At this point it’s a cliche to say that we have an affordability crisis, although it’s more accurately described as a housing shortage. There are many powerful anecdotes that support this thesis, but unfortunately policymakers lack the metrics to indicate if their housing strategy is working.
In the news media, we see two data series that don’t do the job. One is the median single-family home price in Seattle. This metric accurately measures the misery of someone shopping exclusively, for whatever reason, in the detached home market. It also measures the pleasure of anyone selling out of Seattle. However, it’s also an expression of the inevitable: due to geometry, there will be essentially no new detached homes built in Seattle. Barring destruction of jobs, more crime, worse schools, or a long speculative bubble, the long-term price trend will be upwards.
At the other end of the market, a simple thought experiment shows the problem with median rent. Imagine a city with two rental buildings: 100 units at $750 per month and 75 units at $1500. Then, a dreaded luxury developer comes in and turns a parking lot into 75 more units at $2000 each. Even if no one’s rent increases, the median rent doubles to $1500. The mean goes up as well. Not only does a rent crisis emerge where none actually exists, but the luxury developer superficially appears to make things worse!
[Zillow Research, which makes a scientifically serious attempt at meaningful statistics, says that “the impact of new high-end units will be minimal when taking the median over all Zillow rent estimates.”]
What cities like Seattle really need is a professionalized rental index. Much like formal inflation indices, it would measure the change in the rent of the same units over time, with adjustment for the demolition of existing housing. To understand how this would work, let’s return to my fictional city:
The rental index starts at 100 with the two buildings. In the first month, the rent of both buildings goes up 10%, which leaves our index at 110. In the second month, the luxury building opens and existing rents stay flat. Although the new building is now in the index, the score remains 110.
The follwing month, the luxury building raises rent 30%. As this is 30% of the units, it is a 9% increase overall, and the index moves to 110 * 1.09 = 120. Finally, someone tears down the cheap building and puts up 150 units, 75 at $1500 and 75 at $3000, while other rents remains stable. The cheapest 100 of these units are effectively replacing the teardowns, meaning that the rent for these households increases 100% for 75 and 300% for the other 25. That averages out to a 60% increase, bringing the index to 192. A bad series for our city!
There are other things one could do to add more richness — in particular, accounting for unit quality in some way. But we will probably not get good policy until we measure the right thing.
A running total of available units or bedrooms by neighborhood plus a year-over-year comparison of the asking price for rent (per bedroom) would add a lot of information. Example: ” Ballard currently has 4,500 units (or bedrooms) in inventory and the average available unit is asking $1000/bedroom. One year ago Ballard had 4,150 units at an average asking price of $950/bedroom.”
Add in a distribution report: “38% of the units are priced under $1000/bdrm, 51% are asking $1001-2000/bdrm and 11% are >$2001/bdrm.” I’m pretty sure most of this information is known by the leasing companies but it isn’t being disseminated to the public.
+1.
The leasing companies that are quick to raise rent base their changes on the prevailing rate in the neighborhood. They use some kind of index to determine that, unless they really just go by purchase prices (which they know because they’re also real-estate companies) but I doubt that. They also look at whether a competitor has raised rent and how successful that was, like the airlines do. So we need the index or assumptions the leasing companies use, or at least the average of what all the companies do.
Reads like the leasing companies are on the edge of collusion.
Just look at the For Rent section of craigslist or any other posting site. Landlords follow the market and they track what other landlords are asking for similar properties. If you own a circa 1968 4-plex, you will watch what other similar properties are getting for rent. Just like renters know what a typical 2 bdrm unit in Fremont is renting for. Landlords don’t want to leave any money on the table, just like renters don’t want to pay an extra dime for their apartments.
Do apartments need licenses from the city?
Simple solution: require reporting of rents to the city as part of that licensing, and then we can get a true view of what rents actually are. Any claims of this being a “burden” would be total nonsense. It would be a field on a form.
