Seattle, Washington, population 724,305 (2019), is the largest city in King County. In 1985, the city launched its first TDR program in its downtown, aimed at promoting affordable housing, open space, historic preservation, performing arts centers, and landmark theaters that include housing. In addition to downtown, Seattle subsequently expanded its use of TDR into most of its South Lake Union district and parts of its University, Uptown, and North Rainier neighborhoods. Seattle’s TDR bank has bought and sold floor area representing the preservation of affordable housing, landmarks, and landmark performing arts centers as well as the development of its concert hall and sculpture park. Seattle has cooperated with King County on interjurisdictional transfers and participates in a three-county regional TDR program that allows the city to use an infrastructure financing tool that would not otherwise be available.
Seattle’s 1985 downtown plan reduced base FAR but allowed developers to gain bonus floor area by transferring it to receiving site projects accomplished various planning goals. As of 2021, TDR regulations had been amended at least 14 times and Section 23.49.014 of Seattle’s Land Use Code offered seven different types of TDR:
- Within-Block TDR allows transfers between any lot in the same block.
- Housing TDR
- DMC (Downtown Mixed Commercial) Housing TDR
- Landmark Housing TDR
- Landmark TDR: Eligible sites are designated landmarks pursuant to the city’s Landmark Preservation Ordinance.
- Open Space TDR: Open space that is designed, maintained, and operated similar to a public park
- South Downtown Historic TDR: Eligible sending sites are structures contributing to the architectural or historic character of the Pioneer Square Preservation District or the International Special Review District.
Table 23.49.014A of the Seattle Municipal Code displays six forms of TDR operating within some or all of twelve zoning categories, producing 72 different permutations. For example, lots in the DMC 170 district can serve as sending or receiving sites for the Housing TDR, DMC Housing TDR, Landmark TDR/Landmark Housing TDR, and Open Space TDR options but can only serve as receiving sites for the South Downtown TDR program.
With the exception of South Downtown Historic, Landmark Housing and Landmark TDR sending sites, transferable floor area is calculated by subtracting the existing floor area from the amount of floor area allowed to the sending site by the base FAR. For Landmark Housing TDR sending sites, transferable floor area is the total floor area permitted by code without deducting existing floor area. For Landmark TDR sending sites, the transferable floor area is the floor area allowed by code; if the landmark exceeds the base FAR, transferable floor area is the floor area allowed by code minus the floor area that exceeds base FAR. In all cases, floor area previously transferred is deducted from the remaining transferable floor area.
In South Downtown, sending sites in two zones can transfer six times the floor area minus existing floor area. In all other South Downtown zones, the transferable floor area is the floor area allowed by base FAR minus existing floor area. In addition, South Downtown sending sites cannot transfer more than three times their lot area. Several additional regulations and exceptions are in the code.
Transfers from Landmark and Landmark Housing TDR sending sites require the historic building to be rehabilitated and maintained as directed by the Landmarks Preservation Board or, in the case of South Downtown Historic TDR, as required by the Director of Neighborhoods upon recommendation from the Special Review District Board or the Pioneer Square Preservation Board. In the Housing TDR program, sending sites are required to be rehabilitated with the goal of assuring at least an additional 50 years of useful building life. If Housing or Landmark Housing TDRs are proposed to be transferred prior to completion of rehabilitation, a security may be required in order to assure completion. The owner of a Housing, Landmark Housing, or DMC Housing TDR sending site must enter into an agreement to provide maintenance and adhere to rent and occupancy requirements for at least 50 years. The transfer of TDRs from a sending area remains in effect for the life of the project at the site that received these TDRs.
Code Section 23.58A.042 includes receiving site requirements that vary depending on whether the transfer preserves landmarks, provides housing, adds open space or produces some other community benefit. For example, open space sending sites must meet 13 standards including design elements, public access, minimum hours of availability to the public, and solar exposure.
Receiving sites can be located in any of 11 zoning district categories. For example, receiving sites for Within-Block TDR, Housing TDR, Landmark TDR, Landmark Housing TDR, Open Space TDR and South Downtown Historic TDR can be approved in the Downtown Office Core 1 (DOC1), DOC2, Downtown Retail Core (DRC), and Downtown Mixed Commercial (DMC) 340/290-440 zones. Base FAR and Maximum FAR are 6 and 21 in DOC1, 5 and 15 in DOC2, 3 and 6 in DRC, and 5 and 11 in the DMC 340/290-440 zone.
