Kirkland City Council approved, in a 6-1 vote, an affordable housing pilot initiative at its Sept. 3 meeting. The initiative is a collaborative effort between the city and Kirkland Sustainable, which is made up of Kirkland Sustainable Investments, LLC and Sustainable Kirkland, LLC.
The pilot initiative seeks to offer both generally affordable housing units and units catered specifically to city and public sector employees. The buildings holding these units — the Arete multifamily development and the soon-to-be-completed Plaza multifamily development — are both located in Kirkland, and currently owned by Kirkland Sustainable.
“I think it’s a step forward,” Councilmember Kelli Curtis said. “I think we’ll learn a lot.”
To provide for the 23 affordable rental housing locations at the Plaza location specifically, amendments were made to the city’s multifamily housing property tax exemption (MFTE) ordinance, chapter 6.88 of the Kirkland municipal code. For the 34 employee and public sector rental housing units, master lease agreements with Kirkland Sustainable will be executed by the city manager.
The code changes necessitate that MFTE units be required for only a 12-year MFTE period rather than a “life of project” period, and that the units be offered at no more than 80 percent of the King County area median income (AMI).
“These are general Kirkland requirements and not state law requirements,” city attorney Kevin Raymond noted.
Following a discussion during Kirkland’s most recent special council meeting, 65 percent of anticipated property tax savings realized by the developer, as recommended by the city, will initially go toward the housing transition programs at the new Eastside women and family shelter, in addition to Kirkland. Through this, the initiative is estimated to provide almost $1.2 million in funds for the shelter and other housing programs.
Kirkland Councilmember Tom Neir, who voted against the pilot initiative, first said there are aspects of the proposal he is in favor of before discussing his misgivings.
“I am open to experimentation,” he said. “I think it’s fabulous that you’re looking for ways to house employees. I think every company’s got that problem — we clearly have that issue as a city. I think that’s the good news in this…These things said, I have serious reservations about this deal and this application of MFTE.”
Neir noted that the MFTE, as it stands, redirects property taxes, which benefit schools, emergency services, libraries, hospitals and other city entities. He agreed that the MFTE can be used as a tool to increase the supply, affordability and quality of housing, but said that he believes the initiative “doesn’t do any of that,” since the Arete and Plaza locations already provide many of the things the pilot seeks to enact.
“I don’t think we should be redirecting taxpayer money through MFTE…to take care of a human resource problem, which is paying our staff enough to live here or finding them a place to live,” he said. “Or taking care of homelessness — we should fund them all, but this is not the tool.”
He added that the 12-year deal as advertised by the initiative neither reads to him as an experiment nor a pilot.
The council was otherwise enthusiastic about the project.
“It’s been a difficult decision because it’s been a complicated proposal and agreement,” Councilmember Jon Pascal said. “But I think everyone is supportive — and I am — of providing affordable housing in the city of all housing types for all people at all income levels.”
Deputy Mayor Jay Arnold had similar views.
“This pilot by the city of Kirkland is a creative, innovative housing solution worth pursuing and I think we’ll learn a lot on…the potential for scaling this up,” he said.
Arnold added that the project will likely benefit the community on all sides. An estimated 15 percent of Kirkland workers live in the city, for example, and Arnold noted that the housing opportunity could potentially increase the number.
“I really salute the staff on the hard work on finding a way to make this work,” he said.
For more information about the initiative, go to the most recent city council meeting packet.