Good morning, everyone.
Welcome to the Sustainability and Transportation Committee.
Today is October 12, 2018. It's 9.30 a.m.
My name is Mike O'Brien, chair of this committee, joined by Councilmember Rob Johnson.
Thank you for being here.
Today is a special meeting.
We each have a single agenda item, but it's going to be an in-depth conversation about the Racial Equity Toolkit on policies for accessory dwelling units.
And we have a hard stop time at 10.30, so we're going to jump in and get going.
We have public comment.
It's going to be one minute each.
I have two people signed up.
Alex Zimmerman, you're first, followed by Marguerite Richard.
Okay, Mr. Zimmerman, you don't want to go.
Mr. Richard, you can go.
I won't go for one minute.
I won't go for one minute.
I won't go for one minute.
I won't go for one minute.
Okay.
Okay.
I won't go for one minute.
I won't go for one minute.
I won't go for one minute.
I won't go for one minute.
I can go forever for 10 seconds because you are Nazi pig.
Why one minute?
There's nobody here.
Only me, Alexander man.
Oh, oh.
Oh, barrel two, two people in empty room for 30 second.
Why we have a 30 second?
Why we have one minute?
And when you Nazi pig start doing this like this, they hire my Nazi pig.
They hire my Nazi pig.
They hire my Nazi pig.
They hire my Nazi pig.
Is it enough for 30 second?
No?
Guys, where do we stop in acting like a degenerate idiot, like a pure cretin?
Where this will be?
We have right to speak about Russia's equity for one minute or 30 seconds.
And how about meeting tomorrow?
Why you close this for people, Consul Brian?
You are real Nazi pig.
Thank you very much.
Sieg Heil, my Führer.
I'm concerned about having a one minute too and we got all these folk oh no we don't have all these folk up in here so that's That's a concern that I have, and then also, you're talking about a race toolkit.
I don't even like that.
Did you hear what Kanye West said with Trump?
He was saying that, I don't think the stuff that they're doing in Chicago is gonna work, and I really know that the stuff that you're trying to do here is not gonna work.
You don't even have a panel of people to discuss it that look like me.
You're disgusting.
Everything about this city right now is disgusting.
You need to take that off of your your screen and tell people that you're racist.
Whoever raised you was racist.
City Hall is racist.
And all these other people are thinking they're gonna do something to help us is racist too.
Huh?
This whole place is dismissed.
All right, public comment is now over.
Council Member Herbold, thank you for joining us.
And we're gonna jump into agenda item number one.
I'll read it in for the record.
Racial Equity Toolkit on Policies for Accessory Dwelling Units.
Why don't we start with a round of introductions.
I'll say a couple words and then we'll jump in.
I'm Susie Levy, Council Member O'Brien's office.
Hi, I'm Jennifer Labreck.
I'm the Home Ownership Program Manager at the Office of Housing.
I'm Alicia Delasto.
I work in Council Member O'Brien's office.
Allie Panucci, Council of Central Staff.
Colleagues, you're aware, I'm sure, of a number of years of work on backyard cottages and mother-in-law units, ADUs and DADUs.
And so, as you know, about a week ago, the final environmental impact statement was released.
And we, for the last number of months, have conducted a racial equity toolkit looking at the racial implications of the policy around backyard cottages and other laws, so I'll turn it over and I'll say thank you Councilmember Scata for joining us.
Thank you all for being here this morning.
We'll just walk through briefly the agenda for this morning.
We will discuss why we conducted a racial equity toolkit, walk you through our racial equity process, share our key takeaways and next steps, and hopefully have some time for questions at the end.
We do want to start by acknowledging that we are a group of primarily white folks who had worked on this racial equity toolkit, all the more value and importance in bringing a racial equity analysis to our work.
So to start, what is a racial equity toolkit?
The vision of the Seattle Race and Social Justice Initiative is to eliminate racial inequity in our community.
To do this requires ending individual racism, institutional racism, and structural racism.
The racial equity toolkit lays out a process and a set of questions to guide the development, implementation, and evaluation of policies, initiatives, programs, and budget issues to address the impacts on racial equity.
The most effective racial equity toolkits are done early in the process to help gain insight as we develop a program or policy.
What is an accessory dwelling unit?
Just for those who are watching from home, we just want to have some clarity about language.
We often talk about ADUs, accessory dwelling units.
When we're saying that, we are talking about both detached accessory dwelling units, or secondary units located in a separate structure from the principal dwelling.
We often talk about these as backyard cottages, as well as attached accessory dwelling units, or AADUs.
which are secondary units located within or connected to the main house.
And we often call these in-law units.
In this slide, you can see on the top row are DADUs and the bottom row are AADUs.
They're attached.
These are just a few examples.
And then I want to share a bit about Council Member O'Brien's goals and why we are working on different strategies around backyard cottages and in-law units.
First, we want to increase production to create more housing choices in Seattle's single-family zones.
We hear from community members every week who are eager to create additional units on their property, be it to supplement their income through a new rental unit or to house an aging parent or create more flexibility for future uses.
We also want to support lower-income homeowners and homeowners of color with strategies and tools they can use to benefit from backyard cottages and in-law units.
We're exploring programmatic ideas for ways the city can invest to create these opportunities, and we'll share more about that as we walk through this presentation.
And we're also interested in generating rent-restricted backyard cottages and in-law units so that low-income individuals and families can benefit from housing opportunities across the city.
Why conduct a racial equity toolkit for ADUs?
We know that the land use code changes alone won't address existing racial disparities in homeownership and access to financial capital.
Those most able to benefit economically from our proposed land use code changes are likely to be wealthy, primarily white homeowners due to the history of racial segregation and redlining.
