Shaping Seattle

Government finance law might not sound like the most riveting practice area to everyone, but don’t tell that to Faith Li Pettis.

“I drive around Seattle and I’m constantly telling my family, ‘That’s bond work’—that was done with bonds,’” says Pettis, who has spent 30 years working on some of the most influential public bond issues in the state. She ticks them off.

“We underwrote the Mercy Housing complete renovation of the old Navy barracks known as Building 9 at Magnuson Park,” she says. “And Uncle Bob’s Place in the Seattle International District. We’ve done the IMAX camera at the Pacific Science Center, and the private schools, from University Prep to The Bush School.”

Pettis has negotiated bonds to pay for schools, housing and an array of nonprofit projects, for clients ranging from state agencies to housing authorities to local school districts, cities and counties. In 2014, Pettis was at O’Hare Airport, staring at a restaurant menu, when her phone rang. Steve Walker, director of Seattle’s Office of Housing, wanted her to co-chair Mayor Ed Murray’s Housing Affordability and Livability Agenda (HALA) task force.

She said no. “I was on the board of the National Association of Bond Lawyers; I was traveling a lot; I was really busy with my practice,” she explains. “I had too much on my plate.”

She went back to the menu. “The phone rings again and it was Leslie Brinson, who had also gone to work in the mayor’s office … and she said, ‘I heard you said no to Steve, and you really need to say yes,’” recalls Pettis, who had worked with both of them on the Washington State Housing Finance Commission. “They each called me several times and worked me over. I really felt that if anyone had a shot at making a change in the way Seattle looked at and dealt with affordable housing issues, it was those two.”

It was a pivotal moment. Seattle was recognizing that housing affordability was in crisis after years of double-digit increases in housing prices, combined with restrictive zoning laws in single-family-zoned neighborhoods.

Pettis, who was born in Seattle and grew up in a comfortable middle-class family, was shielded from a lot of issues surrounding discrimination and housing affordability. “As people have been telling their own stories of the discrimination and difficulties of their upbringing, it let me know how lucky I am,” she says. “We’ve shared our stories and I have realized my background is really different than a lot of others.”

So Pettis, along with co-chair David Wertheimer, former director of civic and community engagement at the Gates Foundation, took on the daunting task of pulling Seattle’s housing approach into the 21st century. They spent 10 months chairing the fractious 28-member HALA task force and ended up presenting Mayor Murray with a 65-point plan.

“It was,” Pettis concludes, “the best yes I’ve ever said.” Seven years later, the fruits of that effort are being seen. Seattle is building affordable housing in neighborhoods throughout the city with a multitude of funding efforts. The Mandatory Housing Affordability (MHA) Program—created by the HALA task force—requires developers to either include affordable housing in their projects or contribute to a fund for affordable housing construction. The MHA has raised $150.6 million in the last two years. Rent in these units is capped. Projects have been funded in Eastlake, Capitol Hill and South Seattle—including Columbia City, Mount Baker, North Beacon Hill, Othello and Rainier Beach neighborhoods. According to the Seattle Office of Housing, the city currently has more than 17,000 city-funded rental units, with 3,746 under development.

Residents of the north end, Pettis and her husband, Phil Pettis, a public school teacher, have two college-age children. Her mother, Elisa, grew up in Hong Kong. Her father, Richard Li, has a more complicated story. “My grandfather was in the foreign service for mainland China before it became communist. So my father grew up all over the world and spoke several languages, speaking English at home rather than Chinese.”

Her parents met as students. Her father was getting a master’s in civil engineering at UW; her mother was at Seattle Pacific College. Pettis’ brother, James, was born in 1965, Pettis in 1967. They grew up in the University District of Seattle, in a house also serving as her father’s engineering office, later kitty-corner from the U District Farmers Market. “The Ave was awesome back then,” Pettis recalls. “It was a safe, fun place. We used to have unlimited freedom—we’d roam the Ave, we’d go on the UW campus, we’d play ball in Red Square. It was a miraculous childhood.”

Pettis entered UW as an undergraduate in 1986, uncertain what she wanted to do. Interested in languages, she signed up for a class in Russian. “It is a beautiful language, but I ended up spending more time on that than all the other classes combined. But I got to read all the Russian literature. It was a rigorous, wonderful education.”

After graduating and reassuring her father she wasn’t interested in a possibly dangerous career in the CIA, she went to Taipei for a Mandarin language-study program. Two major events happened: She met her future husband, and she took the LSAT and applied to law school. She was sure about the former, less so the latter.

“I picked law school in that period when people went to law school and they didn’t know what they were going to do,” Pettis says. “I had never been passionate about law and probably fell into it. And then I was extremely lucky that I did, because I love it.”

She went to Harvard. In the summers, she returned home to intern at Perkins Coie, then at Preston Gates & Ellis, where her life’s work began to come into focus. She was mentored by Jay Reich, then bond counsel for PGE.

“Municipal finance is very esoteric, it’s not taught in law school,” Reich says. “It’s a combination of federal constitutional and statutory law, state constitutional and statutory, and tax law. You help local districts enter the capital markets and borrow money by issuing bonds. And they take the money and build schools and museums and highways. It’s a practice where there’s not a lot of fighting, not like litigation. Everyone sits around a table—bankers, lawyers, borrowers, issuers—and we try to get the lowest possible interest rate that we feel good about sending into the market.”

Pettis recalls, “Jay and I really hit it off; he was a wonderful teacher. Someone who was completely without ego but also one of the most brilliant people I’ve ever met; smart, down-to-earth, a trusted person.”

