It’s Ikea’s quote not mine.

How much people spend for housing—rent or mortgage payments—drives much of the discussion about density in Seattle. Housing price is quantifiable, while affordability is a qualitative relationship to price. Measuring whether the price is too big can be a challenge. And how small is too small for a house? San Francisco and New York are exploring opening up their land use code to allow for tiny apartments of 150 square feet.

Interestingly, Seattle already allows for micro or efficiency apartments. The problem of course in all three cities is housing supply. What accounts for big housing prices? The facts point to an increase in demand for apartments in big, dense cities, with supply lagging behind that demand. San Francisco’s vacancy rate is essentially zero, while Seattle’s is at about 4.8 percent.  And in spite of price controls, San Francisco’s housing prices are still insurmountable for many people who want to live in the city. Here’s a quote from the sponsor of the proposal, Scott Wiener:

“We have a housing shortage in San Francisco,” Wiener said. “It’s a densely populated city where a lot of people want to come, and we have to add to our housing supply in a smart way.”

A developer who studied the concept has pushed the issue, designing a prototype of the tiny units.

But are these little houses a concession to the profit seeking developers? Won’t the price of these small units go up? And is this housing dignified, or is it a return to the shantytowns and tenements prevalent at the turn of the last century that inspired zoning in the first place? Are the tiny units simply a high tech maquiladora?

“How small is too small?” asked Sara Shortt, executive director of the Housing Rights Committee, a San Francisco-based tenant rights organization. “There’s a slippery slope when it comes to habitability and quality-of-life issues.”

A few things come to mind. First and foremost, housing is like any other product produced in a market; it has costs, there is a profit motive, and price is dependent on a relationship between supply and demand.

Second, I am familiar with the issues related to dignified housing. I was a foot soldier in several battles 15 years ago about whether tents should serve as adequate housing for farmworkers.  The argument then was that, “tents are better than nothing.” Advocates disputed that and demanded a more dignified bricks and mortar solution. The real issue, we argued, was not-so-latent racism from people who would have been happy to see farmworker housing stay fleeting and temporary.

Third, the market is always right. Yes, I know this antithetical to our Keynesian instincts. But San Francisco has a zero vacancy rate, high demand and price controls. The price controls have not helped. When government intervenes by setting price bad things happen. The best thing would be to eliminate price controls and allow small units. Government can intervene beneficially in the housing market by loosening regulation, allowing more supply, which means more density; more people in a smaller space. Density doesn’t necessarily mean small apartments if property owners can build higher and bigger.

More people means we need more housing.

It’s reasonable to think that young workers wanting to live in the city are like farmworkers: so eager to make a living in a new place that they’ll sacrifice their dignity to exploitative landlords.  But the solution to the farmworker housing crisis years ago was not to limit supply. It was the opposite. Organizations and advocates demanded support to create more housing for farmworkers, not less.

We’d do well to learn from cities like San Francisco and New York that are more densely populated and more popular than Seattle (if you can make it there you can make it anywhere!) Seattle should not give in to the temptation to obsess about housing price, but rather boost the markets ability to produce more and better quality housing by limiting regulation in key areas like around transit and in areas with existing density. If we do that, Seattle may see smaller prices not smaller units.

94 Replies to “Tiny Houses or Big Supply”

  1. I’m not sure this topic is appropriate for a transit blog. How about some discussion of how transit can help push these efficiencies along in Seattle? What’s wrong with the current TOD in Rainier Valley?

  2. Prices are tied to development cost. If micro-units can be built to rent profitably at <$600 (similar to a lot of them now)…..when owners raise rents to $700, other developers will undercut them.

    I love the micro concept. Not for me today, but for me at 20. And maybe the me at 75 if I'm single and trying to help the money last. Not into the pied a terre concept but apparently that's a target too.

    Transit and walkability key. The concept only works easily with little or no parking…otherwise with a 1/1 ratio you're building more space for parking than you are for housing (say 350 sf vs. 250 sf once circulation etc. is included). Or far worse on a small site where parking can be inherently inefficient. Personally, if I was living in something that tiny, I'd want outstanding walkability with immediate access to everything; transit would be for the airport and non-daily stuff.

    1. PS, I lived in 250 sf for four months, in a hotel room while my current building was being built. I wouldn’t want to do it forever, but it wasn’t bad at all.

