(AP Photo/Ted S. Warren)
Seattle’s elected officials want developers to build more family-sized apartments — the two- and three-bedroom units that could offer parents and children an alternative to expensive single-family home rentals. In recent years, less than 20 percent of new apartment construction has been multi-bedroom and the majority of that has been two-bedroom. The city has proposed a new policy that would require residential developers in some low-rise zones to build a two-bedroom or larger unit for every four studios or one-bedrooms they build.
The proposed regulation is part of a broad package of upzones and land-use tweaks across the city. It is the latest step in Seattle’s Housing Affordability and Livability Agenda (HALA). Over the last few years, the city has implemented several neighborhood upzones. With the upzones came a requirement that developers provide a certain number of income-restricted units in their building or pay an in-lieu fee to the city housing fund.
Earlier this month, the mayor and City Council unveiled the final environmental impact statement for the citywide version of those neighborhood upzones. It increases allowed density in neighborhood centers and along transit corridors in much of the city. The plan also makes some small changes to the land-use code. It creates a new zone called Residential Small Lot that will replace about 6 percent of existing single-family zones. The new zone permits a modest increase in density by allowing up to three units per lot instead of one. The citywide plan also expands the boundaries of neighborhood “urban villages.”
If the package passes, Lowrise 1 (LR1) zoning will no longer have a density limit and developers will be required to build family-sized units. LR1 allows for “gentle density” such as cottages, duplexes, rowhouses and small apartment buildings. According to Office of Planning and Community Development (OPCD) spokesman Jason Kelly, the current density limits in LR1 make it economically unviable to build apartments. The change should make apartment construction financially feasible. Because there are so few apartments in LR1 currently, OPCD heard concerns from residents that buildings full of studios would not be a good fit.
The requirement that for every four studios or one-bedroom units, developers must build a unit with two or more bedrooms is, in part, a concession to existing residents. It will likely have a modest impact on the lack of family-sized apartments.
“Creating a range of housing options from that two-bedroom unit that would function to serve a very small household to a five- or six-bedroom home that maybe serves a multigenerational household continues to be a challenge. We need more options to meet the needs across that spectrum,” says Spencer Williams, a legislative assistant to Councilmember Rob Johnson.
It’s true that the market is not building many family-sized apartments. Curbed Seattle reports that between 2012 and mid-2017, 52 percent of the new apartments constructed have been one-bedrooms and 29 percent have been studios. Only 17.5 percent were two-bedrooms and a mere 1.3 percent were three-bedrooms.
With the median home price now north of $700,000 in Seattle, and multi-bedroom houses often renting for well over $2,000 a month, there are not many options for low-income families in the city. A 2014 report on family-sized housing by the Seattle Planning Commission found that as of 2009, just 1 percent of market-rate, three-bedroom apartments in Seattle were affordable to low-income families. That percentage has almost certainly dropped in the intervening years as the market’s boomed.
Some housing experts wonder if there really is an unmet demand for family-sized apartments, however.
“It’s fair to ask, if family-sized units were so in-demand, wouldn’t developers be building more of them?” says Robert Hickey, a D.C.-based housing policy consultant. He concedes, however that, “there’s a difference between what would deliver the greatest profit, and what would help meet the greatest need for the city as a whole.”
As is often the case with this sort of thing, some developers see the proposed regulation as yet another burden that will ultimately stymie apartment construction.
David Neiman, a Seattle developer who sat on the HALA committee, does not mince words. “It’s a terrible idea,” he says. “The idea stems from a general cultural hostility towards microhousing development, data-free concerns that we are not building enough family-sized housing, and a misguided notion that compelling apartment developers to build project types that run counter to the demand that they see in the marketplace is a wise policy decision.”
Neiman thinks the regulation would lead to fewer apartment buildings built in LR1. Those that do get built would skirt the regulation by building 401-square-foot or larger units (just above the regulations 400 square foot threshold, therefore not having to build the family-sized units.
He says the city should instead focus on “boldly expanding” the stock of townhouses, backyard cottages, duplexes and triplexes. The city is currently considering looser regulations on basement apartments and backyard cottages.
Kelly says they expect developers to take advantage of the LR1 change. “By removing the density limit, we’re actually making apartments economically viable in LR1, whereas today we don’t see those being built.”
Seattle’s not alone in its lack of family-sized apartment construction, though it builds far fewer two-bedroom apartments than most. CoStar, a real estate data company, looked at the types of apartments being built in 16 major American cities since 2012. In all 16, three-bedroom construction is in the single digit percentages. Seattle ranks the lowest. It also does the worst on two-bedrooms, with two-bedrooms accounting for 20 to 40 percent of new apartment construction in most other cities.
A few cities have experimented with policy tools to incentivize or require family-sized apartments. In fall 2015, Emeryville, California, passed a regulation requiring that in new apartment buildings of 10 units or more, at least 15 percent of units must be three-bedroom and 50 percent must be two-bedroom. The Emeryville Planning Division did not respond to a request for data on how the policy has performed over the last two years.
Other cities have implemented small-scale regulations. In San Francisco, the East SoMa neighborhood plan called for 25-40 percent of units in new multi-family housing be two-bedroom or more. In Washington, D.C., a two-block redevelopment plan offered developers a density bonus for building three-bedroom units. Portland’s inclusionary zoning program has incentives to encourage construction of units with two or more bedrooms.
Implementation of the citywide upzones and new LR1 regulation are a ways off still. The city will spend months doing outreach before the City Council takes up the issue. The council is expected to vote sometime summer 2018.