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Aug. 8, 2022

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Housing boom around University Village: Will it be a real Seattle neighborhood?

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SEATTLE — Most of Seattle’s growing urban neighborhoods surround light-rail stations, but at least one is sprouting around an upscale, open-air shopping center.

There are more than 2,300 new apartments recently completed, currently under construction or planned in the blocks that encircle University Village, a sprawling collection of stores, restaurants, plazas and parking lots located northeast of the University of Washington campus.

Spurred by zoning changes and sky-high demand for housing across the city, the 10 or so new buildings with market-rate rents near U Village are targeting college students, young professionals, empty nesters and seniors.

The housing boom is smaller than a simultaneous surge underway west of the UW, in the University District, where 40-story towers are rising. Yet the U Village area is adding apartments at a scale on par with many of the city’s light-rail hubs, like Othello, Columbia City, Roosevelt and Northgate, where an old-school, enclosed mall is being redeveloped with housing.

Those neighborhoods are different from U Village, “but the principles are the same,” with people wanting to live close to jobs and meet their daily needs without driving, said Michael Hubner, a planning manager at City Hall.

The changes near U Village mean more people are starting to view the area as a place to live, rather than as a retail destination, and they may suggest the popular 24-acre shopping center is starting to take on some characteristics of an actual village square, versus a cheesy imitation. The crowd that packed the center’s pedestrian streets and play areas on a recent sunny afternoon included preening teenagers, screaming toddlers and relaxing retirees.

At the same time, the center remains a privately owned, somewhat sterile space patrolled by security guards and dominated by businesses that cater to well-off people. None of the new buildings in the area have yet been dedicated to lower-income residents, with almost all the large development sites already spoken for, raising concerns about economic diversity.

Also, there are more than 1,600 new parking garage stalls recently completed, under construction or planned as part of the new complexes.

“I don’t know yet” whether the end result will be positive, said Rubén Casas, an assistant professor at UW-Tacoma who studies the urban environment and public life. But the housing boost “could point in the direction of how spaces like this can become more than just somewhere to spend money.”

Prime location

There are multiple reasons why the U Village area is booming, starting with its proximity to the UW’s campus, which has 45,000 students and 25,000 employees, said Aaron Keeler, a regional managing director for the development company Greystar. The company is currently completing the Arista Residences: 236 rentals on 25th Avenue Northeast, west of the shopping center.

Two hospitals (UW Medical Center and Seattle Children’s) are close by. So is Ravenna Park, and the Burke-Gilman Trail runs through the area. Though U Village has no light-rail stop, the station at Husky Stadium is three minutes away by bus and six by bike. The shopping center includes a massive QFC supermarket, a pharmacy, a day care center and restrooms.

The detached houses that line most northeast Seattle blocks are super expensive, Keeler noted, with large apartment buildings barred by zoning laws almost everywhere between U Village and Lake City. “A lot of people would like to live there, but finding housing is difficult,” he said.

UW students have moved into Trailside, a building with 265 dorm-style units that opened last year on 24th Avenue Northeast. There’s a market for student rentals: The 10-year growth plan that the UW adopted in 2018 calls for adding more than 5,000 students, with many expected to live off campus. Meanwhile, the Arista Residences include two- and three-bedroom apartments aimed at families, Keeler said. More than 700 units are planned for a site now occupied by a Safeway. Just east, 136 assisted-living units are under construction.

The U Village area boasted similar advantages before the current boom, and it already had some apartment buildings, including UW-owned housing complexes with almost 250 units just north of the shopping center, a 70-unit Seattle Housing Authority complex for seniors to the northwest and a number of buildings toward Ravenna Park.

High rents

The landscape changed in mid-2019, when the City Council approved zoning changes for urban nodes across Seattle. Maximum heights for new buildings in and around U Village grew from as low as 40 feet to as high as 75 feet, paving the way for the redevelopment of several large, underused sites that had large parking lots, including the Safeway and an Office Depot.

Most of the projects completed or under construction to date have not involved direct residential displacement, though 120 older units were demolished to make way for Trailside and there are plans to replace 18 low-rise apartments on 24th Avenue Northeast with at least 88 new units.

That project will pay a fee to the city to help fund the creation of rent-capped housing elsewhere, according to requirements established with the zoning changes, noted David Neiman, the project’s architect. Per those requirements, the Arista Residences paid more than $6 million, and the Trailside building paid more than $8 million to help fund housing for lower-income residents.

“Seattle has basically placed its bet on a program that encourages development and that makes new development contribute to affordable housing,” Neiman said.

The city’s requirements allow developers to pay fees or include some rent-capped units on site in their new buildings. Since the zoning changes were established in 2019, however, no developers have so far selected the on-site option in the U Village area, and no rent-capped projects have been erected with city funds in the area. Four of the buildings recently completed or coming online soon vested before the requirements, according to the city.

In other words, people moving into the area’s new buildings are paying market rates, and those are costly. Monthly rents at the Arista Residences range from $2,276 for some studios, to $6,099 for some three-bedroom units. A partial exception: The Spur Apartments, which just opened on Union Bay Place Northeast, is participating in a city program that gives tax breaks to developers who place income and rent restrictions on 20%-25% of their units.

In general, the U Village area appears to be attracting affluent renters who want “a happy medium” between downtown living and the suburbs, said Elliott Krivenko, a Seattle analyst for the real estate data firm CoStar. The average monthly rent within a quarter mile of the shopping center is $2,213 for all units, and $2,344 for units added since 2017, with rent increases accelerating last year, he said.

“This is a perfect illustration of why zoning changes on their own are not going to solve our housing crisis” unless paired with a social housing approach, said Tiffani McCoy, co-chair of the Initiative 135 campaign, a ballot measure proposing a public development authority in Seattle to create, own and maintain housing for people with low and moderate incomes. The campaign is trying to qualify for the November ballot.

As the U Village area grows, “Teachers and dental hygienists are not going to be able to afford” the rents, McCoy said, arguing the city should have acquired sites in the area before the upzones. “Having everything within reach is fantastic, but why do only folks who are wealthy get access to that?”

Moving in

At Trailside, the new, dorm-style building that caters to UW students, residents like Carmyn Rogers and her friends, who share a four-bedroom unit, pay as much as $1,400 each, she said. The complex includes a grassy courtyard, a gym, study lounges, game rooms and a special connection to the Burke-Gilman Trail.

“Ease of access to everything,” like classes, groceries and hangout spots, made the building attractive, said Rogers, 22, who graduated this spring with an engineering degree. “It’s definitely pretty pricey for student housing,” she acknowledged. “The location is kind of what made [the cost] worth it.”

Zihan Zheng, a 24-year-old research scientist, made a similar calculation when she signed a lease at the U Place Apartments, which opened last year next to the QFC. The UW alum visits the shopping center at least three times each week to shop and spend time with friends, Zheng said, describing the area as safer and cleaner than the U District west of campus.

With new residents like Zheng spending so much time in the shopping center, it’s not surprising that the center’s general manager, Susie Plummer, believes the housing growth is “going to be positive” for U Village and the area.

“You see them commuting, you see them with their backpacks,” said Plummer, who expects the center to stay busy later at night and who recently worked with a developer to add crosswalks on 25th Avenue Northeast.

To some extent, the changes around U Village align with a national trend. Many malls that have lost business to online retailers, like Northgate in Seattle and Alderwood in Lynnwood, are developing apartments and rebranding.

Zheng said she thinks U Village is becoming “more like a neighborhood.” But she doesn’t love her building and isn’t completely sold on the area as a long-term home. When her lease is up, she’ll likely move — destination unknown.

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