Only since 2014, as part of the new inspection requirements, and the city’s still executing the final stages of the 3-year plan to get all the existing units registered (also the toughest stage… chasing down every duplex, triplex, and 4-plex landlord in the city, many of whom don’t want DPD to know that they subdivided a house in a single-family zone).
The registration is only updated on a 5-year cycle, though, so there would be some data lag. It’s a plan that I endorse, though.
“just a field on a form,” though, might turn into a burden if it’s the registration for a 100-unit complex, each unit rented at a different rate.
Pretty good! Now just get some government agency to fund tracking the numbers for 100 years. Good luck!
I would argue that a simple monitoring of the vacancy rate more cheaply accomplishes most of what’s important. Every other factor that affects rental pricing and availability seems to track neatly and predictably with vacancy rate, from rent hikes to displacement.
Multifamily with owner-occupied units – Condos – are missing from all these numbers, though. Buildings get converted from condo to apartment or vice versa, moving units between the rental market and the ownership market. Owners buy units and then rent them. Investors buy units and sometimes don’t rent them. The market of units to own can expand and contract completely separately from the rental market. They can get lopsided, to where finding a unit to buy is easy and cheap, but finding one to rent is hard and expensive, or the opposite. A crunch in either market is a problem to be looked at.
“I would argue that a simple monitoring of the vacancy rate more cheaply accomplishes most of what’s important. Every other factor that affects rental pricing and availability seems to track neatly and predictably with vacancy rate, from rent hikes to displacement.”
Yes! I’ve been trying to say that for years. Rent isn’t directly related to purchase price or expenses or taxes. It’s based on the number of available units per renter, the quality/location of this unit relative to others, and the last successful rate (the rate that got a good tenant within N weeks). But before owners cry crocodile tears over rising taxes, the rents since 2000 have been rising faster than costs. In the post-dotcom recession, my friend’s landlord waived a few months when he lost his job because “I wouldn’t be able to find another renter anyway.” And in 2008-2011 many out-of-state tech workers moved away, “For Rent” signs went up on practically every building in Summit, and rents froze and move-in deals became de facto decreases.
However, getting the vacancy rate info can be difficult because some landlords treat it as a trade secret. Landlords have an incentive to make it look artificially low because that helps them sustain higher rents and avoids a stigma on highly-vacant buildings. (“There must be something wrong with that building.”)
Just doing a Google search for Seattle apartment vacancy rates yields several articles from the same publication claiming that “Vacancy Rates in Seattle are at a 10 year low” and “Vacancy rates in Seattle at a 5 year high” all within the last few months.
Tracking data is a lot easier when non-random is available.
My building used to list the number and types of available units on the front door. Now they don’t anymore. There’s always a sandwich board on the sidewalk even when there’s no vacancies. It seems they always want you to ask. That puts them in control because you don’t have full information what’s available, in that building or others that have the same practice. I’ve always found apartments by walking around the neighborhood looking for “For Rent” signs as active vacancies, and this would make that impossible if all landlords do it.
There’s two reasons why vacancy rates aren’t a substitute for prices. One of the reasons to track prices it to determine affordability. When you track prices you can then compare that to buying power and determine how much of wages are devoted to housing.
Second, vacancy rates are typically used to indicate which way the market is headed. For example, if we have low vacancy rates we can expect increasing prices in the future. But vacancy rates are virtually never broken down into segments of the market. In other words, they suffer from the same ‘average’ problem that Martin describes with prices. You don’t know much about the plight of the poor by seeing a 5% vacancy rate in a market that actually has a 1% vacancy rate in the bottom decile of rents.
Overall I like Martin’s idea. New York has been tracking rents for a very long time and has some pretty detailed data.
Depends what you’re looking at. If your question is “Is there a housing shortage, and what type of units are we short of”, the vacancy rates are ALL you need to look at.
