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Last year in Seattle, the Bullitt Foundation’s proposed Living Building was subjected to a costly legal challenge based on Washington’s State Environmental Policy Act (SEPA). Opponents argued that an environmental impact statement (EIS) should be required because the building would block views. Given that it’s on track to being one of the greenest commercial buildings ever constructed in the United States, and is also located in a dense walkable, transit-rich neighborhood, the fact that environmental regulations could be exploited to oppose the project suggests something is amiss, to put it mildly.

Following on the heels of the 1970 National Environmental Policy Act (NEPA), Washington’s SEPA was created during an era in which the planning culture was dominated by concerns over ecological degradation and responded with strict limits on growth – planning’s so-called first wave. In the mid-1970s planning entered its second wave focused on comprehensive planning and infrastructure, followed by a third wave defined by “smart growth” that began around the turn of the century and is still the prevailing approach today.

And now a fourth wave of planning is emerging, with a perspective that will hopefully put an end to perverse contradictions such as what happened with the Bullitt Foundation Living Building. The formative influences on planning’s fourth wave are the “new normal” economy, climate change, energy, food systems, and regional sustainable development.

< The LEED Platinum Center for Urban Waters on the Foss Waterway in Tacoma; photo by Dan Bertolet - click to enlarge >

So then, how do we make this transition to the fourth wave and a new regulatory milieu that accurately reflects the profound, inherent environmental benefits of compact, mixed-use urban infill? As one example of a modest first step, Seattle’s South Lake Union neighborhood is in the midst of a lengthy upzone process that required a voluminous EIS. To counter the typical “growth is bad” perspective of the EIS, I (while with my former employer, GGLO) worked with a group of local property owners to create an Environmental Benefits Statement that articulates the wide range of benefits that high-intensity redevelopment would bring.

As a second example, my firm is currently engaged in a Subarea planning process in Tacoma that will implement a brand new flavor of Upfront SEPA that was designed to encourage infill around transit. The EIS will pre-approve a set amount of development across the Subarea, and once adopted, it cannot be appealed.

But ultimately, what our environmental policy needs is a makeover. Massive change is upon us, and we can’t afford to let crusty regulations needlessly impede progress on what is already a mind-numbingly overwhelming challenge. NEPA and SEPA were created in the hey-day of muscle cars, and it’s time to sort out the pieces that belong in the policy junk yard. At the same time, new policy must be added to ensure that we properly account for expanding knowledge and game-changing trends such as global warming. All that’s stopping us from surfing the fourth wave and creating a revamped set of regulations that make sense for the 21st Century, is us.

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Dan Bertolet is an urban planner with VIA Architecture and the creator of the Citytank.

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Not surprisingly, housing is the largest cost for households in the Seattle area, yet transportation also accounts for a substantial chunk of our spending. On average, about 33 percent of what we spend each year goes to housing, while another 15 percent goes to transportation.  That’s close to half the amount we pay to keep a roof over our heads.

As the Planning Commission details in its recently released Housing Seattle report, the share of households with unaffordable housing costs has increased substantially since the 2000 Census. In order to reverse this trend, Seattle must advance “affordable living” on a broader level. Improving access to affordable transportation and developing a citywide Transit Communities policy are important steps toward making living in Seattle affordable to a greater number of people.

The American Public Transit Association calculates that a two-car household in Seattle can save an average of $12,000 per year if they give up one of their cars and one driver commutes via transit. That’s real money that could go toward housing costs instead.

Maps created by the Center for Neighborhood Technology show that households in locations with higher housing densities and levels of transit service tend to have lower transportation costs. Our report found that households with low incomes are under the greatest strain from both housing and transportation costs. In order to address both issues, one of the Planning Commission’s key recommendations is to build most new subsidized housing within transit communities. In a transit community, residents can easily walk, bike, or take transit to get to work, school, and more, and they don’t have to transfer twice and miss dinner with their kids to do it!

Neither APTA’s nor CNT’s methodology is perfect.  Still, a combination of data and personal narratives like those featured in Housing Seattle make a compelling case:  transportation policies and choices have a big impact on determining who can afford to live and work in Seattle. Let’s pursue a citywide Transit Communities policy, increase access to transit and invest in our transit communities, and help keep Seattle open to all.

