New York
The eight-story, 150-unit Elara at the Market looks like just another sleek apartment building in Seattle’s trendy Belltown neighborhood.
Blocks from Pike Place Market, the Elara opened six years ago with a lush private courtyard, a gym and wine storage lockers. The building is full of Amazon workers who pay more than $2,000 a month for a one-bedroom to live near the company’s headquarters.
But this upscale building with a rooftop deck overlooking the Puget Sound recently transformed into something more likely to conjure images of high-rise public housing in the US or Soviet-style concrete housing blocks: government-owned housing for low-and middle-income renters.
Seattle believes the affordable housing model has left a void for middle-class households that earn too much to qualify for housing lotteries, but too little to pay for a market-rate apartment. The city’s solution is to create a social-housing model inspired by Vienna, where roughly half of residents across a wide range of incomes live in government-subsidized homes.
It’s not the traditional public housing the federal government built for low-income households during the 20th century. It’s also not affordable housing, privately-owned developments built with government subsidies and tax credits in exchange for below-market rents.
The Seattle Social Housing Developer (SSHD), the city’s newly established public development authority, purchased the Elara for $61 million this month from a private owner.
While many cities and states are trying to climb out of the housing crisis by cutting regulations and relaxing zoning laws to entice private developers, a growing movement on the left wants the public sector to build social housing. The acquisition is the first step in Seattle’s effort to buy more than 1,000 apartments and build 600 new units of social housing for mixed-income households over the next five years.
Roughly 15 of the Elara’s units are vacant. The social developer held a lottery to fill them for people making up to 50% of area median income — $65,000 for a two-person household. It also froze rents on existing market-rate tenants for two years. Nobody’s being evicted, but as apartments turn over, they will be filled with lower and middle-income renters.
Bilal Durrani, who works as a manager at Amazon and has lived in a 600-square-foot, one-bedroom apartment at the Elara for a year, was surprised when he received a letter in the mail from his new landlord.
He wondered if public ownership would affect his rent or change who lives in the building.
He’s glad the building’s new owner froze his rent and eliminated storage fees. He’s happy to be a guinea pig in Seattle’s experiment — at least for now — and hopeful that social housing may help people struggling to afford the city.
“People always get freaked out when the government steps in, but I’m glad the city is doing something,” he said.
‘Wasted three years and $60 million’
Social housing has won strong political support on the left in Seattle in response to soaring housing costs. The average home value doubled from 2012 to 2022 to $945,000, while rents grew 75% to roughly $1,800 a month.
Voters in 2023 approved a ballot measure establishing a public developer to construct social housing for people earning up to 120% of area median income — roughly $138,000 for a single person.
Last year, voters approved a dedicated “social housing tax” to finance the effort, levied on businesses like Amazon and Microsoft who pay employees more than $1 million in salary annually. Revenue from the tax will fund the social developer’s acquisitions and development, and rents for higher-income tenants will subsidize lower-income neighbors.
But many development experts and business advocates in Seattle have criticized the social developer’s strategy. They say it’s ineffective, led by activists without experience developing housing, and siphons off resources that could go to building housing for people with lower incomes.
The tax generated $115 million this year, and critics believe that funding should go to building new homes or preserving existing affordable apartments for lower-income renters. Dozens of nonprofit and for-profit affordable housing providers in Seattle are reporting losses and have sold off their properties, risking that they become market-rate apartments.
“I think the Seattle Social Housing Developer should develop social housing,” said Jamie Madden, an affordable housing development consultant in Seattle and the author of “Bittersweet Lane: Creating Home(s) in the American Affordable Housing Crisis.” “They have wasted three years and $60 million and delivered rent control for residents who are not low income and 15 new apartments.”
Seattle’s model represents a sharp break from how the federal government has funded affordable housing in America since the 1980s: the federal Low-Income Housing Tax Credit (LIHTC), which awards tax credits to private companies that construct housing for lower-income residents.
Social housing advocates believe this model is broken. LIHTC funding is limited every year, and projects financed with the credits have strict income eligibility limits. Tenants with incomes above 80% of area median income typically don’t qualify. Credits also typically expire after 15 or 30 years, at which point the building’s owner can start charging market rents.
Montgomery County, Maryland, an affluent suburb of Washington DC, pioneered the social housing model Seattle and other US cities are trying to replicate.
Montgomery County has used a $100 million fund to finance construction of new mixed-income, mixed-use developments. These projects do not require LIHTC credits or other affordable housing subsidies. The first building, the Laureate, opened in 2023 with a courtyard pool, theater and a gym.
“We were very inspired by them,” said Tiffani McCoy, the interim director of the Seattle Social Housing Developer.
But Seattle’s social housing push has had growing pains since it was formed in 2023. The social developer’s board has turned over and it fired its first CEO in January, installing McCoy.
The social developer wanted to acquire a high-end building in a hot neighborhood to dispel the idea that people who make less money “should only have access too lower-quality housing,” McCoy said. It was also less risky than buying a struggling property behind on millions of dollars of repairs.
But ultimately, McCoy said it’s about thinking about housing as a public good like libraries and roads.
“We don’t want to rely on the private market, which is ultimately there to create a profit off renters,” said McCoy. “We need a model in this country, like other countries across the world, that creates housing as public infrastructure.”
