Seattle law requires developers to pay for affordable housing

SEATTLE (Reuters) - Seattle Mayor Ed Murray signed an ordinance into law on Tuesday he says will add 6,000 living units for low-income residents over the next decade to be paid for by fees on private developers.

The measure aims to address an overheated real estate market fueled partly by the growth of Seattle-based Internet retailer Amazon.com and other companies, which is pricing out low- and middle-income residents.

The new ordinance, part a set of proposals that could add 20,000 units of affordable housing over 10 years, will provide 6,000 units paid for by private residential and commercial developers, the mayor said.

The law imposes a special fee on commercial developments ranging from $5 to $17 per square foot, based on a building's size and location.

A separate resolution, passed by the City Council, requires that up to 8 percent of multifamily dwellings be set aside for residents earning no more than 60 percent of the area's median income - $37,680 for an individual or $53,760 for a family of four. Alternatively, developers could pay a fee to help finance off-site affordable housing.

The measures signed by the Democratic mayor were passed by the City Council on Nov. 9.

Affordable housing has been a top political issue in Seattle, a city of 650,000 residents, especially in gentrifying neighborhoods.

A lack of affordable housing, combined with stagnant or falling wages, has been cited by analysts as a contributing factor to homelessness in a number of U.S. cities.

Opponents of the measures, including the Real Estate Investors Association of Washington, have said looser zoning and permitting, rather than mandates and fees, would increase inventory and lower prices.

Murray is also calling for a bigger property-tax levy in 2016 and for state lawmakers to grant the city the authority to expand a real estate excise tax to fund affordable housing.

(Reporting by Eric M. Johnson in Seattle; Editing by Peter Cooney)