Office to Residential: Call for Ideas
Sales Tax Deferral for Conversions of Underutilized Commercial Space to Housing
Our 2023 Office to Residential Call for Ideas informed several policy and code changes to encourage conversions. In December 2024 Mayor Harrell proposed to defer the 10.3% sales and use tax on the construction costs of converting commercial space to housing. To qualify, the developer is required to provide 10% of the new housing units as affordable for households with incomes at or below 80% of Area Median Income (AMI). If the units are kept affordable for 10 years, the deferred sales and use taxes do not need to be repaid. This tax deferral is authorized by the State of Washington under RCW 82.50.
Legislative materials under review by the Seattle City Council are provided below. The City Council Land Use Committee will consider a Resolution stating the City’s intent to enact the sales and use tax deferral on December 4, 2024. The committee will hold a public hearing on an Ordinance that would codify and enact the sales and use tax deferral on January 30, 2025.
- Resolution
- Draft Ordinance
- Draft Application Form
- Draft Conditional Approval Letter
- Draft Final Approval Letter
- Director’s Report
- Summary and Fiscal Note
- Washington State Department of Revenue information
Removal of Code Barriers to Converting Commercial Space to Housing
The Call for Ideas also informed several policy and code changes to encourage conversions. Mayor Harrell proposed legislation passed by City Council in July 2024 that removed code barriers to the conversion of commercial space to housing. Ordinance 127054 established Seattle Municipal Code section 23.40.080. The code changes established clear guidelines for determining what qualifies as a residential conversion and provided broad exemptions from design development standards any time an existing structure is converted to housing from another use, or residential uses are added within an existing building. Additionally, the changes reduced the cost of conversion to residential use by exempting conversions to housing from the City’s Mandatory Housing Affordability (MHA) requirements.
Competition Winners Announced
Thank you to all who submitted their Call for Ideas in 2023, and to those who attended our celebration events on June 6 and June 14, 2023. We are proud to share all of the submissions in this document: Office to Residential Call for Ideas Submissions (Large 32mb file) For more information about the winning submissions, please visit our Daily Plan It blog.
Seattle Design Festival 2023
Our Director Rico Quirindongo hosted a panel discussion with the winners of our Office to Residential competition at Seattle Design Fest 2023, alongside our principle urban planner Lyle Bicknell. Watch the entire discussion on Seattle Design Fest's Virtual Mainstage.
About Our Call for Ideas
Downtowns across the nation look different today than they did before Covid. The Call for Ideas competition asked how the City of Seattle can provide a vision to the nation for what the future of Downtown will look like and how we will get there.
Numerous design and property owner teams shared their vision for the future of a Seattle Downtown that is more balanced between residential uses and civic and office uses than today. We sought ideas to create vibrant neighborhoods where people live, work, shop, and play. The call for ideas explored the potential for conversion of office spaces to residential uses and adding activated ground floor uses.
Since the call for ideas, the City has used the submittals to inform and develop policy changes, code changes, and continues to explore funding opportunities available to all.