$15 Minimum Wage Won’t Improve Housing Affordability Without More Housing

Belltown (Wikimedia)

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.

Comments

  1. Brent says

    The painful irony of the Seahawks ticket subsidy analogy is that is isn’t an absurdist comparison. We are, in fact, subsidizing the cost of Seahawks tickets, Seahawks paraphenalia, Sounders tickets, Sounders paraphenalia, and helping to underwrite the whole cost of operating the Seahawks/Sounders organization, whether we want to or not.

    All those exempted sales that go on on-site, and all those exempted ticket sales, are a loss of opportunity to get tax revenue from other economic activity that could have been going on on the same site. And property tax, and hotel/motel tax that could go to other purposes, or be lowered in order to encourage more tourism, thereby actually bringing money into the local economy instead of into the untaxed hands of the Seahawks/Sounders organization.

    Imagine what that forgone sales tax could do if it were used for something else like, say, transit.
    .

    Consider a different analogy: Cost of food and EBT. I would submit that the existence of the EBT program not only keeps some people from starving (although, frankly, anyone looking for free food in MLK County will find it in ample supply, with a little shoe leather and access to transit, but not necessarily the right kinds of food for, say, infants), but encourages enlargement of the food supply. This is a good thing, in my book.

    Likewise, housing vouchers encourage developers to choose to build housing, if only their opportunities weren’t limited in such draconian ways by Seattle’s Snob Land Use Code. (As a reality check, I know a number of people who have been told that in order to get publicly-subsidized housing, they have to move outside the Seattle City Limits.)

    We know there is huge pent-up demand for housing. The developers know it. The city council knows it. Even the NIMBYs know it, but they happen to disagree with the goal of allowing more people to live within Seattle’s footprint, unless it is the *right* people. Is it not universally obvious that the hindrance to housing supply is artificial (i.e. government) controls on how much housing can be built? Is it not also universally obvious that housing supply will skyrocket (regardless of rent controls and housing subsidy programs) if all the Snob Zoning (especially around light rail stations) is removed?

    Yes, rent control would start to damp down supply at some point, but we are far away from crossing that line in the supply/demand graph, IMHO. I would agree that political energy spent pushing for rent-control is a poor use of political energy, but I would also submit that any energy we waste fighting real rent control right now would be a poor use of our time, until we get much closer to that point where rent control would actually impact demand by developers to be allowed to build housing in Seattle. In the meantime, I hope that transit advocates and Councilmember-elect Sawant see common cause in removing large swaths of Seattle’s antiquated snob zonings, and focus our energy into that common goal.

    • John Bailo says

      How about this then…build a new stadium someplace were the people who are forced to funnel into Seattle to see a game, actually would want to be. Someplace with a big parking lot, in the suburbs, next to a mall with plenty of food and shops, rather than having to walk through a derelict rail yard and be prey to the occasional psychotic with a shank, post-game.

      • William C. says

        Where in the suburbs? How would the people from all the other suburbs get there, given that suburb-city transportation (both transit and roads) is much better than suburb-suburb transportation? And, how are you going to put this hypothetical stadium next to both a giant parking lot and a giant mall, given that either use will largely preclude the other?

      • Brent says

        Sticking to economics: If one wishes to make a fortune owning a sports franchise, downtown is the ultimate plum location to con taxpayers into building you a stadium.

        For taxpayers, though, a stadium is one of the lowest and worst uses of downtown land, unless zoning already precluded the higher uses (which, other than portage facilities, our zoning laws kinda do). We’ve beaten that horse to death a few times.

        When selling another sucker community into building them a free stadium, the sports franchises will cherry pick examples of how the economies of localities with stadia thrive. But the sports enterprises are attracted to such markets, not the cause or even a contributing factor to such markets.

        Kent doesn’t have an NFL stadium not because Seatteites are greedy to have all the big toys, but because Paul Allen knew what he was doing when he decided to make a killing as an NFL franchise owner.