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Diana Canzoneri is the staff Demographer for the Seattle Planning Commission and was the primary researcher and analyst for the Commission Housing Seattle report.  She analyzes census and market data and provides demographic analysis related to  comprehensive planning, community development and long-range planning for the Commission as well as City officials and departments.

< Tacoma Narrows from the Amtrak train; photo by Dan Bertolet >

The 2012 Living Future Conference was held in the bike mecca of Portland, so how could I not bring along the Cannondale beater, which Amtrak stashed onto the baggage car for an extra five dollars. The train from Seattle to Portland is a magical ride, slicing through hidden back alleys, skirting the spectacular edge of Commencement Bay, and finally crossing the Columbia before rolling into cozy Northwest Portland. Luggage on my back, I pedaled out into the drizzly shiny night, careful to keep my tires out of the street car slots, while the quick, mellow ride to my hotel near Powell’s Books reminded me once again how amazingly comfortable and convenient downtown Portland is without a car.

Not your father’s green architecture conference, Living Future prides itself on drawing people outside of their boxes and making them uncomfortable—in a good way. Case in point, in his plenary talk, Living Future Institute CEO Jason McLennan described how twice in past years the conference organically adopted a four letter word as the conference theme, and proceeded to provoke audience members to shout them out—picture a huge conference ballroom packed with 800 people erupting with shouts of “shit!” and then “fuck!”

Not to be outdone, McLennan proposed a new four letter theme word for this year’s conference:  love.

The essence of Living Future is regenerative design, the idea that design should develop the potential of whole systems and empower them to regenerate and evolve indefinitely. A lofty and challenging aspiration, no doubt, one that calls for nurturing intricate webs of relationships, recognizing the interdependence of all life, and eliminating our tendency to see ourselves as something separate from nature. And love is an apt choice of words to capture the core sentiment of that philosophy. It’s analogous to what wise parents know about their children: You can’t make them do what you want them to do, but you can give them everything they need to grow and realize their full, natural potential.

< Stark and 11th in downtown Portland; photo by Dan Bertolet >

Places can be thought of in the same way. In Portland the exceptional energy and care that has been put into improving the public realm and promoting walking, biking and transit should help unleash the City’s potential to become a regenerative place with the capacity to evolve in powerful, unforeseen ways. It will probably be a decade or more before we know the extent to which Portland’s investments help create a more resilient, culturally and economically thriving city. But when I’m in Portland these days I love what I see so far.

< Street food on SW 5th Ave in downtown Portland; photo by Dan Bertolet >

Reductionist analysis has enabled spectacular human progress over the past few centuries, but has also put us on a collision course with the carrying capacity of our planet. Restoring balance calls for shifting our emphasis to relationships, patterns, and systems, a shift that would be all the more likely if we reframed our outlook through the lens of love. Not that this would be an easy task for a society with the habit of  ignoring whatever doesn’t show up in the economists’ balance sheets.

Indeed, the most elevating things in life—social bonds, fulfillment, memories, dreams, dignity, devotion—cannot be accounted for in the analytical bottom line. And we’ve been so obsessed with the quantifiable for so long it’s almost impossible for most of us to imagine how these intangibles could play an influential role in the major decisions that shape our world. But we ought to start imagining it if we hope to steer our course away from the brink and toward a regenerative future.

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Dan Bertolet is an urban planner at VIA Architecture and the creator of Citytank.

< Looking west from the corner of Lenora Street and Westlake Ave in downtown Seattle. The car lot on the right is the site of a future office tower for Amazon.com; photo by Dan Bertolet - click to enlarge >

Today is Earth Day, but I still think we need a City Day too, because in this era of global urbanization, what happens in cities will largely determine the fate of the Earth. And how we build our cities will dictate what happens in them.

In this spirit of progressive city building, you are invited to the second City Builder Happy Hour, Tuesday May 1, 5pm to 7pm at the Pike Brewing Company, 1415 1st Avenue in downtown Seattle (Facebook invite).

