Affordable Housing Solutions from Around the Country

December 18, 2018
Authors: Jennifer Shuch, HFO Research Analyst
Publishers: The Northwest Apartment Investor Newsletter

 Despite recent news of a slowdown in rent growth in Portland, residents throughout the metro area continue to struggle to find housing they can afford. But these issues are not unique to this region – around the country, some cities are working on ways to increase the supply of affordable units to prevent displacement and increased rates of homelessness.

TO THE NORTH: The Seattle City Council Retreats
Earlier this year, Seattle passed a tax on large employers in the city in hopes of raising $47 million in funding for affordable housing and homelessness services. The tax would have charged businesses with annual earnings above $20 million a flat $275 per worker. Amazon fought back, calling the tax an attack on job creation and immediately halted construction of a new office building. A week later, the Seattle City Council rescinded the tax.

TO THE SOUTH: Los Angeles' Development Incentives
The city of Los Angeles is starting to see some success with its Transit Oriented Communities (TOC) program. TOC went into effect in the Fall of 2017, and by July 2018 over 1,000 affordable units were already in the pipeline. The program applies to projects within a half mile of major transit stops and requires developers set aside 8% of total units as affordable housing. In exchange, projects are eligible for density and height bonuses, as well as expedited project review. Meanwhile, California SB 827 which would have forced cities to allow taller, denser development around public transit was defeated 9-4 in April. Housing advocates were successful in getting Proposition 10 on California’s November ballot—the initiative would have ended the state’s ban on rent control but
was resoundly defeated.

TO THE EAST: Denver's Successes
In Denver, two recent proposals demonstrated the city’s ability to think outside the box. In August, Mayor Michael Hancock successfully argued for an ordinance to raise the tax on marijuana from 3.5% to 5.5% to collect $15 million annually for the city’s Affordable Housing Fund. Hancock said the funding would help build or preserve about 6,000 units per year. The city also launched a pilot program called LIVE Denver, turning 400 vacant luxury units in high opportunity neighborhoods into workforce housing. The City Council approved $1.2 million in funding for the program aimed at keeping rents below 35% of income. Funds will subsidize residents working full time and earning 40-80% of area median income.

ACROSS THE COUNTRY: Missing Middle Initiatives
Some cities are also focusing on increasing density to allow for so-called “missing middle” housing in single-family neighborhoods. Cities including Washington, D.C., Des Moines, Atlanta, and Nashville are all working on plans to increase neighborhood density to keep families in the city. Spokane mayoral candidate Ben Stuckart is even running in 2019 on a platform of eliminating parking requirements and encouraging redevelopment of surface parking lots. In Portland, revisions to the Residential Infill Plan have moved the vote to 2019. Portland’s plan would allow duplexes, triplexes, and fourplexes in single-family neighborhoods.

As the City of Portland weighs in on residential infill and re-evaluates its inclusionary zoning requirements, its leaders might benefit from looking to successes and failures in other cities.