      • Mike Orr says

        Suburban stadiums have been doing a good job of locating near suburban downtowns and regional transit nodes. My original fear was that they would locate in inaccessible nowhere like south Kirkland, outer Issaquah, or Newport Hills. But the Kent Showare Center is right on the 150, the Everett Events Center is in downtown Everett, and the Tacoma Dome had the honor of a transit center being built around it. The main problem now is that regional transit cuts off before the events end, so you can’t use it for a round trip unless you leave at halftime.

      • asdf says

        To some extent, stadiums located in suburban places that are inaccessible transit can be mitigated by running special shuttles to and from the stadium on event days only.

        One very good example of this is the home of the New York Jets, pictured here: https://maps.google.com/maps?q=new+jersey&hl=en&ll=40.812331,-74.070017&spn=0.0165,0.033023&sll=47.272986,-120.882277&sspn=7.574664,16.907959&t=h&hnear=New+Jersey&z=16.

        Where there is nothing going on, the stadium is located in a desert – it is extremely isolated, surrounded by nothing by ugly parking lots, and is an unpleasant, 2+ mile walk minimum to get virtually anywhere. But, when a football game is on, New York residents can take a regular commuter train out of Manhattan, then transfer to a special event train that drops you off right at the stadium.

        It works great for people living in Manhattan, although it is quite expensive (I read somewhere that a round trip to and from the Super Bowl will cost in excess of $50 per person). But the catch is that it pretty much works only for people living in Manhattan, or at least New York City itself. For people living almost anywhere in New Jersey, the options include driving way out of the way to a P&R served by the event train or driving directly to the stadium.

        And the only reason the event train is even there is because you have the New York City market to support it. If you want to visit the Kansas City Royals by transit (https://maps.google.com/maps?q=kansas+city&hl=en&ll=39.049685,-94.471822&spn=0.033861,0.066047&sll=40.812315,-74.069996&sspn=0.066001,0.132093&t=h&hnear=Kansas+City,+Jackson,+Missouri&z=15), and you want a ride back, a weekday day game is your only option.

        If you survey professional sports facilities around the county, the trend is undeniable that the stadiums located in and near downtown are orders of magnitude easier to access by transit than the stadiums which aren’t.

  2. asdf says

    One big irony here is that the bus pass analogy is actually closer to the football analogy than you might think. We can give everyone a free bus pass, but without money to run more buses to carry all these extra people, there won’t be a whole lot of room for them all.

    You think buses are crowded today, just imagine how crowded they’d be if fares were free.

    • aw says

      That would be the case if the city demanded that Metro give away the passes. But if instead, the city pays Metro for the passes, there would be revenue to provide extra service. Additionally, the need for fare enforcement in the city would be reduced, reducing costs somewhat.

      That doesn’t mean that the gains would necessarily be enough to satisfy the added demand.

      • asdf says

        I thought about the that, but I’m not sure that the revenue from the passes alone would be enough. Fares currently only pay for about 25% of Metros’ operating costs. Granted full buses have greater farebox recovery than half-full buses, but even full buses generally do not have a farebox recovery rate of anywhere near 100%.

        In fact, the only way the extra pass revenue would provide sufficient revenue to meet the new demand would be to make the (probably correct) assumption that only a minority of the free pass recipients would regularly use the service, and everyone else would just keep driving as before.

        This is why cities with real mass transit that move a large majority of the population all have rail – even if the capitol costs are high, the marginal cost per passenger of simply throwing more buses at the problem is too much to be scalable if the goal is to have a more than 10-20% transit mode-share.

    • Brent says

      Another approach would be to require employers in Seattle to pay for a one-zone peak (or its cash equivalent) transit pass for each employee. This is not much different than requiring a $15 mininum wage except that a lot of people already earning at least $15 would benefit.

      • djw says

        This is not much different than requiring a $15 mininum wage

        I don’t understand this claim at all. It’s very, very different. For one thing, it’s a $90 value, tax-deductible. That’a around 10% of the monthly value of giving a minimum wage employee a raise to $15 an hour.

      • Brent says

        I’m not trying to quantify the costs to employers or value to employees, or even count how many more people would benefit. I’m just saying it is the same principle.