In addition to questions around who benefits from expanding ADU production, we also heard concerns that ADUs could increase the risk of displacement due to speculation in single family neighborhoods.
This question was considered in depth in the environmental impact statement on the proposed land use code changes.
The focus of this RET is really to identify opportunities to expand access to ADUs across the city and address racial disparities in who benefits from ADU production.
As the city evaluates policy changes to remove barriers for constructing ADUs, we want to ensure that communities of color across the city benefit from these new opportunities.
Completing a racial equity toolkit also allows us to hear directly from communities of color who are best positioned to help us understand racial equity implications.
Bless you.
So I'm going to walk us through the racial equity toolkit provides basically a set of steps that you go through as you're thinking through the racial equity implications.
And we'll start with the first step in conducting a RET, which is determining what you define as the most important racially equitable outcomes for your communities.
We established three key racial equity community outcomes.
Those are increasing housing choice for people of color, for renters, POC renters across the city in single family zoned areas.
to avoid increasing displacement risk of communities of color, people of color, homeowners, and renters, and to decrease the disparity of who is benefiting economically from our ADU policies.
And step two really asks us to consider who is impacted.
What are the existing racial inequities, and what are the root causes of these inequities?
Before reaching out to community partners and homeowners, we first needed to understand the context for ADUs in single-family areas.
This redlining map is certainly familiar to all of you.
Through practices of denying mortgages based on race and ethnicity, the federal government played a significant role in the legalization and institutionalization of racism and segregation.
For years, these restrictions prevented people of color from buying, improving, and developing property and building wealth.
By limiting access to homeownership, these policies have contributed to growing wealth disparities by race and ethnicity.
I know I was a couple minutes late, so maybe my colleagues have already said this, but thank you so much to you and Council Member O'Brien for doing this.
I think that it is so remarkable that we're bringing this into the conversation.
about the unfairness of housing practices in the past and what this can do to help us increase numbers for people around ownership.
So I just want you to know I really appreciate what you're doing.
Thank you, thanks Council Member Agachar.
So I'm gonna run through some data.
There's a lot of detail here.
You can find more in the racial equity toolkit in front of you as well as a lot of detail in the EIS that was released last week.
But as you can see above, in Seattle, 51% of non-Hispanic white households own their homes, while only 34% of households of color and only 24% of black households own their homes.
For the purpose of considering racial equity outcomes, understanding the racial makeup of homeowners, renters, and cost burden households across the city is important.
Generally, housing found in single-family zones has a pattern of being high cost.
If we look specifically at households who own their single-family homes, the average 42 percent of those households earn more than $120,000 per year.
Only 22 percent of households who own their homes, single-family homes, make less than $50,000 a year.
As you can see above, the median income for Black or African American households in Seattle is $32,000.
Thank you, Mr. Chair.
Susie, thanks again for this work and to the team.
I was just looking forward a few slides and you may have this later on in your presentation, so I apologize if so.
Did your team also do the analysis of what's happened since the recession and the number of communities or the individuals from communities of color who lost their home ownership options and the disproportionate rate of loss of homes compared to white homes?
We we didn't look at that as part of this racial equity toolkit, but it's a good it's definitely a piece of the puzzle I think anecdotally and folks, please correct me if I'm wrong.
It's This is even more important as we talk about how we create opportunities for folks to live in the city and opportunities for people to stay in their homes if they're still homeowners and not get displaced from the city because we know that Since the recession, the number of individuals who lost their home were disproportionately coming from communities of color.
And I think you had a good statistic on it the other day, but I just want to put that in there for the record and maybe we can add a little footnote at some point.
I agree.
Thank you.
Wealth lost during the recession is the accumulation of all the wealth of African American folks since Jim Crow.
Wow.
Could you explain that?
the entire wealth accumulation of African Americans in this country that was gained since the Jim Crow era was lost during the recession.
Okay, so when you, I mean we know what Jim Crow is, but what are the dates that you're focused on there?
Up to 2008. Of the recession, during the recession?
So up until 2008 you're saying that all the wealth that had been accumulated prior to 2008?
So not all the wealth, but the...
The equity in the housing stock owned by the African American community over decades was wiped out in one recession.
I think the point, one of my takeaways from that data point is, again, Here we're talking about how the upside of a policy will skew towards white and wealthier households.
What we saw during the recession is how the downside skewed heavily towards black households because, you know, lots of people lost some equity in the recession, yet it was disproportionately borne by certain communities.
I think that's critical and that we recognize that and also the opportunity that this creates when we think about how we can encourage people to continue to live in the city if they do maintain their homes, having an accessory dwelling unit and being able to have that additional income to make sure that they can stay in place is important, but also the ability to welcome people back to the community that they may have been displaced from because of the recession, a loss of wealth or equity.
And I just think it's an interesting interplay in terms of how we are creating opportunity for people to stay in place and also come back to the city that they may have been displaced from.
And I'll just, because I've been doing some work on this and reading it, I'm going to give a little hint of what's to come.
In a lot of the conversations that the folks had doing this racial equity toolkit, which we're going to get to in a minute, is really understanding directly from those communities how we can make these programs benefit them.
And so that's going to be an exciting conversation we'll be at in a few minutes.
Yeah.
Excellent.
Excellent.
And I also hope that we can get into how this is going to contribute to the well-being of the city as a whole.
Great.
And I think that sometimes there is an assumption that if somebody wins, somebody else has to lose.
And in this particular case, I don't believe that that's the fact.
That's a great point, Council Member Begichon.
I think that's a point that's worth highlighting.
You know, this policy has been driven by trying to address broad city goals about creating more housing opportunities.
And at least for me, looking at that racial equity toolkit, it's not to say should we do this or not do this necessarily, but what are the impacts?
And what we learned is not surprising.