      1. Prior to WWII, permanent hotel living was quite common. Usually hotels had a shared dining room with dinner for guests in case you didn’t want to go to a restaurant. In some ways the tiny apartments is a return to this.

    2. I don’t see why the developers would cut the rent prices by much if at all.

      If the premise is that there is a lack of apartment in-city housing, then what you are saying is that there is zero available. So, even if I make my apartments half or a quarter the size of a standard apartment, I could still charge the same rent…because the demand would be there.

      I mean…if what all you are saying is true.

      1. That’s the fear. Even a tiny apartment in SF might be over $1000.

        In Seattle, well, it would be similar to the Apodments, at around $500-700. I’m not sure which would be cheaper. An Apodment is a room slightly bigger than a bed, with the minimum that can be called a bathroom, and a shared kitchen. That’s almost like a tiny apartment, except the latter has its own kitchen and a more serious bathroom. But some people may prefer a large shared kitchen to a skimpy kitchenette.

      2. If people choose to pay that price to live in a tiny room in the city rather than have a commute to the suburbs, who are we to stop them?

      3. I agree about choosing to live in rabbit hutches. If that’s what people want, or will put up with, I wouldn’t interfere. That’s the difference between people like me and the zealots here: You despise people in single-family houses, people in the suburbs, and people in cars, and want to use the power of government to punish them.

        Me, I say, “do your thing.” Now, like all cities we have a zoning code. McGinn and the city council will allow any rich developer to buy an exemption, but I do think we should preserve the single-family areas of the city. After all, people relied on that zoning when they bought in and then poured their sweat into their dwellings.

        I realize that this means nothing here. The Roger Valdezes and Seattle Transit Blogs of the world regard individuals as ants to be swept aside or crushed if need be. Me, not so much. I say live and let live. Roger and his kind have a deep need to tell other people how to live their lives, and to use their city hall connections to make lots of money off of it.

      4. So you’re saying single family is sacrosanct and not a single SF lot should ever be re-zoned for higher density?

      5. Rabbit hutches are a sign of overcrowding, which is objectively recognized as detrimental to social cohesion and public safety. The standard is one person per room (i.e., two people in a 1 BR). If a couple voluntarily shares a studio or an individual chooses a rabbit hutch, turning down a larger apartment in an equally-walkable neighborhood, that’s no problem. But if people are priced out of normal apartments, so that they have to choose to (1) share a room with strangers, (2) get a rabbit hutch, or (3) live 30 miles away in a non-walkable suburb, that contradicts the goal of reducing driving. People who want to give up their car are forced into a situation where they have to drive 30 miles, and to drive to the nearest supermarket. We need to either double the housing in the walkable areas so that the vacancy rate can return to the normal 5%, or upgrade suburban neighborhoods so that walking/transit is viable for people.

      6. There is plenty of land in Seattle available for apartments. Look at Ballard. Your developer friends are busy ruining it, and that won’t stop. You’ll see all the big apartments you want, right there.

      7. So you’re saying single family is sacrosanct and not a single SF lot should ever be re-zoned for higher density?

        Instead of spending your energy constructing strawmen, try actually reading what I write, thinking about it, and replying intelligently and on-point. It’s harder, but it makes for a more worthwhile conversation, not to mention a more serious (or at least less ridiculous) one.

      8. Not Fan is accusing others of straw men? While accusing urbanists of “hating” people in houses etc?

      9. matt, I think I wrote “despise,” but I won’t quibble. I think the urbanists do despise single-family dwellers, and anyone who drives a car. Their vision of “appropriate” housing is a tiny apartment on Capitol Hill, above a “vibrant” 24-hour tavern, preferably owned by one of Mike McGinn’s best friends.

  3. That apartment reminds me of a cruise ship cabin, or my grandparents’ sail boat. But without the ocean.

  4. A friend of mine is moving to a job in Sacramento. He turned down a job in San Francisco because he couldn’t find an apartment for less than $2500 a month without living in outer Hayward or San Jose or Sacramento and doing the 90-minute+ commute. He decided that would make his life unacceptably miserable. Soo he took a job in smaller, less interesting Sacramento, where he could get an apartment in Sacramento, and still go to San Francisco once or twice a month for fun. By the way, his Seattle apartment is in Center City and within walking distance of his last job.

