GO TOWARDS SOLVING HOMELESS
CRISIS THAT COULD STILL BE USED,
IF SEATTLE WOULD JUST CREATE THE
BETTER POLICY THAT THIS COUNCIL
IS SUPPOSE TO GET RID OF THAT
THE PREVIOUS COUNCIL CREATED,
THAT YOU COULD HELP FIND BECAUSE
THE CENTRAL STAFF KEPT A LOT OF
THINGS GENERALIZED DURING THE
BUDGET THAT EXACERBATED THE
PUBLIC SAFETY CRISIS, THE
HOMELESS CRISIS, THE HOUSING
CRISIS, THE SMALL BUSINESS
CRISIS, AND THE ECONOMIC DEFICIT
CRISIS THAT THE MAYOR KEEPS
GETTING IN THE WAY OF. WE NEED A
MORE INDEPENDENT COUNCIL THAT
DOESN'T ALLOW FOR THE MAYOR TO
CONTINUE RUNNING INTERFERENCE
FOR REACHING OFFENDERS AND USING
THE HOMELESS CRISIS MONEY --
>> THANK YOU, DAVID. THAT'S THE
LAST PUBLIC COMMENT.
>> OKAY. ALL RIGHT. AS OUR
NORMAL COMMENTERS, WE WILL NOW
HAVE THE PUBLIC COMMENT -- IF
THERE ARE NO OBJECTIONS, PUBLIC
COMMENT PERIOD WILL BE CLOSED.
ALL RIGHT, VERY GOOD. LET'S
MOVE ON TO OUR ITEMS OF
BUSINESS. CLERK, CAN YOU PLEASE
READ ITEM ONE INTO THE RECORD.
>> ITEM ONE, COUNCIL BILL
121039, AN ORDINANCE RELATING TO
RESIDENTIAL PROPERTY
TRANSACTIONS, REQUIRING CERTAIN
DISCLOSURES TO OWNERS BEFORE
PRESENTING AN OFFER TO PURCHASE
A RESIDENTIAL PROPERTY,
ESTABLISHING CONSUMER
PROTECTIONS FOR OWNERS OF
SOLICITED RESIDENTIAL PROPERTY,
AND ADDING A NEW CHAPTER 6.610
TO THE SEATTLE MUNICIPAL CODE.
>> THIS IS FOR BRIEFING AND
DISCUSSION. WE ARE JOINED BY
CHRISTA. PLEASE INTRODUCE
YOURSELF FOR THE RECORD.
>> GOOD MORNING, EVERYBODY,
CHRISTA VALLES, MAYOR'S OFFICE.
UNFORTUNATELY MY COLLEAGUE FROM
FINANCE WAS NOT ABLE TO MAKE IT
THIS MORNING. SHE WAS AT THE
LAST PRESENTATION. SHE MIGHT BE
ABLE TO COME IN AT THE END, BUT
SHE HAD A CONFLICT THAT
PREVENTED HER FROM BEING HERE,
SO YOU'RE JUST GOING TO GET ME
TODAY ON THIS.
>> NO WORRIES.
>> I'M FEELING MUCH BETTER,
THANK YOU. SO TODAY I AM GOING
TO TALK TO YOU ABOUT THE
MAYOR'S PROPOSED LEGISLATION
REGARDING PREDATORY HOME BUYING
PRACTICES. AND THE ORDER OF THE
DAY IS JUST TO REVIEW THE KEY
COMPONENTS OF THE LEGISLATION
WITH YOU. SEE IF YOU HAVE ANY
QUESTIONS.
>> AND WHILE YOU'RE GETTING SET
UP THERE TECHNOLOGICALLY, I WANT
TO REFLECT FOR THE RECORD
COUNCIL PRESIDENT NELSON HAS
JOINED THE COMMITTEE.
>> THANK YOU. SO AT FIRST I WANT
TO BRIEFLY DISCUSS WHAT DO WE
MEAN BY PREDATORY HOME BUYING?
FIRST OF ALL, IT'S UNSOLICITED
OFFERS FOR HOMES THAT ARE NOT
CURRENTLY ON THE MARKET. THIS
COULD COME IN THE WAY OF
LETTERS, POSTCARDS, TEXT
MESSAGES, CALLS, EVEN PEOPLE
KNOCKING ON YOUR DOORS. AS A
RULE OFFICIAL POPULATIONS, MOST
AT RISK FOR THIS KIND OF
BEHAVIOR ARE THE ELDERLY,
FINANCIALLY DISTRESSED, AND
COMMUNITIES OF COLOR. THIS OFTEN
INVOLVES HEAVY-HANDED PRESSURE
TACTICS AND CAN RESULT IF
BELOW-MARKET OFFERS FOR HOMES.
SO THIS IS THE BEHAVIOR WE ARE
LOOKING TO REGULATE. THIS IS ALL
COMING IN THE CONTEXT OF THE
MAYOR'S EXECUTIVE ORDER TO
MITIGATE DISPLACEMENT PRESSURES
ON SEATTLE RESIDENTS AS WE LOOK
TO MOVE TOWARDS THE BIGGEST
UPDATE TO THE CITY'S COMP PLAN
IN THE CITY'S HISTORY. SO WITH
ALL THE NEW ZONING PROPOSALS
BEING PUT IN PLACE THAT WE
ANTICIPATE WILL BE OCCURRING
SOON. WE WANTED TO MAKE SURE
VULNERABLE HOMEOWNERS ARE NOT AT
RISK OF THESE PREDATORY
PRACTICES. SO WHAT DOES THIS
LEGISLATION DO? HIGH LEVEL, IT
WILL OBLIGATE POTENTIAL BUYERS
TO DISCLOSE CERTAIN INFORMATION
TO HOMEOWNERS ABOUT THEIR
RIGHTS. IT PROVIDES AN OUT FOR
HOMEOWNERS TO CANCEL THEIR
PURCHASE CONTRACT AFTER SIGNING.
IT GIVES THE CITY THE ABILITY TO
FIND BUSINESSES AND INDIVIDUALS
WHO DO NOT COMPLY. SO I'M NOW
GOING TO JUST TALK ABOUT THE
SPECIFICS OF THIS AND HOW THIS
WOULD WORK. SO AT LEAST FIVE
DAYS IN ADVANCE OF SIGNING A
PURCHASE CONTRACT, THE POTENTIAL
BUYER OR THE BUYERS WRAP MUST
PROVIDE WRITTEN NOTICE TO THE
OWNER. AND THE NOTICE MUST
INCLUDE INFORMATION ABOUT HOW TO
ACCESS RESOURCES TO ASSESS FAIR
MARKET VALUE, OUTLINING THE
OWNER'S RIGHT TO APPRAISAL WITH
THE POTENTIAL BUYER BEING
RESPONSIBLE FOR THE COST OF THE
APPRAISAL. HIGHLIGHTING THE
OWNER'S RIGHT TO REAL ESTATE
AGENT AND TO SEEK LEGAL COUNCIL,
AND ANY OTHER INFORMATION THAT
THE FAS DIRECTOR DEEMS
APPROPRIATE. SO THIS IS PROVIDED
IT IN ADVANCE. WHEN IT COMES
TIME TO A PURCHASE CONTRACT,
THERE IS ANOTHER NOTICE THAT IS
A SEPARATE DISCLOSURE NOTICE
THAT MUST BE REQUIRED THAT
INCLUDES ALL THE ADDITIONAL
INFORMATION I JUST RELAYED AND
SPECIFYING THAT THE OWNER HAS
THE RIGHT TO PURCHASE THE
CONTRACT WITHOUT PENALTY. AND WE
WILL BE REQUIRING SIGNATURES ON
THIS DISCLOSURE DOCUMENT TO
ENSURE THAT IT'S ACTUALLY
PROVIDED AND RECEIVED. FAS WILL
ALSO BE PROVIDING INFORMATION ON
THE -- REQUIRING INFORMATION ON
THE DISCLOSURE FORM ABOUT HOW
THE HOMEOWNER CAN GET IN TOUCH
WITH THE CONSUMER PROTECTION
BUREAU SHOULD THEY HAVE ANY
ISSUES OR QUESTIONS. AND THEN
AFTER SIGNING THE PURCHASE
CONTRACT, THE OWNER CAN STILL
HIRE AN APPRAISER AT THE
BUYER'S EXPENSE WITHIN TEN DAYS
AFTER THE CONTRACT EXECUTION.
THE OWNER CAN ALSO CANCEL THE
PURCHASE CONTRACT WITHIN TEN
DAYS AFTER RECEIVING THE
APPRAISAL. EVEN IF THE OWNER
DOES NOT SEEK AN APPRAISAL, THEY
CAN CANCEL THE PURCHASE CONTRACT
WITHIN TEN DAYS WITH NO PENALTY.
SO THIS IS DESIGNED TO ENSURE
THAT IF SOMEBODY IS PRESSURED
INTO SIGNING OR EVEN IF THEY
JUST HAVE SECOND THOUGHTS ABOUT
SIGNING THAT THEY ARE ABLE TO
GET OUT OF THE CONTRACT. SO OUR
LEGISLATION DOES ALIGN CLOSELY
WITH THE STATE HOUSE BILL. WE
HAD ISSUED AN EXECUTIVE ORDER
WANTING TO DO SOMETHING ON
PREDATORY HOME BUYING BEFORE WE
SAW THE STATE LEGISLATURE WAS
GOING TO BE TAKING UP A BILL. SO
WE ENDED UP WATCHING CLOSELY
WHAT THEY WERE DOING IN OLYMPIA.
WHILE WE LIKED WHAT WE SAW, WE
DID THINK THERE WAS ROOM FOR
IMPROVEMENT. SO I JUST WANTED TO
POINT OUT SOME OF THE
DIFFERENCES BETWEEN OUR BILL AND
THE STATE BILL. SO WE DO IMPOSE
MORE STRINGENT FINES FOR
VIOLATORS. WE ARE GIVING
HOMEOWNERS MORE TIME FOLLOWING
EXECUTION OF THE PURCHASE
CONTRACT TO OBTAIN AN APPRAISAL
AND CANCEL THE CONTRACT. I THINK
THE STATE ONLY HAD THREE DAYS,
AND WE DID NOT THINK THAT WAS
SUFFICIENT, SO WE ADDED TEN
DAYS. AND THEN WE ARE ALSO
REQUIRING STRONGER DOCUMENTATION
REQUIREMENTS, THIS IS A SEPARATE
DISCLOSURE NOTICE, JUST TO MAKE
SURE THE HOMEOWNER IS GETTING
THE INFORMATION THEY NEED TO
MAKE AN INFORMED DECISION. AND
AS MENTIONED BY ONE OF THE
SPEAKERS HERE, WE ARE ALSO
ESTABLISHING A PRIVATE RIGHT OF
ACTION FOR BUYERS, FOR
HOMEOWNERS IF THE BUYER FAILS TO
COMPLY. SO THAT'S KIND OF THE
HIGH LEVEL DIFFERENCES WITH THE
STATE BILL. AND THEN THIS IS --
THIS NEXT SLIDE IS ONE THAT FAS
STAFF WOULD HAVE BEEN PREPARED
TO SPEAK TO. BUT I CAN SAY FROM
WHAT I KNOW THAT FAS WILL BE
OVERSEEING THE IMPLEMENTATION OF
THIS BILL. THEY WILL BE PULLING
TOGETHER A PLAN FOR EDUCATION,
BOTH TO HOME BUYERS AND TO
HOMEOWNERS. THEY WILL BE SETTING
UP INFORMATION ON THEIR WEBSITE
AS WELL, AND ALSO PROVIDING
TRAINING. AND THEN MAKING IT
CLEAR, THE DISTINCTIONS, FOR
PEOPLE BETWEEN THE STATE BILL
AND THE CITY BILL TO AVOID ANY
CONFUSION. SO WITH THAT, THAT'S
THE END OF THE PRESENTATION.
I'M HAPPY TO TAKE QUESTIONS,
BUT I JUST WANT TO THANK YOU FOR
THE OPPORTUNITY TO BE HERE.
WE'RE REALLY EXCITED TO SEE
THIS BILL GET APPROVED.
>> GREAT. THANK YOU. BEFORE I
ASK MY COLLEAGUES ABOUT
QUESTIONS, I HAVE A QUICK
QUESTION FOR YOU IN TERMS OF
FAS'S DOING ON THE EDUCATION
AND TRAINING. ARE THEY ALSO THE
ENFORCEMENT COMPONENT HERE?
>> YES.
>> OKAY. THANK YOU. COUNCIL
PRESIDENT NELSON?
>> HERE IS LAURA FROM FAS.
>> I'M LAURA BECK FROM FAS. MY
APOLOGIES.
>> WELCOME. AGAIN, SEEING HANDS,
I BELIEVE COUNCIL PRESIDENT
NELSON, YOUR HAND WAS UP FIRST.
>> OKAY, THANK YOU VERY MUCH.
THANK YOU FOR THIS PRESENTATION.
THIS IS VERY IMPORTANT
LEGISLATION. SO I ALWAYS GO WITH
WE'RE TRYING TO PREVENT BAD
BEHAVIOR. AND THE BAD BEHAVIOR
HERE IS PREDATORY HOME BUYING
PRACTICES, RIGHT? SO WE NEED TO
GIVE -- TO ME, THAT MEANS WE
HAVE TO PROVIDE -- WE HAVE TO
ARM POTENTIAL SELLERS EARLY ON,
SO THEY CAN MAKE GOOD DECISIONS
WHEN THESE PREDATORS COME BY,
OKAY. AND SO ONE THING, A
WEAKNESS I SEE IN THE STATE
LEGISLATION THAT I BELIEVE THE
EXECUTIVES OR OURS COULD
ADDRESS. ON PAGE SIX, PROPOSED
REGULATIONS. SO AGAIN, THIS IS
THE STATE. AT LEAST FIVE DAYS IN
ADVANCE OF SIGNING A PURCHASE
CONTRACT, AND THEN THE FIRST
BULLET POINT IS HOW TO ACCESS
RESOURCES TO ASSESS FAIR MARKET
VALUE OF HOME. YOU NEED TO
ASSESS THE FAIR MARKET VALUE
RIGHT AROUND THE TIME YOU PUT
YOUR HOME ON THE MARKET IF
YOU'RE GOING TO DO THAT. SO I
WOULD LIKE THAT ADDRESSED. ON
PAGE EIGHT WHEN YOU'RE TALKING
ABOUT THE COMPARISON. THAT ISSUE
IS NOT -- IT'S NOT TAKING INTO
ACCOUNT. IT LOOKS LIKE THE
CHANGES THAT I AGREE WITH TO THE
STATE LEGISLATION THAT THE
EXECUTIVE BILL DOES WOULD ALL
HELP AFTER THE FACT. SO WE'RE
DOING MORE STRINGENT FINES ON
VIOLATORS. YOU KNOW, MAYBE
NUMBER TWO DOES, NO, FOLLOWING
EXECUTION OF PURCHASE. SO
STRONGER DOCUMENTATION. SO ALL
OF THESE -- AND THEN THE LAST
BULLET IS PRIVATE RIGHT OF
ACTION. ALL GOOD THINGS, BUT
THOSE HAPPEN AFTER THE VIOLATION
OR EVEN AFTER A POTENTIAL
HOMEOWNER MAKES THE DECISION.
>> SO I'M NOT SURE IF I'M
HEARING A QUESTION THERE, BUT
LET ME TRY TO CLARIFY WHAT OUR
LEGISLATION DOES. SO EVEN
SITTING DOWN, SIGNING A
CONTRACT, THE BUYER WILL BE
REQUIRED TO PROVIDE A DISCLOSURE
STATEMENT TO THE HOMEOWNER THAT
THEY HAVE A RIGHT TO HIRE A REAL
ESTATE AGENT. IDENTIFY WHERE
THEY CAN LOOK FOR FAIR MARKET
VALUE RESOURCES. SO IF THE BUYER
IS PROPOSING CERTAIN AMOUNT OF
MONEY FOR THIS PERSON'S HOME.
YOU SEE A LOT OF CASH FOR HOMES,
WHATEVER. THIS PERSON WILL GET A
VERY CLEAR NOTICE ABOUT WHAT
THEY CAN DO TO DOUBLE CHECK
WHATEVER PRICE THIS PERSON IS
BEING OFFERED, IN ADVANCE OF
SIGNING ANY CONTRACT. IT SAYS AT
LEAST FIVE DAYS IN ADVANCE,
RIGHT? BUT IT COULD BE LONGER
THAN THAT. AND THEN THE PERSON
IS NOT OBLIGATED TO SIGN THE
CONTRACT. IT IS IMPORTANT TO
HAVE A FAIL SAFE AFTER THE FACT
AND AFTER SOMEONE SIGNS THE
CONTRACT, IN CASE THEY WANT TO
GET OUT OF IT, RIGHT? BUT THE
UPFRONT DISCLOSURE NOTICE IS
INTENDED TO HELP ARM HOME BUYERS
WITH THE INFORMATION THEY NEED
TO DECIDE WHETHER THEY EVEN WANT
TO SIT DOWN AND CONTEMPLATE
SIGNING A CONTRACT.
>> SO DOES THE TRIGGER OF THE
TIMELINE INCLUDE WHEN, YOU KNOW,
WHEN ONE OF THOSE NOTICES WOULD
GO UP IN A PUBLIC PLACE OR ON
SOMEBODY'S DOORSTEP?
>> SO I THINK THAT'S A GOOD
QUESTION, AND THAT'S PROBABLY
PART OF IMPLEMENTATION. BUT I
THINK I CAN TURN THAT OVER TO
LAURA, BUT I THINK YOU PROBABLY
WOULDN'T START PROVIDING THAT
SORT OF DISCLOSURE INFORMATION
UNLESS YOU HAD INITIATED SOME
SORT OF BACK AND FORTH
CONVERSATION WITH SOMEONE.
>> OKAY.
>> LIKE WE MIGHT STILL SEE THE
POSTCARDS AND THE CALLS WITHOUT
THIS TYPE OF INFORMATION. IT'S
ONCE THEY START ENGAGING WITH
THE HOME BUYER THAT THEY WILL BE
OBLIGATED TO DISCLOSE ALL OF
THIS INFORMATION.
