nehemiah studio central district policy review

Policy Background

The information summarized below will allow those interested in the goals of the Nehemiah Initiative to understand the policy landscape as it currently exists from a federal, state, and local perspective. These policies shaped how the Central District looks, feels and functions and will continue to shape how growth occurs. The policies were chosen because of their direct relevance to Nehemiah Initiative goals, and it is important to have an understanding of them when moving forward in the development process.

Federal Policy Landscape

Small Business Act (1953)

The Small Business Administration (SBA) is a federal government agency created by the Small Business Act of 1953 that propels economic development and provides support to small businesses. Small businesses are defined as organizations with less than 500 employees. The SBA provides loans and grants. The agency also provides support through counseling services, with the goal of providing mentorship to small businesses.

Fair Housing Act (1968)

The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) prohibits various types of discrimination in the sale, rental, and financing of housing. An amendment in 1988 added categories of disability and family status to the list of protected groups and also provided greater administrative authority to HUD to address fair housing complaints. Many gaps still exist between fair housing in theory and housing discrimination in practice. The law continues to be interpreted by the courts, with a ruling in 2015 by the supreme court that held that fair housing concepts should be applied to broad municipal policies, not just individual landlord-tenant or real estate transactions.

The Fair Housing Act, while a critical step in preventing discrimination in housing, did not provide many tools for addressing existing housing disparities and the negative impacts of past policy. While it prohibited legally-enforced segregation and discrimination, it did not provide the means to fight against socially enforced segregation.

Tax Reform Act (1986)

Created as a result of the Tax Reform Act, the Low-Income Housing Tax Credit (LIHTC) is a dollar-for-dollar tax reduction system that is used to propel the development of affordable housing. This is a federal level tax incentive that is widely used to reduce the total amount of taxes owed to the government. The federal government issues tax credits to state agencies that are then passed to developers in a highly competitive process, as there is a limited amount of tax credits available.

Washington State Policy Landscape

Growth Management Act (1990)

The Growth Management Act is a monumental piece of Washington-state legislation that guides the long-range development of cities and urban areas in a thoughtful manner. The act requires that cities adopt a comprehensive plan to map out their growth strategy over the span of a few decades. The GMA also outlines a process for developing population projections, which are frequently utilized to understand the housing market and future demand in the city and region. As a result of this legislation, the City of Seattle adopted a Comprehensive Plan – the most recent of which was created in 2015 and projects to 2035. All development and growth within the city must align with the overall goals of the plan. Additionally, urban growth areas are identified within counties to promote denser development and infill within these urban environments and to eliminate unnecessary sprawl. As such, development within King County is encouraged, which is evident in current development patterns.

While the GMA is an important policy for reducing development strain on the environment and preventing sprawl, it also creates pressure on areas within the GMA boundaries to absorb population growth. The GMA creates the need for carefully crafted policies that allocate density and provide for affordable housing in an equitable way. Seattle’s response with the Urban Village strategy has not adequately met these needs to date.

Minority and Women-Owned Business Assistance Act (1993)

This policy resulted from recognition that minority and women-owned businesses historically have more difficulty obtaining financing for their small businesses. The legislation established the Office of Minority and Women’s Business Enterprises and the Linked Deposit Loan Program. The loan program is a coordinated effort that links funding to minority and women-owned businesses by depositing state funds at below-market rates. The program results in lower interest rates for borrowers of up to two percent.

Initiative 200 (1998)

In 1998, Washington State passed Initiative 200 which restricted policies that aimed to support inclusivity efforts at local governments and various state agencies. Additional language was added to Washington’s law that specifically denied the state any ability to discriminate or award preferential treatment to public employees, public education, or public contracting. Voters reversed the ban on affirmative action in 2019 with the passage of Initiative 1000, though it was blocked in November 2019. Legal action surrounding this bill is still ongoing. Though this policy applies to state and local agencies, Nehemiah Initiative churches will need to keep this policy in mind when considering ways to partner with the City.

SHB 1377 (2019)

Substitute House Bill 1377, passed in 2019, is an incentive tool that promotes affordable housing development on land owned by faith-based organizations in exchange for a density bonus. Affordable housing for the purposes of this bill includes households earning at or below 80% AMI. Additionally, the housing must remain affordable for 50 years and all of the dwelling units must be affordable. The bill does not explicitly prohibit other types of services in the development, which creates an opportunity for mixed-use utilization.

This is a key policy for the Nehemiah Initiative to pay close attention to as the city is looking at ways to expand upon this bill or make it more useful for churches in the Central District. tTe Nehemiah Initiative plays a unique role in being able to advocate on behalf of churches for any policy that develops. As it stands now, there are opportunities for churches to claim this height and density bonus on top of existing MHA bonuses.

SHB 1918 (2019)

Residents, property owners, employees, or business owners of an impacted community may propose the formation of a Community Preservation and Development Authority (CPDA). An impacted community is defined as a community that has been adversely impacted by major capital projects. The proposal for formation must be presented by members of the community and include geographic boundaries of the impacted area and have one or more stable revenue sources. Formation of a CPDA allows power to buy, own, lease, and sell real and personal property and accept gifts, grants, loans, or other financial aid from public or private entities with legislative credibility. The Central District currently has a CPDA within the City.