Do you have an idea for how we can build a better city? Do you want to be given the spotlight to mouth off about it during the next City Builder happy hour? If yes, please submit your idea on the back of a cocktail napkin. You can email a picture of the napkin to tanked@citytank.org, or mail it to City Builder Happy Hour, c/o Sierra Hansen, 1809 Seventh Ave, Suite 1111 Seattle, WA 98101.

At the first City Builder happy hour, Matt Roewe pitched his idea for a gondola connecting Capitol Hill to Seattle Center. Matt’s blog post on the same topic set a new record for page views on Citytank, and the story was picked up by a wide range of media including local TV news.  Can you top that?

< Skanska's proposed Living Building in Seattle's Wallingford neighborhood; image courtesy LMN Architects - click to enlarge >

Juxtaposing urban development and mindfulness in the same sentence appears akin to throwing a reunion party for the north and south poles: a futile attempt of gathering opposites.  However, the practice of mindfulness is limitless, accepting and able to party with anyone.

I am a real estate developer educated in urban planning and embedded with a civic decoder, loving to hack the physical and social patterns present around me.  This is the awareness innate to passionate place makers, where I seek to belong.

I began studying awareness after several experiences pushed me to feel, and use my right brain.  This level of awareness is intuitive, creative, natural and effortless. It’s void of thinking or creating logic, and it is immediately present.  Neuroscientists view thinking as mental activity focused on past events or future projections (left brain). Sit still and observe over 5 minutes where your mind goes, and 99.9% of it has nothing to do with you just sitting there, feeling the moment (being in the right brain).

Clinical psychology defines mindfulness as a self-regulation of attention maintained on the immediate experience (i.e. not past or future).  This attention increases recognition of the present moment and involves adopting an orientation characterized by curiosity, openness and acceptance.  This is a mental state or knowing that is beyond what can be thought.  Fun, eh?

A mindful awareness is the very real and present space where urban development, or place making, has authentic voice and power for me.  The most valued community development is present and connected to human feeling and experience. Highly valued urban spaces are rarely a construct of past experiences or future projections (e.g. the urban simulacra of Las Vegas); rather real urban spaces are organic forms created by people working together to push aside fears, embrace uncertainty and rest in the knowing of not knowing.

Louis Sullivan’s famous aesthetic credo of form and function affirms that it is not just our heads that go to create functional urban places.  He states…

“It is the pervading law of all things organic and inorganic,

Of all things physical and metaphysical,

Of all things human and all things super-human,

Of all true manifestations of the head,
Of the heart, of the soul,


That the life is recognizable in its expression,
That form ever follows function.”

Therefore, when cities (form) result from unawareness or as places shaped by what we fear, our landscapes are molded into places that only breed more fear.

Seth Godin calls this fearful paradigm the “No Coalition,” where the No Coalition only requires just one objection, one defensible reason to avoid change.  And the No Coalition has many allies — anyone who fears the future or stands to benefit from the status quo (e.g. a view from a living room, availability of parking, time it takes to drive to work, etc.). Further, “No” is easy to say, because people don’t actually need a reason to say no.  No instantly grabs power and slows things down because with yes comes responsibility.

Godin says, “No comes from fear and greed and, most of all, a shortage of openness and attention. You don’t have to pay attention or do the math or role play the outcomes in order to join the coalition that would rather things stay as they are (because they’ve chosen not to do the hard work of imagining how they might be).”

Like Godin, I live in a world of yes, where possibility and innovation and the willingness to care seek to triumph over the coalition that would rather it all just quieted down and went back to normal.

How do we stop this vicious cycle of fear leading to bad form leading to more fear?  Having a new civic awareness that is not based on what we fear but having responsibility for change.

To be an effective and mindful developer, my challenge is to realize that communities and stakeholders probably know something I don’t, or more likely do not see what I see.  My job is to figure out what are their fears, biases and perspectives, then help them understand what I know.  Ultimately we are at our best when we mutually cultivate a collective awareness together to bring about urban places that foster the health of our communities for generations to come.

Join me.

