The development tactics listed below are just a few of the important tools that churches or other religiously-affiliated organizations can utilize to develop property. Though not an exhaustive list, these tactics are often used to develop and sustain affordable housing. Other tactics highlight ways that the organization can operate in order to get mixed-use and affordable developments off the ground.
Low-Income Housing Tax Credits (LIHTCs)
Collecting LIHTCs for a project can greatly reduce the amount spent overall to develop. They are widely used by developers to build affordable housing units and are even more popular than tax deductions. However, the process is competitive and there is no guarantee that the tax credits will be awarded to a qualifying project. They also must be used within a certain time frame and expire after a set number of years, at which time the property can be turned over to market-rate units.
Multifamily Property Tax Exemption Program (MFTE)
The Multifamily Property Tax Exemption program is a statewide policy that offers a tax exemption for low-income development. In Seattle, developers or property owners who devote 20-25% of units in future/existing multifamily buildings as income- and rent-restricted may apply for the benefit. Property tax exemptions can last for up to 12 years but will expire at that point. The results of an audit released in 2019 indicate that it is unclear whether the program has actually helped boost housing production or was simply a welcome subsidy for developers. Additionally, this policy does not include limitations on unit size. As such, approximately 75% of units created through the MFTE program were studios and one-bedrooms, which do not serve the needs of many residents of the Central District at risk of displacement. Regardless, this is a program that the Nehemiah Initiative could utilize to help lower maintenance costs in the long term.
Long-Term Leasing
Similar initiatives across the country have achieved their goals by forging partnerships between churches, nonprofit developers, and nonprofits. In a long-term lease, the church can hire a nonprofit developer to construct the building and lease the development for little to no cost with a long-term lease. This structure allows the developer to build while still allowing the church to retain ownership. Acquiring land is a costly expenditure in the development process, and forging this type of partnership allows the developer to bypass this step. Some examples from other similar initiatives have leased property for 50+ years, as a symbolic way of guaranteeing the property for the developer to collect money in the long-term. Additionally, the church does not take on the responsibility of serving as the property manager.
Partnerships with Nonprofit or Socially Conscious Developers
While most developers are driven to maximize their bottom line, certain developers – both nonprofit and private ones – do maintain a focus on issues of equity and justice as well. Depending on how a church wants to develop their property, working with a socially conscious developer could create a valuable partnership and streamline the development process. Socially conscious developers currently serving the Seattle Area include:
- Spectrum Development Solutions: For-profit developer focused on complex development problems and transit-oriented, environmentally sound solutions.
- Bellwether Housing: “Seattle’s largest non-profit affordable housing provide,” focused on creating “stable communities and access to opportunity through affordable housing”.
Conditional Uses, Variances, & Building Departures
Although Seattle’s zoning code guides development, it may be the case that the uses or designs desired by the Nehemiah Initiative conflict with the zoning of a specific property. Should this be the case, there are multiple avenues that the Nehemiah Initiative or member churches can pursue to reach their development vision, listed below. Please note that conditional use and variance are avenues that should be pursued much earlier on in the development process than building departures. There are also limitations to the below listed tactics, so these should not be used in place of advocating for zoning changes that would potentially be more suited for future development.
- Conditional Use Permits: Conditional uses are allowed in a given zone after the developer has gone through a process of public comment, SDCI review and decision, and appeal (if needed). Conditional uses often occur in single-family zones, where private schools, community centers, child care centers, or religious facilities may all be desirable land uses.
- Land Use Variance: A variance is a grant of relief for developers from specific requirements in Seattle’s Municipal Code. Developers must apply for one or more variances with their Master Use Permit, and variance requests cannot be for uses that are prohibited or to exceed height limits. Variance proposals should be “consistent with the spirit and purpose of the Land Use Code”
- Building Departures: Departures occur when a building design exceeds or conflicts with an applicable building or design code. Building departures are relatively common, and there may be multiple for a given project. Architects will be helpful in applying for departures once projects are further along in the development process.
