46 Replies to “Podcast #60: Demolish All the Freeways”
Right that the problem is zoning, not Amazon jobs. That’s the best argument against the head tax I heard. The city created the housing shortage itself by not letting zoning keep up with the population increase, so the city could solve the problem itself without Amazon. (Although we still need more subsidized housing than we would have if the zoning policy were like Chicago’s, because we’ve made old cheap inner-city buildings the victim of the shortage.)
Only counter-counter argument I’d make is the housing shortage is a regional issue, not a city issues, and the zoning problem is a regional problem, not a city problem.
True. My thought on that is…what if we, the city, took more than our share of the regional burden with upzones? It should help concentrate growth in the city, increase density (while preserving areas threatened by sprawl), and hopefully reach the critical density where people start choosing to be car-free in larger numbers.
It is a regional issue, but the biggest city in the region should be a leader in addressing it.
Part of the problem is that many people don’t want Seattle to become a big city. Opposing single-family upzoning (and the earlier opposing urban villages) is really an anti-city stance: “I don’t want my neighborhood to grow more dense than it is”, and when it’s replicated across the city it hinders the city from growing. Seattle has grown from 500,000 to 710,000 with urban village-only growth, and that’s something, but it could easily grow to a million or more with relaxed zoning. Seattle has about 130K fewer people than San Francisco but twice as much land, so it could easily absorb 280K more and still remain less dense than SF, to say nothing of Chicago. But when the people who oppose upzones are confronted with those who can’t afford to live in Seattle or are displaced or cost-burdened, they either deny the problem, or say the displaced have no right to live in a high-cost city, or suggest loosening the urban growth boundary so they can live in Arlington and Enumclaw, or blame the cost on property taxes.
I would view zoning as the last step in establishing city form. It’s probably more an effect rather than a cause.
For example, if the ST3 program funded rail extensions into developable areas for 20-story buildings rather than 3-story to 6-story little villages, the impact would be much more profound. The deal in theory should be this:
– Surface light rail stations should have 6-7 story buildings
– Aerial light rail stations should have 10-15 story buildings
– Subway light rail stations should have 20-50 story buildings
Unfortunstely, our processes separate these decisions. Our current frame of reference is that we see a few mid-rise buildings and think that it justifies a subway station or see a three-story, free-parking suburban office building area and think it deserves a surface light rail stop. A station-area density score (and minimum score standard higher than our current frames of reference) for each proposed light rail station is badly needed to inform our rail investment decisions.
Finally, future density in land use policy needs to be decided first and a regional mandatory housing allocation system is needed — to inform infrastructure improvements in addition to zoning. If all we do is quibble about zoning on an individual city level, we don’t make much of an impact after hundreds of hours of neighborhood fights.
More housing would stabilize rents and housing prices [1] and allow them to decrease a little but, but they aren’t going to decrease back to $500 studios and $900 1BRs like we had as recently as 2006, because prices are sticky on the way down: nobody wants to take a loss. For that reason we’ll have to replace the old cheap buildings we lost with subsidized housing. And let’s be realistic: housing costs have gone up 60% in the past seven years but inflation has been 2% or less since 2000, so realistically we’ll have to have subsidized housing for people making all the way up to $50K. So let’s relax the zoning to relieve the competition pressure on market-rate units, and start building the subsidized housing and SROs (eek, apodments!) that we’ve seriously neglected for decades.
And we really need our local officials who represent us at the state level to be more effective in taking on this condo issue. MANY families would choose to live downtown now that there are more amenities. Adding to the condo inventory would take some demand off of SF neighborhoods, which is pretty much the only place families can go if they are able to own.
Right – it’s a both-and. We need to facilitate (with better zoning, etc.) a market-driven solution to supply tens of thousands of market rate housing, and provide government support for below market housing. Only the private sector can deliver the sheer volume of market-rate housing the region needs.
I’d rather focus on building more permanent affordable housing vs. subsidizing existing rentals, but it’s definitely a challenging short-term/long-term trade-off. Do you temporarily help lots of people, or permanently helps some people?
It’s super expensive to build anything right now. I’m not sure you can build a ton of new affordable housing without it being part of projects that include a large proportion of pricey market rate units. Financially, I think it makes the most sense to upzone and incentivize as much dense housing as you can. Include some affordable units as part of the cost of doing business for the builder. And then focus on converting existing older building into affordable housing. That way you are not throwing all of your money at new affordable units that are anything but affordable to actually build.
Unfortunately there are huge regional obstacles to getting condos build in the first place.
“Do you temporarily help lots of people, or permanently helps some people?”
You permanently help everybody, like many European countries do, as well as states like Massachusetts where shelter is a constitutional right, and cities like SLC that decided to build enough housing to eliminate homelessness. You may need to phase the tactics, but we need to start with a commitment to house everybody. These partial solutions are not acceptable, even if they must be tolerated temporarily.
“It’s super expensive to build anything right now. I’m not sure you can build a ton of new affordable housing without it being part of projects that include a large proportion of pricey market rate units.”
The high cost is the land, not the building. The city just needs to find a way to buy the land, or find enough existing city land, or change the tax structure which could significantly affect the price and developers’ incentives (although it would require the state to change the tax structure).