This will benefit wealthier, whiter households.
So how do we make some changes so that the benefits are shared more broadly, not do we do this program or not, because it does have broad goals that we're trying to achieve, and then are there specific things that we can do to tailor it towards certain communities to make sure that they have as much benefit as other people.
And that's going to be tricky, but we'll get to that in a second.
I'll keep moving through the data so we can get into that conversation.
Yeah, it's okay, I know.
Housing affordability is generally considered not spending more than 30% of your income on housing costs.
If you pay more than 30%, you're considered cost burdened, and if you pay more than 50%, you're considered severely cost burdened.
As demonstrated by this slide, white residents are less likely to be cost burdened.
For white residents, 66% are in housing they can afford.
Only 53% of households of color are in housing they can afford.
And for black or African American and American Indian or Alaskan Native households, less than half, 45% and 44%, respectively, are in units they can afford.
So this slide comes from and the data that preceded it came from the EIS analysis.
And this illustrates what we expect to happen from the land use code changes in terms of the number of ADUs produced if we change nothing versus if the preferred alternative is implemented and the number of single family teardowns comparing the existing regulations to the preferred alternative.
And I'm not going to go into great detail.
There'll be more opportunity to talk about the land use code changes at a later date.
But overall, what we found was in terms of looking at displacement, which was squarely a question we looked at in the EIS, is that while affordability would remain a concern and burden for many Seattle residents in this, you know, the ADU changes alone are not going to solve the problem by itself, the creation of additional ADUs under the proposed land use code changes, they would increase the number of housing choices available in the study area compared to doing nothing.
This would have a positive impact potentially on affordability and decrease the potential for economic displacement because the additional housing supply could marginally reduce upward pressures on rents and housing prices.
So essentially, instead of replacing one single family home with one bigger, more expensive home, you have a home with one or two accessory dwelling units that are relatively more affordable because of their smaller size.
In addition, we found that the land use code changes would result in fewer teardowns than alternative one, or sorry, the no action, do nothing alternative, which would reduce the potential for physical displacement.
So if you think of that in terms of A renter occupying a single family home now and the property owner has the choice to tear down and rebuild and sell it because the for sale market continues to be strong and you can make a decent amount of money on that.
Or choosing to instead keep that renter in place and adding one or two accessory dwelling units that provides more rental housing.
Given that the land use code changes alone are insufficient to address racial disparities in our housing, we began to explore additional ways to lower the costs and barriers to building ADUs, both backyard cottages and basement units, so that more people could benefit from our ADU work.
As part of this, we looked to other jurisdictions across the region and country who envision ADUs, to Council Member Mosqueda's point, not only as a housing type option, but as an anti-displacement strategy.
While many ideas are being explored and tested across the country, the cities we reviewed who are farthest along are still only in the early stages of program development or implementation and have no more than a few ADUs in the ground.
Some program examples we have looked at included the Alley Flats Initiative in Austin, the West Denver Single Family Plus Initiative in Denver, LA Moss in LA, and the Dweller Model, which is a for-profit model in Portland.
Some key elements of different programs we have looked at include reducing barriers to backyard cottage construction, making backyard cottages accessible to lower income renters, providing technical assistance and support to homeowners who want to construct DADUs.
Benefits to participants may include fee waivers for permitting, some capital recovery fees, expedited review through the permitting process, and advocacy in resolving issues that may arise with other city departments, even though we know this never happens.
Tenants are limited.
I was making a joke about how smooth our permitting process is, that there's never any issues with city departments in the permitting process.
It's all timing.
Yeah.
Pause.
Yeah.
Sorry.
Susie, could you talk a little bit more before you get off L.A.
Moss?
And I know the print is small here, but what I think I see is that they've got an incentive program, and design support we understand, reduced permitting fees is clear, low interest loans, construction, administration.
Do you know what those elements are?
And how?
Yeah, so the low, well, I, there's, and there's a lot more data about each of these in the report.
I don't want to get too deep in the weeds, but low interest loans, I mean, one of the big challenges we continue to hear is that folks have trouble accessing financing, and that even the financing that people can access might be a higher interest loan than, typical mortgage.
So one of the things that we're also exploring is opportunities to create a lower interest loan product that would allow people to get the capital needed to build without the same amount of.
So I learned of something yesterday and it's focused on URM, our unreinforcements program.
that apparently California and Oregon have both accepted and have implemented, and the acronym is PACER.
And what my understanding is, and Barb Graf just introduced me to this yesterday, is it is a lien on the property and it runs with the land.
So an individual can get the loan, and it is, as I understand it, a lower interest loan.
And it goes directly onto the property.
So the homeowner is paying for it, but should he or she decide to sell, it's still there on the property.
And the positive impact of that is, you know, it's not a mortgage on the individual's property.
a personal credit sheet, and they can get it fast up front, and it's up to $150,000.
So it could really help in something like this if we could see if we could expand a program like it.
Yeah, that's great.
Thank you.
If I may, I think that there are examples that the city has used in the past, Council Member Bagshot, to that point.
I mean, certainly we've been an early pioneer in community land trusts and partnerships with for-profits and non-profits around that concept.
The city in the late 90s or late 2000s helped pioneer something called location efficient mortgages where we worked with private equity partners to allow for people to get access to up to 40% of their income to be able to purchase a home.
If they could show us that they were going to buy that home on a transit corridor and that they weren't going to have the $8,000 or $9,000 a year that you would need in a car payment and car operations payments, So when you combine those housing and transportation costs together, giving people access to 40% of their income for a home loan as opposed to 30% was an issue that we pioneered.
An idea that we have, Council Member O'Brien and I have been talking about with the Office of Planning and Community Development about would be sort of in complements to the ADU legislation, allowing individuals to access what is a massive amount of capital in their property values, but that they're having difficulty in achieving with the high rate of construction in the marketplace right now.
