New Report: Seattle Needs More Housing Choices


A recent report by the Harvard University and the University of California, “The Economic Impacts of Tax Expenditures: Evidence from Spatial Variation Across the U.S.” has been getting a lot of attention in the press (check out Paul Krugman’s take on the study) lately for a report with such a wonky title.

For those of us in the various theaters of the land use war in Seattle there is one paragraph in the summary of the study that should get special attention:

In particular, areas with a smaller middle class had lower rates of upward mobility. In contrast, a high concentration of income in the top 1% was not highly correlated with mobility patterns. Areas in which low income individuals were residentially segregated from middle income individuals were also particularly likely to have low rates of upward mobility.

At first reading, this might seem to bolster the argument that some make for something called “inclusionary zoning,” a requirement that private developers should build price controlled units into their market rate projects. The basis of that argument is that greater mixing of income levels should be required and achieved through setting and controlling housing prices of a set aside number of housing units.

Notwithstanding the questionable nature of this strategy—that controlling the prices of a few hundred units of housing is the way to achieve economic diversity and upward mobility for the poor in a neighborhood or city—the study should be carefully considered for its implications on this discussion of normative housing price in Seattle.

Some might argue that this is “proof positive” that lowering housing prices in new development will result in greater economic integration and thus result in greater upward mobility for people with lower incomes. But let’s reverse the logic of that argument; gentrification (a term that stubbornly resists a quantitative definition) itself is a kind of inclusionary strategy. Why not move people with higher incomes into lower income neighborhoods? Wouldn’t that also be a salve for economic pain in low income neighborhoods? And gentrification or displacement is a watchword in any discussion of the so called impacts of light rail in the Rainier Valley.

However, the argument cuts two ways: if we demand that developers build price controlled units into their housing in rapidly growing neighborhoods because it supports upward mobility of people with lower incomes, then we must also consider the reverse—putting more people with higher incomes into neighborhoods with lower incomes— might have the same effect.

Continue reading “New Report: Seattle Needs More Housing Choices”

Conlin is Right On the Money

Conlin on the MoneyLast week Seattle Councilmemer Richard Conlin said something that made perfect sense to me:

We may not be as successful if we devote our resources into the new housing in a very hot neighborhood in producing as much help for people who need affordable housing as if we focus our resources on, say, along the light rail line in Rainier Valley, where there is easy access to some of those jobs and where there are lots of great communities, such that can be built up there. It is a matter not so much about, say, everything there and not here, but what is where is the most effective way in which to deploy the resources that you might be able to have, which we know we can’t create all the affordable housing that we would like to have. The government efforts are not possible to do that. So we have to figure out where our resources are most effective.

Councilmember Conlin was talking about South Lake Union when he was referring to a “hot neighborhood.”

Here’s the reaction to Conlin’s comments from a couple of advocates quoted by Dominic Holden in the SLOG:

Philippa Nye, of Ally Community Development, was the first to speak at a comment period, denouncing the idea: “Having everyone commute from Rainier Valley or Rainier Beach feels like housing segregation to me.

She was hardly alone—I heard from several people this week. “Having council suggest redlining and segregation is part of Seattle’s future makes my stomach hurt,” says Rebecca Saldaña, a program director of the housing advocacy nonprofit Puget Sound Sage.

What’s odd is that Saldana’s group Puget Sound Sage produced a report on light rail in the Rainier Valley that said this: Continue reading “Conlin is Right On the Money”

Housing and Transit: Supply and Demand Works for Transit Too

Mike Lindblom wrote a pretty decent story on the idea of gondolas in Seattle. Unfortunately the headline touts the gondola as a solution to a “traffic mess,” which plays into the narrative of transit as a means to improve the flow of car traffic. Most of us view transit as a way out of auto dependence, not a way of making our car commute faster. Nevertheless, the article gave fair play to what might seem like an outlandish mode of travel for Seattleites.20130219-115049.jpg

But there’s another big issue for innovative transit solutions like gondolas: supply and demand. In order to create the demand that would support lots of transit innovation, we need to aggregate that demand geographically. That means dense, compact development patterns.