>> OKAY. I THINK I EXPLAINED THE
SPIRIT OF MY THOUGHTS AND -- IF
IT IS AN IMPLEMENTATION, THAT'S
FINE. WE DON'T NEED TO HAMMER
THIS OUT OR I'M NOT SAYING
THERE HAS TO BE AN AMENDMENT
HERE. BUT GO ON.
>> DO YOU WANT TO SAY ANYTHING
ABOUT TIMING OF HOUSE THIS WOULD
ALL WORK?
>> YEAH. I THINK AS FAR AS THE
IMPLEMENTATION, AND THAT'S ONE
OF THE CHALLENGES. GETTING THIS
INFORMATION OUT TO THE PUBLIC,
WHERE THE BEST PLACE IS. I
REALLY DO LIKE THE IDEA OF
HAVING SOMETHING INCLUDING MAYBE
ON THE ADVERTISEMENT. THAT'S
NOT A PART OF LEGISLATION AS
THEY START NOW. BUT AN EXAMPLE
MIGHT BE WE DO THAT FOR WHEN
SOMEBODY IMPOUNDS YOUR CAR. YOU
CAN REFERENCE OR SOMETHING FOR
THE PUBLIC TO KNOW WHAT LAWS
MIGHT BE SURROUNDING THAT. I
THINK THAT THE MAJOR ENGAGEMENT
IS GOING TO HAVE TO BE AT THE
COMMUNITY LEVEL FOR
ORGANIZATIONS THAT ARE IN
COMMUNITIES OR SERVE PEOPLE THAT
ARE MORE LIKELY TO BE PREYED
UPON THAN OTHERS, WHICH WOULD BE
THE ELDERS, THE SENIORS, LIMIT
ENGLISH SPEAKING NEIGHBORHOODS
AND NEIGHBORHOODS THAT ARE GOING
THROUGH A LOT OF CHANGE. WHAT
THAT PLAN ACTUALLY LOOKS LIKE,
WE DON'T HAVE IT SPECIFIED YET,
BUT WE TOOK NOTES FROM THE LAST
MEETING ON SOME OF THE
SUGGESTIONS. SO THAT'S STILL
WORKING OUT.
>> EXCELLENT. THANK YOU VERY
MUCH FOR THOSE TWO POINTS. I
LIKE THE FIRST SUGGESTION YOU
SAID, YOU KNOW, PUTTING THE
TOWING NOTICES, THEN ALSO, OF
COURSE, YOU KNOW, MOSTLY ABOUT
COMMUNITY.
>> COOL, ALL RIGHT, GREAT.
COUNCIL MEMBER RINCK?
>> YES.
>> THANK YOU HAD. I'M SORRY, I
HAD LITTLE HAND UP.
>> OH, YOUR HAND WAS UP.
>> PLEASE.
>> YOU SHOULD LET YOUR ELDERS GO
FIRST.
>> YES, MA'AM.
>> YES, AUNTIE.
>> YES, EXACTLY. FIRST OF ALL,
THANK YOU FOR THE POWER POINT,
WHICH WAS PRINTED OUT. THANK YOU
FOR THE PAGE NUMBERS. VERY
IMPORTANT TO ME. CAN WE GO TO
PAGE EIGHT? THIS IS WHAT I
WANTED TO CATCH. SO HOUSE BILL
1081 WAS PASSED IN 2025,
CORRECT, THIS YEAR? YEAH? SO THE
FIRST BULLET POINTS, ALLOW CITY
TO IMPOSE MORE STRINGENT FINES
ON VIOLATORS. I GUESS IMPLICIT
IN THAT SENTENCE IS THE STATE
DOES IMPOSE FINES ON VIOLATORS.
SO IF THEY DO, THEN HOW ARE WE
ALLOWED TO EXCEED THE STATE LAW
IN FINES? BECAUSE USUALLY THE
STATE LAW IS THE CEILING. WE CAN
DO THINGS AS LONG AS WE DON'T
GO ABOVE THE STATE LAW.
>> YEAH, SO IT'S BEEN A FEW
MONTHS SINCE I'VE BEEN IN
CONVERSATION WITH OUR ATTORNEYS
OVER THIS, BUT WE DETERMINED THE
STATE LAW WAS SORT OF THE
BASELINE, AND WE COULD GO OVER
AND ABOVE THAT AND STRENGTHEN
THAT. SO THAT'S WHAT YOU'RE
SEEING HERE, AND THAT'S WHAT WE
HAVE DONE GENERALLY. WE DIDN'T
TRY TO GET TOO FAR AWAY FROM THE
STATE LAW BECAUSE WE DIDN'T
WANT SOMETHING WILDLY DIFFERENT
THAT WAS JUST ADOPTED BY THE
STATE. BUT WE SELECTIVELY
STRENGTHENED CERTAIN AREAS OF
THE STATE LAW THAT WE TAUGHT HAD
WOULD BE HELPFUL FOR HOMEOWNERS
IN SEATTLE.
>> WHICH WOULD MAKE SENSE FOR
EVERY CITY MUNICIPALITY THAT
LOOKING AT THIS LAW THAT WOULD
HAVE THE SENSIBILITY OF THE CITY
OR THE MUNICIPALITY ABOUT WHAT
FITS AS A FINE FOR THAT CITY OR
MUNICIPALITY. IF YOU DON'T
KNOW, THAT'S OKAY, I COULD HAVE
SOMEONE PULL IT UP FOR ME. WHAT
ARE THE FINES ON THE STATE SIDE?
I'M JUST CURIOUS. IF YOU DON'T
KNOW IT --
>> I MEAN, BALLPARK, SO THIS
WOULD GO THROUGH THEIR ATTORNEY
GENERAL'S OFFICE IF IT ENDS UP,
LIKE YOU COULD EITHER TAKE YOUR
COMPLAINT TO THE STATE IF YOU
WANTED UNDER THE STATE LAW OR
TAKE YOUR COMPLAINT TO THE CITY.
WE ARE GOING TO -- BECAUSE OF
THE DISCLOSURE NOTICE AND THE
INFORMATION WE'RE PROVIDING, WE
ARE ANTICIPATING THAT PEOPLE WHO
HAVE PROBLEMS IN SEATTLE WILL
LIKELY CALL THE CITY, BUT I
THINK THE STATE FINE, THEY'RE
IN THE BALLPARK OF $4,000,
$5,000 FOR A FIRST OFFENSE.
DON'T QUOTE ME ON THAT.
>> THAT'S OKAY, I'M JUST
TRYING TO GET A SENSE.
>> AND OUR INITIAL FINE IS LIKE
$7 ,000 WITH ABILITY TO INCREASE
OVER TIME WITH MULTIPLE
VIOLATIONS.
>> SO WERE THERE ANY PARTICULAR
OR MAYBE, WELL, YOU DON'T HAVE
TO NAME THEM, BUT I KIND OF
UNDERSTAND THE HISTORY OF HOUSE
BILL 1081. WERE THERE PARTICULAR
GROUPS THAT WERE DOING MAILERS,
KNOCKING ON DOORS, DOING IT
ONLINE? WHY THIS WAS TARGETED
AND THEN, OF COURSE, THE MAYOR
PICKED UP ON IT. IS THAT -- HOW
DID THAT MANIFEST?
>> SO I MEAN, I'M NOT SURE HOW
IT MANIFESTED AT THE STATE
EXCEPT THEY TOO ARE MAKING LOTS
OF CHANGES IN LOCAL LAND USE
CODES AND REQUIRING MORE
DENSITY. AND SO I DO THINK, AS
YOU START TO TALK ABOUT
INCREASING DENSITY, YOU RAISED
FEARS ABOUT DISPLACEMENT. AND SO
I'M NOT SURE WHAT PRECIPITATED
THIS DISCUSSION AT THE STATE.
BUT HERE AT THE CITY, IT CAME
ABOUT IN THE CONTEXT OF OUR
COMPREHENSIVE PLAN UPDATE AND
CONCERNS ABOUT DISPLACEMENT. AND
SO MAYOR HARRELL ISSUED AN
EXECUTIVE ORDER ON DISPLACEMENT
THAT IDENTIFIED A VARIETY OF
STRATEGIES IN AREAS THAT WE
WANTED TO STRENGTHEN IN THE
CITY. THIS WAS ONE GAP THAT WE
NOTICED IN TERMS OF PREDATORY
HOME BUYING. I WILL SAY WE
DON'T HAVE A STRONG HANDLE ON
THE EXTENT OF THE PROBLEM, AND
THIS, IN SOME WAYS, WILL REALLY
HELP US IDENTIFY TO WHAT EXTENT
THESE PRACTICES ARE HAPPENING.
WE HEAR ANECDOTALLY, I THINK
MANY OF US HAVE BEEN ON THE
RECEIVING END OF SOME OF THESE
VERY AGGRESSIVE TACTICS. BUT TO
THE EXTENT TO WHICH PEOPLE END
UP FEELING UNDER DURESS AND
SIGNING THESE CONTRACTS AND
LATER REGRETTING THEM. YOU KNOW,
I DON'T THINK WE'RE REALLY
GOING TO KNOW TO WHAT EXTENT
THAT'S HAPPENING UNTIL WE START
HEARING FROM PEOPLE. AND THIS
GIVES US A WAY TO START
REGULATING A LIGHTER REGULATION,
I WOULD SAY BECAUSE IT'S GOING
TO BE COMPLAINT BASED.
>> RIGHT.
>> WE HAVE LOOKED AT A SYSTEM
WHERE WE WOULD TRY TO LICENSE
THESE TYPES OF BUSINESSES, BUT
IT WAS PROHIBITIVELY EXPENSIVE.
GIVEN WE DON'T KNOW THE EXTENT
OF THE PROBLEM, WE DECIDED TO
START OUT THIS WAY TO SEE IF WE
COULD GET A HANDLE ON IT FIRST.
>> THIS IS A GREAT FIRST STEP
AND A GREAT STOP-GAP MEASURE
WITH THE COMP PLAN COMING IN,
DENSITY DISPLACEMENT, AND ALSO
STEERING PEOPLE BACK TO THEIR
LOCAL MUNICIPALITY OR CITY TO DO
THE COMPLAINTS. SO THAT WOULD BE
IN THE NOTICE, WHICH IS GREAT.
WELL DONE. I SAW THE EXECUTIVE
ORDER, SO THANK YOU.
>> AND THE MAYOR, THANK YOU.
>> THANK YOU.
>> COUNCILMEMBER RINCK?
>> THANK YOU, CHAIR. MY QUESTION
IS BUILT ON THE POINT
COUNCILMEMBER JUAREZ JUST
RAISED, BUT I WANT TO START ON
THE POINT THAT THIS LEGISLATION
IS SO IMPORTANT. IN FACT, I WAS
OUT IN THE DAWSON NEIGHBORHOOD
JUST THIS WEEKEND, TALKING TO
RESIDENTS ABOUT PREDATORY HOME
BUYING PRACTICES, AND TALKING
ABOUT THIS LEGISLATION, AND
FOLKS WERE REALLY EXCITED TO
HEAR THIS IS SOMETHING THE CITY
IS TAKING UP AND INTERESTED IN.
SO WANTED TO EMPHASIZE AT THE
TOP MY EXCITEMENT ABOUT THIS,
AND REALLY I SEE AS AN IMPORTANT
STEP FORWARD AND US TRYING TO
MITIGATE THESE PRACTICES. SO I
ALSO WANT TO APPLAUD THE
EXECUTIVES AND THE SPONSORS FOR
TAKING IT A STEP FARTHER BEYOND
WHAT THE STATE HAS DONE,
PARTICULARLY IN THE AREAS OF
PROVIDING HOMEOWNERS MORE TIME
FOLLOWING THE EXECUTION OF A
PURCHASE CONTRACT, WHILE ALSO
PROVIDING THESE STRONGER
DOCUMENTATION REQUIREMENTS. I
THINK THESE ARE IMPORTANT
ELEMENTS OF THIS BILL. MY FEW
QUESTIONS FOR TODAY, IF YOU CAN
EXTRAPOLATE A LITTLE BIT MORE ON
HOW WE SHAPED THE RIGHT TO
PRIVATE ACTION SECTION, AND I'M
IN THE LEGISLATION. I'M NOT
SEEING A HARD AND FAST DOLLAR
FIGURE. SO CAN YOU GIVE A SENSE
OF HOW MUCH SOMEONE COULD EXPECT
TO RECOUP IF THEY DECIDED TO
PURSUE A RIGHT TO PRIVATE
ACTION?
>> YEAH, I THINK THAT WOULD BE
DEPENDENT ON SORT OF THE
PERCEIVED DAMAGES AND WHAT THE
ACTUAL VIOLATION ENTAILS. BUT I
CAN GET MORE DETAILED FOR YOU
FROM OUR LAW DEPARTMENT. I'M
ASSUMING IT'S A CASE-BY-CASE
BASIS. THERE CERTAINLY ISN'T,
YOU KNOW, LIMIT IN OUR
LEGISLATION. SO I THINK THAT
WOULD BE SOMETHING THAT WOULD BE
ADJUDICATED THROUGH THE COURT
SYSTEM.
>> IT IN OUR LAST MEETING, WE
DISCUSSED THE CHALLENGES AND
WORKING IN THIS POLICY BECAUSE
TO A CERTAIN EXTENT, WE DON'T
KNOW WHAT WE DON'T KNOW. THIS
IS THE FIRST STEP. AS WE GATHER
MORE INFORMATION, AND WE
UNDERSTAND MORE ABOUT HOW THESE
PRACTICES PROLIFERATE AND IMPACT
FOLKS THAT WILL REVISIT AND
IMPROVE. SO I'M WONDERING WHAT
INFORMATION WILL WE BE
GATHERING? WHEN SHOULD THIS
POLICY BE APPROVED? WHAT
INFORMATION WOULD WE START
GETTING ACCESS TO AS A CITY THAT
COULD INFORM FUTURE POLICY
DECISIONS IN THIS AREA? WOULD
THAT INFORMATION BE HOUSED AND
HELD BY FAS OR OFFICE OF
HOUSING?
>> SO AS FAR AS THE COMPLAINT
PROCESS, THAT WOULD BE SOMETHING
THAT WOULD BE TRACKED IN FAS. IT
COULD EITHER COME THROUGH THE
CUSTOMER SERVICE BUREAU OR IT
WOULD BE INTERNALLY TRACKED BY
THE CONSUMER PROTECTION
DIVISION, SO THAT DATA WOULD BE
AVAILABLE THERE. KIND OF ON TWO
LEVELS, CUSTOMER SERVICE BUREAU
AND THE FIND IT, FIX IT DATA
WOULD TRICKLE TO US, BUT WE
COULD HAVE ADDITIONAL DATA
BEYOND THAT, AS FAR AS WHAT THE
COMPLAINTS WERE, WHAT THE
OUTCOMES WERE, AND WHAT THE
INVESTIGATION LOOKS LIKE.
>> IS THERE A SECOND PART TO
YOUR QUESTION?
>> I THINK THAT ANSWERS THE KIND
OF INFORMATION WE'LL START
RECEIVING AND WHERE WE GATHER.
THANK YOU FOR THAT ANSWER, AND
THANK YOU, CHAIR.
>> THANK YOU. COUNCILMEMBER
SAKA?
>> THANK YOU, MR. CHAIR, AND
THANK YOU FOR THIS PRESENTATION
TODAY. I WANT TO THANK THE MAYOR
FOR BRINGING THIS IMPORTANT
PIECE OF LEGISLATION FORWARD.
NOW IS THE TIME FOR OUR CITY TO
BETTER ADDRESS PREDATORY HOME
BUYING. JUST AS RECENTLY AS LAST
WEEK AT ONE OF THE MANY
NEIGHBORHOOD NIGHT OUT SESSIONS
I ATTENDED IN MY DISTRICT, SOME
NEIGHBORS, SOME ELDERLY
NEIGHBORS WERE TALKING ABOUT
THIS IN TERMS OF RECENT IMPACT
ON SOME OF THEIR NOW FORMER
NEIGHBORS. AND SO THIS IS A
CHALLENGE AND AN OPPORTUNITY FOR
OUR CITY TO BETTER ADDRESS THE
UNDERLINING ISSUES OF WHAT'S
GOING ON HERE. IN SOME CASES,
WHAT'S GOING ON WITH THESE HOME
BUYERS, THEY'RE ENGAGING IN
UNFAIR BEHAVIOR, DECEPTIVE
BEHAVIOR, COERCIVE TACTICS. SOME
CASES INTENTIONALLY OMITTING
MATERIAL FACT ABOUT THE BROADER
DEAL AND BROADER OPPORTUNITY.
UNCONSCIONABLE OR UNSCRUPULOUS
BUSINESS PRACTICES, AND I
MENTIONED A TERM THAT MY FELLOW
LAWYER HERE WILL UNDERSTAND,
COUNCILMEMBER JUAREZ, SOMETIMES
ENGAGING IN UNCONSCIONABLE
CONTRACTING.
>> YEAH.
>> AND SO WE HAVE AN OPPORTUNITY
HERE AS A CITY TO DO BETTER AND
BETTER PROTECT, IN MANY CASES,
OUR MOST VULNERABLE BECAUSE
PREDATORY HOME BUYING PRACTICES
DO TARGET THE MOST VULNERABLE IN
OUR COMMUNITY, AND HOMEOWNERS
WHO HAVE A RESPONSE TO THESE
UNSOLICITED OFFERS, WE KNOW WILL
RECEIVE SOMETIMES LESS THAN FAIR
MARKET VALUE. OFTENTIMES LESS
FOR FAIR MARKET VALUE IF THEY
HAVE LISTED ON THE FREE MARKET.
PREDATORY HOME BUYING PRACTICES.
WE KNOW OFTEN TARGET COMMUNITIES
OF COLOR. CONTRIBUTING TO
WORSENING ECONOMIC DISPARITIES,
DISPLACEMENT, THE COMPLETE
GUTTING OF GENERATIONAL WEALTH
OPPORTUNITIES, WHILE ALSO SEEING
HISTORICAL PATTERNS OF RACIAL
SEGREGATION. LEGACY OPPRESSION.