So how do we find ways for people to take the single family home that they have invested in that is now worth a lot more than it used to be, and allow them to borrow against that capital with the understanding that they're gonna be working with a private financer who's not gonna be predatory in their process, And also work with developers who are not going to be predatory as well.
And kind of create a system where the city could bless those transactions and provide additional support not dissimilar from what you see here in the incentive programs.
Allowing people to access that property to provide a permanent affordability option both for their friends or neighbors or those that have been displaced from their neighborhood.
could allow for us to encourage individuals in the private marketplace to take ownership over displacement in a way that the city probably won't ever be able to get our arms around everything that we need in terms of funding to replace all those who've been displaced from the city.
But I think that there are folks in the private marketplace that are interested in that conversation, but it is incredibly complicated.
to try to get that table together to find those folks who are willing to do it.
OPCD and Ali, maybe this is something that you already know.
Is this underway?
Do we have the opportunity or can we call the question or is the question already been called?
And what can we do to really move this forward?
Because I know it's something, what are you grinning at Council Member O'Brien?
You have answers to this?
So I think there are a couple of things.
One, the sort of what we've learned through the RET process is going to inform a work program for the next 12 months.
I think I won't steal the punchline.
There's some things coming later in the presentation about sort of next steps, but part of what OPCD is doing this year is convening a sort of interdepartmental team to work on a and on national convening of cities who are working on ADU strategies and looking at a variety of tools and ways you can do this.
So that's the Office of Planning and Community Development, council staff, SDCI, the Office of Housing, and the Planning Commission.
So there is a group trying to figure out how to do this.
Great.
And I'm smiling, Council Member Banks, because I love the fact that five of us here are, we cannot wait to brainstorm how to solve some of these problems.
And at the same time, part of the racial equity toolkit is for us to go out and make sure that we're asking the communities most impacted, how do you think we need to solve it?
And so I want to make sure we have time to get to hear their, the challenges they're trying to overcome and some of the ideas about how to solve it.
And we will have plenty of time to add our layers on top of that too.
So.
I'll keep us going.
So some of the other aspects of some of the programs that we're looking at include having tenants limited to being tenants with incomes below 80% AMI or requiring that they are houses that they house Section 8 voucher holders.
One model, the dweller model, that's again a for-profit model in Portland, has a unique land lease option where the rental income is actually shared between the company and the homeowner, which allows the homeowner to not necessarily have the capital to take on that level of investment.
So similar to many of the strategies that we just shared, some of the strategies that we're looking at that you all are speaking to as well include looking at better financing.
We continue to hear that financing is a key barrier for homeowners.
Strategies we can pursue include programmatic or financial partnerships with a nonprofit, lender, or other organization working to facilitate financing.
Alternatively, and something we'll talk about a little bit more today, is that we actually have a city loan program, an existing city loan program through our city's home repair loan program, and that we could build upon that to support the development of ADUs to provide housing for low-income households.
We're also looking at creating resources to help homeowners evaluate their options for creating an additional unit and assisting homeowners in navigating the permitting and construction process.
And we continue to look at efforts for reducing construction costs, recognizing that that will make it more feasible for lower-income homeowners.
While the city can directly pursue strategies to lower the cost, we also recognize that ongoing private sector innovation and design, construction, and ownership of ADUs could also result in new lower-cost models.
As you all probably know, we've been working on pre-approved backyard cottage plans.
Independent of the land use code changes, we're exploring options for developing these pre-approved designs.
Seattle Department of Construction and Inspection's permitting staff would review and pre-approve standard plans as conforming to applicable building and energy codes.
And finally, as we're thinking about this, we'd want to make sure that any city investments we're considering can be attached to requirements for rent and income restricted ADUs.
I just want to clarify.
Can I get clarification?
When we're talking about homeowners, we're talking about the existing homeowner who may want to build a backyard cottage or an attached unit, but are we also going to be talking about creating the opportunity for that accessory dwelling unit to be purchased?
Is that correct?
That's an option as well?
I think that that hasn't been the focus of this, but I think that certainly as we think about work moving forward and how we can do that and how folks can pull resources, that's definitely an opportunity for creating lower cost home ownership opportunities that we want to continue to explore.
Okay, great.
I just want to put a plug in for that.
I think it's incredibly important that we create more rental options.
especially along these transit corridors and in the heart of the city so people can afford to live here.
I also think it's important that we create home ownership options.
I wouldn't be promoting that so much if we didn't have a terrible retirement system in this country, if home ownership wasn't one of the only ways to acquire wealth and try to get out of generational poverty.
I do think it's at a critical piece as well as we think about what these units may look like for allowing people to accumulate wealth and equity.
Great.
So to explore the issues, the Racial Equity Toolkit work focused on engaging community members and stakeholders to identify additional actions the city can take to ensure homeowners and renters of color can benefit from ADU production.
We focused our community and stakeholder engagement on a few key strategies.
First, in connecting with community organizations and coalitions that work on housing affordability and anti-displacement issues.
Second, in reaching out to low-income homeowners who have accessed Office of Housing's homeownership stabilization resources.
And third, having additional conversations with individual stakeholders.
We held three focus group conversations with organizations or coalitions that included both renters and owners.
Essentially, we shared a 30-minute presentation that included background on the proposed land use code changes, findings from our environmental review and displacement analysis, and provided examples, like I just shared with you all, of programmatic options from other cities that a Seattle program could be modeled after.
We then had open-ended conversations with the group focused on two key questions.
How do you see ADUs benefiting or harming your communities?
What opportunities do you see and what challenges?