If your question is about affordability, go ahead, look at something else. But bluntly we shouldn’t even been looking at “affordability” when we have 1% vacancy rates in ANY class of housing. Build more housing first then look at “affordability”. If there is actually enough housing (5%+ vacancy rates in every class of housing) then I tend to think that lack of “affordability” is due to not paying workers high enough wages — it’s not really a housing problem at all, it’s a wages problem.
Housing rents tend to be Poissonian distributed, which is why mean or median are not good indicators since those operate better under a Gaussian distribution. Using the interquartile range to describe variability in rents would be more telling since that would describe what the middle 50% is paying.
Thanks for clearing that up.
Does anyone know what a house rents for in Seattle?
Based on ad listings alone, $2000-3000 is typical in most of the city, depending more on size than on neighborhood. This tracks pretty well with what I’ve heard from old co-workers.
Another pet peeve of mine is that almost all rental statistics reported in the media are based only on buildings with 20 or more units. A lot of apartments – generally the cheaper ones- are in buildings with less than 20 units. So the statistics show higher average rents than reality. I understand that it is more convenient for the brokerage firms to report data this way, but Census ACS data gives a more complete picture. For example, the “median gross rent” in Seattle in 2014 was $1202.
Why don’t we try this. Every working person, meaning willing and able to acquire the training and skills needed to function in a first-world economy, gets the jobs they’re trained and motivated to do.
And upon being hired, membership in a clean and politically active labor union. And every assist and encouragement to get active in grass roots politics, and at least one major political party representing their interests.
First reason I think above plan will work is I saw it work for the first twenty years of my life. But second and main reason is that my program works perfectly from the much smaller percentage of our local population that still enjoys these chances and benefits.
Already works for Jeff Bezos. So since there are so many more of them, should work even better for his employees, right? SLUT (name one of them “Dolly Parton” and she’d come help rename it. She told her mom she wanted to be a Tramp because the town one was so pretty) would have so many passengers living along her route ridership numbers will tell their own story.
And tell me that average people who can now comfortably afford to live in Seattle aren’t organized, professionally and politically. Especially since for political purposes, corporations are now people.
When I moved here, for average working and small business people, The Market was the Pike Place one. In whose job and housing participation was as roughly equal buyers and sellers. Not the commercial product hanging from a hook.
Best and most missed of all? Not a a single New Electric Railway Journal- or any other transit periodical- article on subject of today’s posting. Obviously not a liberal vs. conservative thing. Change a few nouns and publisher the late Paul Weyrich makes my point verbatim.
https://en.wikiquote.org/wiki/Paul_Weyrich
Mark Dublin
Not a bad idea Mark. I think Engles would agree:
https://www.marxists.org/archive/marx/works/1872/housing-question/preface.htm
Seriously, Barman, absolutely wonderful addition to this discussion, and these pages.
I’m pretty sure the man that Pierre-Joseph Proudhon, the fellow revolutionary Engels was arguing with, considered himself a liberal, and would be called, in these pages, a NIMBY. Or at least NIMBYthizer.
Interesting how similar economic and political periods of history resemble each other. And the ideas, arguments, and personalities who live in them. Wish I’d read this in college.
However, I think Engels, and Marx, and I, and our descendants, will always have this problem: How do we achieve the political changes necessary to bring our ideal world about in a way that isn’t just drudgery?
Every ideological revolutionist’s worst problem: The worse someone really needs armed revolution, the less likely they can even think about doing it. Neither Marx, Engels, Proudhon, Lenin, would ever class as “working”.
And learned the bitter truth that when anybody can afford an apartment with an indoor toilet, Hell if they want a noble gunfight in front of it.
Being a (Godfather, julip type) Georgian, playing into ethnic slurs like ours about certain Mediterraneans, Stalin was a bank robber. Illustrating usual outcome of victorious armed revolution in any other kind of society.
If the first rebel boots into the capital aren’t filled with kindly, intelligent, combat-trained policemen and women, and followed logistically with a lot good food and supplies, their first flag gets raised over their own bullet-riddled bodies.