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Lisa Picard has over 18 years of experience in the conceptualization, design, finance and management of large real estate projects, in various types of mixed‐use developments valued at over $1.2 billion. Holding a master’s degree in urban planning and another in real estate finance, both from MIT, Lisa seeks to push urban development to an increased value that exceeds what is possible by pursuing the needs of a single stakeholder. Currently, Lisa is leading Skanska’s west coast development strategy with two projects currently underway in Seattle; the first project (rendered above) is participating in the City’s Living Building Pilot Program and is confronting some resistance by nearby neighbors.

One word: fahgettaboudit.

Today, a proposal with the audacity of the Space Needle would incite an citywide naysayer orgy. It will compete with views of the mountains! It’s a waste of money! It’s out of character with the neighborhood! Where’s the affordable housing? Not unless they also pay for a 3000 stall parking garage! It’s just plain silly and we need to get serious!

Our collective character has changed over the past half century. And my take on it is that the critical element is confidence. In the early 1960s, we had gobs of it. But since then, a series of setbacks from Vietnam to the recent banking implosions have steadily drained it. And that unconfident state of mind, perhaps more than any other factor, is the biggest threat to the success of our efforts to tackle the challenges of the future and create a world in which humanity’s journey continues to expand and thrive.

< In the late 19th Century many Parisians vehemently opposed the Eiffel Tower; image from the movie "Hugo" via bplusmovieblog.com >

Curing a lack of confidence is a quandary, because the kind of dramatic successes that inspire confidence require bold action and risk taking, precisely the type of behavior that a lack of confidence inhibits. But the first step is to at least recognize this dynamic.

As an example, consider the recently proposed idea to run a gondola from Capitol Hill to Seattle Center. While there were some who loved the idea (e.g. me), most of the responses I heard or read were not too far off from some of the objections I facetiously suggested above. It seems the serious people—the grown ups—were all too eager to dismiss the idea of a gondola as naive and out of the question.

The reality is that gondolas can be efficient and cost-effective urban transportation, and a gondola is a smart, outside-the-box solution for the unique set of obstacles associated with east-west travel in central Seattle. Gondolas have been successfully implemented in cities worldwide, one of the most impressive examples being in Medellin, Columbia, where a network of nine cable cars that primarily serves the poor was completed in 2010. But when minds are stonewalled by a lack of confidence, such positives tend to be overlooked, and instead people focus on all the reasons why it could never work.

But more importantly from the standpoint of confidence, besides being a practical transportation solution, a gondola from Capitol Hill to Seattle Center would be an outrageously cool thing. People would ride it just for the awesome views. It would become a Seattle icon that no other major U.S. city could match. It would be, dare I say, fun. And all that positive mojo would breed confidence.

The proposed gondola would require a high-rise tower at the Capitol Hill light rail station, an idea that likewise faces resistance at least in part, I believe, due to a lack of confidence and a corresponding aversion to bold thinking. On the practical side, the added value of a high-rise project could help fund the long list of public amenities that the neighborhood wants. On the inspirational side, an iconic tower on Capitol Hill could become a placemaking symbol for the next “Next 50,” those who see a bright future in urban density and transit, and who also wish to celebrate the most socially progressive city neighborhood in the Pacific Northwest.

Seattle is among the most wealthy, highly educated, and politically liberal cities in the United States. How is it that in Columbia—a country with a per capita income about one fifth of ours—they manage to build a system of nine gondolas, while we balk at the idea of even seriously considering one?

And why isn’t Seattle jumping at the chance to expand LINK light right into a city-wide subway system, as proposed by the activists of the new Seattle Subway initiative? Starting in 1991, the City of Athens, Greece, began constructing a subway that opened in 2000 and now serves 33 stations on  29 miles of track. Per capita income in Greece is roughly half that in the U.S.  Not to mention the torrent of rail transit being built in China (more than 3000 miles worth in 2010 alone).

For sure, Seattle’s got a lot of great things going on, as I gushingly described recently. But that’s exactly what offers Seattle the opportunity to take it up a notch and really start pushing the envelope, not only to take on the toughest challenges like public transportation, but also to create an inspirational example of city building done with intention, passion, and soul.

The brains are here. The money is here.

Hey Seattle, got confidence?

