Since we’re on a roll, I’ll add my opinion to this discussion. I started thinking about this last month at the equitable growth dialog but haven’t until now been able to put it in a good context. This discussion has done that.
Simply put Martin and Sherwin are both correct, the problem is they are thinking about afforable housing (and in some ways affordable commercial/retail space) at two different physical and temporal scales. This lack of scale definition in my opinion is the crux of the problem when talking about affordable housing. Martin and Sherwin each describe one of the two opposing forces that I see playing out with affordable housing, one short term and site specific, the other long term and region wide. Note, for this discussion I’m not talking about single family houses, I’m talking about apartments, condos and townhomes.
In the short term, new housing in the city is almost always more expensive than old housing, unless it is subsidized. This is because it is more expensive to build housing now than it was before, and developers will target the most lucrative market, and cheap housing usually isn’t it. New housing simply demands a premium. So yes new housing is more expensive than old housing.
However, in the long term housing prices are mostly determined by supply and demand. Once housing is built, regardless of the price to build it 15 or 20 years ago the market will determine it’s value. The larger the difference between supply and demand, the higher housing prices become. Additionally, over the long term, new housing become old housing, and old housing is cheaper. I would venture a guess that a large majority of the affordable housing in Seattle is just our older housing stock, not subsidized housing. Old housing in desirable neighborhoods may still be expensive, but building less housing 15 or 20, or even 100 years ago in those neighborhoods wouldn’t make them any cheaper now.
Thus to me I only see a two fold solution. First restricting large increases in housing where we want it (around Link, urban centers, etc) is guaranteed to increase prices in the long term, there is no other possible outcome. Period. Second affordable housing that is lost from a new project should be replaced, through programs like the housing levy and incentive zoning. This is the only solution I see that preserves affordable housing in the short term and builds up an affordable housing stock for the long term.