I’ve pointed out before that when we disperse demand, we end up increasing the costs to operate transit, a cost soaked up by government subsidy. When we have lots of people in one place, it’s more efficient and cost effective to get them where they need to go and back again.

I love the gondola idea. But if we’re going to create more transit supply (which can be expensive to build), we need to work on the demand side too. Seattle and the surrounding region has a tendency to forget that while modes are important (BRT, light rail, monorails, gondolas etc), there must be adequate, dense demand to make them competitive with driving.

With housing, we fuss about price while at the same time, restricting supply – we need to do the opposite. With transit, we’d also have better outcomes for affordability if we allowed more density. In the case of housing, increased supply has a salutary effect on price, while in the case of transit, an increase in demand has a similar salutary effect.

Density solves the demand problem for transit, concentrating it in fewer places, creating efficiencies and even competition between modes and innovative solutions (think about all the car sharing going on for profit!)

Gondolas in Seattle? Absolutely! But don’t forget the density.

A Fistful of Contingencies: Developers, Risk, and Profit

Some people like to talk and write about “greedy developers.” Greed is an attribute of people; there are definitely greedy real estate developers in Seattle. But there are also greedy bus drivers, greedy kindergarten teachers, and the greedy guy who makes 10 trips to the all you can eat sushi bar. Why one profession attracts greedy people and one does not is a sociological question, not an economic one. Consideration of how a piece of land becomes a financially viable project should dispel the notion that real estate development is a greed driven enterprise, or an easy way to exploit zoning and “laugh all the way to the bank.”Fistful of Contingencies

The business of real estate development is often characterized with a simple story of rich fat cats buying up land, building things on it, and then reaping massive profits by selling off what they build. However, like any business or organizational venture, real estate development is no sure thing. Business is like love; it’s about taking risks. One does not find Mr. or Ms. Right by sitting a home watching television; such a venture requires engagement and vulnerability.

Real estate development is about transmuting risk into profit; it requires taking a chance. The certainty levels of profit in real estate development are very low, and if they were higher there would be many more cranes than are on the horizon now. Projects that are coming out of the ground now came a long way, and it may have taken years of work and lots of money to get it done. Here’s a quick sketch of the factors affecting development.

Continue reading “A Fistful of Contingencies: Developers, Risk, and Profit”

Seattle Times: More Housing Means Lower Prices

Whatever one might think of the Seattle Times editorial board, there is one story that the paper is running this week that confirms that their reporters are at least in touch with reality. The headline—Apartment boom in Ballard comes with risk of overbuilding—is a little bit odd and displays some of the basic prejudices held by many about density, housing, and affordability. Reading the headline one would think “overbuilding” was a crisis for Seattle. But the story simply confirms what many of us have been arguing for a while now: if you want lower housing prices, allow the construction of more housing. The only people hurt by too much supply are developers.

Increasing housing supply could mean lower rents, more jobs, and developers eating themselves!

The article by Eric Pryne reads like a primer in the economics of housing supply and demand.

Developers are building [apartments] because demand has risen, led by a demographic surge of young adults who prefer in-city living, at a time when there’s little new supply.

Few projects were built during the recession. The last new complex in Ballard opened more than two years ago.

Because of the economy—it is harder to buy a single-family house these days—and the appeal of living in the city younger people are opting for living in Seattle rather than other places. This is exactly what transit advocates, sustainability  and smart growth proponents all want to see happen. But all these people need a place to live, and the market is responding by building more housing.

What does that do to the price of housing in the Seattle market?

Owners of new rental projects, with loans to pay off, will do whatever it takes to fill units, Gardner says, and that will put pressure on other landlords to cut rents or offer concessions to keep up.

“By the end of 2013,” he says, “it’s going to get ugly.”

Ugly for whom?

Continue reading “Seattle Times: More Housing Means Lower Prices”

Time to Dream Big on Measuring Affordability

The apparent high cost of living in a dense transit oriented neighborhood, measured mainly by the monthly cost of housing, is significant barrier to building support for density.

Yes, all this density is wonderful, but, as the NIMBY and naysayer will always say, “it’s too damn expensive.” The right response to that argument is, of course, to ask them a question: “compared to what?” Compared to driving every day, damaging lakes and streams with sprawling pavement, and changing the planet’s climate, density is a bargain, even a steal.

