Council mulls tax exemption for boost in Central Issaquah affordable housing

Transit-oriented development project set to include 176 units of affordable housing

As the end of a year that has been dominated by affordable housing worries draws near, the Issaquah City Council faced a step at Monday’s meeting to bring more housing to town for low-income families.

Though they opted to postpone the agenda bill until the Dec. 18 meeting, council members expressed support for the idea of adding more affordable housing to the Central Issaquah Plan.

In exchange for nearly 200 more affordable housing units for families, the city would grant a 12-year property tax exemption to all affordable units of the transit-oriented development project, located just east of the Issaquah Transit Center at 1505 Newport Way NW.

The state’s Multi-Family Tax Exemption program allows local governments to give tax exemptions to developments in exchange for a public benefit.

The transit-oriented development project, expected to be finished by 2021, is a project between the city, Spectrum Development Solutions/King County Housing Authority and CenturyLink to put a mixed-use development on the current CenturyLink truck parking and material storage site. The two buildings, which would also include a commercial ground floor, would contain 355 residential units, 176 of which would be affordable.

Of the 176 affordable units, 21 would be at 80 percent area medium income (meaning to qualify for the housing, a person would need to make 80 percent of the average annual income for one person in King County), 131 would be at 60 percent AMI and 24 at 40 percent AMI. According to information provided in the city’s agenda packet, 80 percent AMI for a one-person household equals $50,600 per year, 60 percent AMI for one person amounts to $38,000 per year and 40 percent AMI for one person is equivalent to $25,300.

For a family of four, 80 percent AMI is an annual income of $72,200, 60 percent AMI means an annual income of $54,200 and 40 percent AMI is $36,120.

According to the agenda packet, 28 percent of jobs in Issaquah pay under $25,000 per year and 26 percent pay between $25,000 and $50,000.

A prime goal of the 2013 Central Issaquah Plan is to increase affordable housing in the Central Issaquah area. According to the city’s website, there has been no new affordable housing built in Central Issaquah since the plan was established.

However, as Mike Martin of SeaLevel Properties pointed out, there are affordable housing projects in the pipeline; SeaLevel is providing about 10 units of affordable housing at its new apartment project on Seventh Avenue Northwest.

“I support this, I think this is a great idea,” said Issaquah resident Lindsey Walsh, who sits on the city’s Planning Policy Commission, during a public hearing on the agenda item.

In contrast, Issaquah resident Connie Marsh said that there should be more transparency in talking to the community about this project to get their approval before losing “a massive amount of money” in tax exemptions.

“How much of this are we paying for ourselves so that somebody else can have this building when we can’t even afford our own anymore because it’s too expensive?” Marsh asked.

“You’re doing this because you think it’s a great idea, but does your community think it’s a great idea?” She added.

During deliberation, Deputy Council President and Mayor-elect Mary Lou Pauly agreed that the council and the community had not “heard the story” about the property that night.

“If we didn’t hear it, the public didn’t hear it either,” Pauly said, adding, “We have not talked with the community about it.”

Council President Stacy Goodman said that while she was “excited about this project,” the council currently has “got a lot going on … and got stuff flying at us like meteorites from all directions.”

She made a motion to defer a decision until the next meeting on Dec. 18 so that the council could get a clearer picture of the project with more information from the administration.

Council members expressed concern about setting a 12-year tax exemption precedent for developers in city code when they said they didn’t have a full idea of the project on the table. They wanted the ordinance’s language to specifically designate the project with an MFTE.

“To me, [the Multi-Family Tax-Exemption] was linked to this project because of the amount of housing it had that was affordable,” Pauly said.

“I think if this gets built it is a great thing for the city,” Councilmember Tola Marts said, but added that the council members “want to make sure this benefit would get conferred to a project that we would be really excited about.”

Councilmember Eileen Barber said that the transit-oriented development project is “valuable for the community for those who actually need some affordable housing” and is “going to be a very important issue for a lot of people who need this housing.”

Councilmember Paul Winterstein voted against deferring the decision until Dec. 18.

“This is a small footprint to experiment with a new way to actually get what we want in terms of affordable housing,” Winterstein said.