    • d.p. says

      You know what isn’t crowded? That Belltown photograph above. Some tall buildings, a whole bunch of empty space surrounding them, six visible pedestrians in a ten-block scape. Lifeless.

      Photo essays of Belltown should be mandatory viewing for those who believe you can fashion active density by incentivizing nothing but tall, haphazard, large-lot megaprojects.

      • BA says

        A significant portion of the land in this image has been held, for generations, by the Clise family that had a long-term vision that kept their land in parking lots and low density/marginal buildings in the meantime. Arguably we’ve had a couple of generations of unfortunately poor land use waiting, but perhaps as these parcels now develop the market will provide for significantly more diversity of uses, and density, than if they’d were built out say in the 70’s or early 80’s.

        Look at some of the more suburban development in the Regrade and that’s when most of those structures were built.

        History is more complex than just the regulations. The parking lot across from the market at First and Stewart has been there since the 1920’s – it isn’t development regulations that has kept it in that use.

      • d.p. says

        I’m not discounting the historic impact of individual large-scale landowners and their personal peccadilloes, BA. (Wouldn’t it be great, though, if conditions disfavored any one person or company from owning any complete city block, never mind several?)

        But the “more developed” Belltown a few blocks over has a history of whole-block teardowns replaced by towers on crappy podiums, and these are the work of many unrelated developers. The blocks in the photo, meanwhile, are about to become the proud parents of Amazon towers-on-garages (with “community spaces” as fake as a Shia LaBeouf apology), plus a few more residential towers on a few more crappy podiums.

        So clearly bad development forms are the baseline, by virtue of some cocktail of zoning regulations that make these forms easiest/most lucrative, combined with the ingrained preferences/habits of developers and financiers. The result, unfortunately, is not only a failure of urbanism at the ground level, but genuinely lackluster resultant densities thanks to all the wasted low-use acreage.

        this is simply less dense than this. In every possible mathematical way. That it also happens to foster a more visually interesting pedestrian experience, and avoids the cultural and social detachment that is characteristic of “suburbs in the sky” dwellers, is just icing on the cake.

        The solution in boomtowns might just be to regulate away the bad ideas, and to regulate in something skinnier, smarter, more varied, better.

      • Mike Orr says

        The lack of everyday retail and schools in Belltown has been widely recognized. Vancouver’s West End has several full-sized supermarkets and drugstores, some tucked into buildings, and others more like the Broadway & Pike QFC with parking on the roof. That’s what Belltown doesn’t have, and why people find it an incomplete place to live.

      • BA says

        Sure, 150 year old and older development is more granular and often as dense or denser than towers on podiums. That said, there isn’t much of the former being created any more, and our patterns of ownership and the vagrancies of financing and market demand don’t allow for it either.

        I’d focus on the first 30 feet up from the sidewalk to create lots of activity, and let what happens further up in space be generally whatever.

        Creating diversity through regulation tends to be just as artificial as the result of every other regulation. In the Regrade we’re often starting with a parking lot. Hard to force a fine grain with that as the start…

      • smp belltown says

        It would be nice if there was some time info on this picture. Just looking at it I’d, guess it was from maybe 2009 or 2010, on a sunny mid-April Saturday morning around 8am. The area at the left side of the picture looks a lot different today.

        (The Caddy building is gone, but that space looks pretty clean. The UA Theatres may or may not be hiding behind the building on 6th next to the Wexley School for Girls office.)

        Belltown can still be a pretty quiet neighborhood on weekend mornings. Come by for breakfast sometime.

      • aw says

        If you click on the picture, the link takes you to the Wikimedia entry for the photo. According to the EXIF data there, the photo was taken at 11:14, 28 May 2011.

  3. Mike Orr says

    There’s a city in eastern Europe that’s experimenting with buying a block of transit passes for all residents. In Seattle terms, it would be equivalent to a citywide U-Pass. If the city did this, the cost would be significantly less than the nominal $90 because of the guaranteed large revenue stream it would create, plus the fact that not everyone would use transit much even with a free pass. It would also give Seattle the ability to demand the dollars be spent on Seattle service, the way the U-Pass revenue goes to significantly increasing UW routes. I’m not sure if it would have much effect on citywide service hours since the existing number is so large and Seattle is receiving a subsidy, and Metro might just use the revenue to offset those. But it would end the “I’m not taking the bus because I don’t carry cash and I don’t have an ORCA card and I’m not spending $5 for a card so I’ll drive instead.”

