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Developer and investors Scott Shapiro of Eagle Rock Ventures said Seattle could boost production of affordable housing by simplifying its code and upzoning more areas to allow denser development. He is pictured here in 2017 at the former Harvard Exit movie theater, which he redeveloped into office space.

By   – Staff Writer, Puget Sound Business Journal

As a real estate developer in Seattle for the last 18 years, managing director of Eagle Rock Ventures Scott Shapiro is used to interacting with the city.

His latest project is a 111-unit apartment building in Columbia City near the light-rail stop. By the time Eagle Rock breaks ground, though, Shapiro estimates he will have spent five years getting city approval for the project, which included the extra step of getting a contract rezone.

By contrast, in Nashville where Shapiro is developing a micro-housing project, it is taking just a year to get permits.

“(Developing in Seattle) is too hard, too uncertain and too risky until the politics get settled out,” said Shapiro, a board member of Seattle for Growth, which advocates for policies that would foster development of different kinds of housing, from affordable to market-rate.

He also is a member of the board of the Seattle Foundation, which manages more than $1 billion in philanthropic investments.

These memberships along with his professional work — Eagle Rock also owns stakes in businesses like Hosteling International Seattle at the American Hotel in the Chinatown/International District and San Fermo, a Ballard restaurant in two renovated pioneer houses that Doc Maynard owned in the mid-1800s — give Shapiro insight into some of the biggest challenges in Seattle, where housing prices have soared and the homelessness crisis continues.

To tackle the lack of affordable housing, Shapiro suggests dramatically upzoning much of the city, especially around light-rail stations, and making Seattle’s design review process less onerous.

Eagle Rock’s Columbia City project went through three early-design guidance meetings and one full design review session.

“The feedback we got was inconsistent and sometimes it was outside the scope of design review,” said Shapiro.

Meanwhile, Eagle Rock was allowed to build only four stories for its project across the street from the Capitol Hill light-rail station and had to deal with other regulations that limited the project size.

“I could get only 49 studio units in it. I tell my friends in New York and Washington, D.C., and they think it’s crazy,” said Shapiro, who acknowledged that single-family homeowners generally oppose upzones, and they’re typically the people who vote.

Parts of Seattle already have been upzoned and upzones for portions of other neighborhoods are in the works. They’re part of the Mandatory Housing Affordability (MHA) program, which requires developers to include affordable homes or contribute to the city’s affordable housing fund.

“(MHA is) overly complicated and is taking years to implement, and the whole time we’re getting more and more behind in creating housing here,” said Shapiro.

Rather than mandating the development of affordable housing, the city should incentivize it by broadening the Multifamily Tax Exemption program, he said. In existence for 21 years, it has created nearly 8,600 rent-restricted units and at the end of 2017 some 3,760 units were enrolled in the program with nearly 1,900 more in the pipeline.

“It’s a good incentive and unfortunately it’s not utilized as much as it should be,” said Shapiro, who thinks Seattle also could make a dent by allowing housing in parts of some industrial zones like Interbay and Sodo with its two light-rail stations, and “Frelard,” the unofficial name of the area between Fremont and Ballard.

Shapiro said Seattle erred when it banned micro-housing development several years ago. It was done, in part, because in the eyes of lawmakers the tiny apartments are too tiny.

“For a very progressive city sometimes we can be very parochial,” Shapiro said. “We say you can smoke what you want, you can marry whom you want, but we’re not going to let you live in a 200-square-foot micro-housing unit.”

On the philanthropy front, Shapiro said Seattle is a generous community but it could be more so if newly wealthy people started to give or were encouraged to give more. He said donors like to see results, so the Seattle Foundation is working with nonprofits on ways to effectively use what people are giving.