Average Seattle worker can't afford to live here

Noam Gundle's income as a science teacher at Ballard High School is enough to buy less than half a typical house or three-quarters of a condo, based on last year's sales prices.

But he earns too much money to qualify for programs that help low-income residents buy homes.

"I will never be able to buy a home in the city of Seattle unless things change," said Gundle, 32, who rents, with roommates.

Many agree that the time has come to do something about the fact those with decent Seattle jobs can't afford homes here. But proposed solutions vary, and some already are criticizing ones the city plans to release by midyear.

Last year, the typical single person in Seattle earned enough to buy a home for just under $200,000 while the typical family of four had enough to pay just over $280,000, according to the U.S. Department of Housing and Urban Development. The median prices were about $450,000 for a house and $290,000 for a condo.

Typical families can afford apartments, but the rent for the average one-bedroom apartment in King County rose 8.5 percent in the past year as vacancies fell 17 percent -- down to 3.9 percent, according to Dupre + Scott Apartment Advisors. Hal Ferris, a partner in developer Lorig Associates, said increasing construction prices mean living in a new development will cost more than what HUD assumes typical families can pay.

And many median-income workers choose to buy and commute rather than rent.

"They can buy somewhere, but that somewhere isn't in the city of Seattle," said Adrienne Quinn, director of the Seattle Office of Housing.

Just 49 percent of people who work in Seattle live in the city. The percentage is highest among those with the lowest incomes, who qualify for housing help and are unlikely to afford to buy in or outside the city.

No middle ground

The recent attention to work-force housing is obvious: government reports, a speaker series hosted by Seattle and the Urban Land Institute and ads by the Seattle-King County Association of Realtors.

Seattle should see some benefit from the $10 million Atlanta developer J. Ronald Terwilliger recently gave to the Urban Land Institute and Enterprise Community Partners to promote work-force housing.

Cities and housing agencies traditionally have focused on those with lower incomes, said David Bley, Enterprise's vice president of strategic programs. But "all of a sudden there's tremendous need among more moderate-income people who are struggling to stay in cities like Seattle."

The city has various programs to help people earning up to 80 percent of median income. But the state constitution bars it from giving subsidies or even loans to those making more.

Seattle's downtown residential bonus allows condo developers to erect bigger, taller buildings if they make 11 percent of the extra space affordable to buyers making less than or up to the median income.

The only city program for those making between 80 percent and 100 percent of the median income is the Downtown Residential Bonus program, but they can only benefit if condominium developers who build the affordable units on-site rather than pay into a city fund.

City officials continue to look into expanding incentives, such as the height bonus, and including more-expensive units in a program that offers a tax exemption for apartments affordable to low-income residents. Ferris also said the city could lower development fees for projects providing affordable housing.

In March, the Planning Commission recommended more extreme steps, including requiring developers to build a percentage of affordable housing in certain areas, allowing backyard apartments and cottage houses in single-family zones, expanding multifamily zoning, and adding minimum-density requirements.

"They're definitely pushing the envelope," Quinn said, adding the staff proposals won't go that far.

Tony To, a Seattle Planning Commission member and director of the housing agency HomeSight, said developers could take some steps without incentives. He lauded Belltown's moda condos, which got prices as low as $149,950 by cutting unit size to as little as 296 square feet. HomeSight cut prices for non-subsidized homes in Noji Gardens, in South Seattle, by using modular construction and limiting space and extras.

The Seattle Housing Authority used federal money to redevelop New Holly and Rainier Vista, in South Seattle, and High Point, in West Seattle, from public housing to communities that mix subsidized homes and housing for a variety of incomes. It also has bought about 800 market apartments in recent years to keep rents down and prevent condo conversion.

"We don't want Seattle to become a city where you have to be really poor or really affluent to live," Housing Authority spokeswoman Virginia Felton said.

This brings mixed feelings among those focusing on lower incomes.

John Fox, coordinator of the Seattle Displacement Coalition, agreed that people earning the median income cannot afford to buy houses, but said they can rent and insisted efforts to help them "cannot be at the expense of the needs of these lower-income groups, where there's clearly a shortfall of any option."

But Homestead Community Land Trust Executive Director Sheldon Cooper, whose housing program serves those making up to 80 percent of median income, said he hoped the new push would build more resources to help everyone.

Hour commute is 'norm'

Employers agree that housing costs are becoming an issue when hiring. Companies have a harder time attracting and keeping workers and may even move where employees can afford homes. "Jobs follow workers," John McIlwain, a senior Urban Land Institute fellow, warned recently.

