Not There: Why Affordable Housing in Seattle is Busting

Trouble continues in the City of Seattle’s program of subsidized apartments, according to a page-one report in the August 31 Sunday Seattle Times. A 2,000-word story by reporter Greg Kim reports “an explosion of vacancy” as tenants move out of “affordable” units into ordinary housing that these days rents for about the same price.

This is not about housing for the poor. That’s provided by the Seattle Housing Authority, which owns buildings that house people with incomes below 30 percent of the area median. The city’s program of subsidized private apartments serves renters with incomes just under 60 percent of the area median. This is often called “workforce housing” for people earning well above the minimum wage.

The Times story is about this sort of housing in general, but focuses on one example, the 249-unit Thai Binh Apartments in Little Saigon. Built using state and city subsidies, the Thai Binh was opened in 2019 with modern air-conditioned units, big kitchens, a common-area exercise room and other amenities. To live there, tenants had to prove that they earned less than a threshold amount. Currently, these amounts are $66,000 a year for one person, $75,420 a year for two, and $84,820 for three.

Rents in subsidized apartments are supposed to be affordable. (In the housing industry, “affordable” is a code word for “subsidized.”) But in today’s market, rents in many subsidized and unsubsidized buildings are about the same. Rent for a studio apartment at Thai Binh was quoted in June at $1,546. This compares to average rents citywide for a studio of $1,562 (Rents.com) and $1,525 (Apartments.com). “Publicly funded affordable housing isn’t always that good of a deal these days,” says Kim’s piece in the Times.

What’s happened, he says, is that during the boom years, when rents went up and interest rates were down, investors built lots of apartment buildings. It was classic supply-and-demand, so when enough apartments opened up, rents leveled off. The housing-industry web page Apartments.com says Seattle rents have risen an average of only 3.2 percent in the past year. The web page Rent.com says average rents on studio apartments in Seattle have not increased at all. And if rents are nearly the same, many people prefer private housing. Kim’s story says Seattle’s subsidized apartment houses, which were only 2 percent vacant in 2017, jumped to almost 11 percent vacant in 2024. At the Thai Binh it was 20 percent.

In Kim’s 78-column-inch story, it isn’t until the 42^nd paragraph that he mentions the main reasons why people say they moved out of subsidized units: because of the people they’re living with, residents and (especially) non-residents. Kim does not pursue this factor, but if you want the dirty details, you can see the comments on the Thai Binh at Yelp.com.

“Many residents were irresponsible slobs, who didn’t pick up after their dogs… broke and stole gym equipment and set off fire alarms in the middle of the night. It was common for non-residents to get into the building and break into vehicles, steal packages and make messes,” wrote Laura F. (Feb. 2024), who moved out. “Drug addicts are everywhere. Mail is stolen on a daily basis. If you aren’t present for a package delivery then you can consider it lost. Security is terrible,” wrote C’Est L. (Jan. 2023). Jean W. (Feb. 2023) reported the common areas “pee-soaked and vandalized,” with “snot on the walls of the elevator.”

These and other splashes of rhetorical graffiti are from the time when the Thai Binh was managed by a California company, FPI Management. In 2024, FPI was replaced by Allied Residential, based in Renton. Since then, the comments are less negative. But a reputation had been made, and money and tenants lost.

Kim’s story also mentions “lagging rent payments,” without going into details. This was a big problem during the Covid years, when the city shielded non-payers from eviction. That time is over, but the problem is not entirely gone. Just as King County Metro and Sound Transit are struggling with patrons who choose not to pay bus and light-rail fares, owners of subsidized housing still deal with tenants who miss rent payments.

Rather than focusing on Seattle’s anti-landlord ordinances, the slobbishness of tenants, or the weakness of property managers, Kim’s story suggests that the city’s housing money has been aimed at the wrong market. The question, he says, is: “Should this money go to a few of the neediest people or many people who are close to self-sufficient? Some argue officials’ desire to tout unit counts pulled the sector too far toward higher incomes.”

That’s not the only question that could be asked, but it’s one worth asking. The Housing Levy money is “leveraged” with private money in order to build more units. But to attract private investors, the projects need tenants who are not poor. Hence the focus on “workforce housing.”

Seattle’s voters have always supported this approach. In the most recent vote on the Seattle Housing Levy, in 2023, 69 percent said “yes” to a seven-year property-tax increase of $970 million. That money funds an industry — and the industry, in turn, is expected to contribute to the campaigns for the levy to pass.

The largest contributor to the 2023 “Yes for Homes” campaign was Habitat for Humanity, chipping in $77,487. Other contributors of $10,000 or more include developer Matt Griffin, the Housing Development Consortium, Bellwether Housing, Lease Crutcher Lewis, Wright Investco II LLC, Plymouth Housing Group, Washington Multi Family Housing Association PAC, Mercy Housing Inc., SMR Architects PLLC, Amazon, and Vulcan Inc.

In our one-party town, hardly anyone speaks out against the Housing Levy. (An exception was Roger Valdez at the Seattle for Growth blog.) But it’s notable that in Greg Kim’s story, several sources did question the way the levy money has been used. It quotes Susan Boyd, CEO of Bellwether Housing, saying that the program has been “succumbing to political pressure to build the most units.” (“Touting unit counts” again!) It quotes Ben Maritz, CEO of Great Expectations, a private-sector developer, saying that the effort should narrow its focus to people with very low incomes, who are not able to pay much rent.

Narrowing the market served by housing programs would counter the trend of the past 80 years. The Seattle Housing Authority, created in 1939, builds public housing for people whose incomes are under 30 percent of the area median. The Seattle Housing Levy, created in 1986, builds subsidized private housing for people whose incomes are under 60 percent of the area median. In 2023, young admirers of European socialism came up with Seattle’s Social Housing Developer, which aims to use tax money to turn private apartments into public housing for people whose incomes are up to 120 percent of the area median. Each generation of activists has pushed for more. The Kshama Sawant generation envisions public housing for the middle class.

Kim’s 2000-word story doesn’t mention the Social Housing Developer. Then again, the Social Housing Developer doesn’t have any buildings yet. It’s a safe bet that we will see more 2,000-word stories on public housing in The Seattle Times.