Zoning and Development Impact Home Ownership
As Seattle home prices have risen, the City of Seattle has looked to zoning and development changes at the governmental level to address these issues. Seattle’s median home price is $760,000, while median salary is around $100,000 per year. While this is doable for many Seattleites, others have felt the crunch. Seattle has addressed this through multiple avenues, including zoning changes across the city, Mandatory Housing Affordability, Housing Affordability and Livability, and exploring changes to condominium laws. These changes may impact homeowners, real estate investors, and builders across Seattle.
Seattle Zoning Changes
Zoning code specifies land use options, such as residential or commercial designation. Many neighborhoods in Seattle have historically been primarily zoned for single family residential real estate, which has excluded condominiums, apartments, and even townhomes. As Seattle looks to accommodate a growing population, some of these zoning regulations are being changed or examined. Although Seattle has grown dramatically over the last decade, Seattle’s density is still only about a fourth that of New York City. Changes to zoning may impact residential real estate value or options for investment income.
Room to Grow
Seattle has growth options in many single family neighborhoods. These neighborhoods have historically not allowed multi-family housing options, which has restricted the growth and the affordability of homeownership. The price points in these neighborhoods have been high due to the zoning code and lack of options for condominiums, apartments, backyard cottages or townhomes. Builders have focused on large, luxury homes in these neighborhoods, as zoning has restricted the building of more affordable units that better utilized the lot space. As the city has multiple geographic barriers to development because of the bodies of water, subdividing land or growing vertically provide the best options for space utilization. Seattle is starting to pursue denser zoning for homes.
Housing Affordability and Livability
The Seattle agenda dedicated to addressing livability for all Seattleites is known as Housing Affordability and Livability Agenda (HALA). They have a multi-part strategy that includes rezoning some neighborhoods to allow for denser development. Some of these strategies include implementing a Mandatory Housing Affordability (MHA) fee. This fee would contribute to the city’s fund for affordable housing and/or require builders and developers to include a certain percentage of affordable housing units in a housing development, whether this is for ownership or renting.
This agenda has not been without its opposition on both the development and community side. The city is currently looking at public comments and a decision is expected in the Spring of 2019. MHA fees are not currently known, but this could have an impact on the value of land, as well as building costs.
The city is looking at urban villages as locations for potential HALA residential rezone areas. Their determination for urban villages included potential displacement risk due to development of current residents, access to opportunity in the area, as well as access to transit, schools, and other neighborhood resources. Future blog posts will dive more in depth into the Link Light Rail development; rezoning has occurred along the new transit path. The MHA interactive tool allows you to search your own address or addresses in your neighborhood to determine the personal impact to you and your housing situation. Some of these neighborhoods that may experience a rezone in the future include: Crown Hill, Northgate, and Othello.
These zoning changes may impact investment options in multiple ways. Investors who currently own homes in the HALA neighborhoods may see an increase in land value with the upcoming changes. Investors may be wise to seek investment in these areas, as HALA will likely increase development and revitalization of these areas in the near future, thereby protecting their investment. Investors may also be able to explore multi-family investment options that previously did not exist, such as apartment buildings, townhome rentals, or condominium development.
Seattle Regulatory Changes
Seattle has looked to the myriad ways regulation has hampered development and affordable housing throughout the city.
Regulation has been strict around backyard cottages or detached accessory dwelling units (DADUs). Look for a vote near the end of March that may loosen some of these regulations, allowing for more DADUs, and thus, better use of available land for housing.
A proposed bill would amend the condo warranty law, which would encourage more developers to build condominiums, thus increasing affordable options for people seeking homeownership. Condo development has all but halted in the Seattle area over the past decade. Much of this stems from the frequency of lawsuits against condo developers. The proposed bill adjusts the personal liability of condo association board members, as well as the warrantable defects of the condo itself.
Does This Impact You?
Do you want more information on any of these topics, or would you like to learn how these changes might impact you? Whether you currently own property or would like to become a homeowner, we can provide resources and guidance. Interested in investing in Seattle real estate or growing your established portfolio? With our expertise in zoning, land development, and building code, we provide a unique knowledge base outside typical residential real estate.
Talk with Home Docket today
Whether you are buying or selling a home or property in or around the Seattle area, let us navigate you through the exciting Seattle real estate market. Within the last decade, our agents have sold over $200,000,000 in residential real estate alone – we know the ins and outs of buying and selling a home, and we can help you meet your goals.