The problem with requiring affordable units in market-rate construction it doesn’t scale to the problem. With a 25% affordable rate, 1000 total units would have 250 affordable units. But the Seattle Housing Authority’s waiting list has three thousand people on it, and those are only the ones who made it into the lottery. Then there’s the tens of thousands of people who aren’t eligible but are still cost-burdened. So inclusionary zoning can be part of the solution but there’s a large gap it can’t address.
Cost of construction is definitely up, too. Price of land is still the biggest impediment for building affordable housing at scale, particularly within Seattle, but cost of construction right now is slowing the delivery of new housing, both market rate & affordable.
While I agree with Mike and others on the policy point for more housing, the ghost of HALA backlash is still on the minds of many politicians.
Is there any reason to believe the HALA backlash was real? It seems we see over and over again that there is a very vocal minority on housing and land use issues, dedicated to the status quo. This minority, which includes our daily newspaper, certainly makes a lot of noise whenever a change is proposed, but they do not tend to win elections. Mayor Murray certainly folded in the face of that noise, but was that just his cowardice, or was there a real popular backlash?
I don’t want to stereotype, but my guess is that this mob did not have a bunch of pro HALA folks as members.
Sure, and I live in Rob Johnson’s district. The Wedgwood guys have the pitchforks out over the 35th Ave bike lane, but I still think it’s more smoke than fire..
One thing we’ve learned is zoning changes are a heavy lift. The city owns a lot of land, not all of it is “buildable”. But the dpd could make an exception for the city to construct small houses for homeless. It would be a more obvious sign the city is “doing something” about the issue than an employee tax.
According to the APTA report for 2017 ridership, Link is now officially among the top 10 highest ridership systems in the country after passing SLC’s TRAX:
Am I reading this report wrong or are the Seattle “trolley bus” numbers way off? Or does “trolley bus” not actually refer to the streetcar?
“Trolly bus” does not refer to the streetcar. The streetcar is in the light rail table, operator “King County Dept of Trp”. Trolly buses have their own table, which Seattle shares with only four other cities.
Ah, thanks for the clarification!
General proposition, for both housing and transportation: Couldn’t head tax, or anything similar but better, be considered fair bill payment for what their sudden unearned enrichment has cost so many of the rest of us, starting with the undeserved loss of our homes?
Mark Dublin
The absolutely unhinged reaction to the head tax was really disappointing. I’ve never seen so many people rush to defend a corporation’s right to pay as little tax as possible. Businesses will ALWAYS oppose new taxes, that’s just how it is. $500 a year is a pretty negligible amount to spend on a single employee, all things considered.
WA has arguably the most regressive tax structure in the country. If a tiny step towards making big corporations pay a little more unleashes this kind of hysteria in the state’s most “liberal” city, I don’t have much hope for change.
Reminds me of the LunchPail Republicans of the Reagan era.
There is really nothing progressive about this tax. For a tax to be progressive, the rate has to increase as the taxable amount increases, which is not the case here. There is actually a stronger economic argument in support of calling this a regressive tax, since the net effect will be that large employers like grocery stores that have slim margins will pass the tax on to their customers in the form of higher prices. Without a corresponding rise in income, we’ll now spend a higher proportion of our income on food. Maybe it’s pennies on the dollar, but it’s not zero.
If there is a case to be made that a head tax is progressive, no one has effectively made it, especially one that sets an arbitrary threshold at $20M in revenue and not, say, $5M in net income.
If only businesses operated on the principle of fairness and common good… but they don’t. It is up to us to put in public policy that maximizes our tax base, not policy that tries to cut off it’s nose to spite it’s face. It makes sense to get more revenue from the highest paid and highest net worth people who are with these companies, because they have to stay in Seattle if they want these jobs. But it makes little sense to target the companies themselves- who make decisions on where to put their employees solely based on bottom line, and can easily shift jobs elsewhere,
There is a strong moral argument that big companies need to pay a bigger share. I’m all for implementing tax policy on a national scale that forces more of this. But the reality is that the big companies can chose where they put their high paying jobs, and as a region we should focus on remaining competitive because Seattle does not have some sort of intrinsic resource (beyond inertia) that makes tech companies put high paying jobs here. In fact these companies have to pay to relocate their workforce here because we don’t have enough people being trained to fill these spots locally.
On the flip side, Seattle is a huge draw for high paid tech workers. If these people want high paying tech jobs with a COL less than the Bay Area, then Seattle is where it is at. So you can tax these high paid workers a bit more and they will still be drawn to the area. As opposed to the companies, who have cities falling over themselves to give them handouts while Seattle is looking to go in the opposite direction.
Seattle realizes this, which is why it tried an income tax targeted at big earners in the first place. It is ridiculous that the state blocks this and forces the city to either collect revenue using the most regressive means, or create a business hostile environment that will ultimately encourage these companies (and the big tax base they bring) to locate a great proportion of jobs elsewhere.
@huskytbone Thanks for using grocery stores as an example. My former employer was a large grocery store in Seattle and I spent year after year watching my union benefits degrade into what I hear is now essentially nothing. All this despite record setting corporate profits (most of which went out of state). Meanwhile my coworkers and I paid more on rent every year with zero limit to how much it could go up. We’d watch the cranes come in and ask each other where all this money is coming from and where it’s going, because it definitely isn’t benefiting us.
I’m an urbanist. I support density and smart growth as much as anyone else here. But there is a cost of living crisis in Seattle and all over this country. Is the head tax perfect? Of course not. Our hands are tied behind our backs and when we ask for what amounts to a small pittance the ground shakes and the sky falls on our backs.