But when monthly rents seem high, those prices are the only number people can associate with new growth and change. Monthly housing prices become the sticker price of sustainability, and the shock associated with rents is one of biggest barriers (along with the perception that city schools are bad) to getting wider and deeper support of new growth in Seattle.

How do we account for all the other values lost and gained when new development changes a neighborhood? How does a policy that promotes more supply account for the loss of the corner store, support a neighborhood school, or offset somehow the noisiness of a healthy, vibrant neighborhood.

The answer, I think, is redefining how we measure affordability.

Today we have a wholly inadequate way to describe affordability. Nobody actually enters the housing market planning to spend exactly 30 percent of her monthly income on housing. A person, of any income level, in the housing market considers a number of factors along with price. Proximity to affordable day care, good schools, even having a yard are all things that get considered by someone in the housing market. But we don’t consider the price of those goods when we talk about affordability.

To paraphrase Shakespeare, there are more things to an affordable neighborhood, urbanists, planners, and housing advocates, than are dreamt of your measure of affordability. The Center for Neighborhood Technology (CNT) has already suggesting considering transportation costs when determining housing affordability.

Continue reading “Time to Dream Big on Measuring Affordability”

Big Houses, Small Lots, and the Seattle Problem

I wrote at Seattle’s Land Use Code about the upcoming emergency vote Councilmember Richard Conlin has proposed to stop development of some small lot cottage development in single-family neighborhoods. Why a few unique cottages being successfully developed under existing code is an emergency is still a mystery to me, especially since this is exactly the kind of infill development many of us wanted when the Council undertook a review of Detached Accessory Dwelling Unit regulations years ago. The emergency vote seems to be emblematic of the Seattle Problem—trying to make good things happen but then when they do, imposing rules that effectively prevent those good things.

Conlin on Land Use: What’s the emergency?

The substance of the issue is that a developer has figured out what the planners at City Hall call the arcane details of the land use and tax code to figure out how to build tall, cool looking cottages on small and irregular lots in single-family neighborhoods. This has provoked the ire of some single-family neighbors who, in turn, have provoked the Council to throw on the brakes. The truth is that there are very few of these houses being built, and what’s so bad about them being “out of scale” with the surrounding neighborhood.

The fact is that the emergency in Seattle is that we have yet to see innovative land use solutions for Transit Oriented Development, for infill, and for other housing options. It’s true we have apodments and other efforts are underway to make a dent in our need for more housing, so why would we stop something that seems to be addressing that need?

Contact the Council—there isn’t much time, the vote would happen Monday—and let them know what you think. I posted this message to Councilmember Conlin’s Facebook page (it was subsequently deleted by Conlin) and I urge you to give your thoughts about whether this issue even needs a vote. Shouldn’t we wait and see whether this is a problem? Maybe it’s actually a good thing.

Continue reading “Big Houses, Small Lots, and the Seattle Problem”

Seattle’s Yellow Light on Green Building

When I read this headline in Grist a couple weeks ago, “What other cities can learn from Seattle’s troubled ‘deep green’ building program,” the first thought that came to mind was that it isn’t the program that’s troubled, but our culture in Seattle. The problem, somewhat unique to Seattle, is the tendency to think big, plan big, but when it counts, hit the brakes. Other cities could learn a lot from Seattle, but unfortunately the lesson is about what not to do.

What does green mean? The choice is up to us.

The author of the article cites a list of what he means by troubles, and it includes resistance from “code cops,” problems with financing, the expense of building green, and, of course, neighborhood resistance to change. He also wisely points out that you can build the greenest of green buildings only to find people’s behavior doesn’t change; make your building perfectly balanced and watch someone turn the thermostat up or down to get more comfortable.

Unlike the weather, for which we just have to accept and prepare, these troubles are all things within the limits of our control. What I’d call the Seattle Problem is the tendency to push for innovation that will create great things, but then, at the same time, create rules to be sure absolutely nothing bad happens. Ironically, this rule making ends up limiting the good things we want. More after the jump.