  4. Jeik says

    With a higher minimum wage, developer (or at least landowner) profits would increase anyway. The trade-off is that the city is not actually getting more value in terms of more and better housing.

  5. Sam says

    I’m a little confused. One of the reasons we have to build multi-billion dollar light rail lines, we are told, is so people can get from their inexpensive suburban apartment to their low paying job in the city. But now we’re being told that these people need their minimum wage pay rate doubled, and Seattle needs to start building more affordable housing for them, so they can afford to live in the city, and won’t have to live out in Tukwila, for example, where rents are cheaper. But if they are going to end up living downtown in an $800 a month studio apt within walking distance of their low paying job, why are we still building them light rail lines from their old suburban apts into the city?

  6. Urbanist [ad hom] says

    We’ll once rent inflation takes off when burger flippers have a quick 60% pay raise and hit the housing market, we can just slap on price (rent) control. It’s worked out well in Venezuela, just look at all the empty store shelves and 60% inflation rate.

    • Brent says

      The City Council should learn from Venezuela’s example, and Haiti’s too. If you raise the minimum wage, those responsible may get disappeared to somewhere who-knows-where.

    • Mike Orr says

      What about the downside of avoiding the inflation? More people who have to choose between rent, food, medicine, and transportation, even when they’re working full time or working two or three jobs.

  7. Urbanist [ad hom] says

    Sam, don’t you understand? Slogs demographic [ad hom], doesn’t want to live in tukwilla or seatac and take light rail. Too scummy down there and not enough hipsters.

    • Sam says

      Good point. Also, I think part of this is techies being generous with other people’s money. Not to over-simplify, but well-paid techies moved into the city and drove up rents. This screwed over poor people. Now the techies feel guilty, and want to solve the problem they created. Their solution? Businesses should have to pay their low-paid workers more, and taxpayers should subsidize more affordable housing in the city. You should see what’s going on in SF.

    • Martin H. Duke says

      I don’t fit much of your description, but I think it would be nice if not everyone in the city had an income above the regional median. But then, perhaps you would like to keep “those people” out.

      • Urbanist [ad hom] says

        I wanted to live on Queen Anne but you know what, I can’t afford it. But I am not bitter that anyone is ‘keeping me out’. That kind of thinking is for the intellectually weak who blame others for their station in life. So I live in Ballard.

      • Brent says

        Have you considered the fact that you can now afford to live in Ballard might be the result of social engineers who came before you doing such dastardly things as allowing the free market more space in Ballard instead of setting a government edict that nothing can be built taller than two stories, or that residential and commercial use can’t co-exist in the same building?

      • Urbanist [ad hom] says

        …..and the same social engineers have given us light rail to Seatac and Tukwila proving lots of low cost housing with easy access to downtown Seattle, but for some reason, white kids with college degrees think living there is beneath them.

    • RossB says

      I totally agree with all of those. I’ve mentioned some of them before (e. g. we need to liberalize our “mother in law” apartment rules). Another one I would add is to simply get rid of parking minimums.

  8. says

    Before starting a new program like rent control with unknown consequences, we should expand the programs we have. Both the Seattle and King County Housing Agencies offer lotteries to get added to the wait lists for Section 8 housing vouchers. This means that a great many people that are below the income threshold for assistance (roughly 30% median income) are not getting housing assistance. The City could use Housing Levy money to expand the Section 8 program, if we wanted provide more affordable housing.

    • Charles says

      I’d rather SHA build or acquire large numbers of affordable housing units instead of subsidizing landlords. The estimated demand for affordable housing is in excess of 50,000 units.