Multifamily Property Tax Exemption Program

The Multifamily Property Tax Exemption program is a statewide policy that offers a tax exemption for low-income development. In Seattle, developers or property owners who devote 20-25 percent of units in future/existing multi-family buildings as income- and rent-restricted may apply for the benefit. Property tax exemptions can last for up to 12 years. The results of an audit released in 2019 indicate that it is unclear whether the program has actually helped boost housing production or was simply a welcome subsidy for developers. Additionally, this policy does not include limitations on unit size. As such, approximately 75% of units created through the MFTE program were studios and one-bedrooms, which do not serve the needs of many residents of the Central District at risk of displacement. Regardless, this is a program that the Nehemiah Initiative could utilize to help lower maintenance costs in the long term.

City of Seattle Policy Landscape

City of Seattle Comprehensive Plan (2015)

The City of Seattle Comprehensive Plan is a long-range planning document that sets goals and guides the development of the built environment over 20 years. The most recent plan was adopted in 2015 and projects to 2035. All development, city ordinances, zoning practices, etc. in the city must align with the overarching vision set by the comprehensive plan. The City of Seattle adopted an urban village strategy of growth that focuses development in identified urban hubs. One of the residential urban villages identified in the comprehensive plan is located in the Central District: 23rd & Union-Jackson. This residential urban village runs along 23rd Ave between Union and Jackson, and forms a lengthy spine of commercial and mixed-use development. Recent rezones in 2019 paved the way for denser, commercial and mixed-use development which will likely see existing properties be redeveloped, with the potential to further exacerbate gentrification and displacement.

Separate neighborhood plans were developed in the late 1990s as a response to the citywide comprehensive plan, though they have since been phased out. In their place, the Seattle comprehensive plan has dedicated space for more condensed neighborhood plans that integrate with the document as a whole. The current Central Area neighborhood plan outlines numerous goals and corresponding general policies. It is important to have an understanding of these goals and policies, as any proposed legislation regarding the built environment would need to align.

Housing Affordability and Livability Agenda (HALA)

The Housing Affordability and Livability Agenda was launched in 2018 as a response to affordability concerns in Seattle. The process began in 2014 with a call to action by Mayor Ed Murray, who then convened a 28 member advisory committee. The committee released a report with 65 suggested responses to the crisis, one of which is Mandatory Housing Affordability (detailed below) and was later implemented across the city.

Mandatory Housing Affordability (MHA)

Mandatory Housing Affordability, referred to simply as MHA, is a policy requirement adopted in 2019 by the City of Seattle that requires affordable housing in new development in certain parts of the city. Developers can alternatively contribute to a city fund that will go towards affordable housing development. The policy aims to direct growth alongside affordability, in accordance with the city’s comprehensive plan. MHA is implemented in a variety of methods, including through a series of zoning changes that allow for a higher floor area ratio (FAR) and increased building height. These development bonuses allow developers to continue to develop market rate housing while also providing extra capacity for affordability. Much of the MHA applicable areas of Seattle coincide with the city’s designated urban villages, as part of the comprehensive plan, and this includes the 23 & Union-Jackson residential urban village in the Central District.

Seattle Housing Levy

Seattle voters approved a new $290 million housing levy in 2016, a 50% increase from the 2009 levy. The levy, meant to last seven years, is primarily intended to help fund new housing development and rehabilitate existing housing that will benefit low-income residents.

Incentive Zoning

Incentive zoning allows developers to obtain extra floor area than the allotted amount in a zoning category in exchange for affordable housing. It is widely used in Seattle and is one of the main tools used to implement Seattle’s urban village strategy as part of the city’s Comprehensive Plan. Incentive zoning is applied to urban villages and works alongside MHA to create benefits for developers to incorporate affordable housing in building plans.

Neighborhoods for All

Neighborhoods for All is an initiative led by Seattle’s Planning Commission that presents city council and state lawmakers with policy suggestions and strategies to address Seattle’s housing shortages and inequalities. The city has undertaken a large-scale public engagement campaign to develop its recommendations but as of now, the policy strategies listed below are still in the development stages and do not reflect actual policy. They do, however, reflect the city’s interest in finding creative solutions for affordable housing and a willingness to consider new ideas.
The strategies include:

  • Strategies focus on “missing middle” housing and the disproportionate number of white homeowners compared to minority homeowners in the city.
  • Expand current urban villages and the definition of urban villages to increase multi-family housing areas in the city.
  • Allow more housing types in areas currently zoned for single-family housing near existing public infrastructure such as parks and schools to improve access to those public investments.
  • Develop new design standards for a wide variety of housing types to ensure new housing fits with existing housing in terms of scale and design.
  • Relax parking requirements for new development.

Where Nehemiah Initiative goals align with these strategies, there may be advocacy opportunities.

Child Care Assistance Program

The Child Care Assistance Program through the City of Seattle provides qualifying families vouchers that reduce the cost of child care by 25-70% from city-contracted child care providers. Those interested should apply through the City’s website. A listing of currently contracted child care providers shows that many are located within the Central District, though none are listed as offering twenty-four hour care. The Nehemiah Initiative recognizes this gap in the child care system, and would like to be able to fill this need. Additionally, not all families will qualify for the program, leaving many to balance the high cost of child care with other high cost living expenses. This pressure could force some young families to seek a more affordable living situation outside of the Central District.

Community Preference Policy

In 2019 the Seattle Office of Housing adopted new housing funding policies aimed at addressing past discriminatory policies that led to displacement. Community Preference was introduced as a tool to allow non-profit developers receiving money from the city to address displacement in a way that is consistent with fair housing law. The preference policy would allow owners in areas with a high risk of displacement to prioritize applicants already living in the community who were impacted by the project or who have been forced to leave the area in an attempt to restore inclusive communities. (