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The Seattle Problem: Two Steps Forward, Two Steps Back

A funny thing happened on the way to regulatory reform.

The Seattle City Council recently passed regulatory reforms to ease restrictions on land use to create jobs. I was an enthusiastic supporter, erroneously credited with being “in charge of the secret negotiations to bring forth the proposals.” I’m thankful to all the people who actually did work to get it passed. But, unfortunately, the measures to relax requirements under the State Environmental Policy Act (SEPA) are almost canceled out by State mandated growth targets and new requirements for parking in areas exempted from SEPA.

The intention of SEPA when it was passed in 1971 was to disclose and mitigate environmental impacts from new development. The State stepped in because local governments were allowing projects to go forward without enough review. The new legislation was intended to be stronger than local laws. However, over the years, local ordinances passed by local governments afforded equal or better protection than SEPA. In many cases all that was left was a redundant and time-consuming SEPA process. The regulatory reform package was intended to eliminate that redundancy, saving time, money, and creating jobs.

That was the plan. But a closer look reveals that the package may have been two steps forward, a press conference, and then a step and a half backward. The plan was always touted as being a rather modest relaxation of rules and regulations, but it may be even more modest than previously thought.

More below the jump. Continue reading “The Seattle Problem: Two Steps Forward, Two Steps Back”

What Apodments Can Do For You

Sigh. Now the news is full of apodments. I like saying the word, apodments, because it sounds like part of John F. Kennedy’s inaugural address that was edited out. I hear him saying, in that beautiful Boston accent, “Ask not what your country can do for you, but ask when you can move into an apodment!”

Your new apodment?

But seriously, apodments are good for our country—or at least our city—since they offer an affordable alternative people who want to squeeze into city life affordably. Some neighborhood groups are beginning to band together in a kind of pan-NIMBYism to halt the spread of this kind of housing, but I think it’s misguided. People worried about the price of housing should love apodments. And so should neighborhoods.

From an economic standpoint, apodments make sense. As I wrote in another post, smaller, compact, and tiny apartments are an efficient use of space, creating new development projects that can lead to construction jobs. If someone owns two single-family lots in Eastlake, why not let them create a project that will maximize the use of that land, and allow people to live how they choose to? I’ve been going on and on lately about how we Seattle liberals need to let go, and let the market when it comes to land use. Apodments make sense, encouraging property owners to maximize the use of their land.

And housing price, something I think we shouldn’t worry and fret about so much, is something that still troubles Seattleites. The problem, the price worrywarts say, is that, “Seattle is too expensive.” The apodment, tiny and more affordable units right in the heart of active vibrant neighborhoods, is an excellent way to open up real estate renters could never afford.

Living in dense, vibrant neighborhoods means a person doesn’t need a car. Neighbors who live by proposed apodments express a worry about parking. I’ll admit, the parking in Eastlake, especially on the street where the apodments are proposed, is really bad. Could it be any worse? I doubt it. And I don’t think the City should be subsidizing parking by mandating that developers build it. If nobody wants to rent an apodment because it has no parking, the price of the apodment will come down, and people won’t build them anymore. If they do, it’s likely that the renter doesn’t own a car in the first place—saving money is part of why they’re moving into an apodment.

Apodments aren’t for everyone, but why not see what happens with them? I think it’s weird that neighbors, particularly in Eastlake, who own big, spacious homes, are coming out on their lawns to defend the poor, pathetic, hapless, future apodment renters. “A pod is not a home!” declares one flier. Why not let potential apodment renters decide for themselves whether they can make a pod a home?

The thing about local opposition to apodments that discredits it almost immediately is that the opponents are saying that the potential renter of an apodment doesn’t really want to live there. If that’s true, that potential renter won’t rent an apodment. If enough people walk away from apodments, the projects will go unrented and they will fail. On the other hand, if lots of people love apodments, renters will pay rent and forgo a car.

Let’s give the apodment a try. If it’s true that nobody really wants to live there, then these kinds of projects will lose money, and nobody will build them anymore. If they succeed, then we’ve created some good, infill development for people who don’t have a lot of money to spend on rent and cars, but want to live in the heart of the city. And yes, if I could, I’d live in one myself.

