Councilmember Foster proposes Mandatory Housing Affordability accelerator to spur housing construction

Bill allows temporary fee reduction for housing projects; accompanying resolution states intent to establish inclusionary requirements in neighborhood residential

Today Councilmember Dionne Foster (Position 9), chair of the Housing, Arts, and Civil Rights committee, released details of her proposed plan that would spur stalled housing projects to tackle rising costs and generate needed revenue. The legislation would offer an 80% reduction in the Mandatory Housing Affordability (MHA) in-lieu fee for currently vested projects if they start construction in the next two years. It would also provide a 60% reduction for new projects that vest by the end of 2027 if at least 25% of the units are family-sized (2+ bedrooms) and they are not in certain areas of the city with high displacement risk. 

“I believe Seattle’s housing crisis demands action on every front. We have to protect renters, prevent displacement, invest in affordable housing, and build more homes,” said Councilmember Foster. “For me, creating an inclusive city means both protecting the people who are here and creating room for more people to call Seattle home. I’m bringing this legislation forward because we can’t afford to have housing projects ready to go that simply aren’t getting built. Mandatory Housing Affordability has been a key component of our housing landscape for the last decade — and it will continue to be a part of our approach to building an inclusive and affordable city for the long-term future.” 

“The moment we face requires a recalibration in order to meet the significant external pressures our housing and construction industry faces today. This proposal gets shovel-ready projects moving, puts people back to work, and creates more homes for families, while protecting communities at greatest risk of displacement,” noted Councilmember Foster.  

Paired with the ordinance is a companion resolution which outlines the Council’s intent to explore establishing inclusionary requirements for new market-rate residential developments in Neighborhood Residential zones to help the city address our housing affordability needs.

What the bill does

Key provisions of Councilmember Foster’s MHA Accelerator ordinance include:

• Temporary Fee Reduction: Offers an 80% reduction in the MHA in-lieu fee for all currently vested projects.
• Incentive window for new applications: Establishes a deadline of Jan 1, 2028, for non-vested projects to submit a complete building permit application to receive a 60% fee reduction.
• Family-sized housing requirement: Necessitates non-vested projects applying within the incentive window to dedicate at least 25% of their total units to family-sized housing (2+ bedrooms).
• Targeted displacement protections: Excludes non-vested housing projects in certain areas with high displacement risk from receiving the 60% reduction, unless the property is owned by a legacy homeowner.
• Accountability and timelines: Mandates that vested projects receive their first foundation inspection within two years (or three years for non-vested projects), or applicants must repay the remaining balance of the full MHA fee.

What the resolution says

• Pursuing Inclusionary Requirement in NR: Establishes Council’s intent to consider implementing an inclusionary requirement for market rate residential development in Neighborhood Residential zones to meet our affordable housing needs.
• Policy Intent and Structure: Like MHA, which currently does not apply in Neighborhood Residential, the Inclusionary Requirement would include that new market-rate residential development either include lower cost units or make an in-lieu fee payment. The resolution states Council’s intent to consider structuring the policy to:
  • Be set at a level to not significantly deter development in NR, based on the city’s existing feasibility analyses, and remain flat for five years;
  • Incentivize density with a lower in-lieu fee per unit for projects that build to the full capacity of a lot;
  • Require a percentage of any future program revenue be allocated to the development of permanently affordable homeownership.

What people are saying

“Over the last near-decade, Mandatory Housing Affordability (MHA) has been a very effective policy tool to generate more funding for affordable housing, while increasing opportunities for housing overall in Seattle. With today’s significant national downturn in the construction market—driven by factors out of our control like tariffs and interest rates—we are seeing many housing projects in Seattle on the brink of grinding to a halt. This jeopardizes not only the desperately-needed homes within these projects, but also threatens multiple revenue streams for housing and more generated by construction in Seattle. I appreciate the proposal Councilmember Foster is proposing to institute a common-sense, short-term modification to MHA to ensure housing gets built in the near-term, while preserving and committing to this proven policy tool long-term.”
– Teresa Mosqueda, King County Councilmember, District 8

“The Seattle Building Trades want to thank City Councilmember Dionne Foster for her leadership in breaking the logjam and addressing the urgent need to spark housing development in Seattle. The passage of accelerator legislation will bring critically-needed and shovel-ready housing construction, good jobs and economic opportunity. We are ready to get to work building housing in Seattle.”
– Monty Anderson, Executive Secretary, Seattle Building & Construction Trades Council

“The City must use every tool available to increase our housing supply. I support programs that can help move projects forward with a strong focus on family-sized housing. Affordable housing will also be a critical part of this strategy, along with protections for neighborhoods that have experienced high levels of displacement and remain at risk. We need to accelerate both family-sized and affordable housing projects so more people can find homes that meet their needs and remain rooted in our city.”
– Joy Hollingsworth, Seattle City Council President

“I applaud Councilmember Foster for her leadership in taking this on and starting an important conversation about how we get much-needed housing moving again in Seattle. Housing production has fallen dramatically at exactly the moment we need more homes. There are real tradeoffs here, and we absolutely need resources to support all types of housing in Seattle – both market rate and affordable housing.”
– Ben Maritz, CEO, Great Expectations SPC

“On behalf of the members of LiUNA , many of whom live or work in Seattle, I want to thank Councilmember Dionne Foster for her leadership in moving Seattle toward solutions that can get housing built and create real pathways to opportunity. When we invest in housing, we can also invest in the workers and communities that build it—creating opportunities for young people and working families to enter a skilled trade, earn a good wage, and build a future right here in Seattle. We’re ready to get to work.”
– Billy Hetherington, Political Director, LiUNA Local 242

“It’s critical Seattle follows through, without delay, on delivering enough homes for everyone who needs and wants to live here. Born and raised locally, the region I grew up in that once was welcoming and accessible to all has stopped being so, largely because homebuilding is not keeping pace. Solving this requires taking all steps, big and small, to jumpstart homebuilding which has fallen off a cliff. The ordinance Councilmember Foster and Council President Hollingsworth are putting forward is one important step of the many that are needed to get homebuilders of all types back to building.”
– Alex Lofton, Co-Founder, For Seattle

“Seattle and the region are facing a housing crisis, and we need more housing of all types to improve affordability. Unfortunately, applications for new housing projects have fallen by nearly 95 percent since 2020, threatening our ability to meet current and future housing needs. That reality demands urgent action. I applaud Councilmember Foster for her leadership and for recognizing the seriousness of this moment. The temporary reduction in MHA fees will help offset the impacts of war, tariffs, and higher interest rates, making it more feasible for housing projects to move forward and get built. If we are serious about affordability, we need bold policies that encourage housing production and remove barriers to development. This is the kind of practical action Seattle needs to increase housing supply and make our city more affordable.”
– Raymond K. Connell, Managing Director, Holland Partner Group

Next steps

The Housing, Arts, and Civil Rights Committee reviewed the proposed MHA Accelerator legislation and accompanying resolution for the first time earlier today. Councilmember Foster will continue engaging community members on the proposal during budget and anticipates further consideration of the package in committee later this year.

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