How Using Public Land Can Help Address Housing Shortages

The high cost of land poses a significant barrier to producing affordable housing. Land acquisition accounts for 15 percent of total development costs, with some local estimates as high as 35 percent (PDF). Housing is expensive to construct and maintain, so every dollar saved on land or other costs helps affordable developments pencil out. Leveraging public land for affordable housing allows local jurisdictions to make a substantial contribution to more affordable housing without imposing (PDF) additional taxes or fees on residents.

Seattle seeks best value, not highest market value

When most governments identify surplus property, they auction it off to the highest bidder and use the revenue to fill budget holes or add to the coffers, but what if the land could meet other pressing public needs? Recently, Seattle transformed its land disposition process from one that prioritizes revenue generation to one that furthers the city’s affordable housing goals.

“As we look to further fair housing choice across Seattle and reduce the cost of developing housing, publicly owned land can be a key asset,” said Emily Alvarado, director of the City of Seattle’s Office of Housing. “Public land can provide access to locations otherwise difficult to purchase on the market, provide no or low cost for affordable housing development property, and can help cities meet multiple objectives, including colocating amenities like child care and community centers.”

In 2015, Seattle’s Housing Affordability and Livability Agenda task force recommended that the city prioritize surplus properties for affordable housing, either by developing housing on these properties or by allocating proceeds from land sales toward affordable housing. In 2018, the Washington state legislature passed a bill that allows cities to sell or lease surplus land at no or low cost, thereby eliminating regulations that forced cities to seek fair-market value for land.

In response, the Seattle City Council passed a resolution requiring city departments to make affordable housing a priority when disposing of public land. Councilmember Teresa Mosqueda, who sponsored the resolution, summarized the change by saying, “Public land can be used for the best value, which is not necessarily the highest market value.” Recently in one of the first applications of the resolution, Seattle sold the “Mercer MegaBlock” for $143.5 million and dedicated approximately $73 million of the proceeds toward affordable housing.

In support of this resolution, Enterprise Community Partners and Futurewise created a new tool to map publicly owned parcels in King County. The map allows users to filter publicly owned parcels to find ones that are suitable for housing development. These filters include proximity to transit and child care facilities, as well as funding eligibility (e.g., Opportunity Zones) and site characteristics.

The City of Seattle is also looking more expansively at use of public land by exploring opportunities at smaller-scale properties and through partnerships with other public agencies. Three parcels of underutilized land have been transferred for permanently affordable homeownership at Yakima Avenue, and the city recently passed legislation to utilize two additional Seattle City Light sites in Northwest Seattle.

Lessons for other jurisdictions

Prioritizing public land for affordable housing is one tool in cities and counties’ toolboxes that can lower the costs of new housing development—or improve housing access in key locations. In Seattle, the state, county, and city all bought in to the approach and received help from local partnerships. Following Seattle’s example, other jurisdictions can prioritize publicly owned land located in amenity-rich neighborhoods, such as those with access to transit, high-performing schools, jobs, and parks.

Municipal governments should also work with other public entities, such as transportation authorities, hospitals, and school districts, that may have surplus land suitable for affordable housing development. For example, Sound Transit, the Seattle region’s transit authority, offers 80 percent of its surplus property to affordable housing and requires that 80 percent of the resulting housing be affordable to households making less than 80 percent of the area median income.

Communities seeking ways to get started with a public land-use strategy have many options for guidance, including an overview of several jurisdictions’ approaches to public land disposition. An analysis (PDF) of public land potential in Washington, DC, outlined key steps for making public land available for affordable housing. These include conducting an inventory of available and developable land, prioritizing housing on that land, engaging the community to develop a vision for how best to use that land, and simplifying the process of public land transfers.

Even with the savings from using public land, gap financing is still needed to make affordable housing projects pencil out in high-cost markets. But by identifying and committing public land toward affordable housing, jurisdictions can use their own resources to promote (PDF) community goals.

Photo by Anthony Ricci/Shutterstock