Shaping the direction of future development is crucial to promoting livable communities in an expanding world. But what if, instead of looking ahead to future development, we used the LEED-ND criteria to evaluate the sustainability of the existing built environment?

I developed a GIS methodology for applying the LEED-ND criteria to an entire city and scored Seattle as a case study. It’s purely theoretical, since certification is an option only for sites that have new construction. But there are important lessons in what we’ve already built. If an entire city or region is evaluated on the LEED-ND scorecard, we can better understand what places—that we already intimately know—best match the type of development that the USGBC wants to encourage (assuming that LEED-ND is a good proxy for a sustainable neighborhood).

From a GIS perspective, the specificity of the LEED-ND credits made things interesting. Some credits were simply not feasible to evaluate, either because the data were not available (like building façade details or energy and water use) or the credit can’t apply to an existing site (habitat restoration, for example). Sometimes I adapted the nuances of the credit to the data available. In short, my method used GIS data to evaluate whether any given point in the city meets or fails the specific requirements of each credit and then summed these data layers to determine the final score. I divided the city into a grid of one-acre sites—a fine enough resolution to produce a meaningful surface raster, but large enough that it resembles the scale of real-world projects. (For those interested, there’s more about my methodology here.)

Enough about the nitty gritty. Let’s get to the results. (Download a full summary poster pdf here, or view the poster image here.)

< LEED-ND credit estimate for Seattle - click to enlarge >

The suite of credits I evaluated account for about half of the total points available and emphasize walkability, transit access, parks and open space, income diversity, and residential density. Neighborhood qualities like mixed uses, a variety of housing typologies, and frequent bus service factor heavily in the final map. With this in mind, it’s no surprise that some of the areas scoring highest in my analysis were neighborhoods like University District, Ballard, Pike/Pine on Capitol Hill, Mount Baker, and the Downtown Central Business District. These are places where a mix of housing, businesses, shops, and public spaces encourages you to go by foot or bus instead of car—a pattern of development that can reduce per capita carbon emissions and sprawl while increasing physical activity and health.

< LEED-ND walkability rating for Seattle - click to enlarge >

Most of us are probably familiar with this narrative, as urban sustainability has become pretty mainstream in the past few years (thanks in part to LEED-ND). But using tools like GIS to visualize where that kind of development already exists, and what places might be well suited for a rating system like LEED-ND, has a lot of untapped potential. A developer interested in building a LEED-ND project could select a site that already fulfills many of the program’s spatial requirements. A planner can look at high-scoring neighborhoods and ask: Do we like these places? Is it fitting that this is what the USGBC is rewarding, or should we be encouraging something else? Most of all, this cursory survey of Seattle shows how valuable GIS can be in each step of the LEED-ND process. The more we can grease the wheels of this kind of development, the more we can produce neighborhoods that are equitable, encourage physical activity, and address the challenges of climate change and resource scarcity.

< LEED-ND transit access rating for Seattle - click to enlarge >

For more maps and information, check out gradingthegreencity.com.

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Nick Welch is pursuing a Master’s in Urban and Environmental Policy and Planning at Tufts University in Medford, MA. His focus is on sustainability planning, neighborhood development, and geospatial analysis. Examples of his work can be found at nicolaswelch.com.

One camp argues that if you want to make housing more affordable, the best thing you can do is build as much housing as possible so that prices will fall due to supply and demand. All other things being equal, this is no doubt true. However in practice, new high-density housing tends to be relatively expensive, and in some cases may cause the displacement of existing low-income housing. And thus the opposing camp argues that dense redevelopment is an affordability killer. But they ought not to blame density itself.

Inexpensive density has existed in cities throughout history, and is arguably the most prevalent form of housing on the planet today. Of course some of that is unacceptably subpar—a.k.a. slums—but the point is nothing about density precludes affordability. And in fact, dense housing is inherently cheaper because it requires less construction, less infrastructure, less operational energy, and less land per occupant.

Nevertheless, in growing, economically vibrant cities like Seattle, new market-rate housing—dense or not!—is typically not affordable to a large portion of average households. This has two root causes:  high demand, and high cost of production. Again, density is not the culprit.