By professional Mob enforcers who rip the Party emblems off their cold dead sleeves and take over. Meaning to Engels, “NEVER! in Russia!”
First one necessarily either Germany or the United States, which at least had had the Renaissance. Which still hasn’t happened a hundred miles east of Moscow.
Here and now- main transportation problem too many cars, lack of dangerous jobs, and other problems similar. Solvable by people whose political inactivity owes less to terror than comfort, so motivated by discomfort instead of misery.
When, like the IWW hero Joe Hill used to say: “You have nothing to lose but your chairs!” Main reason he got executed.
Mark
It’s not just the reporting of the median that’s a problem, as Martin documents. It’s casting this median in a weird light.
Here’s what every article on affordability does: it looks the median or mean house price in terms of what someone making well *less than* the median can afford. So, you’ve got articles that say, in essence: “Someone working at the 20th percentile of income can’t afford a house at the 50th percentile of price.”
Which, if you think about it, isn’t really all that surprising. Yes, we have a housing crisis, but the inability of someone at the 20th percentile to afford the average house isn’t evidence of it. I think it shouldn’t be hard to find evidence of it – Martin details some ideas for describing a complex distribution in terms of more than a single number. But we don’t see that description at all in the media.
Great post, I totally agree. I can think of a couple ways to track rents better:
First would be to have a bar graph, showing the number of units at each price range ($500 to $600, $600 to $700, etc.). This would give a very clear illustration of how prices are (or are not) going up.
Second would be to list prices on older units only. This basically shows whether rents are being raised, as opposed to new expensive units being added.
In general, I would say that any set of graphs are likely to give a misleading representation of what is going on. Rents are likely to go up for the same reason house prices are likely to go up: increased demand. So you will see a dwindling number of units in the lower ranges of that first bar graph. At the same time, lots of expensive units may be added. This gives the impression that the latter is causing the former. In some cases, this type of thing is precisely what is happening — old cheap units are replaced with new, expensive units.
But by and large, in this city, it is simply demand for housing, especially at the cheap end, that is driving the increase. Again, if you did nothing, you would see huge increases. Meanwhile, it is rare, if not unheard of, for a developer to decrease density (despite the fact that the law encourages it). This is not the case in every city. In Manhattan, for example, there are a lot of very wealthy people who routinely manage to build or convert apartments, altering the mix from small to huge. That hasn’t happened much here, probably because people with lots of money just buy a house. This (along with simply more demand) is probably happening a lot in the single family housing world. It is tough to buy a cheap house, because a lot of the people who buy a cheap house then tear it down and put up a million dollar house (even in cheap neighborhoods like mine). But I just don’t see that in terms of apartments. The folks that want a very expensive apartment are buying them in buildings that just a short while ago were short warehouses (e. g. in South Lake Union) or small office buildings (e. g. Belltown).
Just consider the whole Apodment loophole controversy. I always forget the numbers (so I’ll make them up) but there was a clause that linked size and density to the number of bathrooms. This meant that you could build a six story building, but only put in six bathrooms. Developers found the loophole, and ran with it, building 20 units on each floor, each sharing a bathroom. The city closed the loophole, and you can’t do that anymore. But here is the thing — this hasn’t lead to anymore six story building with giant 8 bedroom units on each floor. If it really was wealthy people who were driving this thing (millionaires buying up giant apartments, as they do in NYC), then you would see it. But you don’t. People don’t want to pay 20 grand a month rent; you just have thousands and thousands of people wanting to pay a grand a month, and being forced into smaller and smaller places (or forced to pay more, or forced to move to a different neighborhood).
In other words, the price of apples are suddenly expensive at the farmer’s market not because some rich guy just bought several bushels, but because everyone wants an apple.
RossB, it wasn’t bathrooms, it was kitchens. But the general idea is correct. Put 8 rooms and 1 kitchen to a “unit” build anywhere from 6 to 16 “units”. (height as always depended on zoning)
IIRC “apodments” were built in both LR and NC zoning though most ended up in LR zones.
