MHA Rezone Passes in Seattle

[Aaron Nelson]

Game changing rezone in Seattle, WA, recently passed! What do you think BP? How does this impact your investment strategy? 

 http://www.seattle.gov/hala/about/mandatory-housing-affordability-(mha)

[Brian Hughes]

IIRC The fee is between $5 and $30-something per sf for development, OR including someplace between 5% and 11% of units as permanently rent controlled/affordable. Fee must be paid whether your are building an ADU or a 100 unit tower. For those choosing to incorporate the affordable units, It also means paying the city annual fees to monitor your rent controlled units for complaince, and a bunch of other rules designed to force you to spend/maintain equally on rent controlled and market units (If you put marble countertops in the market units they want them in the rent controlled units too). The exchange is taller building heights in upzoned areas, to theoretically allow a similar overall number of market units.

Supposedly most developers are for this, as i was touted as a 'grand bargain' between the city, developers, and low income housing advocates. Missing from that are middle income people and smaller investors. For example, anybody building townhouses to replace older properties in L2 zoned city lots are never going to choose to include a below market unit (typical project replace an older SFH/Duplex with 4 or 5 townhouses) since they would be far overperforming the ratio and losing money in the process.

Since I own a now-upzoned-urban-village property the question for me is whether the upzone changes the hold/sell equation.  Short term probably not as its a good property,  long term it may change the ultimate fate of the building.

All the local neighborhood forums like nextdoor people are discussing this vigorously right now...