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.
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.