Thanks for the correction, I appreciate it. With the rules based on kitchens, my point is even stronger. It would be legal, then, to build luxury apartments with one big kitchen, several bedrooms and several bathrooms. But no one is doing that, despite the advantages for builders (less required parking, no review, etc.).
“the number of units at each price range ($500 to $600, $600 to $700, etc.)”
A state legislator on the radio this morning said that $600 wasn’t enough to get an apartment anywhere in the state now.
This was in the context of welfare reform, how it lasts only a couple years now and it’s not enough to rent an apartment anywhere in the state. It profiled a couple women who were eligible for assistance but didn’t take it because it was so little, like $150/month, and they would have to spend the day in a job training program which they said they don’t need, they can look for a job on their own. So if Sam is worried about people being lazy on welfare and losing their incentive to work, he doesn’t have to worry anymore.
There IS land for sale in seattle, FYI, and people do split existing parcels up.
https://www.redfin.com/city/16163/WA/Seattle/filter/sort=lo-price,property-type=land/page-3
I know this doesn’t mean much, but new houses will be built (in space where there weren’t houses before).
Yeah, there are a few single family houses being built, just not that many. I’ve seen a few tear downs where they manage to squeeze in a couple extra houses (all of them very big).
Median home size is decreasing
http://www.cnbc.com/2016/08/23/why-houses-in-america-are-getting-smaller.html
Maybe not in Seattle and avg. household size is probably decreasing also. But the trend makes sense, with a lot of people squeezed by the housing meltdown while at the same time there are stagnant wages.
Averages and medians are easiest to calculate – but variability is just as important to report.
The source of the problem is that the press doesn’t understand the relative importance of variability – and because they don’t ask or ignore the data, the statisticians don’t put the value into it like they should or the data is not published.
It’s a common problem in urban data. If we had better ways of discussing many things – ridership, travel times, housing costs and other data, our discourse would be much better.
One powerful way to discuss rent would be to track same apartment monthly rents – like the retail store industry tracks same store retail sales. That would eliminate the new units bias.
How much does the investor gold rush intersect with this? The Muede/Moon series argues that REITs are flooding the market (Real Estate Investment Trusts that trade like stocks and whose dividend is the rent profit), and out-of-state owners are buying buildings and leaving them empty. To me that’s several issues in one, and only some of them are critical to rent increases.
1) Are REITs and absentee owners really buying up all the buildings in Seattle? Or just a few?
2) Would allowing triplexes in single-family areas cause them to buy up all single-family lots too?
3) If an investor buys a building and leaves it vacant, isn’t that against their interest? It may happen for short-term flipping but that’s probably a small number of buildings.
4) If a foreign tycoon buys a building and leaves it vacant long-term (to invest in its real-estate value rather than rental-income potential, or to help get a US visa or green card), would they really want a mundane building in Seattle? Don’t they really want a prestigious address in New York, San Francisco, or Vancouver?
Brier Dudley writes in the Times ($) that if we relax single-family zoning, investors will buy all the lots and homeowners won’t be able to compete. He says this is bad because home ownership is still the American Dream and the key to a comfortable retirement and capital for your children so the city should facilitate it. This bothers me because with houses $400K and rising, home ownership is limited to a decreasing number of ever-richer people, and it forces people into huge debt. The exclusivity means it doesn’t address the need of an increasing number of Seattlites, and the debt is not something the city should be incentivizing. So city policy should be something else, not just incentivizing house ownership.
Second, are there really enough investors to buy up hundreds of thousands of lots? I doubt it, and I don’t think it will increase that quickly.
Third, the developer could offer a deal in which the current homeowner gets one of the triplexes plus a lot of money. In that case, he’s still a homeowner! And if the other two units are fee simple attached units, then the other two households will also be homeowners! Isn’t that what Dudley wants, to increase the number of homeowners? Or does he implicitly mean “one-house 5000-sq-ft-lot homeowners”? Why should these have privilege over triplexes? What about people who want to live or are willing to live in triplexes? Older cities traditionally densified when the population increased. Why shouldn’t that happen here?
