Downtown Seattle poised for even bigger residential and hotel boom

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This piece was originally published by Curbed Seattle on Feb. 14, 2018.

Downtown Seattle is experiencing explosive growth—but not all Seattleites have access to opportunity


2017 was a big year for construction, with more than 5,700 homes, 3.6 million square feet of office space, and more than 600 hotel rooms coming online in the city center alone. But the future outlook is even bigger.

Downtown neighborhood association Downtown Seattle Association (DSA) released its annual State of Downtown report this morning, which explored the trajectory of the city center’s growth over the past eight years—and forecasted even more explosive growth in the future.

DSA’s work covers not just the downtown retail core and waterfront, but some surrounding core neighborhoods: Uptown, South Lake Union, Denny Triangle, First Hill, parts of Capitol Hill, the International District, Pioneer Square, and Belltown.

Out of those neighborhoods, South Lake Union had the biggest year for new homes and homes-in-progress, with 5,473 units finished or in active construction in 2017. Next came First Hill, with 2,503 new homes, and Denny Triangle, with 2,445.

While 5,703 units were completed in the area in 2017, the real boom year to watch is 2020. If all permitted and planned projects move forward, those neighborhoods combined could have nearly 17,500 homes built in that year alone.

The outlook for hotel rooms is similar. 637 rooms were added in 2017, and nearly 2,200 are planned for 2018—largely because of the Hyatt Regency under construction, which will be the largest hotel in Seattle when it’s done. In 2020, though, that number skyrockets to 2,923.

DSA president Jon Scholes did acknowledge while presenting the report on Wednesday morning that despite the boom, many are being left behind.

“The welcome mat to our city is narrow,” said Scholes, limited to those “who can afford the high cost of housing.”

In previous Seattle eras, said Scholes, “rich, poor, and in-between” contributed to downtown. And while the expansion of the region’s light rail “will allow more people to have access to the jobs and opportunity” downtown, said Scholes, Seattle needs even more homes to address affordability problems—or, as he puts it, “lift the limits on housing supply.”

Scholes voiced support for the city’s Mandatory Housing Affordability (MHA) plan, which trades extra building height for either physical affordable housing units or payment into an affordable housing fund. The plan is currently undergoing a public comment period while under a hearing examiner appeal.

At a media availability after the presentation, Scholes acknowledged that MHA isn’t the only way to work toward housing affordability. “But if we’re going to spend $7 billion on one of the most expensive rail systems in the country… we will not realize the return on that investment if we’re not building housing around it. We need to do that, and we need to get ahead of it and not chase it.”

Scholes argued the Link light rail corridor, which currently stretches from the University of Washington down through the Rainier Valley to just south of Seatac Airport, should have been rezoned before transit went in. “Now we’re trying to catch up.”

Brookings Institution centennial scholar and former Housing and Urban Development chief of staff Bruce Katz, appearing at the event with Scholes, agreed. “You did lose a bit of time here,” he said.

Much of the corridor that the light rail line serves runs through an area acknowledged by the city as having a high risk of displacement. Still, said Katz, “going up on height is critical, you have to go up on height… think you can do this in a very smart and sensitive way.” He said other regions have used “policy techniques” successfully to address displacement, but didn’t provide specifics.

Aside from MHA, Scholes said he’d like to see “a property tax rebate to existing landlords of existing properties if in exchange they keep some of those units restricted to a certain income” to “take some of the older supply that’s not at that market rent” and “bridge some of that gap.”

He said this would be a “great opportunity to set aside thousands of [affordable] units,” but would need action in the state legislature to come to fruition.

Katz said that said that to address many of Seattle’s problems, we “need private capital to come in and fill what are growing gaps, because the federal government and states are backing away.” He other cities are leveraging private capital toward large-scale neighborhood regeneration, giving Cincinnati as a notable example.

“You have the wealth. You have enough crises to get you motivated,” explained Katz. “But the cultural of collaboration that is backed by capital doesn’t quite exist here in the same way it exists in other parts of the United States. I do think it would be really important just to choose one thing and say, okay, we’re going to bring together leaders and institutions from multiple sectors, put real money on the table, then play it out for two years.”

When asked about Seattle’s plethora of public-private task forces, Katz said that “most of those task forces have no force… in the end a lot of people come together and they put together policy ideas and then those ideas never get executed or implemented. [Other groups are] meeting to decide—they’re not meeting to discuss.”

“You are much wealthier than these places,” said Katz. “It’s a cultural difference.”

Katz said Seattle has to get out of its “consensus-driven” comfort zone—which, to be fair, is somewhat codified for certain projects and policies through the Washington State Environmental Policy Act, which leaves governmental action open to environmental appeals. It’s the process that brought both the current MHA appeal and a delay to the city’s plan to allow more accessory dwelling units.

Still, said Katz, the Northwest is in a “quiet crisis”: “The question is whether cities can remain complacent about it.”