Updating the MHA policy

Excerpts of what I helped write for mayoral candidate Andrew Grant Houston:

[Mandatory Housing Affordability (MHA): also known as the “Housing Affordability and Livability Agenda (HALA) Grand Bargain.”]

…the battle for affordable housing to be nearly as ugly as it was. With a disagreement around setting 6% of the city’s land for inclusionary zoning (on-site affordable housing), MHA went too far for some, and for others it did not go far enough.

Read more of the candidate’s policy here!

Still, somehow, Seattle passed the changes and the results have been significant. Payments in lieu of on-site affordable housing funded 698 housing units—110 more units than our existing Housing Levy funded, according to the Office of Housing’s 2020 Annual Report. The program is generally effective at creating affordable housing, however, it does add additional cost to the overall project budgets across the city; which means the cost to be a developer in the city keeps rising at a time when we need more housing in general.

The way I see it, by the time a new Mayor steps into office, it’ll be time to Update MHA. If we want to get more mixed-income housing and build more generally, it’s time to simplify the process.

What exactly is MHA?

In 2015, a 28-member committee established the HALA, which contained MHA, in an effort to address Seattle’s rising rents and costs of homeownership. It, of course, entered into a four-year battle. Ultimately, MHA allows builders to have a bigger building in exchange for including affordable units—specifically, apartments at rents below market rate that must stay that way for as long as 75 years. (A bit cumbersome if a city continues displacing people, which then causes market rates to rise, and these “affordable” units to become, well, unaffordable.) If builders opt for no such exchange, they have to pay a fee which then goes into a pool of affordable housing funds belonging to the City. 

Residential revamp

Instead of having an extremely confusing table of calculations, both on-site performance and payment-in-lieu would be two separate processes. Developers could continue choosing a combination of the two (on-site and payment), but on-site performance would be based on which of the following four categories a neighborhood fell into (more on neighborhood plans here): 

  1. High Opportunity (meaning close to jobs, schools, and more) – High Displacement
  2. High Opportunity – Low Displacement
  3. Low Opportunity – High Displacement
  4. Low Opportunity – Low Displacement

In this way, mixed-income buildings are incentivized in the places they’re needed most, which…instigates more affordable housing choices in our more expensive neighborhoods.

…Lastly, all builders in residential zones would be required to pay the fee. 

No more exceptions for million-dollar mansions

Commercial changes

…The same 4,000 square foot exemption that exists now would continue, with payment only kicking in after that. Given that these are commercial payments, as well as our policy to push more funds into the Equitable Development Initiative, commercial payments would also go into this fund but would be specifically earmarked for creating new commercial spaces (including childcare facilities) and assistance for new businesses. In this way, new buildings create a feedback loop of businesses creating other businesses.

FUTURE MHA UPDATES

In order to create a level of predictability and align future changes with growth, changes in Opportunity-Displacement rating would be done at the same time as the next Major Comprehensive Plan Update. This allows us to adjust payments to reflect growth patterns and focus on anti-displacement as much as possible.

My plans will Update MHA to ensure we can all Stay in Seattle.

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