      Further it is estimated that there are 14 MILLION vacant housing units nationwide. A significant jump in these numbers was from the housing market foreclosure debacle. Banks are sitting in huge numbers of these. They should be forced to return them to the market. That would cause the market to reflect its true price level and there would be far less of a “housing shortage.”

      • Kate Martin says

        Even though they’re complicated, I think we should plow through the bureaucracy and enable Non-Profit REITs (Real Estate Investment Trusts) that Seattleites could invest in to provide permanent affordable housing and commercial space. It would help build inventories that put a lid on costs while providing a modest return for investors.

      • Charles says

        My issue with that is that it requires a return on investment often around debt instruments.

        We should build public housing with no expectation of profit or debt service. Or any of the drivers that inflate rents. We need to stop thinking of public projects as opportunities for our wealthy citizens to earn tax free income. Yes, I know real life isn’t that simple but we can at least push in that direction.

      • Mike Orr says

        A lot of those houses are in places where nobody wants to live and shouldn’t have been built. If somebody works in Seattle and wants to live in Seattle, it doesn’t help that there’s a vacant house in the outskirts of Snohomish.

    • Brent says

      My largest beef with what we call “affordable housing” here is that it is defined in many cases by who is living in it, not by how much it costs, in absolute or relative terms. Developers get property tax breaks to limit who can rent some of the units they offer, but there is no limit to how much they can charge for those thusly set-aside units.

      It would cost taxpayers a lot less, and actually help make rent more affordable, if we simply allowed supply to grow substantially.

      All the money we taxpayers are pouring into housing subsidies is an indirect subsidy of rampant snob zoning. (This is not an argument to end housing subsidies, mind you. It is an argument that we are using the most expensive solutions to get the least results.)

      • Mike Orr says

        My beef with affordable housing is that there’s a large gap between those who qualify for it and those who can get a Seattle apartment with 33% of their income. That gap is ignored in the rush to build “affordable housing” for the poor, but it’s where the bulk of service-sector workers and office clerks and people who make the city function are — the same people who are being pushed out to the low-density edges of the city and into the suburbs. It’s the missing “workforce housing”.

  9. KyleK says

    Good point Martin. We have a major supply problem that a won’t be solves by creation of more high end units. $15/hour means $2600/month. The old affordability ratio is 30% – so about $900/month. In reality, people will push that percent closet to 50% of they can save elsewhere (transpo!) – lets call that $1200.
    Based on the parking study Matt posted, there is no earthly reason to build more downtown parking… So open questions: if unparked and trying really hard – is it possible to build a tower in the downtown core with units that average under $1200?
    How big could they be?
    What is getting in the way – you can build at these prices elsewhere… So why not here?

    • aw says

      Is there a good reason to try to build new affordable housing in the downtown core? There are high land prices, which means developers would tend to build taller buildings. Building taller also means higher costs, so it makes sense that those places would be marketed to well-off tenants.

      • KyleK says

        Downtown makes a lot of sense as a location for lower income people to live: it’s got top quality transit service and tons of employment opportunities.

        Land cost is a relatively small expense per unit on a large building. I question the “building taller is more expensive” bit I’ve seen thrown around a lot. I don’t claim to be an expert, but my understanding is that there is a sweet spot in highrise building where costs are comprable per unti with smaller buildings.

        Other places are able to build affordable taller buildings (Houston, for example.) Again: why can’t we?

      • d.p. says

        Taller does not mean denser.
        Taller does not mean denser.
        Taller does not mean better.
        Taller does not mean more robust.

        I hear Cabrini Green is nice this time of year.

      • Charles says

        Most of Cabrini Green had been torn down to make way for luxury town houses and suburban style strip malls with the displaced former residents dispersed or “dumped” in far flung neighborhoods of the city.

      • d.p. says

        I almost can’t fathom how delusional one must be to wax wistful for that archetypal Towers In A Park/Towers In A Post-Apocalyptic Hellscape slice of Chicago. There were no “residents” there, only prisoners.

        The gradual replacement is a mixed-income experiment, in a development form not dissimilar from the rest of the North Side. There is nothing “suburban style strip” about it.

