Final draft report:
Proposed strategies to increase affordability
& stem displacement on Hilltop

A presentation at City Council Study Session
December 5, 2017   Tacoma, WA

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FTA Transit-Oriented Development (TOD)
Technical Assistance Initiative Grant
Supports
TOD
projects and
policies in
communities
by providing
resources and
support
through
online and
on-site
assistance.

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To better understand:
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Issues of housing affordability and potential for
displacement on Hilltop
Impacts of light rail
Opportunities presented by TOD

Grant award:
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Applied October 2016
Awarded December 2016

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Partners
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Community & Economic Development
Planning & Development Services
Sound Transit
Tacoma Housing Authority
Hilltop Engagement Committee
Community Non-profits
Citizens
City Staff
Elected Officials

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On behalf of technical assistance team
Smart Growth
America
advocates for
people who want
to live and work in
great
neighborhoods.
Enterprise
Advisors
provides publicsector consulting
services as part of
Enterprise’s
mission to end
housing
insecurity.

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Alex Hutchinson
Smart Growth America
Laura Searfoss, AICP
Enterprise Community Partners
Paul Bernard
Enterprise Advisors, Enterprise Community Partners

Jeremy Borrego, AICP
Federal Transit Administration, Region 10 Office

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Timeline of technical assistance

Task 1
July-October 2017

Task 2
October-November 2017

• Programs & policy review
• Housing needs analysis
• Housing market analysis
• On-site strategy
development workshops
• Strategy refinement

Task 3

• Report development
• Final on-site presentation
November-December 2017 • Report revisions & delivery
Ongoing coordination with current & past efforts

 Section overview
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What are the existing
housing needs & market
trends on Hilltop?
How could housing
conditions change on
Hilltop?
What strategies & actions
can create greater
affordability and stem
displacement?

 What are existing housing needs

 

market trends on 

A summary of key findings

What are the existing housing needs & market trends on Hilltop?

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Lack of affordable housing is a national & regional issue.
The U.S. rental market continues to
expand at a robust pace.
The U.S. owner-occupied market is
still in the process of recovery from
the recession.

Units affordable and available per
100 ELI households by state

Nearly 19 million U.S. households
experience housing insecurity.

Nationally, only 35 affordable
homes are available for every 100
extremely low-income (ELI) renter
households.
Within the Seattle-Tacoma region,
only 29 affordable homes are
available for every 100 ELI renter
households.

MAP VIA NATIONAL LOW-INCOME HOUSING COALITION

 What are the existing housing needs & market trends on Hilltop?

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Many common occupations in Tacoma need affordable rental and
homeownership opportunities.

Income needed to afford housing & salaries for selected occupations
City of Tacoma, WA

$90,000

$80,000

$80,928

$74,470
100% AMI

$70,000
$59,569

$60,000

80% AMI

$50,000
$40,000

$56,653

$45,680
$35,400

$35,701

50% AMI

$29,820

$30,000

$24,314

$20,000

30% AMI

$10,000
$0
Income
Income
Income
needed to needed for a needed for a
qualify for a 1-bedroom 2-bedroom
mortgage
rental
rental

Dishwasher

Retail
salesperson

EMT

Elementary Police Officer Computer
School
programmer
Teacher

Sources: National Paycheck to Paycheck Database 2017, HUD FY2017 Income Limits and Fair Market Rent Documentation System

 What are the existing housing needs & market trends on Hilltop?
A summary of key findings
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Hilltop lacks “missing middle” housing. While
Hilltop offers a greater variety of housing options
than the City, housing stock is concentrated in a
few particular types and sizes.
Today, Hilltop offers limited affordable housing
options for
low-income renters.
Many existing Hilltop residents, particularly renters,
cannot keep pace with rising housing costs.
Overall, Hilltop is in the early stages of
gentrification.

 What are the existing housing needs & market trends on Hilltop?

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Hilltop lacks missing middle housing.

Housing types on Hilltop
43%

SF, detached

“Missing
middle”
housing fills
the gap
between singlefamily homes
and apartment
buildings, along
the spectrum of
affordability.

3%

SF, attached

5%

Duplex

MF, 3 or 4 units

8%

MF, 5 to 9 units

8%

MF, 10 to 19 units

8%

15%

MF, 20 to 49 units

9%

MF, 50+ units
Adapted from
missingmiddlehousing.com.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Source: American Community Survey Five-Year Estimates 2011-2015
Note: “SF” refers to single-family properties and “MF” refers to multifamily properties.