SO THIS IS A TOOL, IN MY VIEW,
TO COMBAT AND HELP SHUT DOWN,
ALTHOUGH NOT ENTIRELY, LEGACY
OPPRESSION, SYSTEMIC RACISM.
AMONG OUR MOST VULNERABLE,
INCLUDING OUR ELDERLY
POPULATION. SO I APPLAUD THE
MAYOR AGAIN FOR PROPOSING THIS.
I THINK IT'S A TERRIFIC FIRST
STEP THAT, YOU KNOW, WE'LL WANT
TO CONTINUE TO REITERATE ON AND
IMPROVE OVER TIME. I'M EXCITED
ABOUT THE DISCLOSURE
REQUIREMENT. PROVIDING THE
BRIGHT LIGHT OF TRANSPARENCY FOR
ALL IS A POWERFUL TOOL. AS I
KIND OF REVIEWED IT HAD BILL,LY
BE BE LOOKING TO THE ADEQUACY OF
THOSE DISCLOSURES. BUT I THINK
IN GENERAL, THE PRINCIPLE OF
ENHANCED DISCLOSURE IS GOOD FOR
ALL. LIKE THE OPT OUT PROVISIONS
FOR A CONTRACT AND PENALTIES FOR
NON-COMPLIANCE. IF OUR OWN
COUNCIL CENTRAL STAFF EXPERTS
WERE HERE AT THE TABLE, I WOULD
ASK ABOUT SOME POLICY OPTIONS TO
POTENTIALLY STRENGTHEN THE BILL,
BUT I WILL WORKING WITH THEM
OFFLINE TO SEE, TO EXPLORE
POSSIBILITIES IN THAT REGARD.
MEANTIME, CAN YOU HELP ME BETTER
UNDERSTAND THE PENALTY STRUCTURE
HERE? HOW WERE THE PENALTIES,
THE PROPOSED PENALTIES? I NOTE
THEY RANGE FROM $7,500 FOR THE
FIRST VIOLATIONS TO $10,000 FOR
THE SECOND AND SUBSEQUENT
VIOLATIONS. HOW IS THAT PENALTY
STRUCTURE SET? AND HOW ARE WE
CONFIDENT IT'S ENOUGH TO
PROVIDE A SUFFICIENT DETERRENT
EFFECT FOR REPEAT AND FLAGRANT
VIOLATORS? HOW ARE WE CONFIDENT
IT'S ENOUGH TO DETER,
ESPECIALLY THE MORE DEEP
POCKETED VIOLATORS?
>> SO WE DEFER TO THE
RECOMMENDATION OF OUR FINANCE
OFFICE WHO HAS THE CONSUMER
PROTECTION BUREAU WITHIN IT
ABOUT WHAT SEEMED REASONABLE
FINE WISE. SO LAURA, I DON'T
KNOW IF YOU'RE ABLE TO ANSWER
THAT QUESTION. BUT IF NOT, WE
CAN GET BACK TO YOU ON -- I
MEAN, MY SUSPICION IS IT'S KIND
OF IN LINE WITH, YOU KNOW, OTHER
LEVELS OF FINES FOR SIMILAR
TYPES OF THINGS. BUT YOU KNOW,
WE CAN GET MORE INFORMATION FOR
YOU.
>> YEAH, I WOULD SAY THE FINES,
BECAUSE THERE'S A LOT OF
UNKNOWNS HERE. WE DON'T KNOW
WHAT PRICE RANGE THEY'RE
LOOKING AT IN THOSE TYPES OF
THINGS. BUT THE FINES, AT LEAST
AT THIS POINT, WILL PROVE THE
POINT THAT A, A VIOLATION HAS
OCCURRED FOR FIRST OR SECOND.
THAT WILL HELP SUPPORT THE
PEOPLE THAT HAVE BEEN VICTIMS TO
THIS WHEN THEY DO WANT TO TAKE
LEGAL ACTION, TO SAY THIS HAS
ALREADY BEEN INVESTIGATED BY THE
CITY OF SEATTLE. THE PERSON
DOING THE PREDATORY LENDING HAS
BEEN CITED IN THE AMOUNT OF
THIS. IT'S A GOOD FIRST STEP
FOR THAT. IT'S A FAIRLY LARGE
FINE AS FAR AS CONSUMER
PROTECTION IS CONSIDERED. I
THINK ONE OF OUR MOST HIGHEST
FINE RIGHT NOW IS ONLY ABOUT
$5,000.
>> OKAY. THANK YOU. IF YOU COULD
FOLLOW UP ON THAT, THAT WOULD BE
VERY HELPFUL. AND ALSO, SO FINES
CAN BE AN EFFECTIVE DETERRENT
AFFECT, SO IS ENHANCED
TRANSPARENCY AND OTHER REGARDS.
YOU KNOW, MAYBE JUST SPIT
BALLING HERE SOME POSSIBILITIES.
BUT FOR FLAGRANT REPEAT
VIOLATORS AFTER A CERTAIN
PERIOD, LIKE PUBLICLY POSTING
THOSE RESPONSIBLE PARTIES ON A
CITY PUBLICLY ACCESSIBLE SITE OR
LIST. DON'T WANT TO APPEAR ON
THAT LIST. IN TERMS OF THE
EFFECTIVE DATE, AND I'M GLAD
THERE'S GOING TO BE SOME SORT
OF EDUCATION PERIOD HERE TO
EDUCATE, YOU KNOW, PEOPLE IN
LEGITIMATE BUSINESSES. ENGAGING
THIS. THIS IS HELP TO OFFSET.
THIS IS DESIGNED TO OFFSET AND
ADDRESS THOSE DISPARITIES WE
TALKED ABOUT. BUT ALSO EDUCATE
THE PERSPECTIVE HOME BUYERS. SO
I'M GLAD THERE'S GOING TO BE
SOME EDUCATION PIECE ASSOCIATED
WITH THIS. HOW LONG IS THAT
EDUCATION, I DON'T KNOW,
EFFORT, INTENDED TO RUN EXACTLY?
WHEN IS THE PROPOSED EFFECTIVE
DATE OF THIS LEGISLATION? I'D
HOPE, ONE, THE EDUCATION PIECE
CONTEMPLATES THE EFFECTIVE DATE
FOR ONCE THE PENALTIES START TO
KICK IN. WHEN IS THE EFFECTIVE
DATE?
>> SO I BELIEVE THE EFFECTIVE
DATE IS WHEN THE LEGISLATION IS
SIGNED. AND THEN THERE WILL BE A
PERIOD OF EDUCATION, BUT I
DON'T KNOW HOW THAT WORKS IN
TERMS OF LIKE IS THERE A GRACE
PERIOD OR ANYTHING LIKE THAT
ONCE THAT INFORMATION GETS UP
AND OUT THE DOOR. I'LL DEFER TO
LAURA ON THAT.
>> AS FAR AS EDUCATION FOR THE
COMMUNITY, I THINK THAT CAN
DEFINITELY START ONCE THE
LEGISLATION IS SIGNED. THAT
SHOULD BE ONE OF OUR FIRST THING
IS TO GET THAT INFORMATION OUT
THERE TO SAY YOU HAVE SOME
OPTIONS IF YOU'RE APPROACHED BY
THIS. AS FAR AS EDUCATING THE
BUSINESS SECTION OF THIS, IT IS
GOING TO BE A CHALLENGE BECAUSE
A LOT OF THESE COMPANIES MAY NOT
BE LOCAL. THERE IS NOT REALLY A
PUBLIC LISTING TO SAY HEY, THESE
ARE ALL THE PLACES THAT WILL BUY
YOUR HOUSE. BUT WE HAVE STARTED
TO UNOFFICIALLY COLLECT SOME OF
THOSE FLYERS, SOME OF THOSE
PHONE NUMBERS. I'M A RESIDENT
OF SEATTLE, SO I'VE BEEN SAVING
THEM FOR MY MAILBOX TO SEE WHO
IS OUT THERE AND KIND OF THE
AREAS THAT ARE THERE. SO I
CAN'T REALLY TELL YOU HOW LONG
THAT INFORMATION WOULD GO OUT.
INFORMATION WILL BE ON OBVIOUSLY
THE WEBSITES. BUT THAT TIME
PERIOD, I DON'T THINK NEEDS TO
BE VERY LONG BECAUSE WE REALLY
DON'T KNOW WHAT WE DON'T KNOW.
>> YEAH.
>> WE DON'T KNOW HOW TO CONTACT
THAT INDUSTRY.
>> SURE. SO THANK YOU FOR THAT,
AND I WILL SAY THIS. THIS IS AN
AREA I'M GOING TO BE EXPLORING
MORE WITH OUR CENTRAL STAFF
EXPERT TEAM. BECAUSE WE ARE
SEEKING TO IMPOSE A BRAND NEW
REGULATORY SCHEME, WHICH IS MUCH
NEED, PAST DUE, SHOULD HAVE HAD
IT YESTERDAY, TO BE HONEST. BUT
IT BENEFITS ALL PARTIES. ALL
PEOPLE INVOLVED. WHEN THEY KNOW
ABOUT THIS, THEY KNOW HOW TO
EITHER, HOW THEY CAN EXERCISE
THEIR NEW RIGHTS PURSUANT TO
THIS NEW LAW OR BECOME COMPLIANT
WITH IT, RIGHT? SO IN ANY EVENT,
I WANT TO MAKE SURE WE HAVE A
THOUGHTFUL ROLLOUT AND THESE
PUNITIVE, BUT MUCH NEEDED
PENALTIES DON'T NECESSARILY
START KICKING IN RIGHT AWAY
WHERE THE IMPLEMENTATION DATE
ISN'T DATE OF LEGISLATION OR
WHATEVER THE STANDARD SORT OF
BILL IS HERE. JUST PRINCIPLE IS
A GOOD GOVERNANCE DEMAND, YOU
KNOW, A THOUGHTFUL LOOK AT THAT.
BUT IN ANY EVENT, I'M EXCITED
ABOUT THIS BILL, AND LOOKING
FORWARD TO, YOU KNOW, SUPPORTING
IT AND POTENTIALLY IMPROVING
UPON IT, BUT I APPRECIATE THE
EFFORTS DONE AND PAST NEEDED.
>> I THINK IT'S WORTH
MENTIONING THE STATE BILL IS IN
EFFECT CURRENTLY. AND SO THERE
IS SOME SORT OF, YOU KNOW,
REGULATION OF THIS INDUSTRY
OCCURRING AS WE SPEAK, RIGHT? SO
--
>> GREAT.
>> THESE WERE THE PROPOSED
SEATTLE SPECIFIC IMPLEMENTATION
OF THAT REGULATION WOULD GO
ABOVE AND BEYOND, RIGHT?
>> CORRECT.
>> YEAH, YEAH. AWESOME. ALL
RIGHT, THANK YOU.
>> COOL. THANK YOU VERY MUCH. I
KNOW WE HAVE ANOTHER
PRESENTATION TO GET TO, SO IN
THE INTEREST OF TIME, WILL WANT
TO THANK OUR PRESENTERS. IN
TERMS OF EDUCATION, EACH ONE OF
US DOES A NEWSLETTER. EACH ONE
OF US HAVE STUFF YOU WANT TO
GIVE TO US THAT WE CAN PUSH OUT
TO THE COMMUNITY. I'M HAPPY TO
DO THAT. SO, YOU KNOW, THAT'LL
BE GREAT. AND, YOU KNOW, I DO
HAVE -- FAS IS GOING TO BE DOING
THE ENFORCEMENT OF THIS, I JUST
WANT TO MAKE SURE THERE'S THE
CAPACITY IN THAT BODY TO BE ABLE
TO DO THAT, CONSIDERING THEY
ALSO HAVE A RESPONSIBILITY AFTER
OUR ESTABLISHMENT ENFORCEMENT.
SO HOPING FAS HAS THE PASSION TO
DO THIS BECAUSE HAVING A LAW
WITH NO TEETH DOES US NO GOOD.
SO AGAIN, THANK YOU VERY MUCH.
AS YOU ARE TRANSITIONING TO OUR
NEXT ITEM ON THE AGENDA, CLERK,
WHEN YOU'RE READY TO READ THAT
INTO THE RECORD, THAT'LL BE
GREAT.
>> AGENDA ITEM TWO, COUNCIL BILL
121055, ORDINANCE RELATING TO
THE MULTIFAMILY HOUSING PROPERTY
TAX EXEMPTION PROGRAM, RENEWING
AND MODIFYING THE PROGRAM,
INCLUDING TO MAKE CHANGES IN
CONFORMITY WITH STATE LAW,
REPEALING CHAPTER 5.72 OF THE
SEATTLE MUNICIPAL CODE AND
AMENDMENTING CHAPTER 5.73 AND
SECTIONS 5.75.090 AND 23.50A.062
OF THE SEATTLE MUNICIPAL CODE.
>> THIS IS A BRIEFING AND
DISCUSSION. PLEASE INTRODUCE
YOURSELF FOR THE RECORD AND
BEGIN WHEN YOU ARE READY.
>> CHRISTA VALLES.
>> ISAAC HORWITH, POLICY ADVISER
IN THE MAYOR'S OFFICE.
>> MAIKO WINKLER-CHIN, DIRECTOR
OF THE SEATTLE OFFICE OF
HOUSING.
>> HI, JENNIFER LABRECQUE,
CENTRAL STAFF ANALYST.
>> GREAT. PLEASE PROCEED.
>> GOOD MORNING, COUNCIL
MEMBERS. WE HAVE A PRESENTATION
FOR YOU TODAY TO DISCUSS OUR
PROPOSED LEGISLATION TO RENEW
THE MULTIFAMILY TAX EXEMPTION
PROGRAM. SO JUST A WORD OF
WARNING, IT'S A PRETTY LONG
TECHNICAL PRESENTATION. WE ARE
MORE THAN HAPPY TO TAKE
QUESTIONS AS WE GO, ESPECIALLY
IF THINGS ARE NOT CLEAR OR YOU
HAVE SOME TECHNICAL QUESTIONS
YOU WANT ANSWERED. WE WILL TRY
TO MOVE THROUGH THIS AT A FAIRLY
QUICK PACE, BUT WE ALSO KNOW
THIS IS A LOT OF INFORMATION. SO
WE WANT TO MAKE SURE SOME OF
THESE REALLY IMPORTANT CONCEPTS
ARE EXPLAINED WELL.
>> OKAY. THANK YOU FOR THAT AND
THANK YOU FOR THAT PRECURSOR. I
JUST WANT TO NOTE WE MAY LOSE
QUORUM AT NOON, SO --
>> WE WILL KEEP THAT IN MIND.
>> YES. SO WE ARE HERE TODAY TO
TALK TO YOU TODAY ABOUT THE
RENEWAL OF THE MFTE PROGRAM,
WHICH IS SET TO EXPIRE IN
SEPTEMBER. THE CURRENT PROGRAM,
WHICH PEOPLE REFER TO AS PROGRAM
SIX HAS BEEN EXTENDED ABOUT
THREE TIMES AT THIS POINT. SO WE
HEARD FROM COUNCIL EARLIER THIS
YEAR THAT THEY REALLY WANT TO
SEE US BRING BACK AN UPDATE, AND
THAT IS WHAT WE HAVE DONE. OVER
THE LAST FEW MONTHS, OH HAS
CONDUCTED QUITE A BIT OF
OUTREACH ON THIS PROGRAM, AND
THAT HAS CERTAINLY INFORMED SOME
OF OUR PROPOSALS HERE TODAY. SO
I JUST WANT TO GIVE A LITTLE BIT
OF BACKGROUND ON THIS, AND I
THINK THIS IS PROBABLY ONE OF
THREE SLIDES THAT HAS SUCH A BIG
WALL OF TEXT, BUT MOST OF THEM
DON'T, SO DON'T WORRY. BUT I
JUST WANT TO TALK ABOUT A LITTLE
BIT ABOUT THE STATE PROGRAM
FIRST BECAUSE THIS PROGRAM IS
AUTHORIZED BY THE STATE. IT WAS
AUTHORIZED BACK IN 1995. AND
WHAT MFTE DID, WHAT THE STATE
AUTHORIZED WAS FOR LOCAL
JURISDICTIONS TO CREATE
DIFFERENT PROGRAMS FOR
MARKET-BASED HOUSING DEVELOPMENT
TO CONSTRUCT, CONVERT, OR REHAB.
AND IN EXCHANGE FOR THAT
HOUSING, THE HOME BUILDERS GET A
TAX EXEMPTION DEPENDING ON THE
LENGTH OF THE PROGRAM. THERE'S
AN EIGHT-YEAR PROGRAM, THERE'S
A TWELVE-YEAR PROGRAM, AND
THERE'S A TWENTY-YEAR PROGRAM.
THE EIGHT-YEAR PROGRAM IS
ACTUALLY JUST A STRAIGHT UP
HOUSING PROGRAM AND DOESN'T
COME WITH ANY RESTRICTIONS FOR
HOUSING. SEATTLE DOES NOT
CURRENTLY USE THAT ONE. THE
12-YEAR PROGRAM DOES COME WITH
SOME RESTRICTIONS, AND THAT IS
THE ONE WE'RE GOING TO BE
FOCUSED ON TODAY. AND THEN
THERE'S A 20-YEAR HOME BUYING
ONE, WHICH IS ALSO INCLUDED IN
OUR LEGISLATION. WE'RE NOT
GOING TO SPEND A LOT OF TIME ON
THAT. THAT'S NOT WHERE A LOT OF
THE CHANGES ARE HAPPENING. BUT
WE WILL TALK ABOUT IT A LITTLE
BIT AS WE GO ON. SO I JUST WANT
TO MENTION, AS WE HEARD FROM
SOME OF THE PUBLIC SPEAKERS
TODAY. THE PARTICIPATION IN THIS
PROGRAM IS VOLUNTARY. HOME
BUILDERS ARE ONLY GOING TO ELECT
TO PARTICIPATE IN THIS PROGRAM
IF THEY CAN REALIZE SUFFICIENT
ECONOMIC BENEFIT. SO WHAT THE
HOME BUILDER GETS IN RETURN FOR
PARTICIPATING AND AGREEING TO
RESTRICT A CERTAIN NUMBER OF
UNITS AS INCOME RESTRICTED IS
THEY GET A PASS ON THEIR
PROPERTY TAXES ON THE
RESIDENTIAL IMPROVEMENT PORTION
OF THEIR BUILDING. THEY STILL
PAY TAXES ON THE LAND AND THE
NON-RESIDENTIAL IMPROVEMENTS.
