You’ve Come a Long Way on Housing Supply, Seattle; Sort of

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I remember it clearly, and to protect the guilty I won’t name names. But the conversation was about — what else? — housing, and I was with a person who worked for the Mayor’s office at the time and some other familiar faces of urbanism.

Why, I asked wasn’t the Mayor’s housing committee (yes there was one then, too) looking at the importance of supply.

“More supply is good, but it won’t lower housing prices.”

Huh?

Then two out of the other three people at the table agreed. They just didn’t believe more supply would have a beneficial impact on housing prices. Rents only go up, they said. And if I wanted to be “effective” I should drop the supply argument. Too divisive.

So in looking over where Smart Growth Seattle has been, and my own trip through housing and growth discussions, I’ve always been amazed at the games people play with themselves in Seattle to be nice. Not divisive. Even when it’s about the facts.

The good news is that today, three years later, just about all Urbanists (whatever that means) are united : we need more housing supply.  As the Virginia Slims add used to say, “You’ve come a long way baby.” Everyone at that table today, I think, would have their rap down: more housing is good because it provides more options for people at all levels of income. And the Mayor’s Housing Affordability and Livability Agenda (HALA) Committee, unlike earlier committees, was much more aligned to the idea that the production of more market housing is a solution to price increases.

But that’s where it ends. There isn’t broad agreement on how to create the supply. And there even supply-siders who support inflationary measures like Mandatory Inclusionary Zoning and even rent control. Supporting more supply to solve our housing shortage has become the new “environmentalistism” — even Donald Trump would say he’s an environmentalist.

Still, it’s an important transformation from the arguments I had with really smart people as long as five years ago who said, “Housing is a different kind of product in a different kind of market,” or others who called me, Roger “Housing is bananas” Valdez. Of course bananas are different from housing, but scarcity of either will make them more expensive.

How did the supply-side transformation happen? Two ways. First, being relentless in raising supply as a solution in every forum where housing was being discussed and arguing for it. To some significant degree, the supply deniers were worn down, not convinced. And that isn’t because some detente could have been reached. Denying that more housing would help lower prices is a consequence of economics: if I’m here already and own a home, higher prices benefit me. And for those who want more money from government it’s also more beneficial if subsidies are the answer.

Second, people came around to supply because it was a principled stand. Principled positions are more attractive than wishy washy hedges about density and the housing market. Arguing for supply gave shape to an intellectual point of view; people in Seattle like to think of themselves as super smart, even if they aren’t.

Where do we go from here? What will we be arguing about in three years? Sadly, people in Seattle have shown a need for consensus over consistency. We’ll likely be seeing the full effects of the damage done by MIZ in three years if it moves ahead as promised. The non-profit housing developers still won’t have he capital they need because in spite of more fees collected and some units built, the housing scarcity will continue to mean higher prices for land, labor, and financing. The claim that there isn’t enough money in the world to build all the subsidized housing we need will continue.

We’ll also keep seeing red herrings, like the reason prices for housing are high is that rich Chinese people are buying all the housing and leaving if empty. Not to mentions the tens of thousands of units lost to Airbnb speculators making money from their property from tourists rather than “real people.”

It’s likely that the next leap forward for the principle of making more housing as a solution to many problems including prices, energy efficiency, climate change, and water pollution will come after the next downturn. Perhaps we’ll see some people with real business credentials elected to City Council that will champion simple  market solutions (lake incentives and lowering costs) to create more jobs. Maybe those Councilmembers will call us and say, “How can we help you make more housing and the jobs and value it creates?”

I can assure you builders and developers won’t say, “More zoning,” or “Upzones!” What I’ve learned over the last twenty years is that people who make housing happen want more certainty and a shorter time to get their product to market. A guy selling bananas can adjust his price on the spot to respond to the market; imagine if his bushels of bananas were still in design review when demand for bananas fell or went up. We shouldn’t and can’t compromise with people who stand in the way of creating a good for the community.

