One-Third of Seattle Households Are Low-Income, Driving a Need for 112,000 New Affordable Homes by 2044

by Lauryn Bray

Seattle will need to build 112,000 new affordable homes in the next 20 years to accommodate a third of Seattle households whose annual earning is less than 80% of the area median income (AMI), the Seattle Office of Housing (OH) reported Wednesday, June 12, to the City Council's Housing and Human Services Committee.

"In Seattle, over one-third of our households are considered to be low-income," said Kelli Larsen, policy and planning director for the Office of Housing, citing data from the U.S. Department of Housing and Urban Development.

A low-income household in Seattle is one that makes less than 80% of AMI. Seattle's AMI is approximately $116,068. According to Seattle Housing Authority, a household of one making $77,700 or less is considered low-income. The national median income is $74,750 as of April 2024.

"Renters make up over 50% of the residents in Seattle. We understand how important it is to invest in rental affordable homes, and the rental housing program is the majority of our funds for the Seattle Housing Levy, payroll expense tax, and MHA [Mandatory Housing Affordability Program]. We recently announced the 2023 funding awards, totaling 53 million to build 443 homes," said Larsen. "Seattle needs 112,000 new homes by 2044, with the majority of need in the affordable housing categories. About 70,000 homes are needed at or below 80% of AMI. The greatest need for affordable housing exists at the 0—30 level for those with the lowest incomes. We need over 43,000 homes for extremely low-income households."

Larsen also said priority for such housing should be for residents making less than 30% AMI. "The lowest-income renters have the highest rates of severe housing-cost burden," said Larsen. "It is generally believed that renters experiencing severe housing-cost burden are those most at risk for eviction, displacement, and homelessness."

Meanwhile, the city is also facing a decline in the number of single-family rental homes. The Office of City Auditor investigated the decline in small properties from 2016 to 2022 and determined that in 2022, large multi-family property owners made up just 6% of all property owners but controlled 66% of the city's rental units. City auditor David Jones found that about 6,800 Rental Registration and Inspection Ordinance (RRIO) registered properties were sold between 2016 and 2022, and about 88% of them were smaller properties with one to five units.

Jones' audit also found that 768 demolition permits were issued to RRIO properties between 2016 and 2022, with 92% being properties with fewer units. The audit included a survey among landlords who stopped renting in Seattle, and 21% (54 out of 261) said they converted their rental property into a primary residence either for themselves or a relative. Meanwhile, in 2022, there was a significant uptick in registration for large multi-family properties with more than 21 units.

Also, more tenants filed housing complaints with the Seattle Department of Construction & Inspections (SDCI) concerning single-family and small multi-family rental properties compared to large multi-family properties.

OH also proposed suggestions for process improvement so landlords can register and renew properties more efficiently, stating that the IT system currently being used to verify RRIO compliance is antiquated.

"The IT system that FAS [Finance and Administrative Services Department] has poses some challenges in data gathering and their ability to manage and do enforcement," said Jones. "It's a labor-intensive process that SDCI has now to verify RRIO registration compliance and they have a large backlog of work they have to do on that, and they only have so many staff."

Following the presentation, Council President Sara Nelson said she looks forward to implementing policy that will incentivize single- and small multi-family landlords to maintain their properties as RRIO registered.

"According to the report, 74% of the providers [surveyed] said that Seattle's rules are too burdensome to follow or too difficult to implement; 56% said it was very hard, and 22% said it was hard to comply with Seattle's rental rules, and then 41% purchased rental properties outside Seattle," Nelson said. Only 1% of the landlords purchased another property within Seattle after selling their rental property.

In light of those numbers, Nelson said she looked forward to implementing policy changes that would potentially address landlord concerns regarding compliance with rental regulations.

📸 Featured Image: The Ethiopian Village, a now completed 100-unit affordable senior housing project along Rainier Avenue South and South Rose Street, shown under construction in 2022. (Photo: Phil Manzano)