South Lake Union: More Spontaneity Can Mean More Jobs

Thus Vice nurs’d Ingenuity,
Which join’d with Time and Industry,
Had carry’d Life’s Conveniencies,
It’s real Pleasures, Comforts, Ease,
To such a Height, the very Poor
Liv’d better than the Rich before,
And nothing could be added more.

–From Mandeville’s ‘Fable of the Bees’

A frequently cited rationale for proposed zoning changes in Seattle’s South Lake Union is economic; the rezones will allow for an economic boom that will create much needed jobs for the city and region. We can argue about the numbers, but what about the idea that new land use policy will spark improvements in our economy?

South Lake Union: The Rails to Recovery?

A recent article in City Journal, a quarterly online journal of a libertarian bent, published an interesting and compelling article on the Road to Recovery by John Taylor, which was adapted from his Friedrich Hayek Lecture given as part of Manhattan Institute’s Hayek Prize. It got me thinking about whether Seattle overregulates the use of land and how that could be limiting the economic upsides of growth that could lead to recovery, especially job creation.

Hayek is not so popular around here because he is the economist who is the opposite of John Maynard Keynes, a favorite of liberals and progressives. Simply put, Hayek is remembered for limited, if any, government intervention to affect the economy, and Keynes was the classic interventionist, arguing for government’s role in increasing demand for goods and services, especially during downturns (for more and Hayek and Keynes you’d better watch this then this.)

I have been criticized for what one commenter called “Hayekian reveries” about deregulating land use around transit stations. However, I think Hayekian lenses are what we should wear when we consider how and when government regulates what gets built in Seattle, especially around transit.

Hayek draws a distinction in Constitution of Liberty, between the law and legislation. Hayek argued that spontaneous order—a state of order that is the product of the free market, not planning—in an economy is possible only when there are predictable laws, general in nature, that establish the few things people cannot do, rather than commands about what they must do.

When Hayek talks about the law he is referring in large part to English Common Law that undergirds our entire legal system in the United States, and provides the basis for adjudicating disputes and carrying out justice. The Common Law paves the road to the future with precedents from the past; it is essentially a system of rules based on trial and error.

Continue reading “South Lake Union: More Spontaneity Can Mean More Jobs”

Short Film Highlights Green Building Project in Fremont

I’ve already written here at Seattle Transit Blog and at Seattle’s Land Use Code about the proposed extension and modification of Seattle’s Living Building Program.

To me it’s a simple question: should we support the continuation of a program that incentivizes the development of buildings that are much more sustainable and better designed than required by the regular code. I think it’s an easy “yes!” And I am not alone in my support.

A local film maker, Eric Becker, has completed a short film about the second project proposed under the City’s program. Here it is:

Stone 34 | Skanska from eric becker on Vimeo.

It’s a very powerful film, and not just because I’m in it. Are we finally ready to stop talking and start doing on developing better buildings? This project, Stone34, is a great start.

Councilmembers need to hear what you think.

The Council’s Planning and Land Use Committee will meet to vote on the proposed changes, on Wednesday, July 25th at 9:30am in Council Chambers. Land Use Committee members are Richard Conlin, Chair (206-684-8805); Tim Burgess, Vice Chair (206-684-8806); Mike O’Brien(206-684-8800), Sally Clark (206-684-8802). Speakers are advised to arrive early to get signed up.

Tiny Houses or Big Supply

It’s Ikea’s quote not mine.

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

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

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

Continue reading “Tiny Houses or Big Supply”

Council Hearing Tonight: Living Buildings and Livable Neighborhoods

Here’s an extended quote from “Anon,” posted here on Seattle Transit Blog on my Fourth of July post:

Ballard was being inundated with a bunch of boring, boxy condos, that really took away from the uniqueness of Ballard. While we don’t hate progress, we also wonder why progress can’t at least look good. It seems like the city just rubber stamps the ugliest designs, the developer comes in, builds and runs and “we the people” are left with the ugly monstrosities

It’s a comment I have read again, and again in my posts about density. Another version of it goes, “I’m not against density I just hate bad design.” But there’s a solution for Anon and others who want great design and density.