        When all is said and done, the area will have a higher residential density (and usage density, by all metrics except driveby-shootings-per-acre) than the former PJs did. Though you are correct that because of the mixed-income aspect, it will have fewer subsidized residents (in absolute numbers).

        Fortunately, there are an awful lot of half-empty blocks on the inner South Side which would be much more conducive to government-subsidized townhouses than to any megaproject monolith.

      • Charles says

        I’m not waxing wistfully at all. But the forced displacement of a couple thousand people was not a good outcome either. And it was not replaced by “mixed income” units. It is being replaced by luxury units that the average Chicagoan could not even dream of owning or renting. As for the shopping… I’ll post a pic in another comment.

      • KyleK says

        Whoa DP, who said anything about towers in a park? I’m talking about towers in a city which has a mich higher density celing than mixed use/lowrise. Also: I’m honestly asking a question *what (other than parking, which we have established is unneccesary downtown) is making it so expensive to build in Seattle?

      • Brent says

        “why can’t we?”

        1. We bloggers collectively don’t have the capital or collective skills to design, build, and operate tall buildings.
        2. The zoning doesn’t allow it.

      • Mike Orr says

        “Downtown makes a lot of sense as a location for lower income people to live: it’s got top quality transit service and tons of employment opportunities.”

        There are hundreds of thousands of people with below-median income; they can’t all fit downtown. The other solution is more walkable neighborhoods with good transit connections throughout the city and suburbs, so that people can get around easily even in lower-priced areas. That’s what the northeastern US has that’s missing on the west coast.

      • KyleK says

        Mike: Downtown make a lot of sense because of scale, but yeah, affordable options shouldn’t be focused solely downtown. To be clear, I’m not suggesting we (Seattle) go crazy and build a bunch of projects. I’m talking about a market or semi-market (non-profit financing?) solution(s.)

        Brent: haha, yeah – I’m clear on my inability to build or finance a 50 story building. What about zoning? I read a lot of articles on this subject but I’m still really unclear about why Seattle is a special snowflake. Parking, duh… What else?

  10. John Bailo says

    The effect of a $15/hr wage will be to make the commute into Seattle to get a job more rational. Suddenly taking LINK, the bus or Sounder the 40 minutes into downtown to get minimum and getting to live in large 3-bedroom suburban apartment becomes the minimum lifestyle for a 2-person minimum wage family. Seattle becomes the breadbasket of the region for many.

    • Brent says

      Kent was once the breadbasket of the region, until most of its arable land was turned into office parks with spread parking and large lawns.

      Food has to be grown somewhere. That’s one of the reasons so many environmental groups fight so hard to reduce the footprint of large chunks of the human population.

  11. Andrew Smith says

    Couple things:

    1) A minimum wage won’t raise everyone’s wages. An engineer at Amazon making $200K a year isn’t going to get any extra money. The reason I bring this up, is that the wage increases are all going to wind up at the lowest end of the market, which means, roughly, the people occupying the cheapest housing.

    2) Not everyone works. Some people are on fixed-distribution benefits (disability, social security, etc.) those people may have their rents raised with no ability to take advantage of the higher wages.

    • Brent says

      DId you just make an argument for rent control. ;)

      A lot of unions make sure to put clauses in their contracts that scale up everyone’s wages in their bargaining unit when the minimum wage increases. That’s part of why unions got behind the state initiative so strongly.

      • Andrew Smith says

        Absolutely not. If we need affordable housing, let’s raise a levy a build some, let’s improve zoning rules and build some.

    • Mike Orr says

      But the people who do benefit will spend the increase immediately on necessities they’re doing without now. That will improve the economy and make a larger market for ordinary goods and services (as opposed to luxury goods). That will have indirect benefits for moderate and higher-income Amazon workers, who will be living in a more robust and balanced economy, with fewer social tensions and less cost of crime and emergency-room/mental-health care. It doesn’t address housing costs or supply though, which is the reason for this article.

      • Andrew Smith says

        My point was not that “this won’t benefit amazon workers” is that, in terms of housing, the gains of this will not be evenly distributed.