THE CITY DOES NOT LOSE THOSE
TAXES, HOWEVER. THOSE TAXES ARE
SHIFTED TO THE REST OF THE
CITY'S TAX BASE. I'LL TALK A
LITTLE BIT ABOUT THAT LATER, BUT
IN 2024, THAT AMOUNT OF THAT TAX
EXEMPTION WAS $80 MILLION, WHICH
IS EQUIVALENT TO ABOUT $145 PER
MEDIAN HOUSEHOLD. SO THE STATE
HAS IDENTIFIED SEVERAL GOALS
ASSOCIATED WITH THIS PROGRAM.
THIS IS NOT STRICTLY AN
AFFORDABLE HOUSING PROGRAM. AS
YOU CAN SEE HERE THERE, ARE
MULTIPLE GOALS THAT THE STATE
HAS IDENTIFIED AS WORTHY OF THIS
PROGRAM AND WORTHY OF
CONSIDERATION FOR THIS PROGRAM.
AS I MENTIONED, SEATTLE
PRIMARILY HAS DONE THE 12-YEAR
PROGRAM, AND HERE'S THE DETAILS
OF THE STATE'S 12-YEAR PROGRAM.
THE STATE'S 12-YEAR PROGRAM
REQUIRES JURISDICTIONS TO SET
ASIDE 20% OF UNITS FOR LOW AND
MODERATE INCOME HOUSEHOLDS. ALL
I WANT TO MENTION HERE IS THE
STATE DEFINITION FOR MFTE FOR
LOW AND MODERATE INCOME DIFFERS
FROM WHAT THE CITY USES FOR ITS
AFFORDABLE HOUSING. AND WHAT WE
CONSIDER LOW INCOME. SO UNDER
THE CITY'S PROGRAM, LOW INCOME
RENTERS IS 60% BELOW AMI AND UP
TO 80% FOR HOMEOWNERSHIP. BUT IN
THE MFTE PROGRAM, LOW INCOME IS
CONSIDERED 80% AMI OR BELOW, AND
MODERATE INCOME CAN GO ALL THE
WAY UP FROM 80% TO 115% AMI. BY
AREA MEDIAN INCOME, THAT'S THE
LEVEL AT WHICH SOMEONE IS
ELIGIBLE FOR ONE OF THE UNITS IN
THE BUILDING, AND WE WILL TALK
ABOUT THAT LATER AS WE GO ON. [
INAUDIBLE QUESTION ]
>> YES, SO ON THIS SLIDE FIVE,
THE STATE DEFINITION OF LOW
INCOME IS 80% AMI OR BELOW.
SO SEATTLE'S MFTE PROGRAM HAS
BEEN IN PLACE SINCE 1998. IT'S
AVAILABLE IN ALL MULTIFAMILY
ZONES. IT HAS AN INITIAL 12-YEAR
EXEMPTION WITH ANOTHER VOLUNTARY
EXTENSION FOR 12 YEARS AFTER A
REDUCED AMI LEVEL. FOR THE
SEATTLE PROGRAM, WE ACTUALLY
HAVE A SLIGHTLY HIGHER PERCENT
EDGE THAT WE REQUIRE OF TOTAL
UNITS THAT MUST BE AFFORDABLE IN
ORDER TO PARTICIPATE. THE STATE
SET A MINIMUM OF 20% UNITS. WE
REQUIRE 25% TOTAL UNITS, UNLESS
THERE'S AN OPPORTUNITY TO ONLY
PROVIDE 20%, IF AT LEAST, 8% OF
ALL THE UNITS IN THE BUILDING
ARE TWO BEDROOMS OR MORE. THIS
IS IN PART IN RECOGNITION OF THE
FACT WE'RE NOT SEEING A LOT OF
TWO-BEDROOM APARTMENTS GETTING
BUILT. THIS IS ONE WAY TO TRY TO
INCENT THOSE. AND THEN AS I
MENTIONED, THE LEGISLATION DOES
INCLUDE A HOMEOWNERSHIP OPTION.
WE ARE NOT GOING TO SPEND A LOT
OF TIME ON THAT ONE. IT'S USED
ALMOST EXCLUSIVELY BY NON-PROFIT
HOUSING PROVIDERS. SO ON THIS
NEXT SLIDE HERE, DON'T WORRY,
I'M NOT GOING TO GO THROUGH
THIS TABLE. THE POINT OF THIS
SLIDE IS JUST TO CONVEY WE'VE
HAD THIS PROGRAM IN PLACE SINCE
1998 WITH SEVERAL OF IT. AND
THEN THE EXTENSION THAT I
MENTIONED EARLIER IS A
RELATIVELY NEW CHANGE TO THE
PROGRAM. THAT WAS INCORPORATED
IN 2021 AFTER THE STATE
AUTHORIZED IT. AND THEN HERE IS
A MAP OF WHERE THE ACTIVE MFTE
UNITS ARE ON THE MARKET TODAY.
AS YOU CAN SEE, THEY'RE FAIRLY
CONCENTRATED IN THE DENSER AREAS
OF THE CITY. BUT THEY'RE ALSO
CAN BE FOUND DISTRIBUTED
THROUGHOUT THE CITY AS WELL. ON
IT HAD NEXT SLIDE, I WANT TO
SPEND A LITTLE BIT OF TIME
TALKING ABOUT THESE TWO CHARTS
BECAUSE I THINK THEY'RE
IMPORTANT TO UNDERSTAND. SO
STARTING WITH THE BAR CHART ON
THE LEFT. WHAT YOU SEE IS THE
AMOUNT OF ACTUAL PRODUCTION OF
MFTE UNITS. UNDER EACH OF THE
PROGRAMS THAT WE'VE AUTHORIZED.
AND SO PROGRAM FOUR, WHICH WAS
IN EFFECT FROM 2011 TO 2015 IS
WHERE WE SAW THE HIGHEST
PRODUCTION AND ALSO THE HIGHEST
PARTICIPATION. AND IT HAS GONE
DOWN OVER TIME. BUT I ALSO WANT
TO NOTE REALLY THIS MFTE PROGRAM
REALLY KICKED OFF UNDER PROGRAM
FOUR IN 2011 AND THE VAST
MAJORITY OF UNITS THAT WE'VE
SEEN PRODUCED UNDER THE MFTE
PROGRAM HAS COME FROM 2011
ONWARD. GRAPH ON THE RIGHT IS
GETTING AT THIS RATE. SO THE
GRAPH ON THE LEFT IS JUST
SHOWING THE PRODUCTION. IT
ACTUALLY DOESN'T REALLY ACCOUNT
FOR THE MARKET CONDITIONS THAT
MIGHT BE GOING ON AT THE TIME
THAT ARE IMPACTING OVERALL
PRODUCTION. BUT THIS OPT-IN RATE
REALLY DOES, I THINK, CONTROL
FOR SOME OF THOSE OTHER
VARIABLES. BECAUSE WHAT IT'S
LOOKING AT IS THE TOTAL NUMBER
OF UNITS THAT ARE BEING
PRODUCED, DIVIDED BY THE NUMBER
THAT ARE ACTUALLY OPTING INTO
THE MFTE PROGRAM. YOU CAN SEE
FROM THE CHART ON THE RIGHT, IT
PEAKED UNDER PROGRAM FOUR AT 25%
PARTICIPATION RATE. THAT MEANS
75% OF THE OTHER PROJECTS OUT
THERE THAT PERMITTED THAT YEAR
OPTED NOT TO PARTICIPATE IN THE
MFTE. MEANING THEY DID NOT SEE
OR FIND AN ECONOMIC VALUE IN
DOING SO. THAT RATE HAS GONE
DOWN UNDER P6. AND WHAT WE HAVE
HEARD AS THE CITY HAS KIND OF
INCREASED ITS REQUIREMENTS AND
RATCHETED UP SORT OF CONDITIONS
OVER TIME, IT HAS BECOME LESS
ATTRACTIVE FOR SOME BUILDERS.
AND SO I JUST WANTED TO PAUSE
THERE TO SEE IF ANYBODY HAD ANY
QUESTIONS.
>> OKAY. NOPE.
>> SO THIS CHART HERE IS JUST
SHOWING THE TYPES OF UNITS THAT
ARE GETTING BUILT UNDER MFTE. TO
DATE, PRIMARILY ONE BEDROOM AND
A LOT OF STUDIOS. SO IT IS
REALLY CHALLENGING AND EXPENSIVE
TO BUILD TWO AND THREE BEDROOMS
IN SEATTLE. THE COST OF
CONSTRUCTION IS BASED ON SQUARE
FOOTAGE. YOU DON'T NECESSARILY
GET DOUBLE OR TRIPLE THE RENT
FOR THESE UNITS EVEN THOUGH
THEY'RE LARGER AND THEY COST
MORE TO CONSTRUCT. BUT WE DO
HAVE, YOU KNOW, SOME TWO
BEDROOMS GETTING BUILT UNDER
THIS. WHILE WE WOULD LIKE TO SEE
MORE THREE BEDROOM, YOU KNOW,
I'M NOT EVEN SURE UNDER THIS IF
THERE IS GOING TO BE ENOUGH OF
AN INCENTIVE FOR THAT.
>> GOT IT. WE DO HAVE A QUICK
QUESTION FROM COUNCIL PRESIDENT.
COUNCIL PRESIDENT?
>> I'M SORRY FOR NOT FINDING MY
HAND WHEN YOU SAID ARE THERE
ANYMORE QUESTIONS. BUT WHAT IS
THE OPT-IN GOAL FOR THIS
PROGRAM?
>> YOU KNOW, WE DON'T HAVE A
SET GOAL. I'M GOING TO TALK
ABOUT THIS LATER. BUT YOU KIND
OF NEED TO STRIKE A BALANCE
BETWEEN THERE IS A COST TO THIS
PROGRAM, WHICH, YOU KNOW, I'VE
MENTIONED. IT'S THE TAX
EXEMPTION COST THAT GETS SHIFTED
TO THE REST OF THE TAX BASE. AND
THERE IS THE BENEFIT TO THE
DEVELOPER PARTICIPATING. IN
RETURN, WE GET SOME RENT BUY
DOWN FOR THESE RESTRICTED UNITS.
WE ALSO GET THE BENEFIT OF JUST
MORE HOUSING GENERALLY GETTING
BUILT IN THE CITY. SO I THINK
YOU DON'T NECESSARILY WANT TO
SEE 100% PARTICIPATION. ONE,
THAT WOULD BE EXTREMELY
EXPENSIVE FOR THE REST OF
SEATTLE TAX BASE. TWO, THAT
WOULD BE INDICATIVE OF MAYBE AN
OVERLY GENEROUS PROGRAM. SO I
DON'T HAVE A SET ANSWER FOR
YOU, BUT THERE IS A LOT OF
DIFFERENT FACTORS THAT YOU WANT
TO TAKE INTO CONSIDERATION WHEN
YOU'RE TRYING TO KIND OF SET
THE DIALS FOR THIS PROGRAM IN A
WAY THAT PROVIDES ENOUGH OF AN
INCENTIVE THAT IT'S MAYBE GOING
TO HELP PROJECTS PENCIL THAT
WOULD NOT OTHERWISE AND ALSO GET
SOME RESTRICTED UNITS ON THE
MARKET. BUT IT IS CERTAINLY NOT
GOING TO WORK FOR EVERYBODY.
ECONOMICS AREN'T GOING TO WORK
FOR EVERYONE. THAT'S A LONG
WINDED WAY OF SAYING I'M NOT
SURE.
>> WELL, I THOUGHT MAYBE I WAS
READING BETWEEN THE LINES OR
PROJECTING. BUT THE GRAPH ON
PAGE NINE, WHERE IT PEAKS AT
25%. I WOULD LIKE TO HOPE WE
COULD GET BACK TO THAT AT LEAST
BECAUSE THIS IS, I'VE SAID,
MANY TIMES, A PROGRAM THAT'S
EXTREMELY IMPORTANT BECAUSE IT
MAKES IT EASIER TO BUILD HOUSING
ACROSS THE BOARD. I MEAN, IT
INVITES PARTICIPATION RATES ARE
ONE INDICATION THAT ACTUAL
AFFORDABLE HOUSING IS BEING
BUILT. AND SO THEREFORE WE WANT
TO MAKE SURE WE INVITE AS MANY
DEVELOPERS AS POSSIBLE BECAUSE
IT FULFILLS TWO POLICY GOALS.
ONE WHICH IS MORE HOUSING AND
THE SECOND IS MORE AFFORDABLE
HOUSING. AND THEN I'LL ADD A
THIRD, WHICH IS MIXED INCOME
HOUSING PROJECTS. SO VERY MUCH
WOULD HOPE THIS PROGRAM IS
TAILORED TO INCENTIVIZING
PARTICIPATION THAT WOULD GET US
BACK TO AROUND 25%. RECOGNIZING
THE PROPERTY TAX HIT THAT WILL
TAKE THE SAME TIME WE'VE GOT A
HOUSING CRISIS. THANKS.
>> THANK YOU, COUNCIL MEMBER.
YOU WILL BE HEARING FROM US
SHORTLY ABOUT OUR INTEREST IN
REALLY MAKING SURE IT THIS IS A
PROGRAM THAT IS GOING TO HELP
MORE SUPPLY, UNDERSTANDING WE
ARE IN A HOUSING CRISIS. SO I
WANT TO TALK A LITTLE BIT ABOUT
THE FINDINGS. I WANT TO SAY THE
REPORT, YES, THE REPORT IS NOT
ABLE TO ESTABLISH THE
COUNTERFACTUAL, WHICH IS HOW
MUCH HOUSING WOULD HAVE BEEN
BUILT, BUT FOR MFTE. BUT THE
SHEAR NUMBER OF UNITS BUILT
UNDER MFTE LED TO UDUB TO
CONCLUDE THEY THINK IT
DEFINITELY HAS HAD A STIMULATIVE
AFFECT ON HOUSING IN SEATTLE. SO
OF THE 300 PLUS MULTI-FAMILY
RENTAL PROPERTIES THAT HAVE
PARTICIPATED IN THE PROGRAM, A
TOTAL OF ALMOST 34,000 HOUSING
UNITS HAVE BEEN BUILT. OF WHICH
7,000 ARE INCOME RESTRICTED.
THESE NUMBERS MIGHT LOOK A
LITTLE DIFFERENT THAN THE
NUMBERS I SHOWED YOU EARLIER
BECAUSE THESE ARE THE NUMBERS
THE UDUB HAD AT THE TIME THEY
PUBLISHED THE REPORT. SO ANOTHER
IMPORTANT FINDING IN THE
EVALUATION IS IN ALL SUB MARKETS
AND UNIT TYPES, AVERAGE INCOME
RESTRICTED MFTE RENTS ARE LOWER
THAN MARKET RATE RENTS IN THE
MFTE PROPERTIES. NOW, WE FOUND
LARGER RENT DISCOUNTS IN HIGHER
RENTAL MARKETS, WHICH MAKES
SENSE AND FOR LARGER UNITS. SO
SMALLER UNITS, SAY A CONGREGANT
ROOM OR A SMALL ROOM WILL BE
NATURALLY MORE AFFORDABLE AS IT
IS. SO YOU'RE LESS LIKELY TO
SEE A RENT BUY DOWN AT THAT AMI
LEVEL. BUT IT ALSO HELPS THOSE
PROJECTS PENCIL BECAUSE THOSE
ARE PROJECTS WITH SMALLER
MARGINS AND THAT ARE CHARGING
LESS. WE ALL KNOW THE HOUSING
MARKET IN SEATTLE IS EXTREMELY
EXPENSIVE TO DEVELOPMENT IN. I
THINK AT THOSE SMALLER UNIT
LEVELS, THIS COULD REALLY HAVE A
POSITIVE BENEFIT TO HELP GET
THOSE PROJECTS OFF THE GROUND.
THE REPORT ALSO FOUND THE TENANT
INCOME CERTIFICATION PROCESS AND
SOME OF THE COMPARABLE
REQUIREMENTS WERE QUITE ONEROUS
AND CAUSE FOR SORT OF SOME
STAKEHOLDERS. AND THAT IS
SOMETHING WE'RE GOING TO BE
HOPING TO RECTIFY WITH THIS
UPDATE. I JUST WANTED TO NOTE
BECAUSE THERE'S BEEN SOME
QUESTIONS ABOUT THIS THAT THE
VACANCY RATES IN MFTE UNITS
TRACK VERY CLOSELY TO THE
VACANCY RATES OF THE MARKET RATE
UNITS IN THE BUILDING. SO TO THE
EXTENT THERE ARE VACANCIES FOR
MFTE UNITS, THEY SEEM TO BE ON
PAR WITH THE MARKET RATE ONES.
ARE THERE ANY QUESTIONS? I'LL
MOVE ON.
>> CONTINUE.
