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New Spokane initiative incentivizes building affordable housing downtown | Boomtown

To be considered affordable, the average person making 70-80 percent of Spokane’s median income will be able to afford a unit.

SPOKANE, Wash. — The City of Spokane's Pavement to People initiative is encouraging developers to build housing on vacant land and parking lots in downtown Spokane. They are doing this by offering a sales and use tax deferral and exemption on construction costs for buildings that provide at least 50 percent affordable housing. 

Koz Development, a developer based in Western Washington, is taking advantage of the program to build a 210-unit complex on 4th Avenue near the hospital district. Cathy Reines, President and CEO of Koz Development, said they are breaking ground on the project this summer.

"It took this exemption for us to be able to make this project go. And by go, I mean, make it go and keep the rents affordable as well," Reines said.

For this program, the city defines affordability as the monthly rent an individual or family making 70 to 80 percent of Spokane's median income can afford. Reines said that means studios in their new development will rent for $1,200 a month, utilities included. Koz Development will have to maintain that level of affordability for 10 years in order to turn the tax deferral into an exemption.

Reines said the Spokane housing market caters to high-end and low-income, but there is a hole in the market for people making slightly below median income. Spokane City Councilmember Zack Zappone calls it the "missing middle."

Zappone said building housing in this range will decrease competition for low-income housing and could help bring Spokane's vacancy rate above one percent. Plus, he says it would make downtown more walkable.

"More housing downtown reduces sprawl throughout our whole area. It reduces our reliance on cars, increases the use of transportation, and it makes downtown safer," Zappone said.

People are concerned about what this development could mean for available parking downtown. The city performed a parking study of Downtown Spokane in 2019 that found 30 percent of downtown lots are parking. 

It also found 56 percent of parking spots are available, even at the busiest times of day. But the study said only half the number of parking spots are accessible to drivers at any given time because of how fragmented the system is. 

"This type of program doesn't mean that there is no new development of parking, we're just saying a surface lot is not the best use of that parking. Let's make a garage so that you can have 10 spots in one," Zappone said.

The new Koz Development complex will have parking underneath the housing units.  

Pavement to People launched last year, and Zappone said Koz Development is the only developer to participate so far. He said developers are having trouble keeping costs low enough to meet the 50 percent affordability rate with how expensive construction is right now. 

The city is considering asking Washington State lawmakers to decrease the 50 percent affordability rate to 30 percent, so more developers take advantage of the program. 

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