The City's Real Authority Over Scattered Site and All SHA Developments: Responding to the Myth!
The myth that the City has no authority over SHA's actions and developments is just that - a myth. The conventional wisdom has evolved over the last decade, first promulgated by SHA to serve their particular agenda and to enable them to avoid closer scrutiny by the City or the public. Unfortunately several city officials including current and past Mayors and several city councilmembers, current and past, have chosen to give it currency.
In 1978, the City agreed to approve SHA's participation in the HUD (Department of Housing and Urban Development) Scattered Site Program. Below is the original 2-page resolution establishing the program and setting terms and conditions for city approval of release of these HUD funds. In effect, it was a program that could not go forward without City approval and compliance with conditions set by the City (and of course HUD). HUD would only release the funds to SHA with City approval and only after conditions were established ensuring the program fulfilled certain criteria, ie., that the housing built with these funds would be dispersed into areas at lower densities and in areas otherwise not providing low income housing, particularly Seattle's largely white northend neighborhoods. Note from the attached 1978 agreement there are dispersion criteria and other goals built into it. Page two of the document (not included here) actually limited densities for each project to no more that 4 units.
In 1979, the agreement was amended (document attached below) allowing projects receiving scattered site proceeds to be built up to a density of 15 units but other dispersion criteria remained operative from the 1978 agreement. In particular, units receiving these funds could not be built in areas where there were higher than average concentrations of low income housing and the at all times, SHA must seek to develop projects at densities as small as possible. And Only 20 percent of the funds could be used in areas not approved for low income multi-family development.
Note also that with each of these two resolutions in 1978 and 1979 (also true for subsequent yearly resolutions authorizing SHA to secure additional annual allocations of HUD scattered site funds), the City waived paragraph 1 of the original 1939 agreement between the City and SHA. That agreement and an accompanying resolution formally established SHA and the parameters under which it would operate within the city. To this day, city approval is required for a locality to establish a housing agency under state and federal law. That first paragraph in the '39 agreement explicitly gives the City clear authority to disapprove or approve all SHA projects. But also note that the Council's decision in 1978 to waive paragraph one of the '39 agreement only applied to individual housing projects created by SHA with these scattered site funds. For all other SHA initiated housing developments undertaken with the use of federal dollars, paragraph one of the 1939 agreement would still apply. To this day, there is no record of any city resolution or ordinance repealing or amending paragraph 1 of the 1939 agreement. It still is applicable and would be applicable, for example, when SHA undertook plans to redevelop Yesler Terrace. At minimum any project other than scattered site projects undertaken by SHA that involved use of federal funds would be subject to paragraph one and all other provisions of the original '39 agreement.
What are the key implications revealed from these scattered site agreements and the underlying 1939 agreements defining SHA's relationship with the City vis a vis the scattered site program and all other housing developments undertaken by SHA (such as SHA's plans for Yesler Terrace)?
1. Originally SHA was required to take these funds and use them to build scattered site housing units subject to terms and conditions set by the City under these agreements (see below). If at some future date, SHA sells off units built under these terms, they cannot simply take the proceeds from these sales and use them for any purpose or any activity they choose. The proceeds from these sales - how they're to be used - remain subject to terms and conditions from the original agreements. (Note a check of the list and addresses of units now being sold off by SHA reveals that most if not all were acquired or built with scattered site funds from these first two original years of the program). Only if the agreements are modified by the City Council, could SHA proceed with projects and activity outside the bounds of those agreements. Even though there are no specific provisions in these original agreements spelling out specifically how SHA can "dispose" of the scattered site properties, the absence of such language does not give SHA license to do anything they chose with these properties or the funds they obtain from sale of the properties. (If that were true, what would have prevented SHA from taking these dollars in 1978, using them for creation of scattered site units and then turning around one year or five years later and selling off the units and cashing in on that sale?) Quite the contrary, in the absence of such explicit "disposition" language, it is the underlying terms governing the original use of the scattered site funds that would be the only operative language applying now to SHA's use of the proceeds from any current sale of the properties.
2. If a contrary argument is made by SHA (or Law Department), ie., that they are not bound by the city's terms in these original scattered site agreements when disposing of scattered site units and making use of the proceeds from their sale, then terms of the original 1939 agreement between SHA and the city would be re-activated and kick back in. Paragraph 1 of that 1939 agreement gives the city authority over all SHA projects built with the use of federal funds. These provisions were only waived for units built from funds received under the scattered site program. If SHA claims they are now not bound by those terms when they undertake development of new projects built with the proceeds from sale of scattered site units, then they very clearly are subject to paragraph 1 of the '39 agreement that requires City approval of all new SHA projects.
3. The presence of the original '39 agreement (specifically paragraph 1 stating the City's authority over all SHA projects that receive federal funds) and the fact that it has not been repealed or pre-empted (with only a specific exemption for projects built with scattered site funds), has enormous importance for future SHA projects. In particular, it has enormous implications for their plan to redevelop Yesler Terrace. It means that the City indeed does have direct authority to approve or disapprove any future redevelopment plan of Yesler Terrace regardless of whether or not they tap city funds or seek rezones or other land use approvals. In accordance with paragraph 1 of the underlying 1939 agreement establishing SHA, the city still has authority to approve or disapprove the project. Ironically, this agreement was a pre-requisite and required before they could proceed with the original development of Yesler Terrace 60 years ago. It also means that regardless of whether or not city funds are directly involved - to be used or not - in any SHA development, the terms of this 1939 agreement still apply. The City still has authority over that project if any federal dollars are to be used in that project.
The myth that the City has no authority over SHA's actions and developments is just that - a myth - conventional wisdom that has evolved over the last decade or so to serve SHA's particular agenda and to enable them to avoid closer scrutiny by the Council or the public.
Original Documents with key passages identified:
Immediately below is page one of the original 1978 agreement between the City and SHA establishing the scattered site program and setting terms and conditions for use of scattered site funding and waiving paragraph one of the 1939 Agreement. Paragraph 1 of that original '39 agreement signed by both the City and SHA gives the City explicit authority over all "SHA projects." Why would the City Council feel the need to waive paragraph 1 of that original agreement in 1978 to facilitate implementation of this scattered site program if they believed it was no longer in effect? With the exception of the specific waiver for the scattered site program, no other legislation or resolutions have been passed since 1978 by the Council waiving its authority over all other SHA projects:
Immediate below is the original 1979 scattered site agreement (see three pages below) between the City and SHA amending terms and conditions set in the '78 agreement but still requiring SHA to conform to certain dispersion criteria - (see three pages attached below with arrows pointing to key terms governing use of scattered site funds). Note also that the City had to specifically wave provision one of the original 1939 agreement but only in the case of this scattered site program. For all other SHA projects, paragraph one of the 1939 agreement still applies giving the City authority to approve or disapprove each SHA development.
page one of 1979 agreement reads:
page two: note key provisions here
Attachment to 1979 Agreement providing further details on how SHA must disperse units built with these funds - provisions that still apply:
