Mayor Harrell Proposes Legislation to Support the Conversion of Existing Buildings from Commercial to Residential Uses Citywide

Mayor Harrell Proposes Legislation to Support the Conversion of Existing Buildings from Commercial to Residential Uses Citywide

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Building on the City’s Office-to-Residential Conversion competition, the proposed legislation would support projects that transform existing infrastructure, repurposing vacant commercial property to residential uses.

SEATTLE -As part of his Downtown Activation Plan, Mayor Bruce Harrell has submitted new legislation to the City Council aimed at removing regulatory barriers for converting existing buildings from commercial to residential uses. The proposed changes aim to make it easier and more straightforward for property owners to convert existing structures into residential use, supporting housing development in the city, particularly in and near downtown. 

“As Seattle continues to evolve, we are committed to meeting the dynamic needs of our city, particularly in downtown. With the recent passage of the State’s sales tax exemption on construction for projects converting nonresidential spaces to housing, this legislation is another powerful tool to tackle the housing crisis and replace building vacancies with vibrancy,” said Mayor Bruce Harrell. “While we know there remains a need for office space, this effort will give us flexibility to help optimize our built environment and create the downtown we want to see–a thriving workplace and vibrant community for families and residents of all backgrounds. These changes are a critical step in moving the idea of office conversion to a reality.”

The proposed legislation would establish clear guidelines for determining what qualifies as a residential conversion and provide 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, these changes would reduce the cost of conversion to residential use by exempting conversions to housing from the City’s Mandatory Housing Affordability (MHA) requirements. The proposed changes would apply to all areas of the city where non-residential structures such as office or retail spaces commonly exist, and multifamily residential uses are allowed. These include:  

  • All Downtown zones, 
  • All of the City’s Commercial (C) and Neighborhood Commercial (NC) zones, 
  • All Seattle Mixed (SM) zones, and 
  • Midrise (MR) and Highrise (HR) zones.  

The proposed legislation capitalizes on both statewide and local efforts aimed at fostering innovative solutions to meet Seattle’s pressing need for more housing options and repurposing underutilized spaces for residential and other uses.  

Last year, Governor Inslee signed Engrossed Substitute House Bill number 1042 amending the state’s laws to create additional housing units by removing certain restrictions on adding dwelling units within existing structures. Despite Seattle’s historic levels of housing production, the rate of job growth has outpaced housing development, creating a shortage of housing units, driving up rent and housing prices citywide. Simultaneously, the acceleration of remote and hybrid work models and changes in work culture and preferences, has reshaped the demand for commercial space, particularly in Seattle’s downtown, resulting in an office vacancy rate just over 20%.  

Efforts to facilitate office-to-residential conversions and streamline regulatory requirements for residential uses were identified as key legislative priorities for downtown revitalization. Last summer, the Office of Planning and Community Development (OPCD) launched a call for proposals inviting design teams and building owners to submit ideas for repurposing existing office space into new residential and commercial uses. This design competition sparked the creation of innovative, sustainable, and feasible concepts aimed at activating downtown areas, optimizing urban assets, and addressing specific neighborhood needs. Moreover, the competition revealed significant insights and recommendations that influenced the development of these proposed legislative changes. 

Insights from the competition include:  

  • The suitability of older commercial structures for conversion, 
  • Recognition of the complexity and expense associated with conversions, 
  • The necessity for a streamlined permit review process, potentially bypassing design review and SEPA procedures, 
  • The importance of financial incentives to reduce conversion costs, and 
  • The value of flexible construction codes that align with adjustments to zoning regulations. 

If adopted by the City Council, the regulatory changes would help achieve a key Downtown Activation Plan objective: to transform downtown into a vibrant neighborhood through increased residential opportunities and repurposing underutilized spaces.  These changes would be in accordance with the City’s Comprehensive Plan and align with the goals and policies outlined in sub-area plans. 

What People Are Saying  

Councilmember Tammy Morales, District 2 (Southeast Seattle) 

“We must pursue every opportunity to build vibrant neighborhoods and increase housing throughout our city. This is particularly true of downtown. I am excited to work toward making our downtown affordable to more families and workers and look forward to reviewing this legislation in my Land Use committee.” 

Councilmember Robert Kettle, District 7 (Downtown to Magnolia) 

“I applaud Mayor Harrell for helping to make conversions easier and less expensive for businesses and residences alike. With these proposed changes, the Executive has created an incentive which will, in turn, help to address a myriad of problems that all Seattleites have experienced: housing, public safety and economic viability being chief among them, and largely in the areas that need it most.” 

Rico Quirindongo, Director, Office of Planning and Community Development 

“Our office was proud to convene the Call for Ideas competition last spring, which generated excellent ideas from existing downtown building owners and Seattle’s design community on how city government could encourage conversions to housing.  I’m very pleased that we are now taking steps to implement some of those suggestions, and I’m optimistic that this legislation will help spur several important conversion developments in the coming years.” 

Becca Pheasant-Reis. Senior Architect, AIA, CLARK/BARNES Architects 

“This proposal is an excellent step to incentivize rehabilitation of readily adaptable vacant and underutilized existing buildings for residential use while maintaining the critical protections for existing landmarks and landmark districts. Residential conversion projects are crucial to adapting our downtown and neighborhood commercial areas for a vibrant future without relying on the environmentally carbon intensive demolition and new build cycle of development.”    

Marc Angelillo. Managing Member, Stream Real Estate LLC 

“We are excited to be working on one of the first office to residential conversions in Seattle. Mayor Harrell’s proposed legislation is essential in making our conversion and other’s feasible within the City of Seattle. Conversion projects will provide much needed housing, including affordable housing, create good construction jobs, increase the tax rolls, and lower the carbon footprint of creating new units in our city. This proposed legislation, along with the bill recently passed by the state awaiting the Governor’s signature, benefits both the city and the state, and we strongly support them.” 

Matt Aalfs, AIA.  Founder and Principal Architect, BuildingWork Architecture. 

“The conversion of existing buildings to residential use is a key strategy to address multiple issues facing Seattle. At a fundamental level it will address our critical shortage of housing and it will improve livability, safety, and economic activity in the downtown areas of the city. Residential conversion of existing buildings will also help the City’s response to the climate crisis, as reuse of existing buildings has a lower carbon impact than new construction. Finally, by preserving and reusing existing buildings we can maintain and enhance the existing character of streets and neighborhoods, which benefits everyone. For these reasons I strongly support the proposed Ordinance related to conversions of existing non-residential buildings to residential use.” 

Brian Pearce.  Executive Vice President, Unico 

“Unico supports the City’s efforts to find creative ways to help solve the challenges of housing affordability in the downtown core.  These efforts by the City are a step in the right direction and will help to restore vibrancy to areas within Downtown Seattle that have struggled to recover since the pandemic.” 

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