Amazon is a pariah because they’re the biggest example but I have no sympathy for them. The story is the same all over the world: UK, Germany, etc. Amazon employees are literally pissing in bottles, I have no sympathy for that company.
Couldn’t head tax, or anything similar but better, be considered fair bill payment for what their sudden unearned enrichment has cost so many of the rest of us, starting with the undeserved loss of our homes?
I’m not sure what leads you to consider Amazon employees’ wealth to be “unearned.” If there is any unearned wealth in Seattle, it is that of property owners (like me!) who have seen our assets increase out of sight. If you want to attack unearned wealth, go after the property tax, in particular longtime owners.
What has cost some of us our homes is people moving here. Keeping outsiders away is a pretty common human impulse but not one I can get behind, especially by punishing them with some kind of tax.
I don’t see the property value in one’s primary residence as any sort of wealth, at least not in the same terms as a hefty paycheck or bank account. The only way I can access that ‘wealth’ is by permanently leaving the city, which doesn’t seem like being rich…at least in the traditional sense. I will spend the rest of my life here, and since there’s really no way to make a lateral move, that property value is a mirage.
I’m sure there are tons of people in this city that make very middle class wages (teachers, gov. workers, retail workers), and who bought homes in the 80s-90s, and even the dip in 2010. If they plan on living there “forever”, it’s hard to call them wealthy, even if the home is valued north of a million.
If you have a million dollar house, you have a million dollars. You can choose to use to own a house in seattle, or you can move somewhere cheaper and cash out a nice nest egg. You can even downsize in Seattle, take in boarders, etc.
It doesn’t free you from difficult tradeoffs, but its a freedom not available to newly minted teachers, retailer workers, or indeed Amazon engineers.
Martin H Duke — don’t forget, you can also take out your home equity and continue to stay in your home, which even more directly makes your “if you have a $1M house you have $1M” point.
It’s so incredibly misguided to blame well-paid newcomers for the loss of your home. As Mike said earlier in this thread, it all comes down to insufficient housing supply. Blaming the newcomers for your problems is a short step away from NIMBY “dude just stop people from moving here lmao” rhetoric.
In the past few years, Seattle has both had a significant increase in house values as well as a number of new tax levies — and full employment. If Seattle has to keep creating new ways to get revenue from its citizens, there is obviously something wrong with the taxation system as a whole. Residents see streets disintegrating while the City keeps asking for more revenue as the City seems so prosperous and wonder how badly managed the finances are. What will be needed to fund public services in the next economic downturn, for example?
There is also a pretty big disconnect about what’s causing rental price rises. While rental rates are a matter of market conditions, they are somewhat affected by property tax value increases just like the increases that homeowners get. A fully paid-off small $500K townhouse or condo has seen an increase in property taxes from a $300K assessment a few years ago (say around $3000 a year) to the value today (say around $5500 a year). A landlord has to raise rent about $200 a month just to pay the higher tax bills in that situation. Renters are never clearly told how their support of new property tax levies raises their rents.
Upzoning also increase property value, and that increases property taxes for owners of older apartment buildings. It makes those building owners have to increase rents to pay for the added taxes on their property, even if they have no intention of tearing down their low-rise apartments, which are certainly more affordable than a new building would be.
Finally, there are long-term and short-term housing problems. In years with an increase in population of at least 2 percent, it would seem to make sense for bringing in temporary housing and placing it in large, underutilized areas until a more permanent housing solution becomes available. Those sites may not be within the Seattle city limits. In contrast, denser multi-story housing requies more time to design and construct — and there are still vacant lots all over Seattle which had design review at least two or three years ago that sitll have not had a development project broken ground. Are there any large tracts of underutilized or vacant land that could be put up for a land lease with incentives to bring in termporary housing by highway, barge or rail? Are there any incentives to get already approved projects under construction faster? Should Seattle be putting a temporary moratorium on new Downtown office buildings until our housing supply catches up?
“Temporary housing”…like FEMA tents/trailers? To make a huge difference, there would have to be multiple thousands of additional “temporary” units added for each year we grow anywhere near the 3% we currently are growing…even with the >10k units being built per year. I’d be all for providing temporary housing during our growth spurt (especially to house more construction workers, since crazy-high construction costs in Seattle are in part due to a shortage of them). But I don’t see city or state leaders letting a city of 10,000 FEMA trailers pop up anywhere around the metro area…
Temporary housing doesn’t have to be FEMA trailers or standard mobile homes. It’s certainly possible to find nicer housing than that.
The biggest challenge is finding vacant land to place them. The next challenge is to find a building inspection department willing to accept them.
I would however note that takes lots longer to build 65 or 85 foot apartment buildings as opposed to something like manufactured townhomes. Wanting to encourage builders to put the extra effort to building taller multi-unit structures but not letting them build at 15 or 20 stories is kind of the worst of both worlds.
Rents aren’t based on property taxes, they’re based on what the market will bear. If property taxes go up by $10 but the landlord can find somebody willing to pay $20, you bet they’d take it. Conversely if property taxes go up $10 but nobody is willing to pay that, the owner will have to lower the rent if they want to fill it. Rents have risen far above inflation since 2000 except for the recession years 2008-2011. So they’re making a lot more profit than they were then, even with increased property taxes.
