An ordinance relating to the Office of Housing; granting a ground lease of real…

This ordinance authorizes the Seattle Office of Housing to enter into a ground lease arrangement for city-owned property at 2929 27th Ave South, located in the Mount Baker neighborhood near the future Judkins Park light rail station. The lessee, MBTOD Phase One LLLP, is an affiliate of two established nonprofit organizations: Mercy Housing Northwest, a regional affordable housing developer, and El Centro de la Raza, a Latino community organization with deep roots in Seattle. A ground lease means the city retains ownership of the land while the developer builds and operates improvements on it, a common tool used by municipalities to enable affordable housing without permanently disposing of public assets. The constitutional and legal basis for this action rests in the authority of Washington State municipalities to manage and lease public property for public benefit purposes, as well as Seattle's own municipal code governing the Office of Housing. Ground leases of this type are standard practice in affordable housing finance, particularly when projects seek federal Low-Income Housing Tax Credits (LIHTC), which require long-term land control documents. The project's proximity to transit infrastructure aligns with Seattle's Transit-Oriented Development (TOD) goals, reflected in the project entity name MBTOD (Mount Baker Transit-Oriented Development). Fiscally, the city is not selling the land, which preserves a public asset. However, ground leases typically involve below-market rents to make affordable housing financially viable, meaning the city forgoes some potential revenue. The long-term benefit is measured in units of affordable housing created and community services provided, including early learning and childcare, which address documented gaps in Seattle's supply of both affordable units and licensed childcare seats. The fiscal impact on the city budget would depend on the specific lease terms, which are not detailed in the ordinance text itself. The historical context is significant. El Centro de la Raza was founded in 1972 through a community occupation of an unused Seattle school building and has long been a hub for Latino community services in South Seattle. The Mount Baker neighborhood has experienced significant gentrification pressure, making affordable housing development there particularly urgent for long-term residents. Mercy Housing Northwest has developed thousands of affordable units across the Pacific Northwest and brings substantial experience with complex tax credit financing. Stakeholders affected include current and future low-income residents who would occupy the housing units, families seeking affordable childcare and early education in South Seattle, the surrounding Mount Baker community, city taxpayers who own the underlying land, and the nonprofit organizations involved. Competing developers or those who favor market-rate development on public land may object, and fiscal conservatives may question below-market lease structures.

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The Seattle City Council is considering an ordinance that would authorize the city's Office of Housing to lease publicly owned land at 2929 27th Ave South to a development partnership affiliated with Mercy Housing Northwest and El Centro de la Raza. Rather than selling the property, the city would retain ownership of the land while the nonprofit partners build and operate affordable housing units alongside commercial space intended for early learning programs and childcare services. This type of arrangement, known as a ground lease, is widely used in affordable housing development to secure the long-term land control required for federal tax credit financing while keeping public land in public hands. Supporters of the ordinance, including affordable housing advocates and community organizations in South Seattle, argue that the project addresses two pressing shortages at once: affordable rental housing and licensed childcare capacity. The site's location near the Judkins Park light rail station makes it an ideal candidate for transit-oriented development, allowing future residents to access jobs and services without car ownership. Advocates for the Latino community point to El Centro de la Raza's decades-long presence in the area as evidence that the organization is well-positioned to serve the neighborhood's evolving needs. Opponents and skeptics raise questions about the use of city-owned land through a non-competitive process, arguing that taxpayers might benefit more from a public solicitation that tests the market for the best terms. Some fiscal watchdogs note that ground leases structured to support affordable housing typically carry below-market rents, which means the city accepts reduced income from the asset in exchange for community benefit outcomes that are difficult to quantify in dollar terms. Others point to the complexity of combining housing and childcare financing in a single project as a potential source of delays or cost overruns. For ordinary Seattle residents, the ordinance represents a local government decision about how to use a piece of publicly owned land in a neighborhood that has experienced significant demographic and economic change. If the project proceeds as envisioned, it would add affordable rental units and childcare seats to a part of the city where both are in short supply. If the financing or development timeline encounters obstacles, the land would remain encumbered by lease commitments while the community waits for promised benefits to materialize. The outcome will depend heavily on the specific lease terms and financing agreements that follow this enabling legislation.