And Felton said she just lost an employee who lives in Everett. "She just can't handle the commute anymore."

Housing costs have forced Swedish Medical Center to beef up its offers; more than 55 percent of Swedish employees now live outside of the city.

"It's becoming more the norm to commute for an hour," said Meg Steele, the hospital's recruitment director.

But Steele said candidates still view Seattle as a good place to live, and costs are lower than in cities such as San Francisco and Washington, D.C.

Just 22 percent of Seattle Public Schools employees live outside of the city. Seattle Education Association President Wendy Kimball said some teachers who didn't buy years ago do commute, while many younger teachers rent, then find jobs in other districts, once they decide to settle down.

Kimball moved to Edmonds in 1986 because that's where she could get a home that accommodated her family.

"Now that we're empty nesters, we're looking at moving back into the city," she said. "We're just stunned at the cost."

Gundle wants to continue living and teaching in the city but understands that conflicts with his desire to build equity and eventually start a family.

The city is looking into tax breaks to encourage employers to provide housing subsidies to workers living in the city. Quinn noted that Facebook, in Palo Alto, Calif., pays an extra $600 to live within a mile of the office.

Officials are not asking employers to be that generous, she said. "But unless we start doing something right now, they might be in a position of having to do more and more like that."

Solutions draw fire

Many area buyers, particularly with children, have not accepted apartments and condos, and developers are building few family-friendly units.

Some groups have called for allowing more single-family solutions such as backyard apartments and small-lot cottages. But city officials drew heat for allowing backyard homes in southeast Seattle last year and are not considering more in single-family neighborhoods, which make up 65 percent of the city.

Quinn said the city could promote family apartments and condos through incentives, and attitudes could change as commutes get longer and more people move in from places where apartment and condo living is more common. To thinks marketing creates the expectation of a house and could change it by featuring more condos.

Officials from the Seattle-King County Association of Realtors oppose new developer fees, requirements or incentives, saying these benefit a few while driving up prices for others.

The association, focusing on overall supply, pushes requiring counties to more frequently assess how supply is keeping up with growth, allowing potential homes lost in areas such as shoreline buffers to go elsewhere on development sites, increasing density in multifamily areas, particularly near existing neighborhoods and allowing backyard homes citywide.

Sam Pace, a housing specialist for the Seattle-King County Association of Realtors, said more options near neighborhoods would spur empty nesters to downsize, freeing houses for younger families.

But Quinn said the city has a lot of unused capacity in places where the market doesn't support prices developers want to charge.

"Who's building condos in southeast Seattle right now?" she asked. "No one."

Developer requirements effective in other cities

San Francisco is one notable example of a city taking steps to get housing affordable to typical workers.

The city requires many new developments to make 15 percent of their homes affordable to first-time buyers earning up to the median income. Developers can build the homes elsewhere within a mile of the project, but that boosts the requirement to 20 percent, or they can pay a fee based on the cost of new units. The city also offers no-interest loans on townhouses for first-time buyers making up to 120 percent of median income.

Here are some other examples of work-force housing efforts, from a 2006 report by the Urban Land Institute, Fannie Mae Foundation and Homes for Working Families.

• The Santa Clara, Calif., Unified School District erected a 40-unit apartment complex where new employees can live for up to five years.

• Austin, Texas, expedites review of developments that, among other things, makes a share of units affordable to people earning up to 80 percent of median income and waives some or all of the development fees, depending on what share of the homes are affordable.

• Massachusetts has a streamlined development process for projects that include homes affordable to buyers up to 80 percent of median income in towns where less than 10 percent of the housing stock is affordable.

• Under Denver's plan for the former Stapleton International Airport, 10 percent of the roughly 8,000 for-sale homes that will be built there must be affordable to people earning up to 80 percent of median family income. Twenty percent of the estimated 4,000 rentals must be affordable to people earning up to 60 percent of median income. The homes must be mixed with market units and include larger units.

• California State University-Channel Islands, in Camarillo, Calif., used surplus land for 316 market-rate rentals and 98 houses sold at about 65 percent of market value, with priority to faculty and staff and restrictions on resale prices.

• The Chicago Housing Authority and city of Chicago require 20 percent of new homes on public land in the redeveloped Cabrini-Green Homes site and surrounding Near North neighborhood to be affordable to buyers up to 120 percent of median income and renters up to 80 percent of median income. An additional 30 percent of the homes remain public housing for renters up to 80 percent of median.