>> SO NOW I WANT TO GET A LITTLE
BIT INTO OUR PROPOSED
LEGISLATION. BUT BEFORE I DO
THAT, I REALLY WANT TO SET THE
TABLE AND TALK ABOUT WHAT WE'RE
TRYING TO ACHIEVE WITH THIS
UPDATE AND THE GOALS OF THIS
UPDATE. SO FIRST AND FOREMOST,
TOP OF MIND FOR THE MAYOR IS TO
ENCOURAGE THE CREATION OF WORK
FORCE HOUSING AND MORE HOUSING
GENERALLY. SO WE'VE ALL BEEN IN
THESE CONVERSATIONS ABOUT THE
COMPREHENSIVE PLAN, AND HOW
IT'S REALLY IMPORTANT TO
LIBERALIZE OUR ZONING TO ALLOW
MORE HOUSING AND MORE HOUSING
CHOICES ACROSS THE CITY. BUT I
THINK YOU HEARD ME SAY THAT IN
AND OF ITSELF IS INSUFFICIENT TO
KIND OF JUICE THE MARKET AND
INCENTIVIZE HOUSING. SO THIS IS
ONE OF THE ADDITIONAL THINGS WE
CAN DO, IN ADDITION TO THE
ZONING CHANGES. WE ALSO WANT TO
REDUCE THE ADMINISTRATIVE
BURDEN, CLARIFY, SIMPLIFY
REQUIREMENTS. AS PART OF
ENCOURAGING THE CREATION OF MORE
HOUSING, WE ARE PROPOSING TO
PROVIDE MODEST INCREASES IN THE
ALLOWABLE AREA MEDIAN INCOME
LIMITS FOR THE MFTE UNITS IN
THIS PROGRAM SEVEN UPDATE. I
JUST WANT TO SPEAK A LITTLE BIT
ABOUT THE CONTEXT HERE BECAUSE I
THINK IT'S IMPORTANT WHEN THE
CURRENT PROGRAM, PROGRAM SIX WAS
ADOPTED IT IN 2019. MARKET
CONDITIONS WERE MUCH MORE
FAVORABLE FOR HOUSING. AND IN
RECENT YEARS, AS A RESULT OF
THOSE FAVORABLE MARKET
CONDITIONS, WE HAVE SEEN FLOOD
OF UNITS COMING ONLINE, WHICH
HAS BEEN REALLY GREAT FOR
RENTERS. I WAS JUST LOOKING AT
SOME DATA FROM KING COUNTY THAT
SUGGESTED ONE-BEDROOM RATES HAVE
REMAINED FLAT FOR THE LAST THREE
YEARS. SO WE HAVE ABOUT A 7%
VACANCY RATE. AGAIN, REALLY GOOD
CONDITIONS TO BE A RENTER. NOT
SUGGESTING RENTS STILL AREN'T
HIGH IN SEATTLE, BUT I THINK IT
DOES DEMONSTRATE THAT HAVING
ADEQUATE SUPPLY REALLY DOES KEEP
RENTS LOW. AND SO I DO THINK ONE
OF THE BEST THINGS WE CAN DO TO
CONTINUE TO TRY TO MAKE SEATTLE
MORE AFFORDABLE IS TRY TO MAKE
SURE WE HAVE AN ADEQUATE
PIPELINE COMING ON BECAUSE THE
DATA DOES SPEAK FOR ITSELF WHEN
YOU SEE YOU HAVE ADEQUATE
SUPPLY. I JUST SAW NEW YORK CITY
HAD A 1.8% VACANCY RATE, RIGHT?
THAT'S NOT HEALTHY. HONESTLY,
7% PROBABLY ISN'T REALLY
HEALTHY EITHER BECAUSE IT'S
GOING TO KIND OF SLOW DOWN THE
PIPELINE. AS SOON AS THAT
VACANCY RATE STARTS TO, I THINK
NARROW, AND MARKET CONDITIONS
BECOME MORE FAVORABLE. HOPEFULLY
WE WILL SEE DEVELOPMENT PICK UP.
BUT RIGHT NOW OUR PERMITS ARE
KIND OF CRASHING AND OUR
PIPELINE HAS DRIED UP, AS THE
MARKET CONDITIONS WERE NO LONGER
FAVORABLE AS THEY WERE BACK IN
2019. THERE'S HIGH INTEREST
RATE, CONSTRUCTION COSTS, AND
MOST RECENTLY, TARIFFS. A LOT OF
UNCERTAINTY IN THE MARKET THAT
IS DRIVING THOSE PERMITS DOWN.
AND SO THIS IS JUST REALLY
IMPORTANT CONTEXT AS WE THOUGHT
ABOUT THE UPDATE, AS WE THOUGHT
ABOUT OUR GOALS FOR REALLY
WANTING TO SEE MORE HOUSING, AND
WANTING TO ENSURE THERE WAS SOME
SORT OF PIPELINE. SO AS THAT
VACANCY RATE DOES START TO
REDUCE OVER TIME, AND IT WILL,
THAT WILL CAUSE RENTS TO RISE,
ESPECIALLY IF WE DON'T HAVE NEW
UNITS COMING ONLINE. JUST WANTED
TO TALK ABOUT THAT A LITTLE BIT.
AND THEN THIS IS JUST ALSO TO
SITUATE. THIS SLIDE HERE, WE
WANTED TO SITUATE WHERE WE
THOUGHT MFTE REALLY FITS WITHIN
THE CITY'S STRATEGIES TO TRY TO
ADDRESS AFFORDABLE HOUSING. WE,
OF COURSE, HAVE OUR CITY
INVESTMENTS IN LOW INCOME
HOUSING. UNPRECEDENTED LEVEL OF
INVESTMENT. THAT'S AN ANNUAL
NUMBER OF $350 MILLION A YEAR
OVER THE LAST FEW YEARS. THAT'S
OUR LEVY, THAT'S OUR JUMPSTART,
THAT'S OUR MHA. YOU KNOW, THE
CITY HAS, ON THE BOOKS, A
PRIORITY FOR OUR HOUSING TO
FOCUS ON ZERO TO 30. AND SO IT
ALSO INCLUDES SOME
HOMEOWNERSHIP. I HAVE A LITTLE
FLAG FOR THAT AS WELL. BUT IT'S
MOSTLY RENTAL HOUSING. THAT IS
WHERE YOU ARE REALLY GOING TO
SEE THE DEEPLY AFFORDABLE
HOUSING GET BUILT. THE
NON-PROFIT DEVELOPERS, FOR THE
MOST PART, WHO ARE ACCESSING OUR
FUNDS HAVE, YOU KNOW, HUGE
CAPITAL STACK THAT REQUIRES
MONEY FROM US, MONEY FROM THE
STATE. THEY GET TAXES, LIGHT
TAXES. SO IT ACTUALLY TAKES A
LOT OF DEEP SUBSIDY. TO SOME
EXTENT, EVEN OPERATING SUBSIDY
CITIES TO MAKE THOSE MORE DEEPLY
AFFORDABLE UNITS WORK. SO
THAT'S WHAT WE'RE DOING TO TRY
TO ADDRESS THOSE -- THOSE LOWER
INCOME INDIVIDUALS WHO NEED MORE
DEEPLY SUBSIDIZED HOUSING. SO
MFTE, ON THE OTHER HAND, IS
SIMPLY A TAX EXEMPTION. THEY
DON'T HAVE ACCESS TO ANY OTHER
SUBSIDIES FROM THE CITY. THEY'RE
SIMPLY GETTING A TAX EXEMPTION
ON THE RESIDENTIAL PORTION OF
THEIR PROPERTY. I DON'T WANT
TO, YOU KNOW, SUGGEST THAT'S
NOTHING. IT'S CERTAINLY
SOMETHING. BUT IT'S, IT'S NOT
SUFFICIENT ENOUGH TO REQUIRE
THEM TO BE ABLE TO MAKE DEEPLY
AFFORDABLE UNITS. SO AS WE SAW
WITH SORT OF THE STATE GOALS FOR
THIS PROGRAM, WORK FORCE HOUSING
IS CERTAINLY ONE OF THEM.
THAT'S WHERE WE REALLY THINK
MFTE SHINES. THIS IS AN
AFFORDABLE CITY. IT'S AN
EXPENSIVE CITY WITH HIGH RENTS
THAT I THINK EVEN FOR THE MIDDLE
CLASS, IT IS HARD TO FIND
AFFORDABLE HOUSING. THERE IS
JUST AN ARTICLE IN THE PAPER THE
OTHER DAY ABOUT SEATTLE'S
SHRINKING MIDDLE CLASS. WE THINK
WORK FORCE HOUSING FILLS A
NICHE. AGAIN, THE MORE HOUSING
THAT GETS BUILT, WE'RE NEVER
GOING TO BE ABLE TO SOLVE ALL OF
OUR AFFORDABLE HOUSING PROGRAMS
SIMPLY THROUGH SUBSIDY. MARKET
RATE HOUSING ACTUALLY DOES PLAY
AN IMPORTANT ROLE, ESPECIALLY AS
THAT HOUSING STOCK AGES. AND WE
NEED PLACES TO BE ABLE TO MOVE
UP AND GET NEW UNITS AND FREE UP
UNITS FOR OTHERS. SO AGAIN, JUST
PART OF THE STRATEGY HERE. AND
THEN I DO NEED TO MAKE A NOD TO
THE SOCIAL HOUSING INVESTMENTS
THAT WE ARE GOING TO BE
BENEFITING IT FROM SHORTLY HERE.
REVENUE FORECAST THAT JUST CAME
OUT, THE NUMBERS YOU SEE HERE
FOR SOCIAL HOUSING ARE TO THE
TUNE OF POTENTIALLY $66 MILLION
FOR THIS YEAR. I'VE INCLUDED
THE RANGE THERE, BUT I THINK
THAT'S REALLY GOOD NEWS FOR THE
SOCIAL HOUSING BOARD, AND SHOWS
THEY WILL HAVE A VERY STRONG
DEDICATED SUBSIDY SOURCE FOR THE
HOUSING THEY WANT TO BUILD,
WHICH WILL GO ALL THE WAY UP TO
120% AMI.
>> AND SO WITH THAT, I'M
PLANNING ON GETTING INTO SOME
PRETTY WONKY TECHNICAL ASPECTS
OF THE ACTUAL LEGISLATION THAT I
THINK ARE IMPORTANT CONCEPTS TO
UNDERSTAND. AND I WANT TO START
BY TALKING ABOUT, I WANT TO WALK
YOU THROUGH HOW WE ESTABLISH THE
RENT UNDER MFTE AND HOW THAT
WORKS. SO I FIRST WANT TO START
OUT BY JUST NOTING A COUPLE OF
KEY DEFINITIONS IN THE
LEGISLATION. LEGISLATION TALKS
ABOUT WHAT AN MFTE UNIT IS, AND
THEY TALK ABOUT IT IN THE
CONTEXT OF A UNIT THAT'S ADDED
AN AFFORDABLE RENT. THERE IS
ANOTHER DEFINITION THAT
DESCRIBES AFFORDABLE RENT. AND
THAT AFFORDABLE RENT IS THE
CONTRACT RENT, AND THEN THE
UTILITIES, AND THEN ANY REQUIRED
FEES. IN THE SUM OF THOSE THREE
THINGS MAY NOT EXCEED 30% OF THE
INCOME LIMITS SET BY HUD. SO IT
IS IMPORTANT TO UNDERSTAND HOW
THAT RENT IS SET. THEN THESE TWO
TABLES HERE ARE EQUALLY
IMPORTANT. THE FIRST TABLE AT
THE TOP IS AN ANNUAL TABLE
PUBLISHED BY HUD OF THE AREA
INCOME LIMITS. WE USE THIS TABLE
FOR A COUPLE OF THINGS. ONE, IT
INDICATES WHETHER WE'RE
QUALIFIED FOR AN MFTE UNIT. SO
IF YOU'RE A SINGLE PERSON
LOOKING TO RENT A STUDIO OR ONE
BEDROOM AND YOU'RE CURIOUS IF
YOU QUALIFY FOR MFTE, AT THE
PROPOSED LEVEL WE'RE PROPOSING
FOR ONE BEDROOM, IF YOU MADE
$82,500 OR LESS, YOU WOULD BE
QUALIFIED FOR THAT UNIT. THE
CHART BELOW IS ACTUALLY WHAT OH
PUBLISHES WHEN THEY IMPUTE THE
RENT AND THE RENT FOR THAT
INCOME ELIGIBLE UNIT. SO DID I
SEE A HAND?
>> COUNCIL CHAIR JUAREZ?
>> THANK YOU, CHRISTA. I HAVE
THE PAPER PRINTOUT, SO MY 17 IS
IN YOUR 17. AND IMPUTE RENTS. SO
THE ONE WITH THE PICTURE IS 18,
AND NOW WE'RE ON YOUR -- SO
I'M WONDERING, ARE WE GOING TO
COME BACK TO MY OLD 17, WHICH IS
THE ONE --
>> I APOLOGIZE, COUNCIL MEMBER.
I THINK YOU MIGHT HAVE
YESTERDAY'S VERSION, AND THIS
IS A SLIGHTLY REORGANIZED
VERSION. BUT WE DIDN'T OMIT ANY
SLIDES, SO WE WILL GET TO YOUR
SLIDES.
>> OKAY BECAUSE THAT'S THE ONE
I TAGGED AND HAD QUESTIONS. SO
I'M NOT CRAZY?
>> NOPE, YOU'RE NOT CRAZY.
>> OKAY. SO AGAIN, JUST TO
RECAP. THE TOP RENT SORT OF
GOVERNS LIKE THE INCOME
ELIGIBILITY AND HELPS US IMPUTE
THE RENTS FROM THAT. AND THESE
TWO TABLES GET PUBLISHED EVERY
YEAR. THIS TOP TABLE THAT HUD
PUBLISHES EVERY YEAR IS
ADJUSTED, AND THAT TENDS TO BE
THOSE ANNUAL ADJUSTMENTS FROM
ANY ONE YEAR IN WHAT
CONSTITUTES, LET'S SAY, 75% AMI
IN 2025. IT MIGHT LOOK A LITTLE
DIFFERENT IN 2026. THE RENT
CAN'T EXCEED WHATEVER THAT
ANNUAL ADJUSTMENT IS THAT HUD
MAKES. SO WE'RE GOING TO TALK
ABOUT THAT A LITTLE BIT MORE,
BUT IT'S GENERALLY THESE ANNUAL
CHANGES IN THESE TABLES THAT
GOVERN THE RENT INCREASES. SO IS
THIS THE TABLE YOU WERE
REFERRING TO, COUNCIL? SO HERE
IS GETTING DOWN TO BRASS TAX.
THIS IS OUR ACTUAL PROPOSAL
BASED ON THOSE AMI LEVELS OF
P7s. SO WHAT YOU SEE HERE ON THE
TABLE IS THE ONE ON THE LEFT.
THE DIFFERENT BEDROOM TYPES. I
INCLUDED P5 IN HERE JUST TO HAVE
SOME HISTORICAL REFERENCE POINT
OF WHAT THOSE AMI LEVELS WERE.
THEN P6, AND THEN OUR PROPOSED
P7, THEN THE EXTENSION. THE P7
IS IN YELLOW. AS YOU CAN SEE
HERE TODAY, LARGELY ALIGNS WITH
EITHER WHAT WE HAD IN P5 OR P6.
THERE IS A COUPLE OF SMALL
CHANGES THAT ARE HIGHLIGHTED IN
RED. THE ONE BEDROOM IS ABOUT 5%
MORE FROM P6, BUT IT ALIGNS WITH
P5. AND THEN WE UPPED THE TWO
BEDROOM TO 90% AMI, JUST BECAUSE
WE'RE STILL NOT SEEING A LOT OF
TWO BEDROOMS AS WE WOULD LIKE.
WE THOUGHT THAT MIGHT BE
HELPFUL. AND THEN WITH REGARDS
TO THE EXTENSION, WE ARE
PROPOSING IT SOMEONE CHOOSES TO
EXTEND ANOTHER 12 YEARS AFTER
THE INITIAL 12 YEARS THAT THEY
ARE WELCOMED TO DO SO, BUT IT
WILL BE AT A SLIGHTLY REDUCED
RENT AT THAT POINT, THE BUILDING
IS A LITTLE OLDER. THEY PROBABLY
CAN'T CHARGE AS MUCH RENT AS
THEY DID AT THE OUTSET. I DO
KNOW THAT IS A LITTLE BIT OF A
POINT OF CONCERN WITH SOME
DEVELOPERS, BUT WE THOUGHT THAT
WAS A FAIR REDUCTION FOR THE
EXTENSION. SO ANY QUESTIONS HERE
BEFORE I MOVE ON? I DO WANT TO
NOTE THAT -- YOU KNOW, I'VE
BEEN TALKING A LOT ABOUT HOW THE
MARKET CONDITIONS HAVE REALLY
CHANGED. IT'S VERY DIFFICULT TO
BUILD. ONE OF OUR CENTRAL GOALS
OF THIS PROGRAM FOR THIS UPDATE
IS TO HELP PROJECTS PENCIL. IF
YOU'RE LOOKING AT THE
DIFFERENCE BETWEEN THESE AMI
LEVELS AND THE P6AMI LEVELS, YOU
MIGHT THINK THIS IS NOT ENOUGH
OF A CHANGE. THIS DOESN'T SEEM
TO KIND OF COMPORT WITH LIKE
WHERE WE ARE WANTING TO GO WITH
THIS PROGRAM, BUT THERE IS AN
IMPORTANT DISTINCTION THAT IS
NOT SHOWING UP ON THE CHART THAT
I WANT TO CALL OUT. UNDER THE P6
PROGRAM, THERE WAS A FOUR AND A
HALF PERCENT RENT CAP THAT WAS
APPLIED TO THE PROGRAM THAT
BASICALLY HAD THE AFFECT OF
LOWERING THE AMI LEVELS YOU SEE
HERE FOR P6. IN PART BECAUSE THE
RENT CAP WAS NOT RESET WHEN
TENANTS TURNED OVER. SO OVER
TIME, THE COMPOUNDING INTEREST
OF THAT RENT CAP RESULTED IN
EFFECTIVELY LOWER AMI LEVELS IN
P6 THAN WHAT YOU'RE SEEING
HERE. SO I HAVE A CHART HERE
THAT SHOWS YOU WHAT THE AFFECT
OF THAT RENT CAP HAS BEEN ON THE
P6 AMI LEVELS. AND THE BLUE IS
WHAT WAS APPROVED IN THE
LEGISLATION AND THE GRAY SHOWS
YOU KIND OF THE COMPOUNDING
IMPACTS OF HOW THAT RENT CAP HAS
BEEN APPLIED FOR P6 OVER TIME.