And the following groups participated in these focus groups, the Duwamish Valley Affordable Housing Coalition in South Park, the Housing Supply Subcommittee of the Seattle Renter's Commission, and South Core, which is a coalition of South End community organizations hosted by Puget Sound SAGE.
The full list of members of that coalition are on the slide.
In addition to the focus groups, and we'll get into the key findings in a minute, but in addition to the focus groups, we conducted phone interviews with 16 low-income homeowners.
Last, in May, we sent out 124 postcards to households that used OH's home repair program in the past three years.
and earned between 50 and 80% of the area median income.
When sending out these postcards, we had hoped to have maybe three to five conversations with homeowners, which would have represented a 2.5 to 4% response rate, which we were already told was a high expectation.
We were overwhelmed by the level of response and interest in building ADUs.
24 people responded to our brief survey, a 19% response rate, and we were able to hold 16 phone interviews.
The postcard, thanks to Joseph Pija, you can see he's brilliant in his support from our communications team, invited recipients to sign up for a phone interview to discuss their interests in and barriers they face building a basement unit or backyard cottage.
From our office, led by Alicia, we conducted 16 half-hour interviews to collect information about the primary motivations for building an additional rental unit on one's property, as well as their knowledge of and experience with the process.
I want to name that of the 16 interviews conducted, five of those were people of color.
This is a bit lower than the percent of people of color served by our Office of Housing's home repair, loan, and weatherization programs during the same time period.
38% of the interviews were people of color compared to 51% of households with people of color served by our Office of Housing programs.
I want to just jump in and highlight this point because I think this is something that really struck me.
You know, we've been talking about this for a long time, and we're all pretty well-versed in our ideas who may want to take advantage of this, but the fact that so many folks that have been identified as low-income that are participating already in city low-income programs and are homeowners.
responded to say not only were they interested, but they were willing to have a half-hour conversation about how we might tailor the program to them.
I think it does speak to some of the comments that you all have made so far about there's a lot of pent-up interest in creative ways to move forward, and the responses are fascinating.
Yeah, great.
So I'll start with the key takeaways from our focus groups.
The focus groups provided valuable feedback, not only on ideas for ADU affordability, but more broadly on the city's need to urgently act to counter displacement of communities of color.
Through our conversations, some of our key assumptions were challenged, and the groups, particularly the South Corn Duwamish Valley Affordable Housing Coalition, highlighted some key issues for us to consider.
First and foremost, while there was interest in hearing and learning about possibilities to expand ADUs, the focus groups stressed the urgency of acting more broadly to address displacement.
Many highlighted that the tools we were discussing still required significant capital and homeownership, which few in the communities they represented had.
The Duwamish Valley Affordable Housing Coalition specifically highlighted the need to consider neighborhood-specific anti-displacement strategies and investments in affordable housing.
For each of the key takeaways, the RET highlights potential strategies to address them.
First, the city should create a comprehensive anti-displacement strategy that weaves together existing and future efforts and works collaboratively with community-based organizations.
We should consider neighborhood-based strategies in areas with high risk of displacement.
Additionally, as SouthCore and others have highlighted in their letter to the executive and council in regard to our MHA legislation, the city should create strategies that help homeowners stay in place despite pressures to sell.
We have great Office of Housing existing programs and ADUs may be one of these strategies.
The letter highlighted outreach and education as a key to make this more effective.
We should continue and expand existing investments in anti-displacement strategies, such as our equitable development initiative and community ownership models, such as limited equity housing cooperatives and community land trusts.
Initially, we considered the creation of rental income as a primary motivator for building an ADU.
While we have been considering programmatic goals from this perspective, we heard quite clearly from our focus groups that for people to consider taking on any financial risk, the motivator would be housing family members and community members as a strategy to prevent displacement.
To address this, some potential strategies include ensuring that any program we design allows for owners to prioritize family or community as a potential tenant.
As our office will highlight through the budget process, we want to consider the expansion of our Office of Housing Home Repair Program, which offers low-interest loans or grants and supports homeowners on essential repairs.
This could be expanded to create additional habitable space in the existing envelope of someone's home at a much lower cost than building an ADU.
While many prefer backyard cottages for their flexibility, for family members, attached accessory dwelling units or creating additional bedrooms may be a much more cost-effective opportunity.
There's also an information gap in terms of existing homeowner assistance programs.
People were really interested but had not necessarily heard about our existing Office of Housing Home Repair and weatherization opportunities that support low-income homeowners.
The Office of Housing recently brought on an outreach staff member for their weatherization program, which is great.
And in this budget cycle, council can consider a budget add to provide additional flexible money for the Office of Housing to work explicitly with community-based organizations to get the word out about our existing and future homeownership programs.
We want to prioritize these resources for areas with high risk of displacement.
Is that budget amount in the budget as proposed by the mayor?
No, there was $20,000 in the budget proposed by the mayor and we are, as will be in the memos next week, proposing an additional $80,000 and making sure that those are for contracting with community-based organizations.
How far does $20,000 go in weatherization?
I mean, is it like $1,000 per household?
So I think Susie's talking, for weatherization, we have funding from Commerce and from Washington State Department of Commerce and City Light to do capital improvements.
And for there, the average improvement to a home is about $10,000.
But that budget's a lot bigger.
Yeah, the $20,000 that I'm referring to was part of the Office of Housing's budget for outreach.
and education to homeowners.
And then the next key takeaway, many voiced concern, continued concern that the proposed land use code changes would lead to an increase in speculation and displacement.
And though, although the analysis in the ADU suggests that removing barriers to ADUs would not increase speculation, To address this concern, the preferred alternative in the EIS would only allow someone to build two ADUs on the same lot if the property has been in the same ownership for at least one year.
So it doesn't have to be owner-occupied, which feels like an anti-renter sentiment, but that it's owned by the same ownership.
