In an ironic twist, downtown Seattle’s phenomenal growth could hamstring the city’s future.
While the number of jobs and people living and working in downtown Seattle is up nearly 40 percent since 2010, a recent report from the Downtown Seattle Association is blunt: Unless Seattle adjusts its zoning guidelines, the downtown area will have “only a few viable sites for the next development cycle.”
Couple that with Seattle’s urgent need for more affordable housing and the Puget Sound area could develop a new type of neighborhood, the “boomburg.” Proponents favor expanding up rather than out near mass transit stations, allowing mid- and high-rise development projects that create densely populated vertical neighborhoods — mini-downtowns — that combine housing, restaurants, shops and offices.
The closest example of a high-rise transit-oriented development is in Vancouver, British Columbia. A flyby of the Vancouver area shows a sea of suburban single-family houses punctuated by bristling clusters of high-rise towers at rail stations. With amenities such as gyms, rooftop gardens, restaurants and coffee shops, these residential high-rises are vertical villages, providing residents a convenient commute and a more urban lifestyle than the surrounding suburbs.
Several factors may influence the development of these vertical villages. Traffic in Seattle is infamously snarled; the average commuter spends 138 hours every year trapped in traffic, according to Inrix. That’s the sixth-worst wait time in the United States. And area residents in 2016 approved a $54 billion plan to extend the Link light-rail system to West Seattle, Ballard, Tacoma, Federal Way, Everett and Issaquah.
Then, in March, the Seattle City Council unanimously approved a controversial plan to rezone for more intensive use, or “upzone,” portions of 27 neighborhoods and several commercial corridors. Doing this would create denser development and taller buildings.
The Council’s Mandatory Housing Affordability plan also requires developers in upzoned areas to either build or contribute to a fund for nonprofits to construct low-income apartment projects. Additionally, Seattle Mayor Jenny Durkan has created an advisory council to address housing for middle-income households.
Noting the trend toward smaller apartments in urban neighborhoods and the efforts of nonprofit developers to build housing for lower-income families, the “missing middle” has become an area of increasing concern, the mayor said in a statement. While median home values in Seattle have actually declined slightly during the past year, the median home value in the city is $729,400, according to Zillow. Global consulting firm PricewaterhouseCoopers says Tacoma is the only market in the region where a household earning an average wage can “theoretically” afford a single-family home.
In the Legislature, state Senator Guy Palumbo, a Maltby Democrat, introduced a bill that would have required a minimum of 150 units of housing per acre within a half-mile of a transit hub. Additionally, he proposed a bill to allow small apartment buildings, duplexes and the like near public amenities such as parks, schools and hospitals. Both were unsuccessful, but the bills reveal a new way of thinking about future development. A less-restrictive bill that would create options and incentives to encourage greater density is likely to make it to the governor’s desk.
HIGH-RISE COMMUTE. The TransLink’s SkyTrain in metro Vancouver, Canada, travels on elevated track from the train station. In the background are the modern high-rises of the Willingdon Heights neighborhood. Photo by Kathryn Hatashita Lee/iStock
Palumbo says that super high prices for houses in Seattle and close-in suburban cities such as Bellevue have prompted “an explosion” of single-family houses in his district, which includes Bothell and Mill Creek. He worries that the area doesn’t have the infrastructure to support such rapid growth.
“We have the No. 1 single-family home sales in the state,” Palumbo notes, “but we only got $10 million for State Route 522 out of a $16 billion transportation packet. We took all the growth without money for our schools. We have to readjust where we fund infrastructure in a big way.”
There’s also a push to make it easier to build condominiums. A bill passed by the state Legislature will tighten the definition of construction defects and encourage repairs instead of legal action against developers. It also protects condo association board members from personal liability for unaddressed defects. At the same time, thousands of condominium units are now in the pipeline after several years of no inventory. Slightly more than 1,000 new units are slated to open in Seattle this year, according to Polaris Pacific, a real estate sales, research and marketing company. And that’s just the beginning: More than 2,400 proposed units are expected to open in 2022.
While big international and national builders will continue their focus on the construction of high-rise steel-and-glass luxury condo towers, smaller local builders are testing the waters for more affordable low-rise projects.