SO JUST GOING BACK TO THIS CHART
AGAIN. I JUST WANT TO STRESS
THAT THE BENEFITS THAT COMES
WITH THE PROPOSAL THAT WERE
SUGGESTING TO YOU IS NOT SO MUCH
WE'RE MAKING HUGE CHANGES IN
THE AMI LEVELS FROM EITHER
PROGRAM FIVE OR PROGRAM SIX, BUT
WE ARE PROPOSING TO REPLACE THE
FOUR AND A HALF PERCENT RENT CAP
WITH THE STATE RENT CAP THAT
RECENTLY JUST PASSED. AND THE
STATE RENT CAP TECHNICALLY DOES
NOT APPLY TO NEW UNITS. WE ARE
SUGGESTING THAT WE APPLY THE
STATE RENT CAP TO THE MFTE
RESTRICTED UNITS IN THE FIRST 12
YEARS. AND ALLOW THAT RENT TO
RESET WHEN THE TENANT MOVES OUT.
FOR THE MOST PART, I DON'T
ANTICIPATE THE STATE RENT CAP
WILL ACTUALLY COME IN TO PLAY.
SO MY NEXT CHART WILL SHOW YOU
THIS CHART HERE SHOWS YOU ANNUAL
AMI ADJUSTMENTS FROM THAT HUD
RENT CHART THAT I SPOKE ABOUT.
AND WHILE THE CHANGES ON AVERAGE
HAVE ONLY BEEN 4%, YOU CAN SEE
BY THIS CHART THEY'VE ACTUALLY
BEEN PRETTY SPIKE I CAN IN
RECENT YEARS. THE ORANGE LINES
YOU SEE HERE ARE WHEN THE STATE
RENT CAP WOULD COME IN TO PLAY.
SO THE STATE RENT CAP IS P% PLUS
CPI. SO THE LOWER ORANGE LINE IS
THE 7% AND THE HIGHER ORANGE
LINE IS THE 10% CAP. YOU CAN
JUST VISUALLY SEE WHEN THAT
STATE RENT CAP WOULD APPLY.
OTHERWISE WHAT IS GOING TO APPLY
IS THE HUD ADJUSTMENT THAT YOU
SEE. SO FOR EXAMPLE THIS YEAR,
2025, THE HUD ADJUSTED AMI
CHANGE WAS 4.3%. SO TECHNICALLY
THE -- THE PROPERTY OWNERS COULD
INCREASE RENT BY THAT AMOUNT
THIS YEAR. I WILL SAY I'D BE
CURIOUS TO KNOW WHETHER -- TO
WHAT EXTENT ANYONE'S KIND OF
ADJUSTING THE RENTS VERY MUCH
THESE DAYS, AS I SAID, WE
UPDATED SHOWING RENTS HAVE BEEN
LARGELY FLAT. IT'S KIND OF A
RENTER'S MARKET RIGHT NOW. SO
THIS DOESN'T ACTUALLY MEAN THEY
ARE INCREASING RENTS BY THIS
MUCH. THEY ARE DEFINITELY
CONSTRAINED THEMSELVES BY WHAT
THE MARKET WILL ALLOW. SO IF
THERE AREN'T ANY QUESTIONS,
I'LL KEEP GOING HERE. AND THEN
JUST ONE MORE THING ON RENTS. WE
PULLED DATA OF NEWER BUILDINGS
BUILT FROM 2020 ONWARD OF
MULTI-FAMILY BUILDINGS, AND WE
LOOKED AT WHAT THE MEDIAN MARKET
RATE RENT IS. AND THEN WE
IMPUTED THE RENT FOR THE
PROPOSED AMI LEVELS THAT WE HAVE
SET. IN ALMOST ALL CASES OTHER
THAN THE SLEEPING ROOM, WE WOULD
EXPECT TO SEE A RENT BUY DOWN.
NOW ONE THING I WANT TO STRESS
HERE, WE WON'T SEE P7 BUILDINGS
GETTING BUILT OVERNIGHT. MOST
PROPERTIES ARE NOT PENCILING
RIGHT NOW. IN FACT, THEY'RE IN
THE DOUBLE DIGIT NEGATIVES. I
DON'T EXPECT WHAT WE'RE DOING
HERE WITH MFTE TO BE
INSUFFICIENT. BUT WITH MARKET
CONDITIONS DO START TO CHANGE,
WE ARE HOPING THIS IS ENOUGH OF
AN ASSIST AND AN INCENTIVE THAT
THEY MIGHT BE ABLE TO COME OFF
SOONER AND MAKE THOSE PRO FORMAS
WORK. SO THIS IS INTERESTING TO
ME BECAUSE THE RENTS TODAY HAVE
BEEN NOT INCREASING AS MUCH AS
THEY HAVE HISTORICALLY IN THE
PAST AND IT IS CONSIDERED SORT
OF A SUPPRESSED RENTAL UNIT. SO
I WOULD EXPECT OVER TIME WE
WOULD SEE POTENTIALLY BIGGER
RENT BUY DOWNS, ESPECIALLY IF
THE MARKET STARTS TO TIGHTEN AND
RENTS DO GO UP. BUT WE ARE
PROPOSING AND DESIGNING AN
UPDATE REALLY FOR THE FUTURE.
AND REALLY FOR THAT HOPEFUL
UPSWING THAT WE ARE GOING TO
NEED AND WANT TO SEE IN
PERMITTING AT SOME POINT IN
ORDER TO KEEP NEW UNITS COMING
ONLINE.
IF THERE AREN'T ANY QUESTIONS,
WE ARE GOING TO PIVOT TO SOME OF
THE OTHER REQUIREMENTS IN THE
LEGISLATION THAT ARE PRETTY
IMPORTANT TO SOME OF THE
STAKEHOLDERS. WITH THAT, I'M
GOING TO TURN IT OVER TO ISAAC
HERE.
>> YES, I WAS GOING TO SAY, YOU
GOT SOME GOOD MEAT COMING UP, SO
I WANT TO MAKE SURE WE GET TO
THAT GIVEN THE AMOUNT OF TIME WE
HAVE LEFT.
>> HOW ARE WE DOING ON TIME?
>> YEAH, SO THANK YOU, CHRISTA,
AND THANK YOU, COMMITTEE FOR
GOING THROUGH THIS PRESENTATION
WITH US. SO AS CHRISTA SAID, ONE
OF THE GOALS IS REDUCING THE
ADMINISTRATIVE BURDEN FOR THIS
PROGRAM. AND SO ONE OF THE
PROPOSED CHANGES IN THE MAYOR'S
PROPOSED LEGISLATION IS AROUND
ALTERNATIVE BEDROOMS OR OPEN
BEDROOMS AS THEY ARE MORE
COMMONLY CALLED. SOME NEWER
BUILDINGS HAVE STARTED INCLUDING
THESE TYPES OF BEDROOMS THAT
LOOK LIKE THE PICTURE ON THE
SLIDE WHERE THE BEDROOM DOESN'T
HAVE A WINDOW TO THE OUTSIDE,
AND SO THEY DECIDE TO CREATE AN
OPENING ALONG THE CEILING TO
PROVIDE SOME VENTILATION AND
LIGHT INTO THE BEDROOM. SO IT
WASN'T CLEAR IF THIS WAS A
STUDIO OR A ONE BEDROOM, AND
THAT CONFUSION LED TO SOME
INCONSISTENCIES AND DISPUTES IN
THE CITY STAFF AND BUILDERS. SO
THIS PROPOSED LEGISLATION
ESTABLISHES AN ALTERNATIVE
BEDROOM FRAMEWORK. SO YOU CAN
SEE THE EXACT DEFINITIONS OF
WHAT A STANDARD BEDROOM WOULD BE
AND WHAT AN ALTERNATIVE BEDROOM
WOULD BE ON THE SLIDE AND THE
PROPOSED LEGISLATION ALSO WOULD
REQUIRE LOWER RENTS FOR THESE
OPEN OR ALTERNATIVE BEDROOMS.
GIVEN THEY WOULD NOT CHARGE AS
MUCH FOR AN OPEN BEDROOM. IF YOU
LOOK AT PAGE -- IT STARTS ON
PAGE 48 OF THE LEGISLATION. YOU
CAN SEE THE EXACT AMI LEVEL
LIMITS BROKEN DOWN BY HOW MANY
ALTERNATIVES OR OPEN BUSINESS
THERE ARE IN EACH UNIT.
COMPARABLE IS ANOTHER AREA WHERE
THERE HAS BEEN SOME CONFUSION
AND INCONSISTENCIES. SO THE
MAYOR'S PROPOSED LEGISLATION
WILL PROVIDE MORE CLARITY AROUND
HOW THE MFTE UNITS SHOULD BE
SIMILAR TO THE STANDARD MARKET
RATE UNIT IN THE BUILDING.
ESSENTIALLY WHAT THE PROPOSED
LEGISLATION REQUIRES IS THAT THE
MFTE UNITS HAVE THE SAME
FUNCTIONALITY WITH THE SAME SIZE
AND THE SAME NUMBER OF BEDROOMS
AS THE MARKET RATE RENTS, THE
MARKET RATE UNITS FOR THE
STANDARD UNITS. BUT THAT PREMIUM
UNIT, SUCH AS THE ONES THAT
MIGHT BE IN THE PENTHOUSES OR
THE CORNER UNITS THAT COULD HAVE
FANCIER APPLIANCES OR
COUNTERTOPS WOULDN'T BE USED
FOR COMPARING TO THE MFTE UNITS.
>> YES. [ INAUDIBLE QUESTION ]
>> YES, YES. SO THE LEGISLATION
WOULD REQUIRE THAT BASICALLY THE
SAME RATIO OF OPEN BEDROOMS IN
THE BUILDING THAT THERE WOULD BE
THE SAME PERCENTAGE OF THE MFTE
UNITS AS THE MARKET RATE UNITS.
[ INAUDIBLE ]
>> ANOTHER TOPIC THE PROPOSED
LEGISLATION COVERS IS THE
DISTRIBUTION OF THE MFTE UNITS
THROUGHOUT THE BUILDING.
PROVIDES MORE CLARITY AROUND
WHERE THE MFTE UNITS COULD BE
LOCATED, ESSENTIALLY REQUIRING
THEY BE DISTRIBUTED THROUGHOUT
THE BUILDING THAT THEY CAN'T BE
CONCENTRATED ON ONE FLOOR OR THE
LOWER FLOORS OF THE BUILDING.
THERE ARE CURRENTLY 15 PROJECTS
THAT ARE IN THE PROCESS OF
APPLYING TO THE MFTE PROGRAM.
THIS LEGISLATION PROPOSES,
ALLOWING THOSE APPLICANTS TO
CONVERT TO THE P7 PROGRAM, AS
WE'RE CALLING IT, WITHOUT
STARTING THE WHOLE PROCESS OVER
AGAIN FROM SCRATCH. WITH THIS
ITEM, I'M GOING TO PASS IT TO
DIRECTOR WINKLER-CHIN. IT WILL
HELP IMPROVE SOME ADMINISTRATIVE
PROCESSES THAT TENANTS AND
PROPERTY OWNERS HAVE FOUND
CONFUSING AND BURDENSOME AROUND
INCOME VERIFICATION.
>> THANKS, ISAAC. SO I KNOW I'VE
HEARD FROM SEVERAL OF YOU ABOUT
WHAT OUR PAPERWORK IS LOOKING
LIKE GOING INTO THE FUTURE ON
THIS. THE OFFICE OF HOUSING
ENGAGED WITH THE RENTERS IN THE
UNIT. WE ACTUALLY DID A
RENTER'S SURVEY FOR THE FIRST
TIME. WE GOT ABOUT A 10%
RESPONSE RATE. THEY WERE VERY
CLEAR, AS WELL AS THE PROPERTY
MANAGERS, OF THE MFTE PROJECTS
THAT THE PAPERWORK WAS
BURDENSOME. AND SO THE OFFICE OF
HOUSING IS COMMITTED TO
SIMPLIFYING COMPLIANCE
REQUIREMENTS TO REDUCE THE
PAPERWORK FOR ESPECIALLY FOR THE
RENTERS AND FOR THE PROPERTY
MANAGERS. SO WE'RE CURRENTLY
UPDATING OUR COMPLIANCE
GUIDELINES IN ORDER TO CREATE A
MORE SIMPLIFIED USER-FRIENDLY
PROCESS FOR EVERYONE. THEY'LL
ALSO DECREASE BARRIERS IN THE
APPLICATION PROCESS FOR THE
RENTERS AS WELL. SO WE'VE
INCREASED FLEXIBILITY IN HOW WE
VERIFY INCOME. AND IF YOU'VE
NEVER APPLIED FOR MFTE, THIS MAY
NOT MEAN VERY MUCH. BUT IF YOU
HAVE, YOU KNOW, WE WILL NOW
ALLOW THE VERIFICATION OF INCOME
PROVIDING MULTIPLE OPTIONS
INCLUDING PAY STUBS, W-2 TAX
RETURNS, AND THIRD-PARTY
VERIFICATION OPTIONS. SO WE HOPE
THAT SPEEDS UP THE PROCESS FOR
QUALIFYING FOR AN MFTE HOME, AND
SUPPORTS FAST RELEASE OF. AND IN
THE RARE EVENT THAT NONE OF
THOSE OPTIONS ARE POSSIBLE,
SELF-CERTIFICATION IS ALLOWED.
WE'RE ALSO SIGNIFICANTLY
REDUCING PAPERWORK FOR
DOCUMENTING INCOME FROM ASSETS.
SO WE WILL ONLY VERIFY REGULAR
WITHDRAWS FROM ASSETS THAT ARE
USED TO PAY FOR RENT AND LIVING
EXPENSES. WILL ALSO ALLOW
SELF-CERTIFICATION FOR INCOME
DURING THE ANNUAL
RECERTIFICATION, REDUCING THE
PROCESS TO A SINGLE PAGE THAT
THE RESIDENT WILL FILL OUT. FULL
INCOME RECERTIFICATION WILL ONLY
BE REQUIRED EVERY THREE YEARS.
SELF-CERTIFICATION COULD BE USED
IN THE INTERIM YEAR. SO THE YEAR
YOU MOVE IN TO BE A FULL SERVE.
YEARS TWO AND THREE WILL BE
SELF, THEN AT YEAR FOUR, YOU
WILL DO A FULL ONE AGAIN, WHICH
WILL STILL BE IN THAT REDUCED
PAPERWORK. WE WORK
COLLABORATIVELY WITH THE
PROPERTY MANAGERS IN
ADMINISTERING THE MFTE
REQUIREMENTS. WE HAVE A SPECIAL
MARKET INCENTIVE TEAM. THEY
PROVIDE TRAINING AND DROP-IN
SESSIONS DESIGNED TO ASSIST
PROPERTY MANAGERS WITH PROGRAM
COMPLIANCE AND REPORTING. I
REALLY WANT TO THANK THEM FOR
WORKING WITH US IN TRYING TO
MAKE THE PAPERWORK SIMPLER, AND
FOR ALSO WORKING WITH THE
RESIDENTS WHO DO CALL WITH SOME
REGULAR FREQUENCY IN ASKING
QUESTIONS ABOUT THE PROGRAM.
>> ALL RIGHT, COOL. GREAT.
>> QUESTIONS?
>> THANK YOU. QUESTIONS FROM MY
COLLEAGUES? I WANT TO SAY, FIRST
OF ALL, THE SIMPLIFICATION OF
THE INCOME VERIFICATION, VERY
WELCOMED. I'VE HEARD FROM
DEVELOPERS AS WELL AS RENTERS,
WHEN WE RECENTLY DID OUR SAVE
THE STABLE HOUSING, SAVE THE
STABLE RENTAL HOUSING FORUM A
FEW WEEKS BACK. THAT WAS
SOMETHING CALLED OUT AS JUST THE
BURDENSOME PAPERWORK THAT'S
REQUIRED. AGAIN, IT'S ONE OF
THOSE THINGS WHERE IT SEEMS LIKE
THE CITY IS GETTING IN ITS OWN
WAY, IN SOME WAYS. SO THANK YOU
FOR TAKING THAT ON. QUESTIONS
FROM MY COLLEAGUES?
COUNCILMEMBER SAKA?
>> EXCUSE ME, THANK YOU, MR.
CHAIR. THANK YOU FOR THIS
PRESENTATION TODAY. I REALLY
APPRECIATE YOU SHARING YOUR
INSIGHTS AND EXPERTISE, AND THE
WORK THAT KIND OF WENT BEHIND
THIS PROPOSED LEGISLATION, AN
UPDATE TO THE PROGRAM HERE. P7,
P7, WHATEVER IT'S CALLED,
STRIKES ME BASED OFF OF MY
INITIAL RENEW AS BEING A
THOUGHTFUL APPROACH THAT IS
GOING TO -- HAS THE TENDENCY TO
MORE LIKELY BRING ABOUT THE KIND
OF CHANGES AND JUT COMES WE
IDEALLY WOULD LIKE TO SEE FOR
THIS PROGRAM. SEEMS LIKE A LOT
OF COMMUNITY EXCITEMENT THAT'S
GOING TO LAND WELL WITH IMPACTED
STAKEHOLDERS. LOOK FORWARD TO
LEARNING MORE. JUST WANT TO CALL
OUT. I HEARD CHRIS, YOU
MENTIONED KING COUNTY RENT
STABILITY OVER THE LAST THREE
YEARS, IN PARTICULAR. IT'S
ESSENTIALLY A RENTER'S MARKET
RIGHT NOW, IF YOU WILL, WHICH IS
TRUE. WE ALSO KNOW RENTERS
CONTINUE TO BE COST BURDENED,
AND THAT IS AN IMPORTANT
SNAPSHOT IN TIME. BUT IF WE LOOK
AT THE BROADER CONTEXT OVER THE
LAST DECADE IN KING COUNTY,
RENTS HAVE INCREASED 58%. THE
AVERAGE RENTS HAVE INCREASED 58%
OVER THE LAST TEN YEARS IN KING
COUNTY. I'M SURE, NO DOUBT,
SEATTLE RENTAL INCREASES HAVE
BEEN HIGHER THAN THE COUNTY WIDE
AVERAGE. SO ON THE ONE HAND,
YES, RENTS HAVE SEEMED TO
STABILIZE FOR A BIT. IT IS A
RENTER'S MARKET. ON THE OTHER
HAND, THE BROADER CONTEXT
REVEALS, CONTINUING THE ONGOING
OPPORTUNITY TO DO BETTER AND
ADDRESS THIS CHALLENGE. AND SO
IN ANY EVENT --
>> MAY I JUST MAKE A PLUG THEN
THAT I COMPLETELY AGREE WITH
EVERYTHING YOU SAID, AND I THINK
THIS JUST CONTINUES TO
UNDERSCORE WHAT WE'RE DOING TO
BRING SUPPLY ONLINE, RIGHT?