So if you've owned a rental property, like in the example that Ali gave, and want to build an additional unit or two, you could do that.
on slide.
Actually if you go back one.
Can I ask a question about that and Susie or Allie can maybe you can jump in on it.
So the issue is it has to the home would have to be owner
occupied for a year or Explain how that works for me Currently in order to add an accessory dwelling unit the property has to be owner occupied So you have to live in one of the units and you can rent out the other one But if you're like if you own an investment property You can't have an accessory dwelling unit and renting out both the house and the ADU What is contemplated in the EIS and included in the preferred alternative is removing that owner occupancy requirement and there are a number of reasons for doing so, but, and instead, and despite the fact that the analysis suggests that the changes won't lead to increased speculation to address the continued concern, one of the things that's proposed is to require that the property is owned by the same person for at least a year before you add a third unit.
So what that means is you can't go and buy a property tomorrow, tear down the house, and rebuild the lot with a new house and two ADUs.
You could add one ADU, but not two at once, so it's sort of incentivizing longer-term ownership before you're adding on a third.
And we'll, this is really, we'll have plenty of time as we, at the point that we actually get to jump into the code change legislation to have these conversations because this is a new idea that we obviously haven't gotten the rest of your all's feedback on as we think through how to best address it.
So we'll have plenty of time for that.
Alicia, if you don't mind going back, I did miss one that starts with the concern.
One more.
Yeah, that one.
So from the focus groups, we heard concern that even with financial support like low interest loans, the cost of ADUs seem out of reach for the lowest income community members who are barely getting by.
Many people are making less than $50,000 per year and taking on any additional risk feels infeasible.
So as discussed previously, expanding our existing Office of Housing program to create lower cost options that leverage the value of existing property, such as basement units, legalizing existing units that we know exist as well.
and creating additional habitable space under one's current envelope are a fraction of the cost of building a backyard cottage potentially.
And we should also continue to look at lower cost options or options that don't require the same level of financial risk on a homeowner such as a land lease option.
So now I'll shift to sharing some of the takeaways from our phone interviews.
Great, thank you.
We learned a lot about the reasons why people are interested in creating additional living space on their property and what their experience has been researching the process.
Half of the group had owned their homes for over 15 years.
As I mentioned before, of the 16 homeowners we spoke to, five were people of color.
There were no significant, I wanna name that there were no significant differences in responses between white homeowners and the homeowners of color.
A key theme that emerged across the homeowners we spoke to was a desire for more flexibility through the creation of an additional unit.
Many talked about wanting to adapt the use of their home as needs arise over their lifetime, such as housing a family member or caregiver, earning supplemental income, and helping house community members.
Many homeowners were interested in building a backyard cottage over a basement unit.
Some folks don't have basements to convert.
At the same time, many respondents didn't have a clear idea about the cost of building a backyard cottage and were surprised at the quote of $200,000 or more.
Some had not previously considered less expensive options such as creating an additional bedroom or apartment and may be open to converting existing space as a lower cost option.
As far as potential strategies to address the interest in flexibility, we can continue to explore programmatic ideas for affordable ADUs alongside the broader anti-displacement strategies outlined in the conversations with focus groups.
While most, again, while most interviewees were more interested in a detached unit, given the cost burden to lower-income households, the city should continue to consider how people can repurpose their existing structures, be it a garage or basement, to create additional habitable space while still maintaining flexibility and privacy.
And we should ensure that as we explore programmatic approaches and investments that there would be flexibility for the homeowner to meet their housing needs while complying with any program requirements.
And we do want to name that this should not include options for short-term rentals as this doesn't meet our overall goals of creating long-term housing units.
The challenges to building ADUs identified by low-income and low-income people of color households were in line with the general feedback that we've heard for years from homeowners across income levels about building ADUs.
Respondents reported that they needed help navigating the permitting process, learning about what building options would work for their property, understanding the costs, financing the project, understanding the zoning regulations and inspection process, and navigating the laws once becoming a landlord.
One non-English speaker also highlighted the need for language access in city information and support around ADUs.
Multiple homeowners envisioned a government-supported program to help them navigate the permitting, financing, and construction process.
And as Ali got out a bit, over the next 12 months, the Office of Planning and Community Development is leading an interdepartmental team with representatives from SDCI, the Office of Housing, the Planning Commission, as well as council staff to participate in the Urban Sustainability Accelerator Program, which is a year-long cohort of city and county teams from across the country working to promote ADUs.
The teams will focus their work on programmatic ideas that align with addressing the challenges we hear from homeowners.
And we want to ensure that we will prioritize programs that further racial equity.
While interviewees were open to the prefab ADUs, most people reacted with overall skepticism and concern about the land lease model and ceding control over property and over the property to a tenant management company.
As next steps, we should work to better understand the land lease model and how the city could ensure protection for homeowners or what kinds of organizations, like the land trust, we could think about partnering with.
And we should also explore how such a model could still allow for flexibility for family members while complying with any rent and income-restricted qualifications.
So this concludes the key takeaways from our community outreach.
And now we'll talk about step four.
Step four is to advance opportunity or minimize harm.
The Rett process asks us, how will we address the impacts, including the unintended consequences, on racial equity?
As we move forward, the RET process highlighted key questions that remain and that must be explored.
First, what is the city's overall comprehensive anti-displacement strategy?
How might homeowner stabilization fit into that?
Should the city be considering an ADU-focused program as an anti-displacement strategy?
Is this the right place for our limited resources?
And as we explore ADU affordability strategies, how can we ensure we center communities of color in our planning?
How will we measure and ensure we meet our racial equity goals?
Moving forward, we want to ensure that we consider racial equity as we continue exploring the program designs to address AD affordability.
