Sharon Lee is executive director of the Low Income Housing Institute (LIHI), an innovative nonprofit organization based in Seattle.
Lee and the LIHI staff have developed over 4,500 units of housing in Washington state and own more than 2,200 units serving families, seniors, people who have been homeless, and those with special needs.
What can developers, even experienced ones, do to be better?
I’ve learned through the years that it pays to not only be a good housing developer and know all your financing sources, it’s also very important to be an advocate. Many of us have projects in our pipeline but are experiencing that there’s not enough financing. If you can change the priorities of what the city, county, or state can do to provide additional funding—capital, operating, and service funding for low-income and affordable housing—then that can make a big difference. In many communities, there are nonprofits who are competing with each other for scarce public resources.
The only way to handle the problem with the housing crisis is to increase the size of the pie. The only way to do this is to get your elected officials to issue a housing bond or find dedicated revenue sources for transit-oriented or low-income or permanent supportive housing. A coalition of housing advocates achieved a major victory on Sept. 17th with a “Homes not Home Runs” campaign when the King County Council voted to provide $165 million in hotel/motel tax revenue for low-income TOD housing, reducing funding that would have benefitted the privately owned Seattle Mariners.
Has your approach to development changed over the years?
We look at who’s underserved in the market. Over the years, we’ve focused on homeless families, low-wage workers, homeless seniors, young adults, and people living with mental illness. More recently, we know there are rural communities that are tremendously underserved, so we’re expanding our development to rural counties and cities.
Because of the homelessness crisis, we can’t build fast enough, so we’ve also been doing tiny houses; we have over 250 of them. These are insulated and heated and have shared common facilities. They’re helping around 1,000 homeless people over the course of the year, and then we help move them into the long-term, permanent housing. With volunteers, we can build tiny houses over a weekend, whereas if we go the traditional building [route] for multifamily housing, we have to take two years to get the financing, one year to get the permit, and then another year or year and a half to build. We’re trying to save people from dying on the street because they’re homeless.
What did your last multifamily project teach you?
We’re leasing up a wonderful building that includes workforce housing in Seattle. At The Tony Lee Apartments, we’ll have 70 apartments at 30%, 50%, and 60% of the AMI. It’s on a city-surplus site. We have a preschool at street level. Our partner is Refugee Women’s Alliance, so we’re going to have 80 preschool-age kids on the first floor attending an educational, early-learning program.
This project is a great example for using city surplus property. It makes sense to get the cities and local governments to prioritize affordable housing and transfer land over at nominal or no cost.
Share a lesson you can pass on.
We’ve been aggressive in acquiring sites for new development near transit. We’ve never regretted buying a piece of property, which means you have to have sources for land acquisition. Many of the sites we’ve purchased and put in our pipeline we couldn’t afford to buy today.
The lesson is to watch for land-banking opportunities.
Yes, but it depends if you’re in a high-cost market. I wouldn’t advise this for people who don’t have a land-cost or land-inventory problem. For us, let’s say we bought a property for $1 million. If we tried to buy it today, it would be over $3 million. This is true for sites near the University of Washington, Chinatown-International District, Rainier Valley, north Seattle, and the Central Area. We wouldn’t be able to afford today’s price. We have to be ahead of the market-rate and speculative developers. We have to be bold and preserve sites for affordable housing.