    That’s why it’s laughable when people say BART causes sprawl. The desire for large lots and the willingness to drive causes sprawl. People who dearly want to live in dense urban areas and give up their car can’t afford to. BART is an insignificant mitigation measure, and wholly inadequate to the transit needs of the East Bay. In Germany there would be a 24-hour S-Bahn to the city and airport, and local buses everywhere.

    1. Actually I think he said Stockton, not San Jose. And he was specifically looking for a place near a rail station, or with a good bus to the station. He skipped downtown Oakland because he considered it too unsafe and hassling. There may be cheaper places far from stations but then he’d have to drive to a BART P&R, which are chock-full. And buses to stations are pretty skeletal in the East Bay. Transit fans deride people for living in Stockton because they presumably want a 4 BR house for $200, but people have to live in Stockton to even get an affordable apartment.

    2. Of course BART caused sprawl. While the Bay Area was building BART, Seattle turned down the Forward Thrust plan, thereby saving the city and surrounding areas from decades of sprawl, crowded highways, and ever-lengthening car commutes.

  5. Third, the market is always right

    Except when it prices single-family houses in the suburbs as reasonably as it does, right Roger? That’s when your inner commissar emerges to tell us how flawed the market is.

      1. Ignoring, of course, all of the subsidies given to suburban homes.

        Really! So suburban houses get a mortgage deduction, but city residences don’t? Suburban homes are fronted by streets, but city residences aren’t? Suburbs are linked to cities by highways, but cities are not linked to their neighbors by highways?

        Really: What unique subsidies go to suburban homes that are unavailable to city dwellings?

      2. It will be interesting to see how the suburbs[1] handle the elimination of high ERoEI liquid fuel reserves and corresponding rise in energy costs. What? No wildcat hydrogen fields to exploit? No money or energy or political will to bring a new nuclear plant online every two weeks to offset the inevitable decline of sweet, sweet crude? Too bad!

        [1] In truth, humanity, but the suburbs will make a great canary.

      3. Look, you gus have to get off this jag of “all these subsidies” given to cars or the suburbs.

        98% of people in this country live and like living in suburbs with cars as the mode of transport.

        Even in the highly urban Seattle only 16% of households are without a car and the majority of those are because of poverty or handicap.

        So it is not a subsidy in the form of influencing behavior, it is just allocating resources to something the great majority has already decided.

        The crime here in Washington is that the planning and decision making has been held hostage by a few radical ideologues who have been allowed to ride rampant and yet now, we find, have not been able to produce results and have left things in a worse condition than ever before!!

      4. “The crime here in Washington is that the planning and decision making has been held hostage by a few radical ideologues”

        I have to laugh at this statement given that most of the Puget Sound area looks like the kind of suburban sprawl that you probably have wet dreams about.

      5. “Really! So suburban houses get a mortgage deduction, but city residences don’t?”

        Well, actually, YES, suburban houses get a mortgage deduction and city apartments don’t. You seriously didn’t know this? [ad hom]

      6. Well, actually, YES, suburban houses get a mortgage deduction and city apartments don’t. You seriously didn’t know this? Ignorant, ignorant, ignorant.

        If you own the city apartment and have a mortgage, you get the same deduction as someone who owns a suburban house. If you rent, either in the city or the suburbs, the deduction goes to the landlord, and is factored into your rent.

        [ad hom]

      7. Not even close, John. A little Googling (combining several sources of statistics) tells me that 20% of the US population lives in rural areas, 50% in suburban areas, and 30% in “true” urban areas. (These numbers are only accurate to one digit.)

        The rural percentage is dropping, as it has been for a very long time. The trend between urban and suburban is less clear; what is clear is that suburbs are getting *poorer* and urbs are getting *richer.

      8. And how many apartments are owned instead of rented? (Waiting for answer.)

        Oh, you don’t really care, do you. You’re just using one of those handbooks on how to make misleading statements which are technically sort of true.

      9. And if you rent, *the deduction goes to the landlord*, and *may or may not be factored into your rent*. It’s only factored into your rent if the price of rentals is *production-cost-constrained*. Usually, the price of rentals is *supply-and-demand-constrained* and the mortgage deduction is pocketed by the landlord. This ends your basic economic lesson for the day.