The key motivations and needs of communities of color should be incorporated into our prioritizing as the city looks at programmatic options and investments.
In the short term, there are some ideas we propose moving forward.
As described previously, we can expand our existing home repair program to create more habitable space.
Currently, the Office of Housing runs a home repair program that provides low-interest loans or grants, depending on qualification, to low-income homeowners to address critical health and safety concerns.
We propose expanding the program to allow for property improvements that create additional habitable space within the existing envelope of the property.
This, as mentioned before, could include finishing a basement, creating an attached accessory dwelling unit, upgrading a garage, or bringing an existing unregistered rental unit up to code.
These improvements could allow a homeowner to house additional family members or generate additional rental income.
In its initial year, we'd hope to do an initial year pilot, and again, we'll talk more about this through the budget process.
We would hope to serve five to 10 low-income households and build a better understanding of the needs, project costs, and challenges of helping people stay in their homes.
This strategy allows people at risk of displacement to leverage the value of their property without having to sell and without taking on the level of risk or debt required at this stage of our exploration of backyard cottages.
Next, we can invest in community outreach.
As discussed, our focus groups made it clear that while we have multiple existing Office of Housing programs that support low-income homeowners to stay in their homes, many people who are eligible for them do not know about them.
Providing resources to the Office of Housing to contract with community-based organizations to share about existing and possible future programs will help ensure we meet our racial equity goals.
Third, in relation to our land use code changes, and as we discussed, with the finalizing of the EIS and the defining of the preferred alternative, we hope to move swiftly with land use code changes to address some of the barriers to expanding ADUs in Seattle.
And in terms of the RET outcomes, we will include a new provision that does not require owner occupancy, but does require that the property has been in the same ownership for at least one year before a second ADU can be built on the property.
Finally, as the interdepartmental team participates in the Urban Sustainability Accelerator Program and explores options for ADU affordability work beyond and next steps are shared, they should prioritize strategies that further racial equity and reflect the lessons learned from this racial equity toolkit.
Step five asks us to evaluate, raise racial awareness, and be accountable.
We know that this will be an iterative process as the city continues to work on ADU affordability over time.
And step six is reporting back, which is why we're having this conversation today.
And finally, I want to just do some acknowledgments.
And while I led this process, it was with the support of several individuals and groups.
First and foremost, we want to acknowledge and thank the community groups and homeowners who took the time to meet with us, talk on the phone, share their insights and experience, and provide feedback to inform our thinking.
Additionally, Jen from the Office of Housing, Nick Welch from the Office of Planning and Community Development, Jackie Mena and Virginia Ways from the Department of Neighborhoods, Ali Panucci from our central staff, Joseph Pija from our communications team, and Alicia Delosto also from our office have all contributed to this racial equity toolkit.
And with that, we, well, I don't know if, I was gonna say we have time for questions, but yeah, we have a little bit of time for questions and conversation.
Member Johnson.
Just briefly, you touched, Susie, on a lot of things that we can do that don't require land use code changes, but some of the more fundamental land use code issues that have been outlined in the proposal would.
So I wonder, Ali, if you could talk a little bit about where we are in the process and what are some of the multiple steps that might need to happen before we can take action on some of the land use code issues.
Sure.
So I'm happy to say that we have released, issued the final EIS, which was issued on October 4th.
So right now we are in a 14-day appeal period.
And so really it depends on whether or not the adequacy of the EIS is appealed will dictate where we go from here.
Assuming it is not appealed, I think that the goal is to have legislation ready to introduce at the end of the year or in early, you know, at the first beginning of the year in 2019 and take action in the first quarter of 2019 and we're well positioned to do so.
If it is appealed, the timeline is uncertain as we've all experienced.
Several cases over the last couple of years, it's hard to predict how long that appeal process will take and until an appeal is resolved, the council couldn't take action on the land use code changes.
So in looking at these programmatic options, we're kind of trying to do both in terms of there are certain components that might depend on the land use code changes, pre-approved plans, for example.
So we're looking, you know, SDCI and OPCD are looking at both plans that would meet current code as well as plans that could meet the future code so that we are not held up on taking other steps that could help homeowners or low-income renters sooner if we are delayed in the land use code actions.
And I'll just add that we've been working on this for a long time.
I think a lot of you have been deeply engaged in it.
You know, a few years ago, we had a pretty refined piece of legislation.
Having gone through the environmental impact statement and getting additional data and getting some clarity on some questions we had, especially around displacement and teardowns and what that would lead to, As you've seen, there's a couple recommendations in the IS that differ from what we were talking about a couple years ago, specifically around ownership and also around FAR limits on single family zones.
And so those are going to require a significant legislative process.
And so that would not start until at the earliest, it would be early next year, but I want to just be clear that We will make sure to vet that.
If it is tied up in legal challenges, we'll have to consider, you know, there's some ongoing work we could do to just be talking about it.
We'll just have to consider if that's worthwhile or when the right timing is that.
But I would imagine sometime in the first quarter next year, we'll lay out a timeline and a process to understand in more depth some of what we heard in the EIS, why my preferred alternative was what it was.
and then have the conversation and hear from public on if, you know, how we want to tweak that as we undoubtedly will.
I want to underscore what you just said.
I hear that and I'm anticipating that there will be a legal appeal.
I'm sorry about that because you know how strong we all feel.
about the need to move forward with these options.
So what I'd like to ask is that we figure out what we can do on a parallel path.
Let us assume that there is a legal challenge.
I don't want to wait on this any longer.
I just feel like we've had the same arguments for, well, at least all the time that you and I, Council Member O'Brien, have been on this Council.
that this is something that we see other cities successfully doing.
I'd like to find out what can we do.
If it's a pilot, if we can begin to think about what that legislation looks like.