Dudley’s screed is utter madness, and that’s saying something since I go out of my way to read all the anti-change screeds. To cut to the chase and save time and bytes, there are grandfathered ADUs, DADUs, duplexes and triplexes already in Seattle’s single family neighborhoods. % owned by some sort of Trumpian investment cabal versus “people who also live there” or small scale local landlords? I’m guessing approximately 0.
(And of course, ADUs/DADUs by right would increase affordability – very simple run through here: https://realitybasedhousing.net/2016/08/21/by-right-adus-and-dadus-for-a-more-affordable-seattle/)
Families who are looking for a house will bid beyond their means thinking that “we can’t really afford to spend $450,000 on a house today but it will be $500,000 in 4 months, so we’d better buy now.” The REITs know this and they are coming to Seattle because there are a lot of new people moving to this area and that means a lot of buyers. The REITs are usually looking to buy and then sell–quickly if possible. Holding the property can be expensive if there aren’t any buyers. Managing rental property can be expensive and paying taxes on unoccupied property is also costly. If the REIT can’t show a ROI higher than the stock market then the investment money goes back into the market, mutual funds or gold and pork bellies.
There’s usually an understanding that housing should consume about 30% of a household budget. But that number is based on the suburban model of The Great American Dream where commuting costs are another significant line item in the household budget. In the New Urbanist version of The Great American Dream, it may be necessary to adjust the spending percentages upward for the cost of housing while we reduce the amount of money spent on transportation. The total spent on housing and transportation will be equal in both models, but the splits will different.
That’s patently false. REITs are first and foremost geared toward income. They’ve shown a renewed interest among investors because interest rates are abysmally low. Buying and selling is an expensive proposition for a REIT. They not only have the inherent costs of agent/broker fees and taxes but have a huge cost in researching potential investments. In a hot market like Seattle it’s impossible to move quickly enough on commercial deals. There’s absolutely no way they are going to be involved in the game of flipping houses. They invest almost exclusively in the stock of companies that own and manage property, primarily commercial. Think about it, REITs have to sell when investors sell shares of the REIT. To do this they have to be liquid in their own investments. The deed on a property is not a liquid investment.
Just to clarify remark about employment loss due to decline in dangerous jobs. Memories of the Belt as it Rusted. A lot of heavily-employing factory work was extremely dangerous by its very nature.
But in places like Detroit, made much worse when companies kept plants in operation that they had already decided to trash out.
Over recent decades, a lot automation was long overdue. Reason I’m reluctant to automate transit- as well as hostile to the idea with highway-driven cars- is first, my judgment that humans can still out-drive computers in the face of sudden complicated danger.
But second, having loved and prided myself on my trolley-driving, I think that where safety and proficiency are about equal, for work that a trained professional person can enjoy, it’s better to keep them at the controls.
Voluntarily changing well-paid and -benefited jobs, and professions, throughout one’s is extremely beneficial mentally and physically. Especially when new work, and technology, comes online.
But- as last forty years prove that years of badly compensated forced unemployment yields nothing but bad results. Gang warfare, drug addiction, lethal mental illness- all the “THE” ____problems.
Also: good idea to keep a reservoir of manual skills to “enter” the right real-world information to the robot controls. Rhetorical accusation about resistance to automation is” “Luddite.” As inaccurately used as “Tea Party”.
English industrial movement wasn’t for idyllic return to hand-operated weaving. As consumers, workers definitely wanted quality clothes they could afford. But as both consumers and skilled professionals- long apprenticeships- what they wouldn’t put up with Management’s approach.
Which was to re-staff with permanently underpaid workers, and give the public a much increased amount of cheap crappy clothes. And keeping the money they would’ve had to pay for good work by skilled people.