Tonight the Seattle City Council is considering an extension and modification of it’s Living Building Pilot Program, a program designed to incentivize better buildings by granting some departures from Seattle’s land use code. All the projects have to go through the design review process (hardly a rubber stamp) and the program limits participants to 12 over the life of the program. The program is set to expire this year and make changes to allow more flexibility for developers.

More below the jump.

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Leave Me Alone! Individualism and Sustainability

Life, Liberty and being Left Alone

A typical trope often heard between the explosions of fireworks on July 4th is about the Declaration of Independence and its  hallowing of the rights of the individual over and against excessive government.

In a 2008 article about the death of Edith Macefield, the woman who resisted developer’s attempts to buy her home leaving it surrounded by a Trader Joes and a gym, Knute Berger pays homage to Macefield as a martyr for individualism saying:

People like Edith Macefield who want to live quiet lives and be left alone are now the equivalent of squatters — they occupy space that has a destiny, a “highest and best use” that doesn’t include people who want to live their lives in peace.

Berger elevates Macefield to mythical status, along with the idea that the individual, not the community, is the unit of measurement we should use to judge progress.  Berger suggests that the choice is being more sustainable by building dense and livable city on the one hand, or our individual rights—our freedom—on the other. Berger says,

Steamrollering over [Macefield] is justified by the notion that we’re fulfilling our civic mission to create a denser, more urban city so that we won’t pave all of nature. The Edith Macefield’s are seen as standing in the way of progress.

The lone individual hunkers down in their castle while the communitarian menace surrounds them with condominiums, transit and Trader Joe’s.  Most Seattlites probably wouldn’t identify with libertarians or people who live on acres of land and drive Hummers or own lots of guns.

But for some, individuality still means the right to a single family home, a car and place to park it. It is easy to mythologize these versions of our rights in the gauzy veil of the “good old days,” and dream of a time when there weren’t so many damn people around here. Individual rights can become code in land use debates for favoring convenience over the larger good, the maintenance of the status quo over change.

Seattle still finds itself in the middle of an age old American struggle between our “civic duty” and our desire, as Berger so aptly puts it, to be left the hell alone.

Today we celebrate one of the greatest documents of individualism of all time, the Declaration of Independence. Some would interpret the Declaration as the ultimate “leave me alone” document of the last 300 years, written by colonists wanting to be free of their Big Brother, the British Empire.

As Americans, and Seattlites it can be tempting to see Macefield’s stand as somehow heroic or a kind of martyrdom to individuality in the face of change. But the first words of our written Constitution,  imperfect as it may be, are plural: “We the people.

Digging bunkers in Ballard won’t help us address the pressing environmental and economic problems we face.  We have to tap into that other strain of American idealism represented by figures like John Adams, Henry Clay and Daniel Webster who are often marginalized by our worship of Thomas Jefferson. Clay developed the American System, a comprehensive, government driven expansion of infrastructure that built a transportation system for the United States in its early years.

Individual expression is important, but so is our civic duty to others and we should articulate this aspect of American tradition more clearly in our language when we talk to people about growth and sustainability.  American tradition includes the common cause, and supporting each other in times of change and challenge. Building better cities in our region, funding transit, and planning for sustainable growth will mean thinking big and beyond the principled stand of lone individuals protecting their rights.

This post is adapted from a post than originally ran a few years ago on Great City’s blog.

Housing Affordability: Where Do Rents Come From?

The rents for this Capitol Hill project were likely decided a long time ago

I have been working with a team that just submitted an application for funding from the Housing Trust Fund this week, and two things came up. First, our market study confirmed pretty much what real estate people have been saying a lot lately, apartment vacancies are down and prices are going up. That’s a trend that will continue for the next few years.

Second, monthly prices for rental housing—rent as it is more commonly called—are based the costs of construction and debt, and what the market will bear. The determination of how much a particular unit will rent for is made at the pro forma stage not after construction. Often in the public discourse about housing price and affordability the discussion proceeds as if developers build their projects then see what they can “get” for the units. Generally speaking, that isn’t how it works.

Why do these things matter when we talk about affordability of housing near transit or anywhere? Because the way we think about housing price should affect the interventions we make to affect it. That is, if we think housing prices are too high then how we change those prices requires understanding about where prices come from.

