Goodbye Studio 6, Hello 120 New Affordable Homes
The city’s only hotel is being converted into affordable apartments. A big shift with big implications.
Hi neighbors,
While a lot of attention recently has focused on public safety and surveillance policy, I wanted to highlight a quieter story that carries real long-term significance. Mountlake Terrace is about to get nearly 120 new affordable homes.
Last week, Sage Investment Group, a Kirkland-based developer, purchased the Studio 6 hotel on Van Ry Boulevard. The location is just a few blocks from the light rail station and the soon-to-open Grocery Outlet. Sage plans to convert the 119-room hotel into affordable studio apartments. Each unit will have a kitchen and bathroom. The property will also include shared amenities such as laundry, a fitness room, and community space. If all goes as planned, the homes could be ready for new residents next year.
This story was first reported by the Puget Sound Business Journal. The article is behind a paywall, but here is the link for those who subscribe:
PSBJ: Sage Investment Group to convert Mountlake Terrace hotel into apartments
Rent is expected to be around $1,300 per month, including utilities, internet, cable, and parking. That is not cheap, but for this region, it is far below market rate and one of the few options at that price point for single adults or people working modest-wage jobs.
This kind of project makes a lot of sense. It reuses an existing building rather than starting from scratch. It brings new housing online more quickly and at lower cost. It adds much-needed housing near transit. And it provides a kind of unit—small, self-contained, and relatively affordable—that is often missing in suburban communities.
The End of Mountlake Terrace’s Only Hotel
There is also a tradeoff to consider. Studio 6 was Mountlake Terrace’s only hotel. Its closure means the city will no longer collect Lodging Tax revenue, which has supported events like Tour de Terrace and helped fund local placemaking and tourism initiatives.
The city’s Lodging Tax Advisory Committee distributes these funds each year. You can learn more about how that process works here:
Lodging Tax Advisory Committee
The loss of that revenue may not be felt immediately, but over time it could limit what the city is able to support in terms of community events and promotion.
Also Worth Noting: More Housing Choices on the Way
On a related note, Mountlake Terrace is moving forward with changes to allow more “missing middle” housing types across the city. Duplexes, triplexes, and courtyard apartments will soon be permitted in many areas that previously only allowed single-family homes. These changes are part of a statewide push to increase housing supply and reduce barriers to building smaller, more affordable homes.
While some residents have expressed concerns about population growth, it’s important to remember what these changes aim to do. They’re not about high-rises or rapid redevelopment. They’re about making it possible to add modest, neighborhood-scale homes—places where a teacher, a retired parent, or someone starting out in life might be able to live.
A Policy Gap to Consider
Mountlake Terrace does not require affordable housing in private development. There are some voluntary incentives, such as allowing additional height or density in exchange for setting aside a percentage of units at lower rents. In some cases, developers can also qualify for a multi-year property tax exemption through the Multifamily Property Tax Exemption (MFTE) program. But these are optional, not required.
Many cities in our region now include some form of mandatory affordable housing, often based on specific zoning areas or the size of a development. Shoreline, Seattle, Bothell, Issaquah, Kenmore, Kirkland, and Redmond are among the cities that have taken this step. Mountlake Terrace has not. If we want housing like this to be more than just an occasional exception, we may need to change that.
Choices Ahead for a Growing City
As we look ahead to this fall’s City Council election, it is worth paying close attention to what candidates are saying about housing. Do they support mandatory affordability? Do they think the city’s current incentives are enough? Are they interested in expanding tools like the MFTE? These decisions will shape who is able to live here, now and in the future.
City Council candidate Sam Doyle recently responded to concerns about the city’s missing middle housing code with this perspective:
“Different families have different wants and needs when it comes to housing—a city’s housing portfolio is not a one-size-fits-all issue. Plenty of families in this country live happily in condos, apartments, duplexes, and so on. A single-family home is a good fit for some, but not all. The goal is that everyone is able to find something that works for them at that point in their life—early adulthood, growing family, retirement, senior, etc. I applaud MLT’s commitment to increasing the number of units here and allowing homeowners to also build ADUs as well—it’s a win-win. And for families who do not live in single-family homes and want access to parks, yet another reason to protect and invest in a good parks and rec system.”
It is encouraging to hear candidates framing housing as a matter of real-life needs and life stages, not just zoning code. More of that, please.
Thanks for reading,
Dustin