I’m all for tiny houses, FEMA-like trailers, shipping-container houses, anything that gives people shelter. The city just needs to take the housing emergency it declared seriously, then all these land problems and inspection problems and construction problems can be solved. We need a basic minimum standard for these units, not like the last bill they signed which excluded microapartments.
There is a problem with tens of thousands of units if they’re all one-story: they take a lot of land. So some of them will have to be in multistory buildings. But we have to start somewhere, and one-story buildings are place to start. The ideal size would be 4-7 stories. Beyond that buildings start needing more expensive construction, and that contradicts the goal of being inexpensive.
Wish there was a “red pencil” app. Should’ve read something like “fair payment from the beneficiaries”. The rest of us have not only already paid, but expect to spend the rest of our lives doing so.
Mark
If, for example, the blocks around the RBS or Othello Station were suddenly upzoned to 30 stories, would the market respond? And, if yes, would that happen quickly? Everyone here talks about upzoning and how transformational it could be, but I’m just wondering how quickly the on-paper potential would translate to occupied units.
I would also like to know the answer to your question. I specifically wonder what percentage (of acreage?) of HALA upzones the city expects to be developed to the new height/FAR limits. I read that Durkan’s office expects something like 11,000 affordable units from MHA over the next 15 years with 5-10% affordable requirements. So…we’re expecting 55k-110k new units within the upzoned areas over the next 15 years? It’s very back-of-the-envelope. How many new units would we get if we also eliminated SF-9600 and SF-7200 (which are embarrassing for a city to have), and changed SF-5000 to SF-3000? I have a feeling that there would be way less NIMBY opposition to altering single family home zones’ square footage minimums than to changing the “single family” part of the designation.
In Portland, the Memorial Coliseum MAX station is closer to the Oregon Convention Center than it is the Coliseum (the new arena was built later) but the convention center demanded its own MAX station one block away from what is now the Rose Quarter Transit Center.
It seems terribly counterproductive for a much larger convention center than ours to plan an expansion while requiring a true *reduction* of transit options available to it, as well as the possible quality of those options.
I’m personally very skeptical of the notion that the city can solve the housing crisis by building subsidized housing. We’re talking buying land at Seattle land prices and paying Seattle construction costs. And, if the goal is to cover everyone under the 30th percentile of income that, by definition, means building enough subsidized housing to house 30% of the entire city population.
The amount of land required to do that would be immense, and the mere attempt to acquire this much land would drive up the housing prices further, so the average cost per square foot to the taxpayer would be even higher than the current market price – probably much higher. This effect is even more pronounced if the land being acquired for affordable housing is concentrated in the tiny slivers of land the city has zoned for residential high-rises (which has to be the case, unless the intention is to offer subsidized single-family homes). Of course, the market effects of this would be borne, not just by the city’s affordable housing program, but by every person searching for a home, so everyone else (e.g. those whose incomes is just a tiny bit above the threshold for taxpayer-subsidized housing) would see even higher rents, as a result of the market interference. Not to mention the taxes to fund it all would also be immense, and probably prohibitive.
So, the inevitable result for any “affordable housing tax” is that what ultimately gets built is going to fall far short of demand, which means there is going to be some arbitrary process (e.g. lottery, wait list) to decide who gets subsidized housing and who doesn’t. It seems unfair for some people to get special privileges worth hundreds of dollars per month, by having their name picked out of a hat, or being first to sign up, which other taxpayers of similar income levels don’t get.
Emergency homeless shelters for people in dire need makes sense, but long term housing requires market-based solutions. This means a combination of liberalized zoning to allow denser construction in more neighborhoods, allowing people to live in smaller homes, eliminating parking requirements, and improving public transportation so that people who can’t afford to live in the middle of the city can live further away, where land is cheaper. You can’t do it by imposing massive taxes and offering massive subsidies. It’s just too expensive, and there’s just not enough land.
The only real solution is to abolish private property tbh…
The decision about who gets the best homes in the best neighborhoods has to be made somehow. If not based on money, that leaves luck, and/or connections to government officials.
Money, at least allows for the fact that different people are looking for different things in a home, and can choose what they want to spend on based on their personal priorities. A system where the government just tells you where to love, and doles out housing based on connections, does not.
I was being a little facetious but the reality is real estate speculation and landlords profiting off nearly unlimited demand isn’t going away any time soon. That’s how it works under capitalism. As long as you’re allowed to own property you aren’t personally using there will never be enough supply to meet demand.
Maybe someday we’ll treat housing as less than a commodity. Like education, healthcare, and food, shelter is something we all need. Everyone should have a right to a safe place to live within reasonable distance of their work. We’ve been dealing with the same housing question for literally centuries.
Yes, I’m so thankful we don’t treat food as a commodity. I can only imagine the chaos and greed that would unfold if America had deep, liquid commodity and futures market for food.
Instead, everyone is entitled to their quota of bread, even if we sometimes have to wait in line…
AJ I’m not sure if you’re aware but food banks and soup kitchens exist in America. There are millions of people: homeless, elderly, low-income students, etc, who rely on other people’s generosity to eat.
Right that the problem is zoning, not Amazon jobs. That’s the best argument against the head tax I heard. The city created the housing shortage itself by not letting zoning keep up with the population increase, so the city could solve the problem itself without Amazon. (Although we still need more subsidized housing than we would have if the zoning policy were like Chicago’s, because we’ve made old cheap inner-city buildings the victim of the shortage.)
