After public comment from housing advocates that was mostly congratulatory, the Seattle City Council went ahead and voted unanimously to pass out of committee Mike O'Brien's more aggressive of the moderate proposals (which we wrote about briefly here) for some affordable housing in South Lake Union as part of the neighborhood's big rezone, which O'Brien calls "a modest step in the right direction."

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This is a big deal in that the council has been at loggerheads over their different proposals for a while, and that this required them to stand up to developers to some degree. Paul Allen's Vulcan Real Estate has argued against any changes to the affordable housing rules the mayor initially proposed—they think it's "unfair" to treat SLU differently from adjacent neighborhoods. Activists think it's unfair to redline poor folks to the Rainier Valley.

O'Brien's proposal raises the fee developers have to pay toward a housing fund if they don't put workforce housing in a particular building, from the current rate of $15.15 per square foot of new height to $21.68—all with the goal of getting developers to build the damn units themselves on site instead of paying the fee. O'Brien says his goal was asking "how high do we need to make that pay-in-lieu fee so that most residential developers will stop using the loophole?" Analysis ended up "right about $21, $22." I asked him if he was aware that Vulcan's vice president of real estate, Ada Healey, disagrees with those numbers—she told me the report the council was relying on was "riddled with errors." He said he was, and pointed out that, "to be fair, I've invited any developers in South Lake Union to open up their books and show me what the right price would be, and they don't want to do that."

By passing this today, the council is essentially dismissing one of Vulcan's key arguments. Vulcan has said it's premature to require a higher fee in South Lake Union before the council resets the fee for the entire city (which is on the planning department's agenda this year). But the council overcame those objections and agreed with housing advocates, saying that development in SLU is happening now, so the rules need to pass now.

However, not to pop the mylar balloons too soon, but this one particular amendment, even with all the back and forth, is not going to create the amount of workforce housing that the city and the growing SLU neighborhood actually requires. The numbers, according to O'Brien, are that this would create somewhere around 700 workforce-affordable units over 18 years. The actual need, just in this one neighborhood, over that time? Four thousand units. "We have a lot of work to do, for sure," he says.

The amendment will now head to the full council when they vote on the SLU rezone legislation. Vulcan spokeswoman Lori Mason Curran says, "the outcome of today's council decision regarding development fees is disappointing to Vulcan for several reasons," every last one of which I've included below the jump...

• Imposing fees in SLU that are 40% higher than fees charged downtown is highly inequitable
• There was no transparent process around the fee increase, how it was determined and why it only applies to SLU
• The city relied on a consultant who was biased—as a member of the Housing Development Consortium he clearly had a vested interest in a certain predetermined outcome
• The city has created a potentially huge missed opportunity (this is disappointing to Vulcan because we have been the catalyst for significant investment in SLU; investment which has netted the city $156 million in tax revenue in just 10 years)
• The increase in fees will result in many developers choosing to develop under current zoning instead (there are already four residential projects in SLU proceeding under current zoning). Development under current zoning will result in:
-NO incentive zoning fees for affordable housing and other public benefits
-NO incremental jobs
-NO incremental tax revenue
• The results of this shortsighted legislation have huge implications for our local economy. If developers decide fees are too high to justify building above current heights, impacts will likely include:
-Risking the opportunity to collect more than $70 million in incentive zoning fees for affordable housing and other public benefits
-It is the difference between 10,000 and 20,000 family wage construction jobs
-It is a difference of $40 million in incremental construction sales tax and $6 million in annually recurring tax revenue for the city of Seattle