The first point is that housing price is affected by supply and demand. There is a stubborn resistance in some quarters to this basic economic principle rooted in culture and politics. Housing, some people argue, is different than anything else. Loosening regulation to allow more housing construction might lead to more developer profit, lower quality housing, and a windfall for the industry at the expense of renters.

But this perception—that allowing more housing construction will hurt renters—just isn’t true. Here’s a paragraph from the latest story highlighting real estate market studies that confirm the important relationship between supply and demand:

The Seattle and Bellevue downtown markets experienced sharper vacancy declines and stronger rent increases than the average. Seattle’s vacancy rate fell 0.74 percentage points to 4.8 percent this quarter, and Bellevue’s rate fell 0.35 percentage points to 4.09 percent, according to Apartment Insights. Both areas saw rent increases above $100 a month.

There you have it, when vacancy rates drop rents go up, a point repeated in market study after market study. It isn’t a radical concept, and it should lead to an easing of regulation to allow for more apartments to be built in Seattle, not less.
Continue reading “Housing Affordability: Where Do Rents Come From?”

Another View of “Healthy, Green and Just”

A couple of weeks ago I was interviewed on by CR Douglas for his regular segment on politics on Fox Q13. Douglas delved into the recently released Puget Sound Sage report on the impact of light rail on the Rainier Valley. Here is the whole segment which runs about 4 minutes.

My take on the report is a bit more critical than some. I think it is important to remember that communities in the Rainier Valley wanted light rail for many of the same reasons the report now points to as bad things, including increased property values, more people visiting and moving into the Valley, and an overall boost to economic activity. In a very real sense light rail is working just the way everyone hoped it would.

Whatever you think of the report, it has raised some issues that consistently get raised when expansion of light rail is considered like increases in housing costs. But too often what gets missed is the decreased costs in everything else created by the many benefits created by light rail, including decreased dependance on owning a car. There have been efforts to capture these savings that I have written about before, the residual income approach to defining affordability and the Center for Neighborhood Technologies metric of affordability which includes transportation costs.

More Zoning Authority for Neighborhoods?

Town Hall Meeting

Lately in Seattle there has been a lot of debate about how powerful neighborhoods really are when it comes to land use decisions in the city. No matter what position one takes on that issue state law and legal precedent are clear that local government–city and county councils–decides what happens with land use, not neighborhoods. But Kenneth Stahl advances an interesting legal argument in an article called, “Neighborhood Empowerment and the Future of the City,” suggesting that cities can and should delegate more authority to what he calls “neighborhood zoning districts.”

Stahl points out that cities have become less competitive with suburbs because land use patterns in cities are far more complex than in suburban cities. More people, more uses, more interest groups means more a more complicated and drawn out process. “Cities can level the playing field with suburbs,” Stahl argues, “by devolving municipal power to smaller, more homogenous subgroups within the city, such as neighborhoods.” Stahl makes a legal case that there is no reason why courts shouldn’t allow local governments to devolve zoning authority to neighborhoods.

According to Stahl the legal and economic principles behind the devolution of taxing authority to local and business improvement districts (LIDs and BIDs) are the same for devolving more power to neighborhoods over land use. The same legal theory used for allowing the West Seattle Junction Association to charge local business owners for signage and parking improvements should also allow the Junction to make land use decisions.

I don’t agree with Stahl on his premise about cities and suburbs. What has bedeviled growth in Seattle isn’t the homogeneity of land use patterns in the suburbs, but the lack of political will to overcome resistance to change by vested interests in the city. It’s probably surprising, however, that I am persuaded that giving more authority to neighborhoods might actually help this problem. Here’s some of my reasoning. Continue reading “More Zoning Authority for Neighborhoods?”

Mike O’Brien Falls Into the Sustainability Gap

Mike and Mike: Help O'Brien out of "the Gap"

Last week Councilmember Mike O’Brien fell into the Sustainability Gap, that wide chasm between what politicians say and what they actually do. O’Brien voted against a carefully considered and vetted proposal (read more about it here), more than a year in the making, to allow some commercial uses in multifamily zones.

