Sage Goes Soft Over New Developer Tax Breaks

An e-mail advisory not to protest.

Earlier this month, the Seattle City Council voted to dramatically increase the amount of rent developers could charge for apartments and still receive the Multifamily Tax Exemption--a tool used by the city to encourage the building of "affordable units."Most low-income housing advocates actively fought the change. But Puget Sound Sage couldn't seem to make up its mind. Shortly before the City Council vote, the group, comprising labor, church, and community organizations, sent its members an e-mail encouraging them to "take action" and turn out at City Hall in opposition to the plan. Only a day later, Sage sent a new note, saying its board "had taken no formal position" on the proposal."We are no longer asking you to attend the City Council hearing," it said. "We apologize for any confusion our previous e-mail created."The succession of e-mails, and Sage's subsequent public silence on the issue, left people scratching their heads—particularly since in the past the organization hasn't been afraid to stand up to City Hall."It's unfortunate that Sage backed away," says the group's former director Alice Woldt. "This is kind of a traditional community issue when you're fighting for low-income housing."Under the new plan, developers get a property-tax break if they build apartments for people earning between 80 and 90 percent of the median income. (In Seattle, that's $45,600 to $51,300 for one person.) The tax break had previously only been available to developers building units for people earning between 60 and 70 percent of the median—or $34,200 to $39,900 for one person. For example, a developer can now get the subsidy for the construction of a building that includes studio apartments renting for between $1,140 and $1,283, compared to $855 to $998 under the old policy.Most affordable-housing advocates say the city should've left the credit alone."We're completely disappointed in the lack of insight on the council and on the real needs of people in Seattle," says Michele Thomas, a community organizer for the Tenants Union of Washington State. "People are being gentrified out of the city, and the people most at risk are the ones in the lower income brackets."Another argument against the change is that the city is giving away money for something developers would be building anyway. "This is one of the more generous incentives I've seen the city give away in a long time," says Nick Licata, the only council member to vote against the plan.Sage also said as much in its initial e-mail trying to galvanize opposition: "Average rents throughout the city are affordable to families making 70 to 80 percent of median income. The proposal would effectively subsidize developers to build housing at market rents with our tax dollars."Founded as the Seattle Alliance for Good Jobs and Housing for Everyone in 2001 (or SAGE), the group changed its name to Puget Sound Sage with the hiring of a new board and an executive and research director last year. Current board members include leaders from the Minority Executive Directors Coalition, the Low Income Housing Institute, the Church Council of Greater Seattle, and unions like the United Food and Commercial Workers Local 21. Sage's diverse groups have historically come together to lobby for public benefits when the city makes policy decisions that help private entities.The group helped persuade the City Council last year to protect certain land zoned for industrial purposes from being rezoned for commercial use. And in 2001, Sage convinced the city to increase the fee it charges downtown office developers from $13 per square foot to $22.50 per square foot, money that goes into a low-income housing fund.Arguably Sage's greatest legislative victory was winning more money for affordable housing in exchange for allowing developers to construct taller buildings downtown as part of a massive rezoning in 2005 and 2006.Sage partnered with other affordable-housing advocates like Real Change to lobby the city to charge developers $19 for each square foot built above the old height limits (almost double the dollar amount initially proposed by the mayor), a fee used to pay for things like low-income housing and green materials. "Sage certainly had an important role in that lobbying effort," remembers former council member Peter Steinbrueck, who also fought for the higher fee.Today, Sage is managing a massive effort to draw up a "community benefits agreement" for the Dearborn project, a plan to build 650,000 square feet of retail (including a Target), 550 housing units, and 2,200 parking spaces on the site in the International District currently occupied by Goodwill. Developer TRF Pacific needs the city to change the zoning and to sell portions of streets and sidewalks to make the project possible. In exchange, Sage wants the city to require TRF Pacific to create low-income housing and quality retail and construction jobs, and to preserve the character of the surrounding neighborhoods through careful planning and design of the development.Some wonder if the Dearborn effort got in the way of the group's opposition to the tax credit."I suspect that because they're working also on the Dearborn project, that there may have been some interplay there," says Licata. "They're juggling different negotiations and working on two projects where they're negotiating with the same person"—that person being Mayor Greg Nickels."It's easy for me to imagine that there were some conversations," adds Licata."I think some of the leadership on the [Sage] board is too tight with the mayor," agrees John Fox of the Seattle Displacement Coalition. "They think they can get what they want for Dearborn by backroom negotiations and sacrificing a principled opposition [on the tax credit] for some marginal return. You become part of the status quo when you play that game."Fox points to the fact that on June 18, the day after Sage blasted its "never mind" e-mail, the city hearing examiner delayed a meeting on rezoning for the Dearborn project until the fall. (It originally had been scheduled for the following week.) The move means the hearing will coincide with consideration of the Environment Impact Statement, which, in the words of another Sage e-mail announcing the delay, "makes clear that the two issues—rezone and EIS—are linked." (Good news, in that the delay gives Sage more time to negotiate the benefit agreement.)But Sage Executive Director David West insists the organization's silence on the tax exemption had nothing to do with any kind of quid pro quo with the mayor regarding Dearborn. "We didn't ask the hearing examiner to postpone that. Her decision was a surprise to everybody," he says.West acknowledges there's been some speculation about what happened. "The common assumption is that we're just rolling over to the powers that be," he says. "But it's actually more complicated than that."Instead, he says what happened was a garden-variety case of the staff getting ahead of the organization's board of directors. "We had to retract what we'd put out because we hadn't taken a formal position." (The staff person who authored both e-mails, Elana Dix, referred questions to West.)So why didn't Sage's board take a position on the issue? Sage members say there wasn't time to meet between the staff-sent e-mails and the City Council vote. However, the council had been considering the proposal for more than six months.Sage may just face internal division. Board president Rick Sawyer is the international vice president of the Washington chapter of UNITE HERE, a coalition of unions that represent service-industry employees. He says this organization had adopted a stance on the issue several years ago that supported credits for "middle class housing," essentially what the council approved. But board member Sharon Lee, executive director of the Low Income Housing Institute, says she would have liked to see the tax breaks stay in the lower-income brackets where the need is greatest."At one point we had more than 12,000 people on the [Low Income Housing Institute] waiting list. They were working people making between 30 and 50 percent of median income and couldn't afford market-rate housing," she says.It's unclear how much Sage's opposition, had the organization stuck with it, would've mattered.Still, says the Tenants Union's Thomas, "I think they should have been there. A lot of other organizations should've been there. The problem with the way policy gets made in this city is that a lot of people don't have the opportunity to weigh in or are chirping the same line to get the convenient vote."Those supporting the new exemption include the Middle Income Housing Alliance, led by former mayor Charles Royer, to promote workforce housing for people like nurses and firefighters, and the Housing Development Consortium, whose members include nonprofit housing developers.West, for his part, promises that Sage isn't retreating as an affordable-housing advocate."I know there are people disappointed on this one," he says. "But we see the [tax exemption] as one of many debates that will happen. We intend to be involved in all of them. Chances are that we will be in a position in the future that maybe we won't agree with the mayor. That's quite possible."He adds that the tax exemption is scheduled to be reevaluated in 2010 and says that Sage might be there—next

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