The the resisting workers, like every real professional, would have loved to run those machines themselves. And made constant informed improvements- thereby also increasing both consumer benefits and, like it or not, owners’ wealth.
Though in those days, cooperatives were still in the English language. In England, all its pronunciations.
My own trade school training after I left transit driving tells me that with “Computer-Assisted Design and Manufacture”, instead of a thousand human beings under one roof repeating same motion, same number can be designing new things to machine.
Know high school shops are teaching these skills right now. Also think average five year old can learn 3D printing. As well as think a ride to work on the above Dolly Parton streetcar is is even better than the way-cool work they’re going to.
Though won’t know what five year olds used to do in the coal mines to keep their families from starving. At least I’m not going to tell them. Though will see to it that starting in pre-school, everybody will learn how to do democratic politics.
And organize labor unions.
Mark
On the August 10th, 2016 Democracy Now program, in discussing Donald Trump there is an interesting statement:
“There are special laws in America for full time real estate people that allows them to live tax free if they own a lot of property.”
It’s maybe 2/3 of the way down the page:
http://m.democracynow.org/stories/16511
Maybe some of these tax laws should be reformed?
Just curious, what’s the public benefit of realtors owning a lot of property that justifies the tax exemption? Is it that without realtors nobody be able to buy and sell houses and the economy would collapse?
And does Washington have this exemption?
Can only answer that last bit: Waahibgtin lacks an income tax so probably.
Yes, without taking into account richness your imaginary town is Toonville. You only have to look at Detroit to find the answer to “affordable” housing.
But let’s look back at your imaginary town at what would “really” happen.
The first mistake is assuming 100% occupancy in the first place but let’s run with it. The luxury developer at first has an effective rent of $0 on his 75 units. 25 of the wealthier residents decide it’s worth the 30% increase in the cost of housing to have a prestigious address in the new Republican Redoubt Building. Affordability problem, what affordability problem? With the vacancies 10 people decide to move their families up the social ladder and swallow the 100% increase in the cost of housing. What happens next is a drop in rents; largest for the Republican Redoubt with it’s 66% vacancy rate. As the market re-balances Hugh Sisley is finally forced to drop rents on the $750 units.
Of course in the real world people move in and out of the city; and in and out of living in their car. But the primary driver of this is jobs/income. Leaving that out of any attempt to quantify the “affordability” of housing is silly. Median household income and median single home price track the market making that ratio a good indicator. The cost of renting vs buying is a different debate but rents follow (lag) prices and of course both are highly influenced by interest rates. Artificially low interest rates not only put the squeeze on old fogies (retired fixed income investors) but on young families looking to buy their first home. Why? Simple, people buy only what they can afford (qualified monthly payment). A lower interest rate means you can buy “more” house which of course drives up demand and prices. That of course assumes you have a job and can qualify in the first place.
“This metric accurately measures the misery of someone shopping exclusively, for whatever reason, in the detached home market.”
“for whatever reason”
Where shall I begin? The sound of elephants… eh, uh, I mean children or heavy-footed adults …stomping on the floor above me. Being able to hear arguments – or sex – through paper-thin walls. The hassle of coordinating exterior repairs with an HOA and your neighbors when I know I am perfectly capable of fixing it myself or vetting a contractor to come out to do the work. Lack of natural sunlight because half of my exterior walls are shared with a neighbor.
These arguments won’t resonate with everybody, no. I did construction labor in high school, so maintaining the autonomy to repair my own home is important to me and to many other working class individuals and people from working class backgrounds. Perhaps if I hadn’t had so many terrible apartment experiences, I would be more open to a condominium. But my experience has been, rental after rental, paper-thin walls, floors, and ceilings, so that it feels like I am sharing a living room with a dozen other people. I don’t want my neighbors to hear my conversations, and I certainly don’t want to hear what they are doing.
That’s why a lot of people are shopping exclusively for detached single family. Improve the quality of the multifamily (including rentals) so that people have good experiences as young adults in apartments, and perhaps more people will shop for multifamily homes.