The admiration was mutual. “She was a great mentee, very quick,” Reich says. “For several years, we would have coffee together in the morning and I would go to her office, or she would come to mine. And we would scope out what we were going to do today, what the personnel were, the issues facing the client—how we could help.”

“It opened up a whole new sense of law to me,” Pettis reflects. “You go to law school, there are two types of law—litigation law and corporate law. I knew I didn’t want litigation, I wanted the corporate side. And the corporate side is great, but it doesn’t have a whole lot of soul to it. It’s good: You’re helping clients. But it’s nice to have clients that have a mission, a vision and values that line up with what you believe in. And that’s where I felt lucky. I have clients who want to do the right thing, and I get to help them with it.”

Pettis spent 18 years at PGE (merged into K&L Gates in 2007). In 2011 she and several other former PGE lawyers stepped out on their own to form Pacifica. “We wanted to recreate a firm based in community,” she says. “We grew up in an era where you gave back, where you were part of the community.”

Since 1993, Pettis has been the Washington State Housing Finance Commission’s bond and general counsel, responsible for a variety of bonds supporting nonprofits, and multifamily and single-family construction. She is also the bond issuer for private colleges and universities.

She has a long list of awards and acknowledgments, but probably her greatest accomplishment followed her decision to lead the HALA process. Mayor Murray’s staff had assembled a disparate and contentious group of citizens to craft a multidimensional approach to the crisis in housing affordability. It was up to Pettis and Wertheimer to find common ground.

“It was really challenging,” she says. “There were for-profit, nonprofit, government people. We had representatives from the downtown associations, neighborhood associations, the landlords union, the tenants union, we had architects … we spent the first three months arguing about whether there even was a housing-affordability problem. We had people saying there’s no problem, we really shouldn’t be doing anything.”

The process was “a 10-month hair-pull,” says Alan Durning, task force member and founder of Seattle public policy organization Sightline Institute. “It was intentionally stocked with people who had different perspectives. Every part was painfully confrontational. Often politely so, because it was Seattle. But people really fundamentally saw a lot of issues differently.”

Soft-spoken, with a quiet and empathic nature, Pettis might not seem a natural choice to corral an intense and contentious task force. But those attributes belie her strength as a leader. “Here’s where I praise Faith,” Durning says. “A lot of her job was really just keeping everybody at the table, listening to each other, and share their perspective and try to look for ways we might agree about. She did remarkably well. She’s disarmingly kind and likable—like your favorite teacher in middle school—you don’t want to upset her. She’s not argumentative in any way. That’s a real skill: to have all the content knowledge and the skills of a Super Lawyer and to have the social skills and likability to keep a fractious group focused on the problem.”

Pettis outlined a couple of non-negotiables to the group. “I told people that everyone would have to contribute to a solution, we couldn’t leave anybody out. It’s not enough to say, ‘this is up to the neighborhoods,’ or ‘it’s up to downtown to solve,’ or ‘it’s the government’s issue.’ It’s going to take everybody—for-profit and nonprofit. Everybody needs to participate in the solution. And if everybody doesn’t feel a little pinch, or a little pain, we’ve left someone out.”

Her second requirement was that all final recommendations be by consensus. It was an approach she took from the late Jim Ellis, of PGE, who gave her a transcript of a lecture he gave at the UW School of Law. Pettis turns from her desk and pulls the transcript out of a file drawer, and says, “He talks about consensus and compromise and how it’s not a dirty word. Initiatives that come out of compromise are more effective and longer-lasting than ones that come out of one side overpowering the other side.

“That really meant something to me, and I remember going back and pulling this out several times during the process, because it is a painful process. People were angry at each other, and the public was watching everything, and the politicians were demanding something. His words really did help me figure out what I wanted out of the process. We did it, and we came out with a compromise at the end that produced longer-lasting results than they would have if it had been a one-sided recommendation.”

According to the city’s website, MHA aims to minimize displacement of existing residents; support more housing choices, including home ownership and family-size housing; and develop more opportunities for people to live near parks, schools and transit. In addition, the task force backed “upzoning” urban growth areas in every Seattle region to allow for high-rises.

Pettis says HALA has provided a roadmap to more affordable housing and also has changed the conversation in the city. “I think housing and housing affordability has become a cocktail-hour topic in the last decade,” she says. “Prior to HALA, I think there was the view that it was an issue, but there wasn’t public engagement. I think that changed.”

In the seven years since the task force disbanded, Pettis’ practice has evolved. She has stepped away from some of her bond counsel work and is more and more involved in legislative and public policy work. She heads “Pacifica U”—the firm’s training program for young lawyers interested in public law. Pettis is also involved in Evergreen Impact Housing Fund, a private social-impact investment fund run by Seattle Foundation to provide capital for affordable housing in King County.

Pettis takes the long view of the evolution of the city. “We need communities where people want to live. If you look at how European cities have done it, or even cities back East, like Boston, where you have townhouses and brownstones, you have space for parks when you put people in living situations much closer together … but you know, we’re never going to change Seattle that much. At least not in my lifetime. But I’m still hopeful for the future.” And looking back at the task force, she is adamant about its value, despite the exhausting and combative nature of the process. “It was fabulous,” she says. “I would do it again in a heartbeat.”

The Sound of Music

Pettis and her family enjoy skiing and hiking in the Methow Valley, where they own a cabin. They also avidly follow daughter Anna’s Ultimate Frisbee competitions. But when she contemplates retirement someday, Pettis hears music. “Music runs in my family. I have cousins who are very musical—an opera director, a couple of violin performers—and my son, James, plays tenor sax. I played piano till graduating from high school. So when I hang up my shingle, I plan to take up cello or violin.”