Seattle’s affordable housing policy is making housing more expensive
Seattle says it wants more affordable housing. Yet one of the city’s own policies is making new homes more expensive to build, discouraging private investment, and potentially keeping desperately needed housing from ever being constructed.
The city’s Mandatory Housing Affordability (MHA) program requires most new multifamily and commercial developments in designated areas to either include rent-restricted affordable housing units or pay fees that fund affordable housing projects.
The goal sounds reasonable: make developers contribute to affordable housing. But the program adds substantial costs to construction, and those costs can make the difference between a project moving forward or being abandoned.
In 2026, MHA fees for residential development range from approximately $11 to $50 per square foot, potentially adding millions of dollars to the cost of a single project.
Consider the stalled redevelopment of the Capitol Hill Safeway site. The project faces more than $8.5 million in MHA fees, adding approximately 8% to its construction costs. That’s millions of dollars in additional expenses before a single new resident can move in.
And MHA is only one piece of Seattle’s expensive approach to housing.
The city already has a voter-approved $970 million housing levy, along with revenue from the JumpStart payroll tax and additional state and federal funding.
Despite the burden MHA places on new construction, the program accounts for only about 7% of the Seattle Office of Housing’s total revenue distributed to nonprofit housing developers.
In other words, Seattle is imposing millions of dollars in costs on new housing construction through a program that represents a relatively small share of its overall affordable housing funding.
The consequences are becoming harder to ignore.
An independent five-year evaluation of MHA found that while eliminating the fees would not make every stalled project financially viable, the added costs can prevent projects already close to feasibility from moving forward.
Several institutional investors have reportedly indicated they will not finance new Seattle housing developments until MHA fees are reduced or eliminated.
Meanwhile, Seattle continues to rely heavily on nonprofit developers to produce government-subsidized housing, an approach that can involve additional regulatory requirements, higher financing and administrative costs, and longer construction timelines.
The fundamental problem is simple: Government cannot make housing more affordable by continually making it more expensive to build.
Fortunately, Seattle has an opportunity to change course.
City Councilmember Dionne Foster has introduced a Mandatory Housing Affordability Accelerator proposal that would temporarily reduce MHA fees by 80% for qualifying projects already in the development pipeline. Certain new projects could qualify for a 60% reduction if they meet requirements intended to encourage family-sized housing.
The proposal acknowledges a reality Seattle officials have too often overlooked: When government makes housing prohibitively expensive to build, less housing gets built.
Reducing these fees could help restart stalled developments, create construction jobs, attract investment, and increase the supply of homes available to Seattle residents.
Seattle’s housing affordability crisis didn’t happen overnight, and no single policy change will solve it. But removing unnecessary government-imposed costs is an obvious place to start.
Seattle leaders should be focused on getting more homes built, not defending regulations that stand in the way.
The City Council is expected to vote on this proposal in December, and we’ll continue tracking the issue and sharing opportunities for residents to weigh in.