        Personally, I think a $15 minimum wage is probably a good idea, though I do worry that there are some people who would lose jobs. A better policy would just be to give everyone who makes less than $30K more money (a guaranteed minimum income or something), but that’s never going to happen because hahahahaha are you kidding me?

      • Brent says

        Strictly speaking, we may not have a guaranteed minimum income, but the EBT, among other benefit programs for the poor, sure comes close to being a means-tested equivalent thereof.

        The problem, as was discussed ad nauseam on the Low Income Fare Options Advisory Committee, is when people hit the threshold where the benefits suddenly disappear, which is 200% of the federal poverty level for most of the programs. (Having the single level keeps down administrative expenses and hassle for the recipients.)

        Two-person households with one full-time breadearner getting $15 an hour will be off of a whole bunch of programs they would have qualified for at $14 an hour, including EBT. The impact of crossing the 200% poverty line, just for EBT alone, would be like getting a sudden pay cut of $1.35 per hour, assuming the recipient is getting the typical $216 monthly benefit.

  12. luke, in Ballard says

    I didn’t read the comments so this may have already been brought up, but,

    OMG city council why isn’t it easier to build secondary studio cottages in the back yard. for fuuuuuuuuuuuureaks sake. Talk about unused space and wasted potential for affordable rental units.

  13. Sam says

    I have a question. Back in, let’s say, the 60’s and previous to the 60’s, the average price of a home in this area was about 2 or 3 times the price of the average salary. But today, the average price of a home is about 6 or more times the price of the average salary. So, in 1960, if your salary was $10,000/year, a typical house cost $30,000/year. But today, the average salary is $50,000/year but the average house isn’t $150,000/year, it’s more like $300,000/year. My question is, how can we make it so average houses cost double or triple the average salary?

    • Andrew Smith says

      You have to build a lot more houses if you want to keep prices down. (A house that costs $300K/year is a very expensive house, btw).

      Realistically, in the city, there’s no room to build new houses, you can go out a long ways, Issaquah or Auburn or something, but that’s about it.

      • Sam says

        $300,000/year. Oops. I meant $300,000. But it has to be more than just supply and demand that caused that gradual upward climb from average houses costing 2 and 3 times the average salary to 5 and 6 times the average salary. Didn’t the market also start factoring in the introduction of double incomes into home prices?

      • Andrew Smith says

        Didn’t the market also start factoring in the introduction of double incomes into home prices?

        That’s a demand “shock” in economics terms. A fixed supply plus increased income means that the willingness to pay is higher.

        Double incomes haven’t raised the price of televisions because supply increases when the price goes up. With housing, because we don’t make new housing fast enough, we see large price increases with more workers.

    • Charles says

      A few things going on as I see them.

      1) change to a Fiat money system in late 60’s which has debt and “managed inflation” as key features.
      2) change in banking, real estate and bankruptcy laws that allow banks to game the system and hold vast numbers of units off the market.
      3) influx of vast amounts of foreign investment in real estate.

      People who’s jobs afforded a middle class life in the 1960’s those same jobs are now considered menial and low paying or have been offshored.

    • Mike Orr says

      The population has also doubled, both nationally and in Pugetopolis. When those 60s apartments with large balconies were built, Seattle’s population was starting to shrink, the 5 BR houses in Bellevue were built on low-cost land, and the Kent Valley was still farmland. The population increase coincided with burgeoning home sizes and two-car garages. 1950s houses were around 600-900 square feet, so similar to a current 1 BR apartment, except a family of four lived in them. House sizes increased to 1000 square feet, then 1500, then 2000, then 2500. So the population doubled but land use quadrupled, and blew through all the available land inside the Marysville – Lake Stevens – Woodinville – Issaquah – Maple Valley – Auburn circle. (I know less about Pierce County so I’m not sure about Puyallup – Spanaway – Lakewood.) Now the Bailoman wants to build the same in the mountains and Arlington and Skagit County. So part of it is the financialization of the economy and the tilting of the playing field toward the rich, but part of it was a rising population and gobbling land use.

      • Andrew Smith says

        This is a very insightful comment. Everyone, please read this. Mike, write a post about it!

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