Innovations in Affordability [December Breakfast Recap]

Banner promoting December 2018 Breakfast Meeting

On Wednesday morning, we heard from three of Seattle’s commercial real estate innovators on their strategies in affordability amid the city’s rapid growth and development.

Before jumping into the program, Doug from Lease Crutcher Lewis gave a recap and showed a video from Community Enhancement Day at St. Bernadette’s Parish School. With more than 450 volunteers, the day was very much a success. Eve Ruiz, Principal, and Jeanne Flohr, Development Director and Librarian, personally thanked the audience for their help in this invaluable transformation. Jeanne gave us a memorable analogy of the work being akin to the work and accomplishments in the story of one of the school’s favorite books, Stone Soup. If you know an organization that could use some care next year, please submit it for consideration.

Rosie with Plymouth Housing introduced the speakers who talked about the partnerships, projects and programs each are doing around development and affordability right now in our city:

  • Daniel Stoner, President, NexGen Housing Partners/Parkstone Properties 
  • Joe Ferguson, Principal, Lake Union Partners
  • Paul Lambros, Executive Director, Plymouth Housing

Daniel with NexGen talked about the facts of what expenses are facing renters right now and their solutions. The NexGen Housing units range from $995-$1,195 and target those who make $35-$45K a year. The two biggest expenses facing renters right now are rent and transportation. Their solutions are Cubix and Cubix Transit. If one lives in a Cubix micro apartment/efficiency units, transit is included with the following options:

  • An unlimited ORCA transit card, 
  • Cubix-owned vehicles for small hourly rates, 
  • Rent credits for Uber pools, and
  • On-site bike repair stations.

They are continually testing and improving upon this amenity, and they see amenities like this as the best way to innovate and address affordability in the Seattle market, versus amenities like bowling lanes or small movie theaters.

In construction, they found many benefits to their modular housing development including stable pricing, building in a controlled environment with assembly-line efficiency, and excellent quality control with pre-approved building components. They believe their next endeavor will see much more efficiency due to the learning curve and consider this their proof of concept, or 1.0 version. Overall, modular saved money, but took more time. They’ll have more data with version 2.0, Cubix Othello; construction will come online in about 12 months. NexGen believes it will be fully viable by answering the last ‘proof point,’ Modular 3.0. The 3.0 phase will be the application of mods to many building sites.

Next up, Joe with Lake Union Partners talked about their work with the much debated, much discussed 23rd and Union property as a case study for the day’s topic. The community would like to keep their unique fabric intact and harness a vibrant sense of place as “Africatown,” much like we see with Chinatown or Little Saigon. Lake Union Partners’ intent with the area was to involve the community and ensure public benefits as well as encourage revitalization with affordable and mixed-income housing. Partnerships include members like K. Wyking Garrett with Africatown Community Land Trust and Capitol Hill Housing as well as the City of Seattle. These “improbable partners,” as per the Puget Sound Business Journal, were what made the Midtown Center happen. For example, that includes LUP’s prowess with the City of Seattle to expedite rezoning, and an increased number of stakeholder meetings at different times to accommodate different schedules. Their aim was to make sure residents stayed in the area and create the artwork, and that the activation for the center considered daytime, nighttime and event use. Personally, I see the most exciting potential to be the art installations on the many “canvases” around the development that will be installed (selections for the art will be by a yet to-be-determined panel).

The other case study that Joe talked about was the Grand Street Commons, a revitalization from Judkins to Mt. Baker and Beacon Hill to Leschi. A huge component to this project is ecology remediation. They are looking to have this finished when the lightrail is finished in 2023 with important components such as “affordable commercial,” a ground floor that reflects the community and a public square. Their partnerships will span non-profits, public agencies and the community to mitigate costs and achieve a return on investment.

Paul with Plymouth Housing was the final speaker to present innovations. With more than 12,112 individuals living without homes in King County, Plymouth serves 3,500 that are chronically homeless, of which about half wrestle with mental illness and/or are seniors; 86% live with a disability; on the whole, have an average income of $8,210; and 15% are veterans. When looking at the city’s unhoused population, Plymouth (and others) now strongly take in consideration those living in vehicles due to high rents in the city whereas in the past, this wasn’t the case.

Paul shared several case studies about the innovation they are doing in the city to address affordability for this population including Sylvia Odom place (on 3rd between Lenora and Virginia) and A.L. Humphrey House (on 1st and Cedar), as well as the new Rainier Supportive Housing development. Plymouth housing usually has great support from the community, in part because the housing units always have nursing, social workers and 24-hour staff onsite. Paul shared the case study where costs on public services of 90 units were tracked by UW and Harborview over 12 months, and they discovered that savings to the city were over $1 million. Therefore, they are replicating the model and building another unit closer to Harborview. Paul talked a lot about unique ownership structures such as tri-ownership with condominiums, purchasing historic buildings, selling air rights, using credit programs, working with local neighborhoods and more.

Paul also talked about the Madison and Boylston Project, also known as “Mad Boy.” It is their first high-rise project, and it has the unique ownership of three condominium owners with a retail requirement. They are working with Bellwether in this partnership and are looking at credit programs with the city. Plymouth is in the process and well on track of completing 5 buildings with 500 apartments in 5 years … all with innovative and unique strategies for affordability.

As a reminder, we will not have a January breakfast due to the Seattle squeeze, and we will see everyone on Valentine’s Eve, February 13.

This article was written by NAIOP Washington State and Marcom Committee member Sarah D. Fischer, Burgess Design.

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