Here’s what O’Brien says about his vision for Seattle:

My vision of Seattle is one of made up of the incredible and growing diversity of our communities, where amid this diversity, all communities are safe, healthy and thriving. I see a Seattle that is a model of economic vitality, environmental sustainability, and political transparency.

But O’Brien, along with Sally Clark, Richard Conlin, and Jean Godden, opposed a proposal that would have helped move Seattle’s land use code toward a more innovative way of doing things, allowing diverse uses to be closer together in denser, more populated neighborhoods. The proposal that O’Brien helped to kill (which he earlier supported) was to allow, essentially, corner store like uses in neighborhoods that are already zoned multifamily. This is the kind of mix that makes transit, biking, and walking work because as uses are closer together the car becomes less necessary. It also promotes economic vitality by allowing new businesses to form.

Why did O’Brien do it?

People who live in vibrant, walkable urban centers like Capitol Hill are the people we need on board to guide the future development of the city. We clearly don’t have them on board today.

Based on the comments of a few dozen people in Capitol Hill who claim they have all the walkability they need, thank you very much, O’Brien chose to oppose the same thing for other neighborhoods.

The gap between what O’Brien says on his campaign website and how he votes is clear. Rather than support an expansion of the kind of diverse and thriving use of land on Capitol Hill, he chose to listen to a small group of neighbors getting help from insiders working for the City Council and live on Capitol Hill who opposed the idea (two members of City Council Central staff opposed the measure, and one, Rebecca Herzfeld helped opponents craft letters to Council).

That’s not sustainable, and it’s not transparent. It’s hard enough to convince Councilmembers to make a bold move on land use, but when one of the members of Council who is supposed to be a reliable ally can be persuaded to oppose something he once supported by a small group of neighbors, we’re in trouble.

Closing the Sustainability Gap means holding our elected friends accountable when they make bad decisions. It’s not a pleasant comfortable thing to do, but it’s necessary. If you think O’Brien made the wrong choice by changing his mind on the proposal call him or e-mail him. He needs to know you’re paying attention.

You can e-mail Mike at

The author was a member of the panel, called the Regulatory Reform Roundtable, that recommended these changes to the code.

CHS: Rasmussen and Clark Hand Out Hunting Licenses to ‘Kill’ Development

It's Hunting Season on Capitol Hill!

The headline in the Capitol Hill Seattle blog pretty much says it all:

Facing ‘unprecedented wave’ of development, letter gives design board license to kill (bad projects)

Well I’m afraid to deliver the bad news, but no it doesn’t. Design review was never intended to kill projects whether they were deemed “bad” by the public or even by the design review committee. The purpose of design review is to provide “a forum for citizens, developers and the City to review and guide the design of qualifying commercial and multifamily development projects (emphasis mine).”

It is simply appaling that two sitting Councilmembers would write a letter fanning community hostility toward development and that they would imply that design review is a forum to stop projects. In fact, every design review committee I’ve attended the chair of the committee has to go to great lengths to remind neighbors who oppose a project that design review isn’t a way to change underlying zoning, stop a project, or even repurpose or redirect a project.

The purpose of design review was supposed to be to allow new development minor departures in exchange for modifying design in accordance with generally accepted design guidelines. Some neighborhoods have developed their own guidelines with more refinements. But as many have pointed out before, design review is a feeble measure for neighborhoods who want to “kill” new development. I think that’s a good thing and that’s what the law says.

I’ve suggested other ideas about how design review could be modified along with introduction of zero based zoning, but the truth is the design review is not a way to kill projects and  shouldn’t become a vehicle for that, ever. At best, design reivew is a give and take process to help move beyond neighborhood objections and get projects built.

Tom Rassmussen and Sally Clark should be embarrassed and ought to make an effort to counter the impression the Capitol Hill blog has created. All their letter and the post does is promote a common misconception about design reivew and add more frustration and costs to people who are trying to follow the law and get their projects built. And furthermore, it stokes an already frantic obession among some that we’re facing some kind of swarm of bad development. We need more housing options in Seattle and Councilmembers who will encourage and support growth, not make it harder for our city to accomodate more people by vilifying developers.