      10. what is clear is that suburbs are getting *poorer* and urbs are getting *richer.
        By what metric? Not mean or average income and certainly not net worth. Maybe the people that own the buildings are getting richer but they probably don’t live there. Most urban growth is from a very young demographic. That’s not the age group that holds the wealth in this country.

      11. And how many apartments are owned instead of rented? (Waiting for answer.)

        I don’t know. It’s irrelevant. Fact is, a suburban owner gets the same tax treatment as a city owner. I know this because I’ve owned in the suburbs and have owned in the city. I’ve also rented in the suburbs and rented in the city, and have been a landlord in the suburbs and a landlord in the city.

        You were wrong, plain and simple. Admit it and move on.

        Usually, the price of rentals is *supply-and-demand-constrained* and the mortgage deduction is pocketed by the landlord. This ends your basic economic lesson for the day.

        The price is “supply and demand constrained.” When the supply and demand balance favors tenants, landords will get low returns. When it favors landlords, it’ll swing the other way. Over time, competition forces the deduction to be passed through to tenants, because as soon as it’s not, more apartments get built and rents decline.

      12. A standard rental isn’t a qualified home for the mortgage interest deduction (unless you live there which typically applies only to vacation homes). In any event it is limited to only a first and second home. Mortgage interest is a business expense. As are property taxes and maintenance. The rent of course is taxed as income.

      13. A standard rental isn’t a qualified home for the mortgage interest deduction (unless you live there which typically applies only to vacation homes). In any event it is limited to only a first and second home. Mortgage interest is a business expense. As are property taxes and maintenance. The rent of course is taxed as income.

        Actually, Bernie, you get your choice, at least if it’s one house that you’re renting out as a landlord. You can take the interest deduction on the mortgage if you want, and then treat the rent as gross income. But in the real world, the landlord does it just as you describe, and deducts the interest as a business expense.

        He can also deduct maintenance, and depreciation as his option. The end result, with respect to mortgage interest, is exactly the same. But if you deduct your interest as a business expense, then you also (as I just noted) have some other expenses that can be deducted.

        The only way this stuff doesn’t get passed to tenants is when the market is tight or if (as in New York) there is rent control. In a free market that’s not supply-constrained, which is almost all areas in this country, the balance swings back and forth. Right now it favors landlords, but when I was a landlord it favored tenants. I damn near lost my shirt.

      14. What I always thought was interesting and amusing was the contrast between my own perceptions as a tenant and as a landlord. Either way, I felt like I was getting screwed. “Never a tenant nor landlord be.”

    1. Homes in the suburbs are less desirable, so the prices are lower.

      Homes in the city are more desirable, but due to overly restrictive zoning requirements, there are more people who want homes in the city relative to the number of units, so the prices are higher, specifically because of the way the housing market is regulated by zoning requirements.

      If we remove some of the restrictions on how many units can be built in the city, the price of housing units in the city would fall.

      1. Homes in the suburbs are less desirable, so the prices are lower.

        Suburban houses are cheaper because suburban land is cheaper.

      2. But why is suburban land cheaper? Are land prices not a reflection of supply and demand?

      3. But why is suburban land cheaper?

        Because there’s more of it.

        Are land prices not a reflection of supply and demand?

        Yep. Regulations come into play too. Suburban land prices have been driven up in parts of the West (the Portland and L.A. areas come to mind) by various anti-sprawl zoning, while in Seattle land prices have been held down in single-family areas because Roger Valdez and his friends can’t (yet) erect the massive apartments they’d like to force everyone to live in.

      4. “But why is suburban land cheaper?” “Because there’s more of it.”

        So why don’t we build more urban neighborhoods so that there will be more of them? The prices show there’s demand for it.

      5. Because there’s more of it, sure, but there are plenty of other reasons. The use restrictions on suburban land are often more severe, and it’s the ability to put land into profitable use that makes it worth more. Put a nice single family house on a lot, even a big one, and you can rent it for $2k a month, or maybe $3k or so. Or you can sell it for an appropriate multiple.

        But take that lot and stack a dozen apartments on the same acreage, and you’re netting $12k or so… assuming you can get a suburban muni govt to permit that density. And even if that use were permissible, it’s less likely to happen because it’s further away from the urban core, because road and transit accessibility is more limited, which results in less demand for whatever use the land is put to.

