The City Council has amended the land use code to make two important changes to the design review program aimed at encouraging additional low-income housing. The first change permanently exempts low-income housing projects from the Design Review program. The second change provides a new Design Review exemption for projects that meet Mandatory Housing Affordability (MHA) requirements by providing units on site via the Performance Option under the Land Use Code. Projects that opt into the Performance Option can skip MUP and Design Review and proceed directly to Building Permit where land use code compliance will be evaluated concurrently with other review subjects.

Expediated Timelines:

Bypassing Design Review and MUP milestones could yield significant time and cost saving on project delivery.

Schedule comparisons showing how fast the entitlements process can be if MHA units are provided instead of the ‘payment in lieu.’

Calculating the Number of Affordable Housing Units Required to avoid Design Review:

If a project contains commercial space, the area dedicated to affordable units required to satisfy the Performance Option is calculated as a percentage of the overall applicable area in commercial use. If a project contains residential space, the required number of affordable units is calculated as a percentage of the total number of dwelling units in the project. Developments that contain both commercial and residential space will use a combination of both calculation methods.

Performance Amount for Commercial Development:

The net unit area of affordable housing required to comply with Performance Option is outlined in Tables A&B for SMC 23.58B.050. The required square footage set-aside for affordable units varies respectively by zone, MHA suffix (M/M1/M2), and performance area intensity as noted in Map A for SMC 23.58C.050. For most zones, the area of affordable housing required ranges between 5-9% of the applicable commercial floor area.

Performance Amount for Residential Development:

The number of affordable housing units required to comply with Performance Option is outlined in Tables A&B for SMC 23.58C.050. The required percentage set-aside similarly varies respectively by zone, MHA suffix (M/M1/M2), and performance area intensity as noted in Map A for SMC 23.58C.050. For most zones, the number of affordable housing units required ranges between 5-11% of the total number of units to be developed in each structure.

Table from the Seattle municipal code indicating how many units need to be affordable for a project to be exempt from development design review.

Performance Standards for Qualifying Affordable Units:

Duration: Units provided to comply with the Performance Option must remain affordable for 75 years from the date of certificate of occupancy.

Distribution & Comparability: Units provided to satisfy the Performance Option must be generally distributed throughout the structure and be comparable to other units in terms of: Type of dwelling unit such as live-work unit or congregate residence sleeping room; Number and size of bedrooms and bathrooms; Net unit area; Access to amenity areas; Functionality; and Lease term.

Eligibility: Household eligibility varies with unit size and rental date.

At initial occupancy (lease-up), units with a net area of 400 sf or less are eligible to households with incomes up to 40% of AMI. Units with a net area greater than 400 sf are eligible to households with incomes up to 60% of AMI.

Thereafter at annual certification, units with a net area of 400 sf or less are eligible to households with incomes up to 60% of AMI. Units with a net area greater than 400 sf are eligible to households with incomes up to 80% of AMI.

Public Subsidy: Affordable housing units provided to satisfy the requirements of the Performance Option may NOT be used to earn public subsidy such as through the Multifamily Housing Property Tax Exemption (MFTE Program).

Rent Levels: Monthly rents for units with a net area of 400 sf or less, shall not exceed 30% of 40% of AMI. Monthly rents for units with a net area greater than 400 sf, shall not exceed 30% of 60% of AMI. “Monthly rent” must include a utility allowance for heat, gas, electricity, water, sewer, and refuse collection, as well as any recurring fees that are required as a condition of tenancy.

Annual Certification, Third Party Verification: Every year an owner of the rental unit must obtain from each tenant a certification of household size and income. Owners of rental units shall attempt to obtain third party verification whenever possible to substantiate income at each certification, which shall include contacting the individual income source(s) supplied by the household. If written or oral third-party documentation is not available, the owner may accept original documents (pay stubs, W-2, etc.) At the discretion of the Director of Housing, the owner may accept tenant self-certifications after the initial income verification and first annual recertification. The owner shall maintain all certifications and documentation obtained on file for at least six years after they are obtained.

Reporting: Once a year the owner of the rental unit shall submit a written report to the Director of Housing, verified upon oath, demonstrating compliance with Chapter 23.58C. The written report shall state: the occupancy and vacancy of each rental unit, the monthly rent charged for the unit, and the income and size of the household occupying the unit. The Director of Housing may require other documentation to ensure compliance including documentation of rents, copies of tenant certifications, documentation supporting determinations of tenant income including employer’s verification or check stubs, and other documentation necessary to track program outcomes and the demographics of households served. The owner of the rental unit shall pay the Office of Housing an annual fee of $150 per rental unit for the purposes of monitoring compliance with the requirements.

By Jennifer Sobieraj Sanin, Managing Design Principal, and Michael Lama, Project Designer