Sage Goes Soft Over New Developer Tax Breaks

Earlier this month, the Seattle City Council voted to dramatically increase the amount of rent developers could charge for apartments and still receive the Multifamily Tax Exemption--a tool used by the city to encourage the building of "affordable units."

Most low-income housing advocates actively fought the change. But Puget Sound Sage couldn't seem to make up its mind. Shortly before the City Council vote, the group, comprising labor, church, and community organizations, sent its members an e-mail encouraging them to "take action" and turn out at City Hall in opposition to the plan. Only a day later, Sage sent a new note, saying its board "had taken no formal position" on the proposal.

"We are no longer asking you to attend the City Council hearing," it said. "We apologize for any confusion our previous e-mail created."

The succession of e-mails, and Sage's subsequent public silence on the issue, left people scratching their heads—particularly since in the past the organization hasn't been afraid to stand up to City Hall.

"It's unfortunate that Sage backed away," says the group's former director Alice Woldt. "This is kind of a traditional community issue when you're fighting for low-income housing."

Under the new plan, developers get a property-tax break if they build apartments for people earning between 80 and 90 percent of the median income. (In Seattle, that's $45,600 to $51,300 for one person.) The tax break had previously only been available to developers building units for people earning between 60 and 70 percent of the median—or $34,200 to $39,900 for one person. For example, a developer can now get the subsidy for the construction of a building that includes studio apartments renting for between $1,140 and $1,283, compared to $855 to $998 under the old policy.

Most affordable-housing advocates say the city should've left the credit alone.

"We're completely disappointed in the lack of insight on the council and on the real needs of people in Seattle," says Michele Thomas, a community organizer for the Tenants Union of Washington State. "People are being gentrified out of the city, and the people most at risk are the ones in the lower income brackets."

Another argument against the change is that the city is giving away money for something developers would be building anyway. "This is one of the more generous incentives I've seen the city give away in a long time," says Nick Licata, the only council member to vote against the plan.

Sage also said as much in its initial e-mail trying to galvanize opposition: "Average rents throughout the city are affordable to families making 70 to 80 percent of median income. The proposal would effectively subsidize developers to build housing at market rents with our tax dollars."

Founded as the Seattle Alliance for Good Jobs and Housing for Everyone in 2001 (or SAGE), the group changed its name to Puget Sound Sage with the hiring of a new board and an executive and research director last year. Current board members include leaders from the Minority Executive Directors Coalition, the Low Income Housing Institute, the Church Council of Greater Seattle, and unions like the United Food and Commercial Workers Local 21. Sage's diverse groups have historically come together to lobby for public benefits when the city makes policy decisions that help private entities.

The group helped persuade the City Council last year to protect certain land zoned for industrial purposes from being rezoned for commercial use. And in 2001, Sage convinced the city to increase the fee it charges downtown office developers from $13 per square foot to $22.50 per square foot, money that goes into a low-income housing fund.

Arguably Sage's greatest legislative victory was winning more money for affordable housing in exchange for allowing developers to construct taller buildings downtown as part of a massive rezoning in 2005 and 2006.

Sage partnered with other affordable-housing advocates like Real Change to lobby the city to charge developers $19 for each square foot built above the old height limits (almost double the dollar amount initially proposed by the mayor), a fee used to pay for things like low-income housing and green materials. "Sage certainly had an important role in that lobbying effort," remembers former council member Peter Steinbrueck, who also fought for the higher fee.

Today, Sage is managing a massive effort to draw up a "community benefits agreement" for the Dearborn project, a plan to build 650,000 square feet of retail (including a Target), 550 housing units, and 2,200 parking spaces on the site in the International District currently occupied by Goodwill. Developer TRF Pacific needs the city to change the zoning and to sell portions of streets and sidewalks to make the project possible. In exchange, Sage wants the city to require TRF Pacific to create low-income housing and quality retail and construction jobs, and to preserve the character of the surrounding neighborhoods through careful planning and design of the development.

Some wonder if the Dearborn effort got in the way of the group's opposition to the tax credit.

"I suspect that because they're working also on the Dearborn project, that there may have been some interplay there," says Licata. "They're juggling different negotiations and working on two projects where they're negotiating with the same person"—that person being Mayor Greg Nickels.