So I'm just advocating for a pilot, some speed, some commitment, and maybe we still have to deal with the larger question, the larger legal question, but I'd sure like to know.
what Councilmember Johnson was saying.
Bless you.
What can we do, what can we do now in the face of the legal challenge that can keep the conversations in the community going?
I love it that you've had all of these phone interviews that you've reached out.
That's a good base.
You may, we clearly will be doing more, but I just don't want to have this put back another year or two.
Yeah, I appreciate that.
And so, you know, frankly, a lot of what we learned in the racial equity toolkit didn't depend on more square footage for Backyard Cottage.
So there are a lot of things that we can do to address the issue around displacement in communities of color and how we can stabilize some home ownership opportunities.
And so we'll be discussing those as part of the budget process.
As Allie talked about, we're already working collaboratively on what are the tools we can put in place.
That doesn't need to wait until we get the legislation done so the interdepartmental team and the working with other folks around the country can continue to happen too.
And we can do some of the deliberative work on thinking about policies while an appeal is playing out.
Obviously that appeal may influence what we can and can't do, but we can start having those discussions so that once we're through the legal process, we can move swiftly.
It's hard to use the word swift with this because it's been taking so many years, but the end could be really swift.
Council Member Herbold.
I'm just, again, thinking about how to mitigate the impacts of potential appeal on our deliberations.
And Council Member Baggio, you mentioned a pilot.
I'm wondering if there was a cap on the number of units developed over X number of years, would that, you know, if we said no more than 1,000 units?
Didn't we start there?
I thought we did in Southeast.
So, no, unfortunately.
We can't, the land use code changes that are contemplated in the EIS will be tied up in any appeal.
So whether we call it a pilot or something else, we couldn't sort of waive those regulations.
Can't we define the impacts in a way?
Well, so the EIS does do that, right?
Which is, I mean, overall, like, it's worth a read.
It's only 1,200 pages.
You can say it for yourself.
But, you know, a lot of that are the comments and that sort of thing.
But it does, it squarely looks at the impacts and comes to, you know, and addresses any impacts.
And overall, what we found is that there will not be significant impacts resulting from these changes.
And so there really isn't any way to mitigate against that because we don't think there are impacts.
So unfortunately, there's a lot of process involved in changing, amending the land use code and the appeal can slow down any changes related to this.
And a related question.
I thought I read somewhere there's a number kicking around that there's an interest in building ADUs that's been quantified.
Is that true?
Are there X number of people who have said, I want an ADU?
I am not aware of that, but I will I mean, that would be great.
We have a long list of people who've been emailing my office over the years.
I mean, and yeah, anecdotally, I think the Council Member O'Brien's office and then through the ADU EIS, I'm getting emails almost daily of like, when is this going to happen?
Should I wait on my plan so I can build a thousand square feet or because I don't live there and that sort of thing.
But there hasn't, one of the things, one of the pieces that we're considering in that work program is some type of survey work that can be kind of costly, but to really get a better sense of the market.
who's interested and what people are using their ADUs for now.
You know, obviously any individual can choose to challenge any of these issues.
People can have phone conversations with folks to try to discourage them.
on this side of the table can say, you know, I will only support these things.
But I'm not sure if there's enough anyone here could do to discourage that from happening.
But welcome to try.
You know, when we lost the challenge a couple years ago to the original legislation and were forced to go through the EIS, you know, that caused a couple years of delay.
At this point, you know, the EIS was a very thorough document.
And what there will be challenging is that it wasn't thorough enough.
The delay we're talking about is a number of months, not a number of years.
And, you know, our own legislative process is we can start doing some work so that the effective delay of even a challenge may not be significant.
Obviously, if we were to lose that, then a lot of things start over.
But assuming that the folks that did this were doing a very thorough job, and from my perspective, it feels like that, it's really more of just someone can buy a little more time.
But we can still move forward on a lot of things right now.
You know, we can have those discussions, we can signal to the community where we're going so that whenever the barriers are gone, we can move swiftly.
And I'm very willing to talk with anybody that you think would be appropriate about this.
I think you know one of them.
So can I ask, and again maybe Susie Alley, has anybody reached out to a group called Semble in Bellevue?
So this is a group, and it just came to my attention recently again, this is one of the barb graph miracles of the work she's doing around resiliency.
But Semble and Bellevue says it provides a comprehensive financing solution for the loans and needs of nonprofits and social enterprises across the United States.
If an organization is in need of financing, Semble looks to address the need at the lowest possible cost, at the same time facilitating stronger partnerships with the communities that support them.
And I don't know if they've got any additional tricks up their sleeve, but I'd sure like to reach out.
I'll send you this link.
Thank you, Council Member Baxter.
I'm not aware of that, but that's exactly the type of research.
And, you know, it's an area of innovation.
We're seeing a lot of folks in the building and technology industry putting their heads together to figure out how they can solve this challenge of creating more housing opportunities in single-family zones.
That's great.
Thank you for bringing that.
Colleagues, I promised we'd keep this close to an hour, and I'm about a minute or two over, but I really appreciate the excitement and energy here.
I will continue to work with you all offline on getting a schedule, and we will make sure that there is, today we're largely focused on the racial impacts of this, and we got some work to do there, which is great.
But I will make sure that there's plenty of time for us to dig deep into some of the broader policy and land use issues, not during budget, but once budget's over on a timeline for that.
Great.
Very good.
Well, we can do all we want.
We just can't ask Council Central staff to do a lot of additional research right now.
Yes.
We need to release Allie back to budget work.
So with that, thank you so much.
And thank you all of you for being here.
Jan, I really appreciate the work the Office of Housing has done.
And going forward, we look forward to working on the budget with that.
Thank you so much.
We'll be adjourned.