Councilmember Zahilay proposes $1B for middle-income public housing

The plan would use bonds to fund the development of “workforce” housing in King County for people earning 50%-120% of area median income.

a four story apartment building under construction next to a single family house.

In this Dec. 13, 2017, file photo, a four-story mixed-use building is under construction in Seattle adjacent to an older single-family home. (AP Photo/Elaine Thompson, File)

You probably don’t need to be convinced that housing is too expensive in Seattle and King County. But the numbers put a fine point on it.

Earlier this year, the median home sale price in King County surpassed $1 million, far out of reach for most residents. Renting isn’t so affordable either. Fair-market rent on a “modest” two-bedroom rental is $2,645, according to the U.S. Department of Housing and Urban Development. A household needs to earn more than $105,000 a year to afford that without being considered cost-burdened. 

Local, regional and state officials have ramped up investments in the construction of subsidized affordable housing for the lowest-income residents in the past decade, though the need for housing still far surpasses the supply.  

The same effort hasn’t been made for middle-income housing, but that is changing as prices tick up and the private housing market provides less housing that's affordable to the middle class.  

King County Councilmember Girmay Zahilay, whose district represents parts of Seattle and Skyway, has proposed an initiative to use $1 billion of the county’s bonding capacity to fund construction of mixed-income, publicly owned housing. Rents would be set at levels affordable to people earning between 50% and 120% of the area median income, or between $52,700 and $126,480.  

“So many people are losing their homes and being displaced farther and farther out of the core of our cities,” Zahilay told Cascade PBS. “They’re living farther away from their jobs, and that is bad for our society. … It lowers productivity, increases stress, increases congestion and climate pollution. It makes sure that families spend less time together.” 

Zahilay’s bill would create a workforce housing initiative that’s tasked with writing recommendations for making the idea a reality.  

The Councilmember said that in his ideal version of the plan, people within that 50%-120% AMI range would live in the same buildings but pay rents on a sliding scale according to income. The higher rents paid by the higher-income residents would help subsidize the lower rents paid by the lower-income residents as well as the ongoing operating costs.  

“My goal is for [the buildings] to be self-sustaining,” said Zahilay. “The combination of rents that we charge and collect are enough to pay off all the monthly costs, includes paying down the interest on the debt, the principal on the debt and any operating costs associated with the buildings.” 

Local housing authorities, including King County Housing Authority and Seattle Housing Authority, would own the apartments to ensure they remain in public hands and that rents remain below market rate in perpetuity. But, Zahilay said, he can imagine private developers, whether for profit or nonprofit, helping with the construction and operation of the buildings.  

King County would use $1 billion of its $9 billion bond capacity to borrow money to pay for construction. Exactly how much housing could be built is yet to be determined, though Zahilay said he’s hoping for thousands of units of new housing for middle-income workers.  

King County has a goal of building nearly 309,000 new units of housing countywide over the next 20 years. Of those, more than one-third need to be affordable to people earning 30% or less than area median income. Another 22,376 should be affordable to people earning 50%-80% AMI, and 14,925 of them affordable to people earning 80%-100% AMI.  

If passed, the bill would direct the King County executive to develop an implantation plan to send back to the Council by March 2025.  

The proposal has garnered support from IBEW Local 46, the MLK Labor Council, Housing Development Consortium, Seattle Chamber of Commerce, developer Nitze-Stagen, Ironworkers Local 86, King County Housing Authority and Civic Ventures. Councilmember Rod Dembowski is co-sponsoring.  

Zahilay’s idea has strong parallels to the type of housing Seattle’s newly formed social housing developer hopes to build in the coming years. They too have proposed constructing publicly owned housing with mixed-income residents and below-market rents on a sliding scale.  

This year, Seattle social-housing advocates collected enough signatures to place a tax proposal on the ballot to help pay for construction and acquisition of social-housing projects. The measure will appear on the February 2025 ballot.   

Asked about the similarities, Zahilay said he endorsed the Seattle social-housing measure in 2023 and is glad that work is continuing. “I think [my proposal] is slightly different in that it’s not calling for a new tax source. … And it’s regional rather than city level. But the more opportunity we have to keep people stably housed the better.” 

In Montgomery County, Maryland, outside of Washington D.C., a public housing agency is putting a similar idea to practice. They’re constructing new apartment complexes in which higher-earning residents paying higher monthly rents help subsidize below-market-rate rents for lower-income residents in the same building.  

Zahilay’s bill will be introduced to the County Council’s Budget and Fiscal Management Committee on Wednesday morning at 9:30 a.m.

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