Only counter-counter argument I’d make is the housing shortage is a regional issue, not a city issues, and the zoning problem is a regional problem, not a city problem.
True. My thought on that is…what if we, the city, took more than our share of the regional burden with upzones? It should help concentrate growth in the city, increase density (while preserving areas threatened by sprawl), and hopefully reach the critical density where people start choosing to be car-free in larger numbers.
It is a regional issue, but the biggest city in the region should be a leader in addressing it.
Part of the problem is that many people don’t want Seattle to become a big city. Opposing single-family upzoning (and the earlier opposing urban villages) is really an anti-city stance: “I don’t want my neighborhood to grow more dense than it is”, and when it’s replicated across the city it hinders the city from growing. Seattle has grown from 500,000 to 710,000 with urban village-only growth, and that’s something, but it could easily grow to a million or more with relaxed zoning. Seattle has about 130K fewer people than San Francisco but twice as much land, so it could easily absorb 280K more and still remain less dense than SF, to say nothing of Chicago. But when the people who oppose upzones are confronted with those who can’t afford to live in Seattle or are displaced or cost-burdened, they either deny the problem, or say the displaced have no right to live in a high-cost city, or suggest loosening the urban growth boundary so they can live in Arlington and Enumclaw, or blame the cost on property taxes.
I would view zoning as the last step in establishing city form. It’s probably more an effect rather than a cause.
For example, if the ST3 program funded rail extensions into developable areas for 20-story buildings rather than 3-story to 6-story little villages, the impact would be much more profound. The deal in theory should be this:
– Surface light rail stations should have 6-7 story buildings
– Aerial light rail stations should have 10-15 story buildings
– Subway light rail stations should have 20-50 story buildings
Unfortunstely, our processes separate these decisions. Our current frame of reference is that we see a few mid-rise buildings and think that it justifies a subway station or see a three-story, free-parking suburban office building area and think it deserves a surface light rail stop. A station-area density score (and minimum score standard higher than our current frames of reference) for each proposed light rail station is badly needed to inform our rail investment decisions.
Finally, future density in land use policy needs to be decided first and a regional mandatory housing allocation system is needed — to inform infrastructure improvements in addition to zoning. If all we do is quibble about zoning on an individual city level, we don’t make much of an impact after hundreds of hours of neighborhood fights.
More housing would stabilize rents and housing prices [1] and allow them to decrease a little but, but they aren’t going to decrease back to $500 studios and $900 1BRs like we had as recently as 2006, because prices are sticky on the way down: nobody wants to take a loss. For that reason we’ll have to replace the old cheap buildings we lost with subsidized housing. And let’s be realistic: housing costs have gone up 60% in the past seven years but inflation has been 2% or less since 2000, so realistically we’ll have to have subsidized housing for people making all the way up to $50K. So let’s relax the zoning to relieve the competition pressure on market-rate units, and start building the subsidized housing and SROs (eek, apodments!) that we’ve seriously neglected for decades.
And we really need our local officials who represent us at the state level to be more effective in taking on this condo issue. MANY families would choose to live downtown now that there are more amenities. Adding to the condo inventory would take some demand off of SF neighborhoods, which is pretty much the only place families can go if they are able to own.
Right – it’s a both-and. We need to facilitate (with better zoning, etc.) a market-driven solution to supply tens of thousands of market rate housing, and provide government support for below market housing. Only the private sector can deliver the sheer volume of market-rate housing the region needs.
I’d rather focus on building more permanent affordable housing vs. subsidizing existing rentals, but it’s definitely a challenging short-term/long-term trade-off. Do you temporarily help lots of people, or permanently helps some people?
It’s super expensive to build anything right now. I’m not sure you can build a ton of new affordable housing without it being part of projects that include a large proportion of pricey market rate units. Financially, I think it makes the most sense to upzone and incentivize as much dense housing as you can. Include some affordable units as part of the cost of doing business for the builder. And then focus on converting existing older building into affordable housing. That way you are not throwing all of your money at new affordable units that are anything but affordable to actually build.
Unfortunately there are huge regional obstacles to getting condos build in the first place.
“Do you temporarily help lots of people, or permanently helps some people?”
You permanently help everybody, like many European countries do, as well as states like Massachusetts where shelter is a constitutional right, and cities like SLC that decided to build enough housing to eliminate homelessness. You may need to phase the tactics, but we need to start with a commitment to house everybody. These partial solutions are not acceptable, even if they must be tolerated temporarily.
“It’s super expensive to build anything right now. I’m not sure you can build a ton of new affordable housing without it being part of projects that include a large proportion of pricey market rate units.”
The high cost is the land, not the building. The city just needs to find a way to buy the land, or find enough existing city land, or change the tax structure which could significantly affect the price and developers’ incentives (although it would require the state to change the tax structure).
The problem with requiring affordable units in market-rate construction it doesn’t scale to the problem. With a 25% affordable rate, 1000 total units would have 250 affordable units. But the Seattle Housing Authority’s waiting list has three thousand people on it, and those are only the ones who made it into the lottery. Then there’s the tens of thousands of people who aren’t eligible but are still cost-burdened. So inclusionary zoning can be part of the solution but there’s a large gap it can’t address.