        This is, of course, no particular mystery. The concepts of supply and demand apply to land, buildings, and houses, and the old real estate agents’ line about location, location, location still applies. Whether it’s residential or commercial real estate, high rents and low vacancies indicate high demand.

        Should I go way out on a limb and assert that the earth is round?

      6. So why don’t we build more urban neighborhoods so that there will be more of them? The prices show there’s demand for it.

        There’s no lack of land for apartments in Seattle. And who knows, maybe even for more of those glorified dorm rooms that are the latest urbanist rage.

      7. OK, if there’s no lack of land for apartments in Seattle, then there’s no problem. Clearly many disagree with you on this claim, and have been providing long excerpts from zoning regulations to demonstrate that you are wrong.

      8. OK, if there’s no lack of land for apartments in Seattle, then there’s no problem. Clearly many disagree with you on this claim, and have been providing long excerpts from zoning regulations to demonstrate that you are wrong.

        The developer weenies want to put their buildings in the prime locations, and the urbanists want to wipe out single-family neighborhoods because they despise the whole idea of it. Each have their reasons: one greed, the other ideology.

        But all you have to do is drive around this city, and it’s plain to see that there’s no land shortage for apartments. Why, you could even snag an “apodment” some day. Wouldn’t that be special?

      9. There is a problem if only a few units are within walking distance of Link and RapidRide stations. Like the missing units around Beacon Hill and Roosevelt stations, and on Aurora between 65th and 145th.

  6. We need to encourage more housing to be built… but we also need to encourage the RIGHT housing to be built. I don’t disagree with the general premise about why prices are so high here. The trouble is that if we just build lots of small units everywhere, we’re going to end up with a whole lot of young and/or single people living in the city. A big part of the conversation not happening is the lack of affordable housing being built for families in the city — and I don’t mean low-income families, either.

    We have plenty of young professionals who live happily in dense, urban environment, taking a bus or riding their bicycle, who get married and then pregnant and realize they can’t afford a single-family home here. So they move to the suburbs and buy a car. That’s conversion of allies in the wrong direction, and more children growing up in the suburbs.

      1. Why do you assume that new families want to buy single-family houses?

        Perhaps by observing their behavior over time?

      2. What, you mean like my friends who are renting out the house they own in Renton and moving to a leased condo in Lower Queen Anne, with their two young kids and no car?

        Observing past behavior is fine for determining trends, but you get into trouble when you ignore the bias that creates against new, emerging living and land-use patterns.

      3. “Perhaps by observing their behavior over time?”

        I’ve observed that women in Saudi Arabia don’t drive, that must mean that they don’t want to drive.

      4. I’ve observed that women in Saudi Arabia don’t drive, that must mean that they don’t want to drive.

        Yep, the Saudi women aren’t free, so therefore neither are we. As a result, we can’t deduce anything from examining the behavior of Americans.

      5. Well, we’re constrained by zoning. Denying the existance of zoning now?

        Nope. So you can stop building that particular straw man.

    1. There won’t be lots of tiny apartments, just a few of them. There’d only be lots of them if they become overwhelmingly popular, at which point there should be lots of them.

      We need to convert space-wasting parking lots and one-story sprawling buildings to six-story apartments; then we’ll make a serious dent in in-city housing demand. That doesn’t mean tearing down one-story University Way or bulldozing all single-family houses. It just means a more uniform midrise density in station areas and neighborhood centers, and a slight expansion into single-family territory. We also need more 3+ BR apartments/condos for families.

    2. Families are why townhouses make a lot of sense. (Hopefully not ones dominated by driveways of course, which apparently the new code doesn’t encourage.)

  7. San Fransisco also has some regulations that are very favorable to renters who can take advantage of them…a relative of mine got a $17,000 payout because he wasn’t able to renew the lease due to remodel. I’m sure those expenses are a factor when it comes to high rents there.

    1. A significant number of people in rent-controlled areas hold onto their apartments forever, even when they’re living somewhere else. Usually they sublease, but it still distorts the market and cuts into the housing supply, which pushes prices higher.