Demand is why the most successful cities have always been the most expensive cities. People recognize a city’s value, and they are willing to pay a premium to be there. There’s nothing to be done about it, aside from intentionally destroying a city’s economy and livability. Densification is the result of demand and rising real estate prices, not the cause.

Regarding housing production costs, over the past several decades the cost of labor and materials to produce housing has risen faster than the average incomes of most of the U.S. population. That combined with the high price of land in desirable cities adds up to a cost that can put new housing out of reach for perhaps the lower third or more of households.

< Subsidized affordable density soon to come online amidst not so affordable higher density: The Dekko Place at Gethsemane Lutheran, located in the Denny Triangle in downtown Seattle >

What to do?
Clearly, affordable housing is a vexing problem, but halting redevelopment—i.e. limiting density—is not the solution. While that approach could potentially save a relatively small amount of existing low-income housing in isolated cases, it would also lead to unmet consumer demand that would drive up prices and exacerbate the affordability problem across the spectrum.

Furthermore, density is the key to the efficient operation of frequent transit service, which can enable lower-income households to significantly reduce their living expenses by not owning a car. And it is also important to recognize that today’s new multifamily housing will age—much of it not well—and is destined to become the affordable housing of future generations.

Nor should we expect private developers or landowners to take full responsibility for a burden that should be borne by society as a whole. For relatively high-value projects (which are almost always high density, by the way), it is reasonable to encumber development with requirements to provide affordable housing in exchange for allowing increased development capacity. But for more modest projects, that approach can have the unintended consequence of reducing the potential amount of housing produced, which is a self-defeating outcome. Regulations should be ground-truthed in the reality that dense redevelopment is good thing in itself—the building is the benefit.

In the end, the only viable solution is market intervention, that is, government subsidy. Most industrialized nations provide valuable subsidies on the consumer side through a range of major programs (health care, education, etc.) that redistribute wealth, and this would be the single most effective strategy for addressing the affordable-housing  crisis in the U.S. Alas, ours is a culture in which socialism is a dirty word.

So for now that leaves the supply side of subsidy, which is currently delivered through a variety of programs at the local, state, and national levels. These programs are vital to non-profit affordable-housing developers, and in particular for projects that address the very low-income range, which is by far the biggest challenge. Private developer incentives can also be an important part of the mix for the “workforce housing” sector.

As the reality on the ground makes clear, however, these programs are not enough. We need to beef up Seattle’s housing levy and the State’s Housing Trust Fund, for example. We also need to pursue innovative new strategies like the land acquisition fund currently being developed by the City of Seattle to secure land for affordable housing in strategic locations with good transit access.  Or how about a federal program that picks up where HOPE VI left off but focuses on equitable redevelopment in high-capacity transit station areas?

And one more thing: If we want more affordable housing in Seattle, we need to learn to love us some density.

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“Rain come down, forgive this dirty town”

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Dan Bertolet is an urban planner with VIA Architecture and creator of Citytank.

< A construction crane rises in Seattle's Roosevelt neighborhood; photo by Dan Bertolet >

Seattle is beginning to emerge from the longest, deepest recession in the last 60 years. We can see signs of this across the city. Projects that were stalled during the recession, leaving empty holes and vacant lots, are again under way. Hard hats are starting to go back to work. As a result, Seattle’s growth is outpacing the rest of the region. Businesses, builders, and working families want to live and innovate here.

But there’s a long way to go before we’ve built a broadly shared prosperity. More than 30% of construction and building-trades workers are still out of a job. Some of them have been out of work for three or four years. We need to look at ways to accelerate our economic recovery and help build a more sustainable city.

Unfortunately, the pace of recovery is being slowed by outdated and obsolete regulations. These rules are making it difficult for people to build sustainable projects and are keeping workers from bringing home a paycheck.

We have an opportunity to change that. Last year I worked with a panel of developers, neighborhood activists, design professionals, and environmentalists to propose a reform package to reduce regulatory burdens that hinder job creation. Mayor Mike McGinn and Councilmember Richard Conlin convened the panel as part of a broad City effort to spark innovation and entrepreneurial investment, and make it easier for businesses to be sustainable in Seattle.