Cost of construction is definitely up, too. Price of land is still the biggest impediment for building affordable housing at scale, particularly within Seattle, but cost of construction right now is slowing the delivery of new housing, both market rate & affordable.
While I agree with Mike and others on the policy point for more housing, the ghost of HALA backlash is still on the minds of many politicians.
Is there any reason to believe the HALA backlash was real? It seems we see over and over again that there is a very vocal minority on housing and land use issues, dedicated to the status quo. This minority, which includes our daily newspaper, certainly makes a lot of noise whenever a change is proposed, but they do not tend to win elections. Mayor Murray certainly folded in the face of that noise, but was that just his cowardice, or was there a real popular backlash?
As someone who lives in Mike O’Brien’s district (which he won by 20 points a few years ago), the angry folks are grabbing their pitchforks. Say what you will about the pros and cons of the headtax, but see, e.g, http://www.myballard.com/2018/05/03/ballard-town-hall-turns-into-an-angry-shoutfest/
I don’t want to stereotype, but my guess is that this mob did not have a bunch of pro HALA folks as members.
Sure, and I live in Rob Johnson’s district. The Wedgwood guys have the pitchforks out over the 35th Ave bike lane, but I still think it’s more smoke than fire..
One thing we’ve learned is zoning changes are a heavy lift. The city owns a lot of land, not all of it is “buildable”. But the dpd could make an exception for the city to construct small houses for homeless. It would be a more obvious sign the city is “doing something” about the issue than an employee tax.
According to the APTA report for 2017 ridership, Link is now officially among the top 10 highest ridership systems in the country after passing SLC’s TRAX:
http://www.apta.com/resources/statistics/Documents/Ridership/2017-Q4-Ridership-APTA.pdf
Am I reading this report wrong or are the Seattle “trolley bus” numbers way off? Or does “trolley bus” not actually refer to the streetcar?
“Trolly bus” does not refer to the streetcar. The streetcar is in the light rail table, operator “King County Dept of Trp”. Trolly buses have their own table, which Seattle shares with only four other cities.
Ah, thanks for the clarification!
General proposition, for both housing and transportation: Couldn’t head tax, or anything similar but better, be considered fair bill payment for what their sudden unearned enrichment has cost so many of the rest of us, starting with the undeserved loss of our homes?
Mark Dublin
The absolutely unhinged reaction to the head tax was really disappointing. I’ve never seen so many people rush to defend a corporation’s right to pay as little tax as possible. Businesses will ALWAYS oppose new taxes, that’s just how it is. $500 a year is a pretty negligible amount to spend on a single employee, all things considered.
WA has arguably the most regressive tax structure in the country. If a tiny step towards making big corporations pay a little more unleashes this kind of hysteria in the state’s most “liberal” city, I don’t have much hope for change.
Reminds me of the LunchPail Republicans of the Reagan era.
There is really nothing progressive about this tax. For a tax to be progressive, the rate has to increase as the taxable amount increases, which is not the case here. There is actually a stronger economic argument in support of calling this a regressive tax, since the net effect will be that large employers like grocery stores that have slim margins will pass the tax on to their customers in the form of higher prices. Without a corresponding rise in income, we’ll now spend a higher proportion of our income on food. Maybe it’s pennies on the dollar, but it’s not zero.
If there is a case to be made that a head tax is progressive, no one has effectively made it, especially one that sets an arbitrary threshold at $20M in revenue and not, say, $5M in net income.
If only businesses operated on the principle of fairness and common good… but they don’t. It is up to us to put in public policy that maximizes our tax base, not policy that tries to cut off it’s nose to spite it’s face. It makes sense to get more revenue from the highest paid and highest net worth people who are with these companies, because they have to stay in Seattle if they want these jobs. But it makes little sense to target the companies themselves- who make decisions on where to put their employees solely based on bottom line, and can easily shift jobs elsewhere,
There is a strong moral argument that big companies need to pay a bigger share. I’m all for implementing tax policy on a national scale that forces more of this. But the reality is that the big companies can chose where they put their high paying jobs, and as a region we should focus on remaining competitive because Seattle does not have some sort of intrinsic resource (beyond inertia) that makes tech companies put high paying jobs here. In fact these companies have to pay to relocate their workforce here because we don’t have enough people being trained to fill these spots locally.
On the flip side, Seattle is a huge draw for high paid tech workers. If these people want high paying tech jobs with a COL less than the Bay Area, then Seattle is where it is at. So you can tax these high paid workers a bit more and they will still be drawn to the area. As opposed to the companies, who have cities falling over themselves to give them handouts while Seattle is looking to go in the opposite direction.
Seattle realizes this, which is why it tried an income tax targeted at big earners in the first place. It is ridiculous that the state blocks this and forces the city to either collect revenue using the most regressive means, or create a business hostile environment that will ultimately encourage these companies (and the big tax base they bring) to locate a great proportion of jobs elsewhere.
@huskytbone Thanks for using grocery stores as an example. My former employer was a large grocery store in Seattle and I spent year after year watching my union benefits degrade into what I hear is now essentially nothing. All this despite record setting corporate profits (most of which went out of state). Meanwhile my coworkers and I paid more on rent every year with zero limit to how much it could go up. We’d watch the cranes come in and ask each other where all this money is coming from and where it’s going, because it definitely isn’t benefiting us.