      1. Especially since “forever” means upwards of 50 years. Upwards of 70 in the case of NYC.

  8. Americans Living Larger As New-Home Sizes Defy Economy

    The percentage of new single-family homes greater than 3,000 square feet has grown by one-third in the last decade, according to data released last month by the U.S. Census Bureau. The increase has occurred even while 4.3 million homes have been foreclosed upon since January 2007, a result of the housing- bubble collapse and economic meltdown. Slightly more than 1 in 4 new homes built last year were larger than 3,000 square feet, the highest percentage since 2007.

    http://www.bloomberg.com/news/2012-07-13/americans-living-larger-as-new-home-sizes-defy-economy.html

    1. From same article…

      The new crop of super-sized houses are sprouting after the average sales price for a new home dropped to $267,900 last year from $292,600 in 2008.

      The Census Bureau reports that the average size of a U.S. house rose in 2011 to 2,480 square feet, up from 2,392 square feet in 2010. The 2011 figure is 62.6 percent larger than the 1,525-square-foot average size in 1973.

    2. Two things. One, Pugetopolis is more urban than most of the country. What’s easy to build outside Dallas or Atlanta is harder to build here, and only the exurbs have room for Bill Gates-sized houses. Two, the bottom fell out of the real estate market and it’s still not recovered. Vast numbers of middle-class people can’t get a mortgage for the smaller house they want. Even a generous 1500-2500 square feet is smaller than the behemoths in this article. The only things that are selling are distressed properties at unheard-of low prices (what kind of speculator can resist that?), fixers, and the McMansion-super-rich units which are a separate niche market. Because regular houses aren’t selling at their historical speed, the percentage of McMansions being sold is larger than it would normally be. That doesn’t mean everyone wants exurban mansions. It just means the super-rich have money to burn and ordinary people can’t get the houses the historically would have bought.

      1. Two things. One, Pugetopolis is more urban than most of the country.

        By what measure?

        The only things that are selling are distressed properties at unheard-of low prices (what kind of speculator can resist that?), fixers, and the McMansion-super-rich units which are a separate niche market. Because regular houses aren’t selling at their historical speed

        You truly don’t know what the hell you’re talking about. Not that laughable ignorance has ever stopped the urbanists around here.

      2. So unfortunate that Not Fan migrated over here from Publicola to make all of our lives miserable.

        Learn how to take part in a civilized discussion: skip the straw man arguments, the personal insults, and hateful generalizations. Or please leave.

      3. So unfortunate that Not Fan migrated over here from Publicola to make all of our lives miserable.

        Learn how to take part in a civilized discussion: skip the straw man arguments, the personal insults, and hateful generalizations. Or please leave.

        Thanks for the tips on manners, “poseur,” especially for your clever couching of those suggestions within an ad hominem attack of the sort that’s allegedly off-limits on this site. Perhaps, in the future, you might come up with some actual ideas to discuss with me.

        At the moment, I can only make an inference based on the placement of your kind invitation to engage in civilized discourse with the progressive voices here. I will assume you object to my having told Mike Orr that he doesn’t know what the hell he’s talking about when he claimed that “The only things that are selling are distressed properties at unheard-of low prices (what kind of speculator can resist that?), fixers, and the McMansion-super-rich units which are a separate niche market.”

        Mike is wrong. All he has to do is pick up the paper, call a few real estate agents, pick up some flyers, or look around the Internet without his ideological blinders on. Sales are up. Prices are up. The percentage of inventory compposed of foreclosures is down. This is happening throughout the price range.

        He could also simply walk around and observe. In my own neighborhood, which is upper-middle class, houses are not lasting very long after the sign goes up. And there’s not all that much for sale.

        You don’t know me, poseur, but it’s clear you despise me, and probably won’t believe what I am about to write. I’m no real estate booster. Other way around. I think prices are too high. I don’t think the economy is doing very well, and I don’t think the current depression will be over for another 10 years.

        I think the current uptick in home sales, home prices, and condo construction is artificial. In my opinion, it is a function of “helicopter Ben” and the monetary stimulus that has brought the 10-year Treasury note, and the mortgage rates that are based on it, to phenomenal lows.

        Still, there is no denying that houses are selling fast. They are not “selling at unheard of low prices,” at least not in Seattle, nor are mini-mansions the only thing selling. Therefore, when Mike Orr wrote that, he didn’t know what the hell he was talking about.

        And yes, a lot of stuff gets pumped out onto this blog that’s just as ignorant as what Mike wrote.

      4. The foreclosures are not selling because they have clouded title and people are *finally* noticing that.

        Are sales actually up? Perhaps in the Seattle area. In most of the country there’s a startlingly thin market.

