Legislation would more equitably distribute utility infrastructure improvement costs across development projects
SEATTLE (April 23, 2025) – Mayor Bruce Harrell has proposed legislation designed to unlock housing and essential development in neighborhoods that lack utility infrastructure needed for growth. This includes more than 25% of Seattle city blocks outside of the downtown core that lack a water, sewer, and/or stormwater mainline.
Under current City code, the first developer in an area that lacks this infrastructure must cover the full cost to add it—often more than $500,000—regardless of the project’s size. This requirement significantly increases the cost of building anything from a single accessory dwelling unit to a school. Projects facing these costs are 30% less likely to move forward than those that don’t.
The legislation proposes an equitable cost-sharing approach that spreads the cost of these essential utility improvements proportionally among all developers who benefit from the growth.
“This legislation would make it easier to build the things we need where we need them, so we can grow and thrive as One Seattle,” said Mayor Harrell. “By creating a fair cost structure, we’ll spur development of housing, daycare centers, and other resources that will increase equity and opportunity across our communities.”
On average over the last 10 years, just 10% of projects funded 76% of development-related utility infrastructure costs. Under the proposed policy, those same projects would have contributed approximately 14%, reducing the financial burden on any single developer and encouraging growth. Seattle Public Utilities (SPU) would pay for the remaining portion through an increase in System Development Charges (SDC) paid by most new developments. With this change, costs for developers would be more predictable and would include an option to pay SDC over time on a schedule that better aligns with typical construction financing. The legislation would not affect utility bills paid by SPU customers.
“This proposed policy shift helps address a barrier to new housing in Seattle,” said Andrew Lee, General Manager and CEO of Seattle Public Utilities. “We’re pleased it takes equity into account by spreading out costs of growth and supports the City of Seattle’s One Seattle Plan.”
The bill will be heard in the Parks, Public Utilities & Technology Committee on April 23. If passed, the policy would go into effect January 1, 2026.
What People Are Saying:
Patience Malaba, Executive Director of Housing Development Consortium of Seattle-King County
“Removing barriers to housing and construction is a critical step in addressing Seattle’s housing challenges. Many affordable housing projects face significant infrastructure costs that can delay or even limit development. We appreciate the City’s efforts to support housing by streamlining processes and helping to share the burden of infrastructure expenses—while ensuring that utility rates remain stable and unaffected for residents.”
Cliff Avril, CEO of C&A Development
“The city is tackling the housing crisis by removing barriers for developers. Cost-sharing for much needed utility improvements makes it easier for new housing projects to proceed. For example, my company, C&A Development, plans to build 70 affordable units on Capitol Hill near the Link Light Station. This proposal supports our project while delivering vital utility upgrades. It’s a smart, equitable plan that creates more opportunities to build the affordable housing our communities urgently need.”
Michelle Linden, Owner and Architect, Atelier Drome
“Seattle needs both housing and improvements to our ailing infrastructure. But, by burdening individual projects with the costs of making block-long improvements, projects are being canceled. As infrastructure costs balloon, the corresponding increases in value are no longer tenable, resulting in a loss of potential new housing as well as much needed infrastructure improvements. Sharing the cost burden will help remove financial barriers, restart paused projects, and bring much needed housing to our City.”
The Rev. Jennifer King Daugherty, Priest in Charge of St. Stephen’s Episcopal Church
“St. Stephen’s Episcopal Church has served the Northeast Seattle Community for over 100 years and we are continuing that commitment through development of a new licensed preschool that will provide affordable childcare. We support the Mayor’s initiative because it allows nonprofit organizations like St. Stephen’s to provide essential community programs without the additional burden of funding city infrastructure we can’t afford. This initiative will remove barriers to nonprofit community development like our affordable childcare project.”