This summer, for example, The Neighborhood Collection will open three planned mid-rise apartment projects as condominiums instead. The projects include the 34-unit Atrium on Capitol Hill, the 51-unit Edison on Pike/Pine and the 48-unit Wallingford 45.
Condominiums, which typically cost about two-thirds as much as a single-family house, appeal to both younger millennials wanting to get into the housing market and to baby boomers who would like to downsize and shed the burden of maintaining a yard and a home. All this helps the housing market by putting more single-family houses up for sale and by positioning young households to start building equity.
TRANSIT-POWERED GROWTH. The recently opened 91-unit Sonata apartment complex is located at the Columbia City Link light-rail station. Nearby, the 96-unit Encore condominium project is slated to open in 2020. Photo by Gene Faught
Bellevue-based BDR Holdings is straddling the rental and for-sale markets with two new projects across from each other at the Columbia City Link light-rail station: the newly opened 91-unit Sonata at Columbia Station Apartments; and the Encore at Columbia Station, a 96-unit condominium project that will open in 2020. In an unusual offer, the first dozen qualified homebuyers to reserve condo units at Encore will be able to rent a unit at Sonata while they wait for the condo project to be completed. Up to 15 percent of their lease payments will be credited toward their condo purchase.
“Our Seattle version of a boomburg is happening right now at the Columbia City Station,” says BDR Holdings president Richard Obernesser. “Other similar BDR projects will depend on where the station is and what surrounds those stations. People want to have the social connectivity that’s part of being in a neighborhood, especially old neighborhoods where you know everybody. There are lots of opportunities to cross paths in the retail on the main level and the amenities up top.”
Light-rail stations are more likely than bus stops to attract transit-oriented development because rail stations are permanent while bus routes can be easily changed, says Dan Bertolet, a senior researcher at nonprofit think tank Sightline Institute in Seattle. Sightline advocates upzoning citywide, Bertolet says.
So do many others. Currently, Seattle’s transit-oriented development more closely resembles a wedding cake, with taller, mid-rise projects near rail stations, dropping down to low-rise buildings nearer single-family housing.
While the current zoning near Seattle’s light-rail stations is “an improvement over single-family zoning, it’s not the kind of zoning we should be seeing,” says Matt Goyer, the founder and managing broker of Urban Living in Seattle. “We have only to look at Vancouver to see what we should be doing. We should allow 40-story towers if what we want is to build urban meccas that make it easy to commute.”
Easier commutes could also make suburban municipalities on light-rail lines better able to compete against larger cities for residents and jobs.
“Face it. Seattle has not done itself any favors with big business in the last year,” says Dean Jones, a principal at Realogics Sotheby’s International Realty in Seattle. “Some of these local neighborhood municipalities are realizing their best days are ahead because of transit and other advantages like school districts and pro-business city councils.”
Bellevue, meanwhile, embraced denser transit-oriented development early on by upzoning an aging light industrial area back in 2009 that embraces the boomburg philosophy. The ambitious 36-acre, 16-block Spring District is being built around a future light-rail station slated to open in four years. The project will bring thousands of jobs and residents to the neighborhood. It also will house outdoor-gear retailer REI’s new eight-acre headquarters, an 11-story Facebook office building and the Global Innovation Exchange, a unique education partnership between the University of Washington, Microsoft and Tsinghua University in China.
Matthew Gardner, chief economist for Windermere Real Estate, says the Totem Lake neighborhood just off Interstate 405 in Kirkland also has enormous potential to become a vertical village. “Strip malls, frankly, are under-demolished, given the existing retail environment,” Gardner says. “Well-located malls can provide a sizable chunk of land near transit corridors that can be redeveloped into large mixed-use projects.”
Nobody is making more land. The Puget Sound region’s hilly, soggy terrain and the Growth Management Act restrict where development can occur, and the supply of developable land is shrinking.
“It’s going to require elected officials to make some really hard decisions about whether they are prepared to embrace denser housing at the same time that neighborhood residents don’t want it,” Gardner says. “At what point will companies think expanding in Seattle is just too expensive?
“They will go looking at Spokane, Boise and Las Vegas,” he adds, “where a new house costs less than $300,000.”