According to Table B for Code Section 23.49.011, the first increment of FAR above base must be achieved by acquiring regional TDR credits if the receiving site is within the Local Infrastructure Project Area. The amount of this first increment ranges from FAR 0.25 in the DMC zones up to 1.0 FAR in the DOC 1 zones. In DOC1, DOC2 and DMC zones outside the South Downtown, once a receiving site applies this first increment of bonus FAR, if applicable, the remaining allowable bonus FAR can be gained by providing combinations of TDR, housing, childcare, or project amenities as long as at least five percent of all bonus floor area (in some districts) comes from Landmark TDR, if available from the TDR Bank or private sources. In some zones and under some circumstances, a minimum of 12.5 percent of bonus must be by TDR from a major performing arts facility (if available from the city at or below TDR market prices) and another 12.5 percent from other forms of TDR except Housing TDR. Subject to many conditions and exceptions, Seattle exempts the floor area occupied by many uses and architectural features from FAR maximums including museums, performing arts theaters, showers for bike commuters, community centers, and schools. This level of complexity indicates that Seattle recognizes the tendency for developers to use the cheapest way of gaining bonus FAR unless the code requires the use of specified methods including TDR. It should also be noted that Section 23.49.011, (which pertains to only a portion of Seattle’s receiving areas), was amended by 24 ordinances between 2001 and 2020, suggesting that the city is routinely fine tuning these requirements to get the desired results from its bonus options.
Regional Development Credits Program
The regional TDR program involving sending and receiving sites in three Puget Sound counties is detailed in the King County profile. However, it is noted here that Seattle Code Section 23.58A.044 includes two tables that control the amount of bonus residential and non-residential floor area that one credit can generate in Seattle depending on the origin of the credit. For example 1,640 square feet of bonus residential square feet can be generated by one Agricultural credit from a sending site in King County, versus 420 bonus square feet per Agricultural credit from Pierce County, or 860 bonus square feet per Forest credit from Snohomish County (with the proceeds from forest credit sales used to buy new agricultural credits). These exchange ratios change after the first 200 credits are extinguished. By meeting the criteria for participation in the regional TDR program, Seattle became eligible to use a form of tax increment financing to fund infrastructure, a tool that is only available in the State of Washington to communities that satisfy the regional TDR program requirements. In 2016, the tax increment generated by the transfer of region TDR was projected to fund $30 million of infrastructure improvements, including Seattle’s Green Streets Program, an initiative to rebuild rights of way in ways that prioritize active transportation and public space (Kinney 2016).
Per Code Section 3.20.320, TDRs either purchased by the city or held for potential sale from city sending sites are considered to be in the city’s TDR Bank. TDRs from Landmark, Housing, and Open Space TDR sending sites are eligible to be purchased by the TDR Bank, which is managed by the Department of Housing. The Housing Director sells TDRs at prices based on negotiation.
As of 2010, 1,970,349 million square feet of floor area had been certified in the following five categories: Landmark Performing Arts Theater/Housing 241,144; Open Space 272,025; Landmark 301,496; Housing 648,648; and Major Performing Arts Theater 507,036. At that time, TDR had preserved ten landmarks including two landmark performing arts theaters, the Paramount Theater and the Eagles Auditorium. By 2010, 19 buildings with affordable housing had been preserved by TDR (often in combination with other funding sources) with a total of 1,106 units (Meier 2010). As of 2018, another 316,653 square feet of floor area had been transferred into downtown Seattle from sending sites within unincorporated King County using interjurisdictional programs (Fesler 2018).
The TDR Bank has been essential to the success of TDR in Seattle. The Bank was the only buyer of TDRs in the program’s first 12 years (Massachusetts Undated). The Bank’s first sale was in 1996, when it sold 130,000 square feet to the W Hotel for $1.47 million. By 1998, the TDR Bank had purchased 274,340 square feet of floor area from eight buildings, including the Paramount Theater and the Eagles Auditorium, and had sold 249,380 square feet. In addition, the city had 423,000 square feet of Major Performing Arts Facility TDRs to sell, with the sale proceeds to be used to pay the debt service on construction of Benaroya Symphony Hall (Walker 1998).
In a single transfer to the Washington Mutual office tower in 2004, the TDR bank sold 9,842 square feet of Major Performing Arts Facility TDRs that generated $150,000 in debt payment for Benaroya Hall, 90,728 square feet of open space TDR putting $1.3 million toward the Seattle Art Museum’s Olympic Sculpture Park, and 132,500 of Housing TDR directed at the preservation of downtown affordable housing (Seattle 2004),
Fesler, Stephen. 2018. Seattle Considers Changes to the City Incentive Zoning Program. The Urbanist. June 7, 2018. Accessed 3-8-21 at Seattle Considers Changes to the City Incentive Zoning Program | The Urbanist.
Kinney, Jen. 2016. Seattle Preserves Farmland, Funds Infrastructure by Building Taller Condos. Accessed 3-12-21 at Seattle Preserves Farmland, Funds Infrastructure by Building Taller Condos – Next City.
Massachusetts. Undated. Smart Growth/Smart Energy Toolkit – Transfer of Development Rights (TDR) Case Study: Seattle, WA.
Meier, Dennis. 2010. Correspondence with author of July 5, 2010.
Seattle. 2004. City Gains Housing, Debt Funding Through Sale of Transferable Development Rights. Seattle City Council News Release dated 4/19/2004.
Walker, Laura Hewitt. 1998. Correspondence with author November 25, 1998.