      5. Are sales actually up? Perhaps in the Seattle area. In most of the country there’s a startlingly thin market.

        Sales and prices are both up here. Again, I don’t trust any of it. But they’re up here, and that’s what this little tempest here was about. As for the rest of the country, well, that varies. As they say, “all real estate is local.”

      6. The foreclosures are not selling because they have clouded title and people are *finally* noticing that.

        It’s true virtually nobody buys houses at foreclosure sales and one of the risks is lack of title insurance. But the main reason nobody buys foreclosures is that it’s cash on the barrel and the vast majority of people need to finance a home purchase. What most people think of as buying a forecloser is a bank owned sale. Foreclosure is a legal procedure where the Deed of Trust is used to formally transfer ownership to the bank. The bank holding first position on the loan can bid up to that amount without incurring any additional loss and since the reason most homes are in foreclosure is that they are underwater on the loan it makes no sense for another individual to bid. Buying bank owned property (previoiusly foreclosed) has the same title insurance as any other sale. The downside is you may have to wait months to get a response to your offer.

      7. It’s true virtually nobody buys houses at foreclosure sales and one of the risks is lack of title insurance. But the main reason nobody buys foreclosures is that it’s cash on the barrel and the vast majority of people need to finance a home purchase. What most people think of as buying a forecloser is a bank owned sale. Foreclosure is a legal procedure where the Deed of Trust is used to formally transfer ownership to the bank. The bank holding first position on the loan can bid up to that amount without incurring any additional loss and since the reason most homes are in foreclosure is that they are underwater on the loan it makes no sense for another individual to bid. Buying bank owned property (previoiusly foreclosed) has the same title insurance as any other sale. The downside is you may have to wait months to get a response to your offer.

        I know of two sales of bank-owned houses in my neighborhood, one across the street and another five blocks away. In one case, the buyer got a good deal, and in the other case, the buyer got a fantastic deal, albeit on a house I don’t like at all.

        They were marketed through the usual real estate broker channel, and the buyers had no trouble. Foreclosure auctions are another breed of cat, and I know very little about them.

  9. You’re misusing the term “Keynesian.” John Maynard Keynes believed in free markets. He argued that, in cases when the economy is depressed due to a lack of demand , the government can play an important role in stimulating the economy.

    In this situation, we have no shortage of demand for housing units, so a Keynesian would agree that no subsidy is necessary.

    Believing that the government has a responsibility to stimulate demand when times are bad does not prevent a person from arguing that some regulations don’t make sense. “Keynesian”does not mean “a person who supports a subsidy or regulation I don’t like.”

    1. +1 unfortunately, in these “modern” times, anything to the “left” of extreme libertarian or crony capitalism has been collapsed to simply “socialism”. The author seems to have been using “Keynesian” with a similar lack of nuance.

    2. Keynes was talking about the economy as a whole, not about the supply of housing units specifically. The economy is in a weak recovery/high unemployment, which dampens demand and justifies stimulus spending.

      The problem with the housing supply is that it’s in the wrong places and it’s the wrong sizes. There’s a shortage of housing where people need it, in the city near their jobs. There’s an excess of unwanted housing in the exurbs. It’s worse in other parts of the country than it is here. If we force people into those houses by holding down supply in the city and near-burbs, it’ll increase driving. The ideal thing would be to scrap the unwanted houses and recycle the materials for infill housing.

      We have a shortage of housing units where people need them, in the city. We have an excess of unwanted houses in the exurbs that were built in a bubble mentality, and they’re too far from work or transit for most people who want houses. Forcing people into these houses because that’s where the supply is, will result in increased driving, often unwillingly. The situation is worse in other parts of the country than it is here. The ideal thing to do would be to scrap those houses and recycle the materials for infill housing.

      1. I find these comments amusing because the thing that should match up the existing cheap housing to jobs is not 150 sq ft apartments but good transit!!

        Which is why I feel this is not about engineering but about a few crooks and cronies who sucked the lifeblood of the population dry without delivering, and in fact made the situation worse because what we really need are better suburban highways and speedy mass transit sytems like Sounder, not overpriced toy trains and closet condoes.

        Even after 20 years of billions spent we can’t get a person in Auburn to a job in Kirkland in a reasonable amount of time!!

        Purge!!