 What are the existing housing needs & market trends on Hilltop?

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Today, Hilltop offers limited affordable housing options for low-income renters.

Why is affordable
housing limited on
Hilltop?
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Total affordable & available rental units by income level
on Hilltop
2,515

Occupancy by
higher income
households
Growth in
units not
targeted to
households with
the lowest
incomes

1,344

1,278

2,381

1,368

358

Loss of
Extremely low-income
Very low-income and below
All low-income and below
affordable
(<30% AMI)
(0-50% AMI)
(0-80% AMI)
units for
extremely lowNumber of renter households
Number of affordable and available rental units
income
Hilltop
lacks “missing middle” housing. While Hilltop offers a greater variety of housing options than the
households
City, housing stock is concentrated in a few particular types and sizes.
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Source: HUD 2010-2014 CHAS
*Note: Does not account for 300+ subsidized units built after 2014.

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Today, Hilltop offers limited affordable housing options for
low-income renters.

 What are the existing housing needs & market trends on Hilltop?

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Many existing Hilltop residents cannot keep pace with rising housing costs.

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Households are
considered
“costburdened” if
they are paying
more than 30%
of their income
toward housing
costs.

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Housing costs have grown faster than household
income.
On Hilltop, 45 percent of households
experience cost-burden, compared with
39 percent citywide.
The number of households experiencing costburdens nearly doubled between 2000 and
2014.

Sources: U.S. Census 2000; American Community Survey
Five-Year Estimates 2011-2015; and HUD 2010-2014 CHAS

 What are the existing housing needs & market trends on Hilltop?

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Hilltop is in the early stages of gentrification.

Housing
displacement
Is a defining
feature of
gentrification
Occurs
involuntarily and
voluntarily
Negatively affects
both displaced
residents and the
entire community

What is gentrification?
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Definitions of gentrification vary significantly.

But agreement exists about gentrification’s
three primary characteristics:
1.
Housing market changes
2.
Economic status changes
3.
Demographic changes

 What are the existing housing needs & market trends on Hilltop?

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Hilltop is in the early stages of gentrification.

Gentrification stages by rental (left) and for-sale (right) housing markets
on Hilltop

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How could housing conditions change
on Hilltop?
A summary of potential losses in affordability

 How could housing conditions change on Hilltop?

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Projected impact of the Link extension

Measuring
transit’s impact
The estimates of
general and TODrelated rent
increases were
projected using
patterns in home
sales prices.

Higher rents:

1.
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On the whole, rents could rise as much as 46 percent
over the next 10 years.

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Much of this increase will be general increases in housing
costs, not necessarily related to TOD.

More cost-burdened households:

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This projection is
based on the
change in home
sale values within
½-mile of the
Central Link in
Seattle.

If these gains are realized, as many as 741 additional
Hilltop renters could become cost-burdened by 2026.

Fewer subsidized and unsubsidized homes for
low-income individuals & families:

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In total, Hilltop could lose nearly 1,500 affordable rental
units in the next 5–10 years.

 How could housing conditions change on Hilltop?

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Projected impact of the Link extension

Subsidized &
unrestricted,
affordable
housing on
Hilltop
18 privately
owned housing
properties receive
a federal subsidy
(with a total of
~600 units).

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The supply of subsidized housing could shrink by as
many as 254 units, a majority of which are within
½-mile of a station area.
The supply of unrestricted, affordable rental
housing could shrink by as many as 1,217 units.

3,047 rental units
on Hilltop serve
low-income
households
without a subsidy.

Sources: 2017 National Housing Preservation Database; 2017 CoStar;
and 2011-2015 American Community Survey Five-Year Estimates

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What strategies can create greater
affordability & stem displacement?
A unified strategy framework for Hilltop

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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1

Increase resources for and impact of initiatives that support
greater affordability.

2

Streamline existing incentives and internal processes to
support greater affordability.

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Support existing Hilltop residents.
Increase housing opportunities in TOD for a range of income
levels and lifestyles.

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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KEY STRATEGY ELEMENTS:
Strategy #1.
Increase resources for
and impact of
initiatives that support
greater affordability.

Identifies new sources of revenue, including those
generated by TOD.

Uses limited federal resources in ways that increase
their flexibility.

Increases competitiveness for private investment.

