Low-income residents of Squire Park Plaza, an affordable housing project up for sale, got a reprieve, of sorts. The nonprofit Capitol Hill Housing (CHH) will buy the building, located at 17th Avenue South and South Jackson Street, for $11.3 million.
But there’s a catch: Capitol Hill Housing will be the local face of a joint venture, funded mostly by Jonathan Rose Companies, a New York-based for-profit developer that specializes in affordable apartment buildings around the country.
The new owners say the deal is a win because it requires no public money. Tenant advocates, who in June rallied to keep the building from being sold to a for-profit developer, worry that the new owners will be more interested in profits than affordability (RC, “Holding out for a hero,” July 23).
Squire Park Plaza’s covenant, which is set to expire in 2027, says that 31 units must be affordable for people making 80 percent median income.
Capitol Hill Housing pledges to make some of the rents even lower. After the sale, the 59-unit building will include 12 units that are affordable for people making 50 percent median income and 19 units that are affordable for people making 80 percent median income. The remaining 28 units will rent at market rates, according to representatives of Capitol Hill Housing and Jonathan Rose Companies.
Advocates for Squire Park’s low-income tenants are unimpressed.
“It’s better than nothing,” Eliana Horn, an organizer for the Tenants Union, said of the proposed rents.
Tenants would’ve gotten a better deal from Low Income Housing Institute (LIHI), she said. Under LIHI’s offer, different units would be available for people making 60 percent of the median income and 50 percent median income. This is inn addition to the minimum number for people making 80 percent median income.
LIHI gained favor from the tenants by committing to a list of requests from the tenants to their future landlord, including giving tenants a seat on its governing board and renewing Squire Park’s affordability covenant to last for another 50 years.
Prompted by the tenants’ group, Seattle City Councilmember Kshama Sawant sent a letter to the Central Area Development Association (CADA) July 31, urging it to choose LIHI.
But LIHI was planning to use a $5.5 million grant from the Seattle Office of Housing.
Capitol Hill Housing’s bid included no public funds, according to a press release from the sellers.
Kristin Ryan, director of Jonathan Rose Companies’ Seattle office, said using money from private investors can save housing levy funds for buildings that can’t return a profit.
“This is the silver bullet that the affordable housing industry has been working to find,” Capitol Hill Housing CEO Chris Persons said. “We are really the dream team of affordable housing preservation.”
Tenants worry the dream won’t last.
Committing to this level of affordability could force Jonathan Rose Companies to raise rents in the market-rate units at Squire Park Plaza, they say.
They also believe public investment in Squire Park Plaza would ensure a greater level of accountability.
“Because there are public dollars in it, we have a say,” Squire Park tenant Linda Johnson said. “When you put private dollars in there that means we’re at the mercy of the private sector.”
Persons said there’s nothing to worry about. The group operates 44 apartment buildings in Seattle, and all include some affordable units.
“We’re committed to 50 years of affordability,” Persons said. “We’re committed to existing covenants. We’re committed to refinancing the building.”
Representatives from CHH and Jonathan Rose Companies said they intend to renew Squire Park’s affordability covenant for another 40 years after it expires in 2027.