(The Center Square) – A housing proposal that would have given Seattle developers an 80 percent break on Mandatory Housing Affordability fees for two years to help expedite much needed multifamily housing projects is apparently dead, with developers wondering what comes next.
The Housing Development Consortium informed the office of Mayor Katie Wilson that HDC was withdrawing its support for advancing the proposal, and the mayor then announced they were not moving forward.
The goal of the planned two-year suspension of MHA fees was aimed at speeding up housing production as Seattle is in the middle of a major housing crisis. The idea being developers would be incentivized to build in the city if they could save millions on MHA fees per project.
Developers building in Mandatory Housing Affordability, or MHA-zoned areas choose between two options:
Payment Option: Make an “in-lieu” financial contribution to the City’s Seattle Office of Housing trust fund, which currently has hundreds of millions of dollars to support nonprofit affordable housing construction.Performance Option: Dedicate a specific percentage of new units to be rented out at affordable rates for low-income households. Typically, at least 5%.
Wilson’s office negotiated the outlines of a deal with private sector housing developers and the Housing Development Consortium to suspend those fees and get some projects in the pipeline.
The proposal was expected to unlock the construction of at least 30 new housing projects by allowing private capital markets to invest locally in building housing.
But then suddenly, the brakes were applied.
During a Tuesday HDC meeting that included a representative from the mayor’s office, some members expressed feeling left out of the planning process.
“By the time I heard about the proposal, it seemed pretty fully baked and then we were sort of negotiating down from what the Seattle Housing Roundtable was discussing with your office,” said Jared Jonson, co-executive director of the Seattle Chinatown International District Preservation and Development Authority.
Nicole Vallestero Soper from the mayor’s office responded to say they had heard from communities that felt left out in policy planning.
“They felt like it could potentially harm their neighborhoods or communities. We really wanted to make sure that those perspectives were included in the final policy package.”
Natalie Quick, co-founder of the Seattle Housing Roundtable, a developers group supportive of the MHA holiday, told The Center Square they have been in talks with the mayor’s office and HDC on the policy for a long while and putting the brakes on now would be devastating.
“New permit applications, according to city data, have dropped 88% from the 2020 peak for housing production. We just got the Q2 2026 numbers from the city and now it’s 94%. So new housing applications are down 94% right now for multifamily housing in Seattle,” said Quick.
“Alarm bells are going off for us, right? We’re not getting new production. Supply and demand tell us we are running out of new supply coming to market, and for renters, that is not a good equation.”
Behind the scenes
According to Publicola, Downtown Emergency Service Center’s Daniel Malone sent an email to Wilson last month expressing “deep concern” about the proposal, which he said would reduce local funding for the kind of housing-first projects DESC builds at a time when federal funding may dry up.
The mayor’s office did not respond to multiple requests for comment.
In a July 3, Facebook post, Seattle Politics and Public Affairs Consultant Sandeep Kaushik gave his thoughts on the issue.
“The old school anti-capitalist, anti-developer cohort of Seattle’s more Jacobin left intervened in the negotiations. They ardently back public and social housing but see development of private housing as a net negative, harming poor and minority communities by driving displacement and gentrification. They sharply ramped up pressure on the mayor, telling her she would be betraying her socialist base by signing off on the deal,” wrote Kaushik.
Quick told The Center Square that her group is holding out hope the mayor’s office won’t kill the deal.
“If you work in the realm of housing and politics, I think you always have to have some hope that things can come together and the optimistic side of me says, where there’s a will there’s a way.”
“It’s not going to get better without something monumental like this in a temporary way to get things moving. But this is a very short window. This isn’t let’s stakeholder this for three months and see how we feel. Moving this into 2027, deals are going to die,” said Quick.