Towards A Cheaper Downtown

When the City Council's study came back last month recommending downtown zoning changes that would raise the ceiling on the business core while funding lower-income housing Seattlest was skeptical:

It just doesn't seem intuitive to us that the results of a City Council commissioned study suggest that the way to encourage high-rise structures downtown is to make them more expensive to build.

But it turns out that we were only tenuously attached to that doubt. A few commenters quickly got the ball of wishful thinking rolling inside of us:

Yes, some developers are very excited. There is at least one building already being designed to fit under the new codes, even though they haven't been approved.

and

I went to the public hearing about changing the height restrictions, and the developers that attended had definite chubbies for taller buildings.

A month later we're wondering where all the chubbies have disappeared to. Yesterday's P-I article on the subject began with the sentence:

Downtown condo developers wouldn't reap huge windfall profits under proposals to raise downtown building heights and encourage more growth there, a Seattle City Council consultant said Monday.

That's a chubbie killer if we've ever heard one. There's been a lot of back and forth among city council members and the mayor over how to incentivize downtown development and fund lower-income housing at the same time. The consultants at Heartland LLC have determined that Mayor Nichols plan would give developers a 29.9% rate of return on their investments in the area and increase property values by 36%. Peter Steinbrueck's plan would pay a 20.1% return and decrease property value by 23%. Currently developers enjoy a 26.4% return on their investments downtown.

Details of Steinbrueck's plan can be found here and the mayor's plan is here.