RENEWAL OF THE MULTIFAMILY PROPERTY TAX ABATEMENT PROGRAM
Testimony Before the Seattle City Council
Housing, Human Services and Community Development Committee
Friday, February 20, 2004, 2:00 p.m.
My name is Susan Cary, Director of Property Development for the Capitol Hill Housing Improvement Program. We support the adoption of a revised Multifamily Property Tax Abatement Program. In particular, we urge your consideration of the position presented by the Housing Development Consortium, including an affordable rent requirement and their suggestion that 20% of the units be affordable to households at 60% of median income. This keeps it simple and consistent with Low Income Housing Tax Credits.
We specifically support the renewal of the property tax exemption for Capitol Hill. While CHHIP is unlikely to directly benefit from the proposed program (our buildings are already eligible for an exemption under separate legislation if we meet certain affordability criteria), we believe it will provide an additional incentive for private investors, particularly important for the Broadway area, where this program could be a modest but positive push in a private developerís decision making.
We note that the value of this program is as a tool to create the opportunity for affordability. If no one uses the program, there is no ìcost.î Having it available, however, means that a developer may be able to include affordable units in a project. The key is having the right balance of rent levels and percentage of units required equal to the benefit the program conveys. Because rent levels affordable to households at 60% are not market rate on Capitol Hill, utilization of this program would produce something that would likely not otherwise occur. (Parenthetically it should be noted that average rents on Capitol Hill can be very misleading. Rents in new developments are typically 40-50% higher than those shown in materials provided by staff.) Further, by tying an occupancy restriction to the affordable units means that a household that really needs a unit at this price level would actually live in it.
Finally, we feel compelled to comment on the exclusion of the
Miller Park neighborhood from the proposed ordinance. We understand
the criteria that led to its exclusion. However, it is important
to note the phenomenal development this area is already seeing,
and is likely to see in the next 2 ñ 5 years. Several
hundred units are either on their way up out of the ground, or
in advanced planning, which will tend to be at market rate and
expensive. This program could be a tool to moderate that trend.
Further, this is a neighborhood that affirmatively supports affordable
housing. It has been a strong supporter of CHHIP and our projects,
it endorsed the housing levy, and it is asking for this program.
It is unfortunate when a neighborhoodís progressive effort
to embrace an important City goal is not supported