I’m an urbanist. I support density and smart growth as much as anyone else here. But there is a cost of living crisis in Seattle and all over this country. Is the head tax perfect? Of course not. Our hands are tied behind our backs and when we ask for what amounts to a small pittance the ground shakes and the sky falls on our backs.
Amazon is a pariah because they’re the biggest example but I have no sympathy for them. The story is the same all over the world: UK, Germany, etc. Amazon employees are literally pissing in bottles, I have no sympathy for that company.
Couldn’t head tax, or anything similar but better, be considered fair bill payment for what their sudden unearned enrichment has cost so many of the rest of us, starting with the undeserved loss of our homes?
I’m not sure what leads you to consider Amazon employees’ wealth to be “unearned.” If there is any unearned wealth in Seattle, it is that of property owners (like me!) who have seen our assets increase out of sight. If you want to attack unearned wealth, go after the property tax, in particular longtime owners.
What has cost some of us our homes is people moving here. Keeping outsiders away is a pretty common human impulse but not one I can get behind, especially by punishing them with some kind of tax.
I don’t see the property value in one’s primary residence as any sort of wealth, at least not in the same terms as a hefty paycheck or bank account. The only way I can access that ‘wealth’ is by permanently leaving the city, which doesn’t seem like being rich…at least in the traditional sense. I will spend the rest of my life here, and since there’s really no way to make a lateral move, that property value is a mirage.
I’m sure there are tons of people in this city that make very middle class wages (teachers, gov. workers, retail workers), and who bought homes in the 80s-90s, and even the dip in 2010. If they plan on living there “forever”, it’s hard to call them wealthy, even if the home is valued north of a million.
If you have a million dollar house, you have a million dollars. You can choose to use to own a house in seattle, or you can move somewhere cheaper and cash out a nice nest egg. You can even downsize in Seattle, take in boarders, etc.
It doesn’t free you from difficult tradeoffs, but its a freedom not available to newly minted teachers, retailer workers, or indeed Amazon engineers.
Martin H Duke — don’t forget, you can also take out your home equity and continue to stay in your home, which even more directly makes your “if you have a $1M house you have $1M” point.
It’s so incredibly misguided to blame well-paid newcomers for the loss of your home. As Mike said earlier in this thread, it all comes down to insufficient housing supply. Blaming the newcomers for your problems is a short step away from NIMBY “dude just stop people from moving here lmao” rhetoric.
In the past few years, Seattle has both had a significant increase in house values as well as a number of new tax levies — and full employment. If Seattle has to keep creating new ways to get revenue from its citizens, there is obviously something wrong with the taxation system as a whole. Residents see streets disintegrating while the City keeps asking for more revenue as the City seems so prosperous and wonder how badly managed the finances are. What will be needed to fund public services in the next economic downturn, for example?
There is also a pretty big disconnect about what’s causing rental price rises. While rental rates are a matter of market conditions, they are somewhat affected by property tax value increases just like the increases that homeowners get. A fully paid-off small $500K townhouse or condo has seen an increase in property taxes from a $300K assessment a few years ago (say around $3000 a year) to the value today (say around $5500 a year). A landlord has to raise rent about $200 a month just to pay the higher tax bills in that situation. Renters are never clearly told how their support of new property tax levies raises their rents.
Upzoning also increase property value, and that increases property taxes for owners of older apartment buildings. It makes those building owners have to increase rents to pay for the added taxes on their property, even if they have no intention of tearing down their low-rise apartments, which are certainly more affordable than a new building would be.
Finally, there are long-term and short-term housing problems. In years with an increase in population of at least 2 percent, it would seem to make sense for bringing in temporary housing and placing it in large, underutilized areas until a more permanent housing solution becomes available. Those sites may not be within the Seattle city limits. In contrast, denser multi-story housing requies more time to design and construct — and there are still vacant lots all over Seattle which had design review at least two or three years ago that sitll have not had a development project broken ground. Are there any large tracts of underutilized or vacant land that could be put up for a land lease with incentives to bring in termporary housing by highway, barge or rail? Are there any incentives to get already approved projects under construction faster? Should Seattle be putting a temporary moratorium on new Downtown office buildings until our housing supply catches up?
“Temporary housing”…like FEMA tents/trailers? To make a huge difference, there would have to be multiple thousands of additional “temporary” units added for each year we grow anywhere near the 3% we currently are growing…even with the >10k units being built per year. I’d be all for providing temporary housing during our growth spurt (especially to house more construction workers, since crazy-high construction costs in Seattle are in part due to a shortage of them). But I don’t see city or state leaders letting a city of 10,000 FEMA trailers pop up anywhere around the metro area…
Temporary housing doesn’t have to be FEMA trailers or standard mobile homes. It’s certainly possible to find nicer housing than that.
The biggest challenge is finding vacant land to place them. The next challenge is to find a building inspection department willing to accept them.
I would however note that takes lots longer to build 65 or 85 foot apartment buildings as opposed to something like manufactured townhomes. Wanting to encourage builders to put the extra effort to building taller multi-unit structures but not letting them build at 15 or 20 stories is kind of the worst of both worlds.
Rents aren’t based on property taxes, they’re based on what the market will bear. If property taxes go up by $10 but the landlord can find somebody willing to pay $20, you bet they’d take it. Conversely if property taxes go up $10 but nobody is willing to pay that, the owner will have to lower the rent if they want to fill it. Rents have risen far above inflation since 2000 except for the recession years 2008-2011. So they’re making a lot more profit than they were then, even with increased property taxes.
