For reasons irrelevant to this blog, I support a higher minimum wage in Seattle and would almost certainly vote for one if given the opportunity. I’m not well-informed about this issue, but basically it would be great if the poorer people among us were able to afford more necessities of modern life.
However, I’m somewhat irritated by the notion that the minimum wage will, in itself, substantially help with the serious problem of housing affordability in Seattle. Although Friend of STB Goldy probably wouldn’t disagree with any of the policy content I describe below, most people would probably construe what he writes in The Stranger the wrong way:
The fact is there’s nothing radical about suggesting that the minimum wage should be higher in Seattle than it is in much of the rest of the state. Nearly everything is more expensive in Seattle—housing especially—and minimum wage workers here simply need higher pay than their counterparts in, say, Yakima or Ferry counties.
Goldy also shares some cost-of-living data in another article.
If Seattle decided to make bus passes affordable to everyone by giving all residents $90 a month to buy one, then it would succeed: there are no practical limits on how many passes Metro can issue, and the price is fixed by legal fiat. At the opposite extreme, if we offered a subsidy to make Seahawks tickets more affordable, that would succeed in nothing but driving up the price of Seahawks tickets. There are 67,000 seats; having more dollars pursuing those seats simply raises their value in the secondary market (or in the primary market, once the team caught on).
Although neither example is entirely apt for the housing market, a market radically constrained by zoning and various taxes on development is more like football than bus passes. If we make the ambitious assumption that Seattle also passed some form of rent control, and that regulation was so brilliantly designed that it avoided obvious pitfalls like subletting and condo conversions, then that would merely reallocate the fixed pool of housing from the highest bidder to the already-here and the well-connected. That’s great if you’re connection-rich and cash-poor, but it’s not a clearly more just framework.
All that said, to the extent that Seattle allows new construction and doesn’t smother it in developer costs, more spending power at the bottom should help the housing supply. Creating a whole class of people that can afford $800 apartments will certainly improve the balance sheet for nonprofit housing organizations. If we can ever satisfy the demand for “luxury” apartments, then someone looking to make a buck is going to have to chase those working-class dollars as well. In any case, even additional luxury apartments help to reduce demand for existing housing stock unless it destroys a large number of affordable units in the process.
The argument that it won’t make a big difference for housing affordability isn’t an argument to keep the minimum wage low. However, people worried about the cost of housing in Seattle should put more effort into increasing supply, whether or not it has the side effect of increasing developer profits.