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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RECOMMENDED ACTIONS:
Strategy #1.
Increase
resources for
and impact of
initiatives that
support
greater
affordability.

Action 1.1. Explore creation of a value capture mechanism
(tied to Link extension on Hilltop).

Action 1.2. Create dedicated sources of funding for the Housing
Trust Fund, including general revenue.

Action 1.3. Pursue additional Section 108 authorization to support
catalytic economic development projects on Hilltop.

Action 1.4. Apply for a Neighborhood Revitalization Strategy Area
(NRSA) designation for Hilltop.

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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KEY STRATEGY ELEMENTS:
Strategy #2.
Streamline existing
incentives and internal
processes to support
greater affordability.

Uses existing City land-use provisions to help diversify
housing options.

Identifies ways to modify existing incentives to target
them to Hilltop and TOD.

Leverages market-rate development to help increase
housing affordability.

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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RECOMMENDED ACTIONS:
Strategy #2.
Streamline
existing
incentives and
internal
processes to
support
greater
affordability.

Action 2.1. Increase by-right development of small-scale
housing types.

Action 2.2. Create & apply stronger housing incentives
for housing production and preservation on Hilltop.

Action 2.3. Study existing fee-in-lieu structure to better align
with housing affordability goals.

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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KEY STRATEGY ELEMENTS:

Strategy #3.
Support

Helps Hilltop residents stay on Hilltop.

existing Hilltop
residents.
Proactively addresses the affordability and quality of Hilltop’s
subsidized rental housing supply.

Expands protections to avoid displacement & support residents
in instances where displacement may occur.

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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RECOMMENDED ACTIONS:
Strategy #3.
Support
existing Hilltop
residents.

Action 3.1. Stabilize long-time homeowners.

Action 3.2. Target expiring subsidized units for preservation,
working with partners to use short-term and long-term tools.

Action 3.3. Adopt tenant protections.

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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KEY STRATEGY ELEMENTS:
Strategy #4.
Increase
housing
opportunities
in TOD for a
range of
income levels
and lifestyles.

Uses TOD as way to increase Hilltop’s affordable housing supply.

Prioritizes city-owned property for affordable housing activities.

Increases competitiveness for private investment (i.e., helps
leverage existing resources).

 What strategies can create greater affordability & stem displacement?
A unified strategy framework for Hilltop

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RECOMMENDED ACTIONS:

Strategy #4.
Increase
housing
opportunities
in TOD for a
range of
income levels
and lifestyles.

Action 4.1. Integrate provisions for TOD & other policy priorities
in NOFA.

Action 4.2. Support TOD master planning and predevelopment
analysis, especially among large-property owners.

Action 4.3. Leverage forthcoming public land study to identify &
solicit for near-term opportunities on city-owned land.

Action 4.4. Explore creation of a community land trust on Hilltop.

 Connection to past efforts and next steps

 

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Connections to previous actions
Affordable
Housing Policy
Advisory Group
(AHPAG)

Created in 2009
and tasked with
recommending a
series of policy
actions that were
consistent with or
complimentary to
the City
Comprehensive
Plan.

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Recommendations of report take into account
previous actions, including work of the AHPAG
Incorporates input from key stakeholders including
the Tacoma Housing Authority and other affordable
housing developers

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Internal Housing Working Group
Internal Housing
Working Group
Includes key staff
from Community
and Economic
Development,
Planning and
Development
Services, City
Managers Office,
Office of Equity
and Human
Rights,
Neighborhood
Community
Services, etc.

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Interdepartmental work group
Tasked with the creation of an affordable housing
action strategy
Goal of strategy is the creation/preservation of
affordable housing units
Input from external stakeholders

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Internal Housing Working Group
Internal Housing
Working Group
Includes key staff
from Community
and Economic
Development,
Planning and
Development
Services, City
Managers Office,
Office of Equity
and Human
Rights,
Neighborhood
Community
Services, etc.

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Interdepartmental work group
Tasked with the creation of an affordable housing
action strategy
Goal of strategy is the creation/preservation of
affordable housing units
Input from external stakeholders

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Affordable Housing Action Strategy
Action Strategy
The process by
which the City will
preserve and/or
create the number
of affordable
housing units
necessary to
address the
growing problem.

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Coordinate efforts across departments
Comprehensive strategy with defined goal of number
of units preserved/created
Actionable items with defined timelines and
responsible departments