That package of reforms is now before the Seattle City Council, which will hold hearings today and tomorrow to discuss the proposal (Council Committee votes on April 11). These reforms can help get people back to work, expediting up to 40 new construction projects, with 100 to 250 units each, by up to 9 months. The Seattle Building Trades Council estimates that as many as 2,400 direct, family-wage jobs in skilled construction trades could be created through this effort.

Seattle has an opportunity to clear out regulations that are no longer working and help create good jobs in the process. With a global economy that is still unsettled, it’s an opportunity we cannot afford to miss.

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David Freiboth is Executive Secretary Treasurer of the ML King County Labor Council.

The Rural/Urban Divide
More than 400,000 Section 515 rental units populate the United States with 8,762 in Washington that receive some funding through the program. The Seattle Housing Authority, for comparison, records 16,984 households served. In a few rural counties of Washington State more than 80% of subsidized units were built under this program. Urban counties, where other sources of funding are common, are less reliant on Section 515 funding. There, percentage of subsidized units dips into the teens and below.

< Section 515 Units as a Percentage of All Subsidized Units; Connecting the Dots, p. 19 >

Cities get subsidized housing from multiple layers of government and a number of mostly large non-profit developers. The result is a concentration of the development and policy talent required to navigate the array of bureaucracies needed to bring affordable housing projects to fruition. The economics of housing management favor portfolios of larger projects nearby to each other, encouraging further concentration of not just staff but properties, too.

In rural areas, subsidized housing owners tend to be small “mom & pop” operations. With smaller portfolios come smaller management costs, but there’s another reason Section 515 owners tend to be small: USDA Rural Development rules limit the ability of owners to move funds around within a portfolio. The larger owners can’t leverage their size the way a car insurance company leverages its size to cover individual claims with a pool of subscribers.

The Aging Stock of Rural Subsidized Housing
Rural subsidized housing isn’t just more uniform in funding and ownership, it’s more uniform in age, too. Construction of Section 515 units peaked in the late 1970s and declined to nearly nothing by the mid-90s. The 515 program, designed for the construction of affordable rural units and their maintenance in early years, has been unable to keep up with the greater demands of aging properties.

< Section 515 Rural Rental Housing Program; Connecting the Dots, p. 8 >

Now many of these properties face expensive repairs (or “capital needs” in the parlance) common to 20-40 year old buildings, like roof replacements. But property owners have found that the approximately $500 annual per unit subsidy granted under Section 515 can’t pay for the work required to keep these properties safe and livable. With their smaller size, the “mom & pop” 515 owners lack the resources of larger, urban operations to advocate for reform or seek alternative government funds.

Acknowledgement of the Problem
In 2005 the Government Accountability Office (GAO), the non-partisan accounting and research arm of Congress, issued a report on the potential future of Section 515 housing. According to the GAO,

“Unless Congress authorizes and funds a permanent preservation program, hundreds of multifamily rural rental properties that are currently structurally sound but repairable could reach the point where they would no longer be cost effective to maintain and then become permanently lost from the portfolio.”

A demonstration program initiated in 2007 responded to some of the GAO’s concerns but the rate of revitalizing is severely insufficient to tackle the ageing Section 515 portfolio. More diligence is needed from Congress.

A Solution
A short-term fix would allow the pooling of property accounts—particularly the $500 annual per unit subsidy—a reform to the rules set by USDA Rural Development. This would provide some economies of scale to experienced urban non-profits to counteract the cost of rural management. It would not, though, clear the backlog of properties under strain of disrepair. The funds allocated for capital needs are simply too small for buildings this old no matter how you slice and dice them.

In the long-term, larger non-profits holding more Section 515 properties means more effective advocacy for preserving these properties. Change could come in the form of new funding and reformed rules for USDA Rural Development or it could bring about an expansion of HUD into rural parts of our country – a significant step to end the urban/rural divide in subsidized housing.

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Michael Goldman is graduating this spring with a Masters of Urban Planning and a real estate specialization from UW. He contributed to Mercy Housing Northwest’s rural housing preservation plan last summer and is pretty excited to witness the new Yesler Terrace develop in the coming years.