I’m all for tiny houses, FEMA-like trailers, shipping-container houses, anything that gives people shelter. The city just needs to take the housing emergency it declared seriously, then all these land problems and inspection problems and construction problems can be solved. We need a basic minimum standard for these units, not like the last bill they signed which excluded microapartments.
There is a problem with tens of thousands of units if they’re all one-story: they take a lot of land. So some of them will have to be in multistory buildings. But we have to start somewhere, and one-story buildings are place to start. The ideal size would be 4-7 stories. Beyond that buildings start needing more expensive construction, and that contradicts the goal of being inexpensive.
Wish there was a “red pencil” app. Should’ve read something like “fair payment from the beneficiaries”. The rest of us have not only already paid, but expect to spend the rest of our lives doing so.
Mark
If, for example, the blocks around the RBS or Othello Station were suddenly upzoned to 30 stories, would the market respond? And, if yes, would that happen quickly? Everyone here talks about upzoning and how transformational it could be, but I’m just wondering how quickly the on-paper potential would translate to occupied units.
I would also like to know the answer to your question. I specifically wonder what percentage (of acreage?) of HALA upzones the city expects to be developed to the new height/FAR limits. I read that Durkan’s office expects something like 11,000 affordable units from MHA over the next 15 years with 5-10% affordable requirements. So…we’re expecting 55k-110k new units within the upzoned areas over the next 15 years? It’s very back-of-the-envelope. How many new units would we get if we also eliminated SF-9600 and SF-7200 (which are embarrassing for a city to have), and changed SF-5000 to SF-3000? I have a feeling that there would be way less NIMBY opposition to altering single family home zones’ square footage minimums than to changing the “single family” part of the designation.
In Portland, the Memorial Coliseum MAX station is closer to the Oregon Convention Center than it is the Coliseum (the new arena was built later) but the convention center demanded its own MAX station one block away from what is now the Rose Quarter Transit Center.
It seems terribly counterproductive for a much larger convention center than ours to plan an expansion while requiring a true *reduction* of transit options available to it, as well as the possible quality of those options.
I’m personally very skeptical of the notion that the city can solve the housing crisis by building subsidized housing. We’re talking buying land at Seattle land prices and paying Seattle construction costs. And, if the goal is to cover everyone under the 30th percentile of income that, by definition, means building enough subsidized housing to house 30% of the entire city population.
The amount of land required to do that would be immense, and the mere attempt to acquire this much land would drive up the housing prices further, so the average cost per square foot to the taxpayer would be even higher than the current market price – probably much higher. This effect is even more pronounced if the land being acquired for affordable housing is concentrated in the tiny slivers of land the city has zoned for residential high-rises (which has to be the case, unless the intention is to offer subsidized single-family homes). Of course, the market effects of this would be borne, not just by the city’s affordable housing program, but by every person searching for a home, so everyone else (e.g. those whose incomes is just a tiny bit above the threshold for taxpayer-subsidized housing) would see even higher rents, as a result of the market interference. Not to mention the taxes to fund it all would also be immense, and probably prohibitive.
So, the inevitable result for any “affordable housing tax” is that what ultimately gets built is going to fall far short of demand, which means there is going to be some arbitrary process (e.g. lottery, wait list) to decide who gets subsidized housing and who doesn’t. It seems unfair for some people to get special privileges worth hundreds of dollars per month, by having their name picked out of a hat, or being first to sign up, which other taxpayers of similar income levels don’t get.
Emergency homeless shelters for people in dire need makes sense, but long term housing requires market-based solutions. This means a combination of liberalized zoning to allow denser construction in more neighborhoods, allowing people to live in smaller homes, eliminating parking requirements, and improving public transportation so that people who can’t afford to live in the middle of the city can live further away, where land is cheaper. You can’t do it by imposing massive taxes and offering massive subsidies. It’s just too expensive, and there’s just not enough land.
The only real solution is to abolish private property tbh…
https://www.marxists.org/archive/marx/works/download/Marx_The_Housing_Question.pdf
The decision about who gets the best homes in the best neighborhoods has to be made somehow. If not based on money, that leaves luck, and/or connections to government officials.
Money, at least allows for the fact that different people are looking for different things in a home, and can choose what they want to spend on based on their personal priorities. A system where the government just tells you where to love, and doles out housing based on connections, does not.
I was being a little facetious but the reality is real estate speculation and landlords profiting off nearly unlimited demand isn’t going away any time soon. That’s how it works under capitalism. As long as you’re allowed to own property you aren’t personally using there will never be enough supply to meet demand.
Maybe someday we’ll treat housing as less than a commodity. Like education, healthcare, and food, shelter is something we all need. Everyone should have a right to a safe place to live within reasonable distance of their work. We’ve been dealing with the same housing question for literally centuries.
Yes, I’m so thankful we don’t treat food as a commodity. I can only imagine the chaos and greed that would unfold if America had deep, liquid commodity and futures market for food.
Instead, everyone is entitled to their quota of bread, even if we sometimes have to wait in line…
AJ I’m not sure if you’re aware but food banks and soup kitchens exist in America. There are millions of people: homeless, elderly, low-income students, etc, who rely on other people’s generosity to eat.