A handful of Seattle’s more than 12,000 homeless people will soon be moving from the street to a studio penthouse with a view. The finishing touches are being put on three apartment buildings in Seattle’s pricey Capitol Hill neighborhood, where one of the buildings has stunning views of the Space Needle and Puget Sound.
But instead of being leased at market rates, the 165 units will go to people currently living in tents and in temporary shelters. The city is using a portion of the $1.9 trillion federal COVID relief package known as the American Rescue Plan Act of 2021.
“Everyone deserves a high quality, affordable place to call home,” says Emily Alvaredo, director of the Seattle Office of Housing, “The fact we’re able to produce high-quality, affordable housing at a price that’s good for the public, through our subsidy, is a win-win.”
Seattle is spending $50 million or $300,000 per unit. Developers say that’s two to three times higher than what it costs them to build. But the Seattle apartment purchase seems like a bargain compared to a homeless housing project breaking ground in Los Angeles’ Skid Row. The Weingart Tower will be 19 stories and have 275 units. It will be mostly studio apartments with some one-bedroom units. The price tag is $160 million, which works out to $580,000 per unit of housing.
They’re part of an expensive push to get the homeless off the streets, out of public parks and into government-subsidized housing even if it means buying new buildings at market rates from developers.
“Affordable, deeply affordable permanent housing is the solution,” says Sharon Lee, executive director of Seattle’s Low Income Housing Institute (LIHI), “It just takes so long to build, so in the meantime, why should we let vulnerable people, women, seniors live on the street?”
LIHI, a nonprofit central to Seattle’s homelessness response, currently manages 40 properties with 1,535 permanent housing units. The three new buildings will push their total past 1,600 units. Additionally, LIHI operates two hotel shelters and nine tiny house villages in Seattle with 298 shelter units.
Some critics say that while city leaders spend big taxpayer dollars on homeless housing, City Hall policies may be contributing to homelessness. Full-paying tenants are having a harder time finding an affordable place to lease. Democratic Mayor Jenny Durkan recently extended the city’s eviction moratorium a sixth time through the middle of January 2022. And the City Council followed that by passing two more so-called renter protection laws. Landlords are now required to give tenants six months notice of any rent increase. They’re also now responsible to pay the moving costs for any tenant who moves out rather than pay a rent increase of 10% or higher.
Real estate experts say the measures are driving landlords out of the rental housing business.
“A lot of people are deciding it’s too risky for me to put someone into my home under the current conditions,” said Cory Brewer of Windermere Real Estate.
Brewer has the statistics to back it up. Of Windermere’s landlord clients, there was a 46% increase in rental homes sold to owner occupants in 2020. And so far in 2021, there’s been a 30% increase on top of that. Additionally, according to the latest report from Seattle’s Department of Construction and Inspection, 2020 saw 4,858 fewer properties registered as a rental property. It was a drop of 14%. Brewer and others say chasing landlords out of the city only hurts renters.
Daniel Stoner, CEO of Next Gen Housing Partners, which has built seven apartment buildings in Seattle, says the answer to the housing crises is more housing. Regulations that dramatically increase development costs or make it more difficult to rent properties, only decrease available supply.
“We see a disconnect between what is being said and what is actually being done behind the scenes in terms of city policies,” said Stoner, “They’re making it harder for us to bring apartments to market.”