Downtown Seattle Association’s “State of Downtown” Reveals Heightened Awareness Around Housing Affordability

This article was originally published by The Registry on Feb. 15, 2018.

By Jack Stubbs

As the economic engine of the Northwest and one of the fastest-growing cities in the nation, Seattle is showing no signs of slowing. In Seattle’s downtown neighborhood, public and private investment is fueling population growth, job growth, expansion of transit systems, increasing demand for commercial and residential product and growth in the retail sector.

And those who have a pulse on the goings-on in our city are taking note.

“Downtown Seattle is the fastest-growing neighborhood in Seattle…we have remarkable opportunities on the horizon; we’ve got some great challenges, too,” said Seattle Mayor Jenny Durkan. And although Seattle’s downtown neighborhood is booming, this activity is also increasing the pressure around transportation and housing.

At Downton Seattle Association’s annual “State of Downtown” event held on Wednesday, February 14th—which was attended by 1,200 people—Jon Scholes, DSA president and CEO, and Bruce Katz, Brookings Institution Centennial Scholar, discussed economic trends shaping downtown, also exploring issues around transportation infrastructure and the increasingly pressing issue of housing affordability.

Activity in Downtown Seattle’s twelve neighborhoods—which include not only the retail core, but also Uptown, South Lake Union, Belltown, Denny Triangle, Capitol Hill and Pioneer Square, among others—is on an upward trajectory. Downtown, home to 281,000 jobs and more than 70,000 residents, currently accounts for 45 percent of Seattle’s overall economic activity despite occupying less than 5 percent of the city’s land, according to DSA’s 2018 Economic Report.

Private investment in Downtown Seattle is one factor contributing significantly to the sustained period of growth. In 2017, permits were issued for $1.9 billion in private investments downtown, a figure that accounted for 52 percent of Seattle’s construction value. Last year also saw the completion of 3.6 million square feet of office space, nearly 5,725 residential units and 637 hotel rooms, with more on the way: over the next two years, downtown will see the completion of approximately 8,600 residential units, 6.3 million square feet of commercial space and almost 2,400 hotel rooms.

Looking ahead, there are also a number of redevelopment projects in the pipeline, including the $688 million redevelopment of Seattle’s waterfront, slated for completion in 2024; the $30 million Pike/Pine Renaissance project, which is set to transform and improve the active downtown corridor starting in 2020; and the $1.7 billion addition to the Washington State Convention Center, which is set for completion in 2021.

The city has also made significant strides in its attempts to improve its regional transportation network. Over the last four years, Seattle and regional voters committed nearly $60 billion toward improving transportation infrastructure, and in 2016, transit use in the Seattle region climbed 4.1 percent. The annual ridership on the light rail climbed from roughly 11.5 million to 19.1 million from 2015 to 2016, and the West Seattle and Ballard Light Rail expansion projects, totaling $7 million and slated for completion in 2030 and 2035, respectively, look set to continue this trend.

The expansion of the city’s transportation infrastructure is an indicator of more promising widespread growth occurring city-wide, according to Katz. “When cities grow, the way [Seattle] is growing, catalyzed by transit and enormous growth in the core, that’s what sustainable development is about.”

However, if at the local level Seattle does not adjust its mentality around development and spending, it might get left behind, thinks Katz. “I don’t think Seattle has figured out a way to aggregate and harness its wealth from the private and civic sectors…there is unbelievable wealth here…but we cannot rely on our national government,” he said. “You have to be intentional going forward to prioritize approaches to challenges,” he added.

And in spite of all of the activity occurring, the issues facing Seattle as a city today are just as pressing as ever. Challenges around transportation and housing affordability are heightening as a result of increased demand to live in downtown, according to Scholes. “There are challenges from all this growth and success in a short period of time, [especially] a need for transportation infrastructure,” he said. “Increasingly, the welcome mats to our cities are narrow and only available to those who can afford the high costs of housing. In the long-term, this is a major threat.”

Positive strides made in terms of transportation infrastructure—namely the $7 million Light Rail expansion—will mean little if Seattle does not tackle the mounting affordable housing crisis, thinks Katz. “This is just half of the equation…we won’t realize the return on investment on this if we don’t lift the housing constraints and limits throughout Seattle, especially around the Light Rail stations,” he said. According to Katz, the current Link light rail corridor, which stretches from the University of Washington to south of SeaTac Airport, should have been rezoned before transit went in. “You did lose a bit of time here…zoning should have happened prior to the transit investments.”

Scholes voiced his approval of the city’s Mandatory Housing Affordability (MHA) plan, a policy that ensures that growth brings affordability. Under the plan, new developments throughout Seattle neighborhoods, which are being up-zoned, must either include affordable homes or contribute to a fund for affordable housing.

However, although MHA goes some way to addressing the issue of affordable housing, there is still work that needs to be done at the local level. “MHA was one of 65 different recommendations in the HALA plan. We achieved some of those…but there are dozens more that need to be implemented,” he said.

Additionally, more infrastructural and financial support is needed from the city to make MHA a sustainable model, according to Scholes. “We need support from city legislature…and a [housing] gap fund from the private sector or philanthropy to cover the difference in the loss of value…it’s not that there’s a lack of funding for capital here” he added.

The issues plaguing the city are not due to a lack of resources, but rather a lack of organization at the local level, according to Katz. “The real questions is whether we’re going to create new multi-sectoral initiatives around housing, homelessness, early childhood and talent retention…[to see what] emerges here as the priority. Seattle doesn’t lack for talent here in terms of leadership,” he said.

Moving forward, the city and its legislative bodies will need to be direct and resolute in its approach to the issue of housing affordability. “You need a lot more intentionality behind [creating] affordable housing…most of the task forces in the city have no force…they put together policy ideas, but [these] are never implemented,” Katz said.

Ultimately, the infrastructure in place will mean little if the city cannot figure out how to leverage its wealth, according to Katz. “It’s a paradigmatic cultural shift that’s underway. The wealth in Seattle needs to be harnessed… the culture of collaboration that is backed by capital doesn’t quite exist here [yet] in the same way that it exists in other parts of the U.S.”

And even though 2018 promises to be a year of sustained economic and commercial development in relation to years passed, time is increasingly of the essence. “We’re at a point in time where we actually need to get stuff done… given the nature and scale of the challenges that we face, there needs to be quicker action…the question is whether the city remains complacent about it,” Katz said.