If we suppose for a moment that everybody should be able to get a detached house so they don’t have to hear their neighbors and can make their own repairs, how do we square that with the fact that the population is increasing and all the single-family lots already have a house on them. Where will the next generation of people live? How can you double the number of single-family houses in Seattle without halving the lot sizes? Or are a million people supposed to live on the edge, in Maple Valley, Orting, Snohomish, Monroe, Smokey Point, Lacey, and Wenatchee? That’s the definition of sprawl. And losing farmland, and long commutes, and oil dependence, and the inability of transit to serve more than 5% of it.
You list items that are important to you. What you want isn’t what everyone else wants. Nobody is forcing you to live in an apartment.
If you don’t build apartments or condos, you get Portland’s situation: 1% vacancy rate, a worse homeless issue due to the city not having anywhere to put those that need aubsidized housing, and people who would rather not be in a house competing with home buyers since they have no choice in where to live
and if you worked construction, you should know that there are ways to build a structure that are fairly soundproof. Many hotels are that way.
I’m not saying that single family is for everyone. I’m not saying that single family is ideal. But to pretend that there is no reason (i.e. “for whatever reason”) for people to shop exclusively for single family is like putting blinders on. Get developers to start building apartments and condos where people have good experiences. Glenn in Portland, great points regarding soundproofing structures. Perhaps that type of construction needs to be the norm, not the exception. As far as where to put more housing stock, single family, multifamily, or some mix, western King County is fully urbanized, yet we have these obscene landscaping requirements. If we, perhaps, eliminating the landscaping requirements that mandate building setbacks, buffers, and landscape strips in neighborhoods that are fully developed, there would be enough land on which to put enough housing. A 20-foot landscape setback from the sidewalk to the parking lot for an apartment complex or industrial warehouse is downright wasteful. Yet, the suburban municipalities continue to mandate it. Maybe the mandate should be in the building code to require better soundproofing, rather than in the zoning to mandate “landscape strips” and “visual amenities and mitigation.”
I agree that unnecessary setbacks compromise multifamily dwellings. There’s a huge difference in livability between an 18-foot-wide townhouse and a 20- or 25-foot-wide one. The former feels like a bunch of rooms hung off of a staircase, the latter feels like a proper home – like you’d find in Brooklyn or Philly or Chicago.
Stacked flats mitigate this problem somewhat, by allowing light in on all sides, in exchange for having neighbors above and below you.
If we made stacked flats and full-width townhouses legal to build, I’m sure lots of people would want to live in them.
Yes, the setbacks are bad, along with the minimum lot sizes. The small-lot bungalows in Mt Baker and Wallingford and elsewhere are doing well and are highly popular with buyers, so why not allow these kind of lots and houses again? And the reason those 4-pack townhouses all look the same is that’s the only design that fits within the required parking and setbacks.
Frank and Mike, BINGO, +1
The building code should definitely require soundproofing. The code should also require insulation… and the two are often literally the same substance. So do it.
Yes, who needs trees and greenery in an urban neighborhood? Very wasteful. Better to build lot-line-to-lot-line. If people want trees or grass or bushes, they can go to a park!
Building lot-line to lot-line is why people universally agree that Paris is hideous and disgusting.
Interesting that you interpret “for whatever reason” as akin to “for no reason at all you selfish pricks.” I interpret it as “for any number of reasons; any specific buyer’s specific set of motivations is irrelevant to this argument.”
The most useful number to identify a housing shortage is the vacancy rate. If it’s too low, there’s a housing shortage.
If it’s too low in any specific type of housing (3-bedroom, for example) then there’s a shortage of that sort of housing.
The vacancy rate is supposed to be 4% or higher for a healthy housing market (and less than 12% to avoid the “vacant derelict area” feel).
Your vacancy rate is too low. Government needs to target a 6%-10% vacancy rate and intervene when vacancy rates go outside that range.