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A handful of Seattle’s more than 12,000 homeless people will soon be moving into the studio penthouse from the street with a view. Finishing touches are being put on three apartment buildings in Seattle’s treasured Capitol Hill neighborhood, one with stunning views of the Space Needle and Puget Sound.

But instead of being leased out at market rates, 165 units will go to people currently living in tents and temporary shelters. The city is using part of a $1.9 trillion federal COVID relief package known as the American Rescue Plan Act of 2021.


“Everyone deserves a high quality, affordable place to call home,” says Emily Alvarado, director of the Seattle Office of Housing, “the fact that we produce high-quality, affordable housing at a good price for the public.” To be able to do so, through our subsidies, is a win.”

Seattle is spending $50 million, or $300,000 per unit. Developers say that it is two to three times more than the cost of their construction. But the purchase of a Seattle apartment seems like a bargain compared to a homeless housing project breaking ground in Skid Row, Los Angeles. Weingart Tower will be 19 stories tall and will contain 275 units. These will mostly be studio apartments with a few one-bedroom units. The price tag is $160 million, which works out to $580,000 per unit of housing.

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They are part of a costly push to get the homeless off the streets, off public parks and into government-subsidized housing, even if it means buying new buildings from developers at market rates.

“It takes so long to build,” says Sharon Lee, executive director of the Low Income Housing Institute (LIHI) of Seattle, “It takes so long to build, so in the meantime, why do we let the vulnerable, the women, Seniors live on the street?”

LIHI, a non-profit Center for Seattle’s Homeless Response, currently manages 40 properties with 1,535 permanent housing units. The three new buildings will further increase their total to 1,600 units. Additionally, LIHI operates two hotel shelters and nine tiny home villages in Seattle with 298 shelter units.

Some critics point out that while city leaders spend big taxpayer dollars on homeless housing, city hall policies may contribute to homelessness. Full-paying tenants are having a hard time finding an affordable location to lease. Democratic Mayor Jenny Durkan recently extended the city’s eviction moratorium for the sixth time until mid-January 2022. And the city council then passed two more so-called tenant protection laws. Landlords are now required to give tenants six months’ notice of any rent increase. They are now also responsible for paying moving costs for any tenant who moves out instead of paying a rent increase of 10% or more.

Real estate experts say the measures are pushing homeowners out of the rental housing business.

“A lot of people are deciding that it’s too risky for me to have someone in their home under the current circumstances,” said Corey Brewer of Windermere Real Estate.

Brewer has data to support this. Of Windermere’s homeowner clients, there was a 48% increase in rental homes sold to owner occupants in 2020 and so far in 2021, up 35%. Additionally, 2020 saw 4,858 fewer properties registered as rental properties, according to the latest report from Seattle’s Department of Construction and Inspection. This was a drop of 14%. Brewer and others say that chasing landlords out of town only harms tenants.

Daniel Stoner, CEO of Next Gen Housing Partners, which is building seven apartment buildings in Seattle, says the answer to the housing crisis is more housing. Regulations that dramatically increase development costs or make properties more difficult to rent out only decrease available supplies.

“We see a disconnect between what’s being said in terms of city policies and what’s actually being done behind the scenes,” Stoner said, “they’re making it harder for us to bring apartments to market.”