THROUGH PERMITTING REFORM, OUR
UPZONES THROUGH THE COMP PLAN,
PROGRAMS LIKE THIS. I MEAN, WE
NEED TO MAKE SURE WE'RE
SIGNALING THAT SEATTLE IS OPEN
FOR HOME BUILDING.
>> YEP. YEAH, ABSOLUTELY. WHICH
ACTUALLY LEADS TO MY NEXT POINT.
SO THIS IS AN IMPORTANT STEP.
IT'S NOT THE END ALL, BE ALL.
IT'S NOT THE MAGIC BULLET. NO
SUCH THING IN THIS BUSINESS. BUT
IT IS AN IMPORTANT STEP TO HELP
ADDRESS SUPPLY AND INCREASE
SUPPLY DOES ADDRESS THE
UNDERLINING ISSUES. AND ALL THE
ANSWERS PROVIDING WHAT WILL
PROVIDE THE RENTERS, THE TYPE OF
RELIEF THAT'S TRULY NEEDED TO
HELP THE BROADER, YOU KNOW, SO
IN TEN YEARS FROM NOW, MAYBE THE
TOTAL RENTAL INCREASE WILL ONLY
BE TIED TO INFLATION, FOR
EXAMPLE. BUT THIS IS AN
IMPORTANT STEP, AN IMPORTANT
FIRST STEP, AND COMMITTED TO
WORKING WITH IMPACTED
STAKEHOLDERS, INCLUDING THE
RENTER'S COMMISSION, SO YOU CAN
SHOUT OUT TO KAY REUBEN HERE,
THE CO-CHAIR OF THE SEATTLE
RENTAL'S COMMISSION. BUT
WORKING WITH IMPACTED
STAKEHOLDERS, FIGURING OUT WHAT
ELSE WE NEED TO DO, BUT THIS IS
MISSION CRITICAL. SO SHOUT OUT
TO V7 OR P7, WHATEVER THIS IS,
WHO KNOWS. SO THANK YOU, MR.
CHAIR.
>> ALL RIGHT. THANK YOU VERY
MUCH. WE DO HAVE ONE MORE
PRESENTATION THAT WE NEED TO
MOVE TO. SO ANY FINAL QUESTIONS
ON THE PRESENTATION WE JUST
HEARD?
>> COUNCILMEMBER RINCK?
>> THANK YOU, CHAIR. I
APPRECIATE IT. AND THANK YOU ALL
FOR THIS PRESENTATION. I'LL TRY
AND KEEP THIS QUICK. I, AT THE
TOP, WANT TO VOICE ALSO MY
CONCERN FOR OUR DROP OFF IN
PERMITS. WE KNOW WE NEED TO BE
BUILDING MORE HOUSING, WE NEED
TO RESTORE OUR HOUSING PIPELINE.
OUR CITY JUST ADDED 20,000 NET
NEW RESIDENTS, AND WE HAVE
ALREADY BEEN IN A HOUSING
SHORTAGE FOR SOME TIME. SO WE
NEED TO FIND WAYS TO INCENTIVIZE
FOR DEVELOPMENT FOR TWO-BEDROOM,
THREE-BEDROOM UNITS, MAKING
THESE PROJECTS ARE CHALLENGING,
GIVEN ALL THE ECONOMIC
CONDITIONS, ESPECIALLY THIS
TRADE WAR THAT WE'RE COPING
WITH. BUT HOPING WE CAN PUT
TOGETHER A MEANINGFUL PROGRAM
THAT PARTNERS WILL WANT TO
PARTICIPATE IN, SO WE CAN BUILD
MORE HOUSING. BUT MY QUESTIONS
TODAY ARE THINKING ABOUT OUR
CURRENT AND FUTURE RESIDENTS IN
MFTE UNITS. WE DISCUSSED A LOT
OF NUMBERS HERE FROM AMI AND
MAXIMUM RENT. BUT I WANT TO
GROUND THE LISTENING PUBLIC IN
THE FACT SEATTLE'S MINIMUM WAGE
IS $20.86 AN HOUR, TRANSLATING
THAT TO ANNUAL SALARY THAT LANDS
AT ABOUT $43,000 ANNUALLY, WHICH
ACCORDING TO OUR AMI TABLE, IF
THAT IS A SINGLE PERSON THAT'S
LANDING JUST BELOW 40% AMI. I
THINK THAT'S AN IMPORTANT
MARKER FOR US TO BE THINKING
ABOUT. YOU KNOW, WE HAVE A RANGE
OF AFFORDABLE HOUSING PROGRAMS.
BUT THE FOLKS WHO MAY BE LIVING
WITHIN MFTE UNITS WOULD LIKELY
BE MORE OF A DIFFERENT KIND OF
PREVENTION IN MAKING ABOVE
MINIMUM WAGE. AND TO THAT END,
I'M CURIOUS ABOUT WHAT WE
UNDERSTAND MORE BASED ON THAT.
MORE ABOUT WHAT WE KNOW ABOUT
OUR CURRENT TENANTS AND LEVEL OF
INCOME. WHO ARE CURRENTLY WITHIN
OUR MFTE UNITS AND HOW MUCH DO
WE UNDERSTAND ABOUT THAT
DEMOGRAPHICICALLY?
DEMOGRAPHICALLY?
>> I'M SORRY, WAS THAT A
QUESTION?
>> YES, WHAT DO WE UNDERSTAND
ABOUT INCOME LEVELS?
>> WE KNOW FROM THE -- I THINK
IT WAS EVEN THE UDUB REPORT, A
FAIR NUMBER OF MFTE RENTERS
CONTINUE TO BE COST BURDENED.
IT'S PROBABLY AT A SIMILAR RATE
TO OTHER RENTERS OUT THERE WHO
ARE COST BURDENED. I GUESS THE
ONE BENEFIT IS THEY'RE PROBABLY
GETTING SOME REDUCTION IN RENT
THAN WHAT THEY WERE OTHERWISE.
BUT THEY'RE PROBABLY, IF WE'RE
LOOKING FOR SOMETHING THAT IS
KEEPING SOMEONE AT THAT INCOME
LEVEL AT 30% AMI, THEY'RE
PROBABLY NOT IN THE RIGHT UNIT.
>> COULD I ADD TO THAT TOO? OH
HAS, THIS IS BASED ON SOME
PUBLICLY AVAILABLE DATA,
ANALYZED THE AVERAGE INCOME OF A
HOUSEHOLD IN MFTE UNIT. RIGHT
NOW THE AVERAGE INCOME IN AN
MFTE UNIT IS, I BELIEVE, ABOUT
50% AREA MEDIAN INCOME. NOTE TO
BE FAIR, THAT REFLECTS A RANGE
OF UNIT TYPES. SOME AT 40%, SOME
AT 50, SOME AT 60, SO THAT'S A
CROSS ALL.
>> GREAT, THANK YOU. WANT TO
EMPHASIZE ALSO MY APPRECIATION
FOR YOU ALL DOING A RENTER'S
SURVEY. I KNOW WE JUST GOT A 10%
RESPONSE RATE ON THAT. I HOPE WE
CAN INCREASE THAT IN THE FUTURE,
JUST TO MAKE SURE WE'RE
CENTERING THAT PERSPECTIVE. IN
THE INTEREST OF TIME, I'M GOING
TO HOLD THERE UNTIL WE GET
THROUGH THE NEXT PRESENTATION,
BUT THANK YOU, CHAIR.
>> OKAY, THANK YOU. ARE YOU
READY TO PROCEED WITH YOURS?
>> ALL RIGHT. SO AGAIN, I'M
JENNIFER LABRECQUE, CENTRAL
STAFF ANALYST. I'LL BE DOING
TODAY A BRIEF OVERVIEW OF SOME
-- SOME POLICY CONSIDERATIONS.
FIVE OF THEM, AND THEN TALKING
ABOUT TIMELINE AND NEXT STEPS.
GIVEN THE TIME WE HAVE TODAY,
THIS IS A FAIRLY BRIEF OVERVIEW
AT A HIGH LEVEL. HAPPY, OF
COURSE, TO FOLLOW UP WITH YOU IN
PERSON TO TALK THROUGH ANY OF
THESE ITEMS IN MORE DETAIL. SO
TALKING THROUGH FIVE POLICY
CONSIDERATIONS TODAY. LET'S
START WITH THE RENT MODERATOR. I
THINK CHRISTA HAS DONE AN
EXCELLENT JOB DESCRIBING SOME OF
THIS, SO SOME OF THIS WILL BE A
LITTLE BIT OF A REVIEW. MFTE
PROGRAM SIX INTRODUCED FOR THE
FIRST TIME A RENT MODERATOR.
UNDER PROGRAM SIX, THE INCREASE
IN MAXIMUM ALLOWABLE RENTS WAS
EITHER THE INCREASE IN RENTS
PUBLISHED FROM THE PRIOR YEAR OR
4.5%, WHICHEVER IS GREATER. THAT
RENT CAP APPLIED TO ALL MFTE
UNITS, INCLUDING A TURNOVER, NEW
UNITS COMING ONLINE. THIS THE
CONSEQUENCE OF RESULTING
ESSENTIALLY TWO INCOME AND RENT
CHARTS, ONE FOR PROGRAM SIX, ONE
FOR ALL OTHER PROGRAMS, AND I
THINK YOU COULD SAY THE MFTE
PROGRAM SIX RENT CHART WAS
ESSENTIALLY SUPPRESSED OR
MODIFIED. THAT WAS THE CHART YOU
SAW THAT CHRISTA, SHOWING THE P6
RENTS WERE BELOW RENTS THAT
WOULD HAVE BEEN BASED JUST ON
THE HUD PUBLISHED AREA MEDIAN
INCOME ALONE. PROGRAM SEVEN ALSO
HAS A RENT MODERATOR, ALTHOUGH
IT OPERATES DIFFERENTLY IN TWO
WAYS. UNDER PROGRAM SEVEN, THE
MODERATOR WOULD BE THE INCREASE
IN RENTS, PUBLISHED BY OH FROM
THE PRIOR YEAR OR 7% PLUS
INFLATION, NOT TO EXCEED 10%.
THAT STANDARD IS BASED
ESSENTIALLY ON THE NEW STATE LAW
THAT PASSED LAST YEAR. THE ONLY
DIFFERENCE BEING THE STATE LAW
APPLIES TO TENANTS AND BUILDINGS
THAT ARE 12 YEARS OR OLDER. THIS
WOULD APPLY TO MFTE UNITS IN
BUILDINGS THAT WERE BRAND NEW.
IT ALSO ONLY APPLIES AT LEAST
RENEWAL, SO IT WOULDN'T RESULT
IN A MODIFIED RENT CHART LIKE
WHAT WE HAD UNDER PROGRAM SIX. I
WANT TO TALK THROUGH A COUPLE OF
EXAMPLES OF HOW THIS WOULD WORK
AS THE IMPACT OF THIS POLICY
CHANGE REALLY DEPENDS ON WHAT'S
HAPPENING WITH THE CHANGE IN
MEDIAN AREA INCOME EACH YEAR. SO
I'LL WALK YOU THROUGH A COUPLE
OF HYPOTHETICAL AREAS. PUBLISHED
BY HUD, INCREASED BY 3% IN A
GIVEN YEAR. FROM THE PRIOR YEAR.
IN THAT CASE, THE INCREASE IN
RENTS, AS PUBLISHED BY OH WOULD
ALSO BE 3% HIGHER. IN THIS
SCENARIO, NEITHER THE PROGRAM
SIX MODERATOR NOR THE PROPOSED
PROGRAM SEVEN WOULD KICK IN.
BECAUSE THAT 3% IS BELOW BOTH.
LET'S IMAGINE THAT AMI
INCREASED BY 6% UNDER PROGRAM
SIX, THE RENT MODERATOR WOULD
APPLY AND THE MAXIMUM ALLOWABLE
RENT WOULD ONLY INCREASE 4.5%,
NOT 6%. UNDER THE PROPOSED
PROGRAM SEVEN, THE RENT CAP
WOULD NOT APPLY, SO THE RENT
INCREASE WOULD BE 6%. FINAL
SCENARIO, I IMAGINE AMI LIMITS,
AREA MEDIAN INCOME UNITS
INCREASED BY 11% UNDER PROGRAM
SIX. THE RENT MODERATOR WOULD
APPLY. AND THE MAXIMUM ALLOWABLE
RENT INCREASE WOULD ONLY BE 4.5%
UNDER THE PROPOSED PROGRAM
SEVEN. THE RENT CAP OR RENT
MODERATOR WOULD ALSO APPLY. THE
INCREASE WOULD BE LIMITED TO 7%
PLUS INFLATION UP TO 10%. POLICY
OPTIONS FOR THE RENT MODERATOR
INCLUDE ELIMINATING THE
MODERATOR ALTOGETHER FOR MFTE
UNITS INCREASING THE MODERATOR
OR DECREASING IT. STOP THERE TO
SEE IF THERE ARE ANY QUESTIONS.
ALL RIGHT. THE SECOND POLICY
CONSIDERATION IS AROUND INCOME
AND RENT LIMITS FOR NEW
PROJECTS. THE PROPOSED PROGRAM
SEVEN, JUST AS CHRISTA
DESCRIBED, MAINTAINS THE SAME
INCOME LIMITS FOR CONGREGANTS,
STUDIOS, AND THREE BEDROOMS, AS
PROGRAM SIX, IT INCREASES THE
INCOME LIMITS FOR ONE BEDROOMS
AND TWO BEDROOMS. IT HAS A NOTE
EVEN FOR UNITS WHERE THE INCOME
LIMITS STAY THE SAME, FOR
EXAMPLE, STUDIOS ARE REGULATED
AT 60% AMI ACROSS BOTH PROGRAMS.
PROGRAM SEVEN RENTS ARE HIGHER
BECAUSE THEY USE THE
NON-MODIFIED INCOME AND RENT
CHART. DIRECTLY FROM MEDIAN
INCOME. UNDER THIS PROGRAM
SEVEN, ONE BEDROOM RENTS UNDER
PROGRAM SEVEN ARE ABOUT $400
HIGHER THAN THEY WOULD BE UNDER
PROGRAM SIX AND TWO BEDROOMS ARE
ABOUT $543 MORE. THE DIFFERENCE
IN STUDIOS BETWEEN PROGRAM SIX
AND PROGRAM SEVEN, AGAIN, BOTH
OF WHICH ARE REGULATED AT 60%
AMI IS ABOUT $200 MORE. AGAIN,
JUST DUE TO THE USE OF THOSE TWO
DIFFERENT RENT CHARTS.
ESTABLISHING AND INCOMING RENT
LIMITS ARE ONE OF THE MAIN, IF
NOT REALLY THE MAIN RENT. THERE
ARE MULTIPLE POLICY RELATED TO
RENT LIMITS, DEPENDING ON THE
POLICY OUTCOME DESIRED. POLICY
OUTCOMES COULD INCLUDE
STIMULATING HOUSING PRODUCTION,
ESPECIALLY IN TODAY'S
ENVIRONMENT WHERE HOUSING IS
LARGELY INFUSIBLE TO BUILD.
CREATING BELOW MARKET HOUSING
FOR LOW AND MODERATE INCOME
TENANTS. CALIBRATING THE
APPROPRIATE BALANCE BETWEEN
PUBLIC COST AND PUBLIC BENEFIT,
AND ENSURING THE PROGRAM
PROVIDES SUFFICIENT ECONOMIC
INCENTIVE TO BE UTILIZED BY
DEVELOPERS. POLICY OPTIONS HERE
ARE TO MAINTAIN THE INCOME
LIMITS PROPOSED IN THE PROGRAM
SEVEN. INCREASE THE INCOME
LIMITS FOR SOME OR ALL TYPES OF
UNITS OR DECREASE THE INCOME
LIMITS FOR SOME OR ALL OF THE
UNIT TYPES. ANY QUESTIONS THERE?
ALL RIGHT. OUR NEXT POLICY
CHOICE OR POLICY CONSIDERATION,
I SHOULD SAY, AROUND PROPERTIES
THAT ARE EXTENDING. AS DESCRIBED
PREVIOUSLY UNDER BOTH PROGRAM
SIX AND PROGRAM SEVEN PROPERTIES
THAT ARE REACHING THE END OF
THEIR INITIAL 12-YEAR TAX
EXEMPTION, DO HAVE THE OPTION TO
EXTEND FOR ANOTHER 12 YEARS. FOR
BOTH PROGRAM SIX AND THE
PROPOSED PROGRAM SEVEN, RENT
LIMITS WERE EXPIRING PROPERTIES
THAT WANT TO EXTEND OR REQUIRED
TO BE LOWER THAN WHAT IS
REQUIRED FOR A NEWLY CONSTRUCTED
PROJECT JUST ENTERING THE MFTE
PROGRAM. THE PREMISE HERE IS
EVERYTHING ELSE BEING HELD
EQUAL, A UNIT, AND A 12-YEAR-OLD
BUILDING WOULD RENT FOR LESS
THAN A UNIT IN A BRAND NEW
BUILDING. SO IT WOULD MAKE SENSE
FOR THE OLDER BUILDING TO BE
REGULATED AT A LOWER LEVEL.
UNDER PROGRAM SEVEN, RENT LIMITS
FOR EXTENDING PROJECTS ARE 5%
BELOW WHAT IS REQUIRED FOR NEW
PROJECTS FOR STUDIOS AND
ONE-BEDROOMS. BECAUSE STATE LAW
SAYS EXTENDING UNITS CAN'T
EXCEED 80%, TWO AND THREE
BEDROOMS ARE TEN PERCENTAGE
POINTS BELOW WHAT'S REQUIRED
FOR NEW PROJECTS. PROGRAM SIX
REQUIRES ALL UNITS AND EXTENDING
PROJECTS TO BE REGULATED TEN
PERCENTAGE POINTS BELOW WHAT WAS
REQUIRED OF NEWLY CONSTRUCTED
PROJECTS. THERE ARE A COUPLE OF
POLICY CONSIDERATIONS HERE. THE
FIRST IS WHAT THE MARKET RATE
RENTS ARE FOR EXTENDING
PROPERTIES AND WHAT LEVEL OF BUY
DOWN FROM MARKET RATE RENTS IS
DESIRED FOR THE MFTE UNITS AND
EXTENDED PROPERTIES. ANOTHER
CONSIDERATION IS WHAT RENT
LEVELS ARE NEEDED TO ENCOURAGE
PROPERTY OWNERS TO EXTEND.
