Habitat SKC in the News: Affordable homeownership in Seattle? Nonprofits look to build upward with condos

By the time the average Seattle-area Habitat for Humanity homeowner buys a house, they’re 38 and in a family of four. The later a homeowner buys, the longer before they start building equity, which can have lasting financial consequences.

“What if,” says local Habitat CEO Brett D’Antonio, “we could get a 24-year-old working in a hospital or a school an ownership opportunity? Could they be buying on the open market by the time they’re 38?”

Habitat for Humanity Seattle-King County plans to start construction in the coming weeks on a 13-unit condo building on Capitol Hill, with one-, two- and three-bedroom condos priced for people making below 80% of area median income, or about $65,000 for an individual.

And that’s not the only affordable condo project on the way. Next year, Habitat plans a similar 17-unit project with developer Green Canopy a few blocks away.

Homestead Community Land Trust also has plans in the works for two condo buildings in the Phinney Ridge neighborhood. Together, those two buildings will include 59 condos expected to be finished in 2023 and 2024.

The Homestead buildings will be a mix of market-rate and more affordable condos, with the market-rate units helping fund the affordable homes.

In a city dense with necessities like health care, jobs and public transit — but short on empty land — “you have to go vertical,” said Homestead Executive Director Kathleen Hosfeld.

Homestead expects to sell the affordable condos for less than $300,000 and the market-rate homes for between $300,000 and $525,000. Habitat’s condos will cost between $150,000 and $325,00, depending on the size.

While nonprofits around the region have long built affordable rental apartments, as well as affordable townhomes and single-family homes to own, subsidized condos for sale are less common.

For bigger families, larger homes remain key. But one- and two-bedroom condos offer options for couples, single parents with one child and empty-nesters, advocates say. Nonprofits elsewhere have built similar projects, including Habitat for Humanity in San Francisco and New York.

In affordable home-ownership programs, developers use public and private funding to subsidize construction of the homes. The home buyers build up a capped amount of equity over time (in this case 1.5% a year) allowing them to gather a nest egg if they opt to later sell the house and buy a market-rate home.

If they move, the home is resold for the original price plus that 1.5% a year, which keeps it more affordable than the market-rate home.

Seattle’s need is far greater than what several individual projects can provide.

As Seattle’s population has grown and home prices have climbed, the share of Seattleites owning homes has dropped and Seattle is now a majority-renter city. Among homeowners, gaps persist. The Seattle metro area, which includes Tacoma and Bellevue, has among the nation’s lowest rates of Black home-ownership at 29%.

The city estimates that over the next two decades, it will need another 9,500 to 14,500 units of housing affordable for people making between 50% and 80% of area median income. (More will be needed for people who make less.)