      2. You just illustrate what is wrong with your previous comment “So it is not a subsidy in the form of influencing behavior, it is just allocating resources to something the great majority has already decided.”.

        Systems like Sounder are precisely a subsidy for suburban living that influences behavior. Without Sounder, people might decide that commuting from Auburn or Puyallup to downtown Seattle everyday is too long and miserable, so they have chosen a home closer to work. On the other hand, build a transit system in which getting to downtown from Ballard, Queen Anne, and Auburn all take about the same amount of time, the subsidies used to operate the transit system (plus the additional employer subsidies towards the transit fare) provide incentives to choose Auburn because you can get a larger home for the same price and get to work in the same amount of time.

        And to make matters worse, limited schedules in Sounder-type services make it such that anyone who doesn’t live in the suburbs far from work will get any benefit. Someone who lives in Seattle will almost never get to ride the Sounder for any useful trip, even on the rare occasion that that person has reason to travel to Auburn for something. Nor will the person who lives and Auburn and also works in Auburn get any benefit from the Sounder either. Only the person who lives in the outer suburbs and has a 20+ mile commute to work every day gets any benefit from the Sounder service.

      3. The suburbs and exurbs were built up BEFORE SOUNDER. People had no idea that commuter rail would ever exist when those cities were growing. Sounder is merely a mitigation measure for the sprawl that already exists. Only a tiny percent of people in those communities take Sounder; most people in those areas don’t work near downtown Seattle. It’s flat-out false that Sounder created or sustains those communities to any significant level. What Sounder does is decrease the number of cars and buses on roads for those who are going downtown at peak-hours.

        A hundred years ago, the interurbans did create suburbs. But that was much more sustainable. The string of compact, walkable towns were like Seattle’s urban neighborhoods. It costs a lot less to run a commuter train every hour than to build a freeway and everybody buy cars and gasoline and emit pollutants.

      4. There’s an excess of unwanted housing in the exurbs. It’s worse in other parts of the country than it is here. If we force people into those houses by holding down supply in the city and near-burbs, it’ll increase driving. The ideal thing would be to scrap the unwanted houses and recycle the materials for infill housing.

        Perhaps before scrapping them, “we” could let the market take care of it, as it’s been doing in greatly overbuild areas. The only one who wants to “force” anything is you.

  10. Went to Jazzbones nightclub in Tacoma last night.

    Man, 6th Avenue has turned into something looking like Fremont! Walkable street, lots of activities for Young People.

    http://www.on6thave.com/

    And the nearby housing stock is beautiful and affordable!

    It seems like if we changed our definitions of what is a good area, and supplemented it with better regional transit and transportation we could provide the Seattle Style to more people without resorting to 250 sq. ft. dwellings

    1. Yes, 6th Avenue is an emerging urban neighborhood. I went to Jazzbones a few times ten years ago. It deserves more frequent transit, and a night-owl connection to Seattle. (Not a one-seat ride, but it should be possible to get back from a show without driving or getting a hotel until the next morning.)

    2. Agreed that resorting to 250 sq. ft. dwellings is bad.

      *That’s why you go vertical and get rid of lawns* when you’re in a city. More square footage inside the apartment / condo, but less ground-space used.

      1. There’s no shortage of ground space. Not in Tacoma and not in Seattle. Once we’re completely built out on the apartment end of things, we can talk about land shortages. But we’re not even remotely close to being there in this region.

        The urbanists want to convince people that land is in short supply. I believe it’s because they want to destroy single-family living, which they despise with a real passion. I say live and let live. The urbanists want everyone else to follow their orders.

      2. Less ground space means more destinations within walking distance. That makes it easier to get around without a car.

  11. Lots of space in Detroit, Camden, North Philly, Baltimore, etc. If you’re really for the environment you’d determine how to revitalize cities like these that need your help versus arguing about density in Seattle. Several even have great transit systems in place!

    1. Easier said than done. Seattle is successful partially because it’s a plesant place to live, and partially because of our nice port.

      Detroit a is less plesant place to live, and the value of a Great Lakes port significantly deminished with intercontinental rail and roads. It’s been kept afloat by existing industry, but industry can be fickle when there’s nothing fundamentally tying it to a particular location.

    1. What’s just hilarious is that people on this blog actually seem to think that there is one single thing new or different about what Ikea is selling.

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