CURRENT OH DATA SHOWS ABOUT 45%
OF THE 30 PROPERTIES THAT HAVE
EXPIRED SINCE 2021, WHEN THE
EXTENSION OPTION BECAME
AVAILABLE HAVE OPTED TO EXTEND.
POLICY OPTIONS HERE INCLUDE
INCREASING RENTS, BUT NOT PAST
THE 80% CAP ESTABLISHED BY THE
STATE. DECREASING RENTS OR
MAINTAINING THE RENTS AS
PROPOSED. QUESTIONS? OKAY.
>> WE DO HAVE A QUESTION FROM
COUNCIL PRESIDENT.
>> CAN YOU GO BACK TO THE OTHER
PAGE, THE OTHER SLIDE? WHY, MY
QUESTION IS WHY DOES THE -- I'M
LOOKING AT IT FROM THE RENTER'S
PERSPECTIVE. WHEN YOU LOWER THE
INCOME THAT YOU CAN MAKE TO STAY
IN AN APARTMENT, IS THAT THE
CASE, YES?
>> THAT IS TRUE.
>> OKAY.
>> I JUST WANT TO MAKE SURE I
UNDERSTAND BECAUSE WE HAD IT HAD
CONVERSATION A COUPLE YEARS AGO.
ALL OF A SUDDEN WHEN THE PROGRAM
ENDS, YOU LOWER THE AMI, SO ALL
THE PEOPLE MAKING ABOVE THAT
HAVE TO LEAVE, AND THAT HAPPENED
TO A FRIEND OF MINE. SO WHY DO
WE DO THAT?
>> THERE ARE A COUPLE OF THINGS
IN PLACE TO TRY TO HELP MITIGATE
THAT IMPACT, ALTHOUGH IT
CERTAINLY HAS HAD AN IMPACT ON
SOME TENANTS. YOU ARE CORRECT
THAT THE INCOME LIMIT DECREASES
FOR THE UNIT. A TENANT CAN STAY
-- UNDER THE PROPOSED PROGRAM
SEVEN, A TENANT CAN STAY IN THAT
UNIT IF THEIR INCOME IS UP TO
ONE AND A HALF PERCENT OF THE
INCOME LIMIT ASSOCIATED WITH THE
UNIT OR 115% AMI, WHICHEVER IS
GREATER.
>> OKAY. CHRIS IS TAPPING ME ON
THE SHOULDERS. IF IT'S OKAY,
I'D LOVE TO FOLLOW UP WITH YOU
AFTER THE MEETING TO FOLLOW YOU
UP WITH THAT. THERE ARE SOME
THINGS IN PLACE TO MITIGATE
THAT, BUT THERE WILL BE SOME
TENANTS WHO ARE IMPACTED.
>> A TENANT CAN STAY IN THERE IF
THEY MAKE 115% AMI?
>> I BELIEVE IF THEIR INCOME IS
1.5 TIMES THE INCOME ASSOCIATED
WITH THAT UNIT, SO IF THEY'RE
AT 60% AMI, FOR EXAMPLE, THEY
COULD STAY. IF THEIR INCOME WAS
90% AMI. FOR A HIGHER UNIT LIKE
THIS ONE BEDROOM OR THE THREE
BEDROOMS THAT ARE RENTING AT
80%, IT WOULD BE 80% PLUS 40%
WOULD BE 120 OR 115% AMI,
WHICHEVER IS LOWER. IN THAT
CASE, IT WOULD BE 115%. SO THERE
IS SOME ROOM FOR THEIR INCOME TO
BE OVER THE INCOME THAT IS
ALLOWED FOR THE UNIT. BUT AT
SOME POINT IF THEIR INCOME IS
TOO HIGH, THEN THAT'S CORRECT.
THAT UNIT WILL LOSE ITS MFTE
DESIGNATION, ALTHOUGH THE RENT
CAN'T CHANGE UNTIL THE LEASE
ENDS.
>> OKAY. I JUST WANT TO NOTE
THAT THESE ARE FAIRLY LONG, NOT
SUPER LONG PROGRAMS, WELL, 12
YEARS, WHATEVER. WE'RE TRYING
TO -- WHAT WE WANT IS FOR PEOPLE
TO MAKE MORE AND MORE OVER THE
COURSE OF THEIR LIFETIME, AND
THAT IS A FAIRLY BIG CHUNK. SO
ONE WOULD HOPE -- RENTS GO UP
FASTER THAN INCOMES, RIGHT? SO
WE'RE TRYING TO PREVENT PEOPLE
FROM BEING BASICALLY EVICTED
FROM THESE UNITS.
>> GREAT. I DO WANT TO RECOGNIZE
WE ONLY HAVE TWO MINUTES LEFT ON
OUR AGENDA. IT IS MY
UNDERSTANDING THAT WE WILL BE
LOSING QUORUM AT NOON, IS THAT
CORRECT? OR DO WE HAVE FOLKS WHO
CAN STICK AROUND FOR A FEW
MINUTES LATER? HOW MUCH MORE
TIME DO YOU NEED TO GET THROUGH
YOUR PRESENTATION?
>> I JUST HAVE TWO MORE SLIDES,
SO I PROBABLY NEED TWO MORE
MINUTES, THEN ANY TIME FOR
QUESTIONS.
>> OKAY. AS LONG AS WE HAVE
QUORUM. PROCEED.
>> ALL RIGHT. YOU HAVE TWO
MINUTES.
>> OKAY, TWO MORE POLICIES,
THREE MORE SLIDES. TWO MORE
POLICY CONSIDERATIONS, I'LL BE
FAST. HISTORICALLY MFTE
REAUTHORIZATION OF THE MFTE
PROGRAM HAS COINCIDED WITH THE
SCHEDULED SUNSET DATE. REALLY
MEANING EVERY FOUR TO FIVE YEARS
COUNCIL HAS NEEDED TO TAKE
ACTION TO REAUTHORIZE THIS
PROGRAM BECAUSE WHAT HAS A
SUNSET DATE. PROGRAM SEVEN TAKES
A DIFFERENT APPROACH.
ELIMINATING THE SUNSET DATE, BUT
ALSO PROVIDING DIRECTION. YOU
KNOW, WHAT FACTORS SHOULD
POTENTIALLY, WHAT FACTORS SHOULD
BE CONSIDERED AND POTENTIALLY
LEADS TO CHANGES IN THE PROGRAM
AFTER FOUR YEARS. THOSE FACTORS
INCLUDE THE PROGRAM NOT
ACHIEVING ITS ESTABLISHED
PURPOSE, WHICH FURTHER PROPOSE
LEGISLATION IS INCREASING THE
SUPPLY OF HOUSING FOR LOW AND
MODERATE INCOME HOUSEHOLDS,
INCREASING WORK FORCE HOUSING,
ENCOURAGING MORE HOUSING
PRODUCTION, AND LIMITING FAIR
HOUSING. OTHER FACTORS ARE THE
OPT-IN RATE OR THE -- I'M
SORRY, OTHER FACTORS ARE THE
OPT-IN RATE CHANGES IN HOUSING
MARKET CONDITIONS AND ANY OTHER
CHANGES IN STATE LAW. REALLY THE
POLICY CONSIDERATIONS HERE OR
THE POLICY OPTIONS ARE TO ADD
BACK IN A SUNSET DATE OR FOR
COUNCIL TO WEIGH IN WITH OTHER
FACTORS THEY THINK SHOULD BE
CONSIDERED AFTER FOUR YEARS AS
PART OF MAKING CHANGES TO THE
PROGRAM. FINAL POLICY
CONSIDERATION HERE IS AROUND
COST. I THINK CHRISTA ADDRESSED
PART OF THIS ALREADY. THERE ARE
TWO TYPES OF COST ASSOCIATED
WITH THE MFTE PROGRAM. CHRISTA
DESCRIBED ONE, WHICH IS THE
CONCEPT OF SHIFTED TAXES, RIGHT?
THERE IS ABOUT, I THINK IT'S
SOMETHING LIKE $8.9 BILLION OF
ASSESSED VALUE THAT'S EXEMPT
FROM PAYING PROPERTY TAXES
BECAUSE OF THE MFTE PROGRAM. IF
MFTE PROPERTY OWNERS AREN'T
PAYING THOSE TAXES, THEN THOSE
TAXES ARE ESSENTIALLY SHIFTED TO
OTHER TAXPAYERS, OTHER PROPERTY
TAX OWNERS IN SEATTLE, AND THAT
DOES INCREASE THE PRICE OF A
MEDIAN HOME IN SEATTLE. THEIR
PROPERTY TAX BILL BY ABOUT $145.
THERE IS ALSO FOREGONE REVENUE
IMPACT TO THIS PROGRAM. BEING A
WONKY ROAD, SO THERE IS SOME
REVENUE LOST PERMANENTLY TO THE
CITY OF SEATTLE BECAUSE OF MFTE.
I'M NOT GOING INTO THE WHY
HERE. IT'S SUPER TECHNICAL AND
COMPLICATED. BUT IN 2024, THE
TOTAL AMOUNT OF FOREGONE REVENUE
WAS $49 MILLION. THAT'S ACROSS
ALL TAXING DISTRICTS, WHICH I
COULD DESCRIBE IN MORE DETAIL.
BUT THE CITY OF SEATTLE WILL
TAKE ABOUT HALF OF THAT HIT IN
TERMS OF LOST REVENUE, SO ABOUT
$20 MILLION. POLICY OPTIONS
HERE, FRANKLY LIMITED. THE CITY
DOESN'T HAVE THE AUTHORITY TO
REQUIRE THAT THE IMPACT OF AN
MFTE EXEMPTION, FOR EXAMPLE,
ONLY BE SHIFTED, THAT THERE
WOULD BE NO LOST REVENUE OR
FOREGONE REVENUE, THAT KIND OF
ACTION WOULD NEED TO BE
AUTHORIZED BY THE STATE.
CONCEIVABLY THE CITY COULD CAP
THE NUMBER OF NEW PROJECTS
PARTICIPATING IN MFTE. AS TO
HAVE SOME CONTROL OVER THE COST
IMPACTS. BUT YOU KNOW, THAT HAS
NEVER BEEN DONE BEFORE AND
PROBABLY HAS SOME ADMINISTRATIVE
COMPLICITY TO IT AS WELL. FINAL
THING, TIMELINE AND NEXT STEPS.
SO WE ARE HERE TODAY, AUGUST 13,
EXECUTIVE AND CENTRAL STAFF HAVE
PRESENTED. WE ARE GOING TO TRY
TO GET THIS DONE IN TWO
COMMITTEES, SO THIS IS COMING
BACK FOR POTENTIALLY FOR A VOTE
ON AMENDMENTS IN THE LEGISLATION
ITSELF TO THE 9/10 HOUSING AND
HUMAN SERVICES COMMITTEE.
BECAUSE OF THAT, AMENDMENT
CONCEPTS ARE DUE THE WEDNESDAY
AFTER THE AUGUST RECESS, SO
SEPTEMBER 3, SO WE CAN HAVE TIME
TO WORK ON AMENDMENTS AND BRING
THEM OR GET THEM READY FOR THE
9/10 COMMITTEE. AS WE LIKE TO
SAY, THAT 9/3 IS THE DEADLINE,
BUT DON'T FEEL LIKE YOU HAVE TO
WAIT UNTIL THE DEADLINE TO START
TALKING TO MYSELF AND TRACI
ABOUT POTENTIAL AMENDMENTS. WE
WOULD MUCH PREFER TO WORK WITH
YOU ON THEM EARLIER RATHER THAN
LATER. EITHER TRACI OR I WILL BE
AROUND DURING ALL OF AUGUST
RECESS, ONE OF US, SO WE CAN
CERTAINLY WORK WITH YOU DURING
THAT TIME. AS A REMINDER, MFTE
TO SUNSET ON SEPTEMBER 10. THIS
TIMELINE IS REALLY DRIVEN BY THE
DESIRE TO KIND OF MINIMIZE ANY
LAPSE BETWEEN PROGRAMS. THAT'S
IT.
>> GREAT, THANK YOU. COLLEAGUES,
ANY QUESTIONS FOR OUR
PRESENTERS? YES, COUNCIL
PRESIDENT NELSON?
>> SO AGAIN I'M RETURNING TO
THE -- THE REVENUE HIT OF THE
LOST PROPERTY TAX. I WANT TO
NOTE THE $970 MILLION HOUSING
LEVY SUPPORTS THE PROTECTION OF
ABOUT 400 TO 500 HOUSING UNITS
PER YEAR OVER THE COURSE OF THE
EIGHT YEARS. BUT ONLY $50
MILLION OF THAT IS ALLOCATED
TOWARDS WORK FORCE HOUSING?
THAT'S JUST, THAT'S JUST
HOMEOWNERSHIP? $50 MILLION OUT
OF $970 MILLION, AND THERE ARE
NO RENTAL UNITS SUPPORTED BY OUR
HOUSING LEVY. WHEN I'M LOOKING
AT THE CHART ON PAGE SEVEN THAT
THE MAYOR'S OFFICE PRODUCED,
THAT'S COMPARED MFTE UNITS OVER
THE LAST TWO PROGRAMS. SO I'M
LOOKING AT, AGAIN, SUPPLY AND
WORK FORCE HOUSING BECAUSE THERE
IS, WHAT I WOULD SAY AN
UNACCEPTABLE GAP IN WORK FORCE
HOUSING, AND THE CITY DOESN'T
HAVE ANY PROGRAM THAT SUPPORTS
WORK FORCE HOUSING BESIDES MFTE
REALLY FOR RENTAL UNITS. BECAUSE
OF THE SHEER NUMBER OF PEOPLE
THAT FALL WITHIN THE CATEGORY
THAT MAKE BETWEEN 60 TO 90% AMI.
COULD YOU PLEASE TELL ME HOW
MUCH IT COST TO PRODUCE, YOU
KNOW, HOW DOES THAT COMPARE TO
-- THE COST OF THE PRODUCTION OF
A RENTAL UNIT UNDER THE
AFFORDABLE HOUSING PROGRAM OF
THE HOUSING LEVY? SO WOULD THE
$39.4 MILLION EQUATE TO HOW MANY
AFFORDABLE APARTMENTS AT 60
ACCOUNT BE AMI?
>> I DON'T HAVE THAT MATH
EXACTLY IN MY HEAD. I CAN DO
SOME FOR YOU AFTER THIS. I WILL
SAY IT IS NOT ENTIRELY AN
APPLES-TO-APPLES COMPARISON IN
PART BECAUSE THE TAX, LIKE
THAT'S -- WHEN WE INVEST
THROUGH THE OFFICE OF HOUSING,
THAT'S A ONE-TIME INVESTMENT,
AND THEN THE PRODUCT IS
AFFORDABLE FOR A 75-YEAR PERIOD
OF TIME. WITH THE MFTE TAX
EXEMPTION, YOU HAVE TO THINK OF
IT AS AN ANNUAL COST, RIGHT?
THAT'S $39 MILLION PER YEAR. SO
ESSENTIALLY IT'S THE COST TO
PURCHASE ONE YEAR OF
AFFORDABILITY. AGAIN, YOU KNOW,
THEY BOTH HAVE A ROLE AND A
PLACE, BUT IT IS HARD TO DO AN
APPLES-TO-APPLES COMPARISON ON
COST. BECAUSE ONE, YOU'RE
PURCHASING ANNUALLY AND
PURCHASING FOR A 75-YEAR PERIOD,
50 TO 75 YEARS, DEPENDING ON THE
REGULATORY AGREEMENT.
>> GOT IT. BUT OUR AMI LEVELS DO
CHANGE OVER THE COURSE OF MFTE
UNITS, OVER TIME? GO AHEAD,
SORRY TO INTERRUPT. I'M DONE.
>> OKAY. ANY OTHER QUESTIONS
FROM THE COMMITTEE? OKAY. GREAT.
WELL, THANK YOU VERY MUCH.
APPRECIATE YOUR PRESENTATION.
LOOKING FORWARD TO GETTING P7
DONE. I'M SURE OUR DEVELOPER
FOLKS ARE LOOKING FORWARD TO
THAT AS WELL. SO WE WILL BE
HAVING OUR NEXT MEETING, ARE WE
GOING TO BE DOING THE SPECIAL
MEETING ON THE 4th? WELL, WE
KNOW WE HAVE SOMETHING ON THE
BOOKS FOR THE 10th, WE MAY
ACTUALLY MOVE SOMETHING A LITTLE
BIT SOONER, SO WE CAN GET IT
DONE BY THE DEADLINE. AND THE
CHAIR IS SHAKING HER HEAD, YES.
>> WELL, YOU'RE THE CHAIR.
>> SO IT SHALL BE DONE.
>> DON'T TRY TO DO THAT NOW.
>> YOU'RE RUNNING THE TRAIN.
I'M YOUR ASSISTANT. I TOLD YOU
I'M YOUR SIDE KICK. [ LAUGHTER
]
>> OKAY, AGAIN, THANK YOU VERY
MUCH FOR YOUR PRESENTATION.
THANK YOU EVERYONE FOR TAKING
THE TIME OUT OF YOUR DAY FOR
BEING HERE TODAY. WE'VE REACHED
THE END OF OUR AGENDA. IS THERE
ANY FURTHER BUSINESS? HEARING
NONE, THEN OUR NEXT SCHEDULED
MEETING IS SEPTEMBER 10, 2025,
9:30 A.M. WE STAND ADJOURNED. IT
IS 12:07 P.M. THANK YOU VERY
MUCH, EVERYONE. ENJOY THE REST
OF