We need to talk about land disposition policies. Stick with me.
We need to talk about "land disposition policies." Stick with me. Sherron L. Pratt/getty

It’s no $180 million for affordable housing, but a resolution passed by the Seattle City Council Monday could make it easier to turn excess public land into homes.

The resolution, sponsored by Council Member Teresa Mosqueda, will allow Seattle City Light to sell surplus land at below market value. That could make it easier for nonprofit housing developers to buy those pieces of land and turn them into housing for low-income Seattleites.

“This is in line with a commitment to keep public land in public hands and use it for the public good,” Mosqueda said Monday.

Typically, governments are required to sell land at fair market value to ensure tax payers are getting as much as possible for publicly owned property. But some politicians and housing advocates say changing those rules in certain cases—in order to build subsidized housing during a housing crisis, for example—is actually a better public benefit.

The state legislature passed a law this year allowing local governments to sell some properties they own at below market value or transfer them for free if they’re going to be used for affordable housing for “low-income” or “very-low income” households. The law does not apply in cases where another state law requires sale at market value. (Low-income here is defined as making less than 80 percent of area median income where the housing is located, and very low-income is less than 50 percent of area median income. In Seattle, that makes “low income” less than $72,000 for a family of four and “very low income” less than $48,000 for a family of four.)

Mosqueda's resolution updates City Light's policies to allow for below market value sales and to prioritize using excess City Light-owned land for affordable housing over any other uses.

In cases where City Light has decided a property could be used for affordable housing, the changes will also allow the agency to delay the sale or transfer for a year "reasonable" amount of time. That's meant to give the city's Office of Housing time to find funding and a developer to build the low-income housing.

Because of past rulings on selling city land at market value, Mosqueda's changes could face a legal challenge on the basis that selling properties for below market value loses ratepayer money, a retired former assistant city attorney told the Seattle Times.

Of the more than 1,000 city-owned parcels, many are not eligible for building housing because of the size or characteristics of the site, according to the latest assessment of city-owned properties. But for those that could be turned into housing, requirements to sell the land at fair market value have been a substantial hurdle.

Right now, for example, the city is in the process of selling two huge plots of land in South Lake Union known as the "Mercer Mega Block.” Instead of becoming affordable housing, those plots will likely be sold for far more than a nonprofit housing developer could afford. The city's transportation department, which used the property, says state law requires the parcels be sold at market value.