Morning Crank: Public Land for the Public Good

1. City Council member Teresa Mosqueda will introduce affordable-housing legislation that could have major implications for one of the largest land holders in the city, Seattle City Light. Mosqueda’s bill would allow City Light to sell its surplus land to affordable-housing developers for less than market value—all the way down to the amount the city originally paid for the land—and would require City Light to do so if the agency committed to build housing making 60 percent or less of the Seattle median income. (That latter part may be up for negotiation.) For example, if City Light bought a piece of property in South Lake Union 60 years ago for a few thousand dollars, and the land is now worth millions, a nonprofit that agreed to build deeply affordable housing could buy it for the original, decades-old price.

The proposal, if it passes, will mark a significant change in the city’s policy for disposing of excess City Light land, and could invite a court challenge. Currently, the city requires property owned by its electric utility to be sold at fair-market value, thanks to a 2003 ruling striking down a fee City Light imposed to install and maintain streetlights. That ruling found that City Light could not charge ratepayers for any purpose other than providing utilities, and forced the agency to return $24 million to Seattle residents. Mosqueda’s legislation would change this disposition policy. However, Mosqueda’s office maintains that a separate ruling in 2013, in which the state supreme court disagreed with Bellevue developer Kemper Freeman’s claim that it was illegal to build light rail over I-90 because the bridge was built with gas taxes, which are supposed to be spent only on road purposes, establishes a precedent for City Light to sell its property at below-market value once that property is paid off and declared surplus to the city’s purposes.

Separately, Mosqueda’s office says she will introduce legislation that would encourage all city agencies that own surplus land to  give away or sell this excess property for below-market values to public agencies or nonprofit housing providers that agree to use the land to build affordable housing. The legislation comes in response to a new state law, House Bill 2382, passed by the state legislature last year allowing state and local agencies to transfer land to affordable housing developers at little or no cost.  Mosqueda’s proposal would also allow agencies, including nonprofits to exercise this right even if they don’t have all the money in hand or haven’t secured a development partner.

“Through smart management of public land, and using surplus and underutilized public land for the best public good, we can reduce the cost of building the affordable housing our communities need,” Mosqueda says. “This will also help us realize more community-led affordable housing and small-business development” by giving housing providers more time to pull together funding and development plans for properties that become available.

According to the latest city land inventory, there are about 35 pieces of city-owned land larger than 15,000 square feet that are surplus, “excess,” or underutilized, although some are outside Seattle and not all are suitable for housing development.

2. As I noted on Twitter last week, the anti-head tax campaign formed on May 18 and achieved its goal of repealing the tax on June 12. In the course of their brief effort, they spent nearly half a million dollars, according to their latest filing at the city’s Ethics and Elections Commission—more than most of last year’s city council candidates spent in a year-long campaign.

9 thoughts on “Morning Crank: Public Land for the Public Good

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  5. 1) I wasn’t paid to testify against the tax on jobs. But In all honesty, let me tell the truth: I was 33% opposed to taxing jobs. I was 67% opposed to losing the hero who showed the world how to take down Alex Tsimerman in Councilmember Lorena Gonzalez.

    2) Teresa Mosqueda is a public policy champion. I wish we had more Teresa, more often! Hell, I’d watch a reality TV show of cameras following her around… what fan of “The West Wing” wouldn’t?

  6. The idea of giving a private developer land at below market rates seems iffy to me… Whether they are building low income housing or not, they are looking to make a profit. Low income or “affordable” housing projects already receive tax and zoning incentives. At some point you have gone beyond incentivizing low income housing construction, and you are just giving money away to private companies.

    There’s also the risk of corruption. How do you choose the company that gets the gift of free or cheap land?

    It would probably be more efficient to use the profits from the sale for the affordable housing fund.

    • “[…]they are looking to make a profit”

      Unless they happen to be a non-profit, which is kind of the point. Sell to non-profits who couldn’t otherwise afford the land; then they build deeply subsidized housing in the city rather than outside of it.

      • It looks like Mosqueda would require a public agency or nonprofit developer, not a for-profit developer. At least that’s what the article says about Mosqueda’s upcoming legislation for other agencies.

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