We’ve come a long way. And we’ve got a long way to go yet. But what would help is kicking the consensus habit. If a proposal doesn’t unwaveringly promote more housing without penalizing it we’re against it, period. We get very few benefits from making the problems worse with half measures. We know what the answer is; let’s act like it.

California Here We Come: Housing Forum to Cover Causes and Solutions to the Housing Shortage

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I’ll be attending and speaking at a forum on Thursday in Sacremento hosted by the California Apartment Association. I hope to learn more from them and share where we’re headed on housing in Seattle. 

CALIFORNIA HOUSING FORUM

Inadequate housing stock threatens California’s economic future. We will explore not only the causes of California’s housing crisis, but also real solutions to this critical problem.

AGENDA

10:00 a.m. – 10:10 a.m.

Welcome and Introduction – Tom Bannon, Chief Executive Officer, California Apartment Association

10:10 a.m. – 10:40 a.m.

Introduction to California’s Housing Drought – California’s High Housing Costs, Causes and Consequences – Mac Taylor, Legislative Analyst, Legislative Analyst’s Office

10:40 a.m. – 11:40 a.m.

California’s Housing Drought: what is the problem? Perspectives on California’s lack of housing and why it is important.

Moderator: Betsy Stark, Former Business Correspondent for ABC News

Panelists:

• Asm. David Chiu, Chair of the CA Assembly Housing and Community Development Committee
• Liam Dillon, Housing correspondent for the Los Angeles Times
• Ralph McLaughlin, Chief Economist for Trulia
• Sonja Trauss, Principal at the Bay Area Renters’ Federation

11:40 a.m. – 12:00 p.m.

LUNCH

12:00 – 1:00

Barriers to new housing in California. What makes California a unique place to build? What are the challenges to new construction in California cities and how might we learn from other states?

Moderator: Betsy Stark, Former Business Correspondent for ABC News

Panelists:

• Brian Augusta, Legislative Advocate for the Western Center on Law and Poverty
• Doug Shoemaker, President of Mercy Housing Group
• Robert Wassmer, Professor of Urban Planning at Sacramento State University
• Marina Wiant, Policy Director for the California Housing Consortium

1:00 – 2:00

Looking Ahead. Possible solutions to California’s housing crisis. Concrete policy solutions for California’s housing dilemma.

Moderator: Betsy Stark, Former Business Correspondent for ABC News

Panelists:

• Tom Bannon, CEO of the California Apartment Association
• Ben Metcalf, Director of the California Department of Housing and Community Development
• Matt Regan, Senior Vice President for Public Policy at the Bay Area Council
• Mark Stivers, Consultant for California State Senate Committee on Transportation and Housing
• Roger Valdez, Director of Smart Growth Seattle and Forbes contributor

Where We’ve Been, Where We’re Going

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Each year, as part of my annual report to our board, funders, and allies, I write a kind of State of Smart Growth introduction. It’s also intended to be encouragement for our sometimes beaten down side  of the growth, housing, and density argument — and for me who is the guy that does this all day. My plan is a write a couple more reflective posts as we consider the end of one year and the beginning of the next.  

We began Smart Growth Seattle with a sense of optimism. Wewere an extraordinary alliance of small, medium, and large housing producers with commercial developers against a gathering storm of regulatory overreach by the City of Seattle. Today, our community is divided, with larger commercial and residential developers in Downtown and South Lake Union supporting a Grand Bargain that creates certainty for them, but uncertainty for us.

By mandating fees and performance, The Grand Bargain, when fully implemented, will cause some projects to become infeasible,raise housing prices (adding to inflation for consumers), and isillegal, violating State law’s clear limits on fees on new housing development.

In rental housing policy, we’ve seen a steady and slow effort to accomplish rent control piecemeal through passage of more and more limits on how private building owners rent and manager their own properties. A shift in State government could end the preemption on local governments imposing rent control, leadingto a rent control proposal in Seattle.

Where do we go from here? We can’t give up! We’ve been a prescient and principled voice of opposition to efforts that will make producing and operating housing in the city of Seattle more costly and expensive.

We can also become, with more resources, a more positive yetprincipled voice, explaining and showing how important our people are in creating housing that is accessible and affordable to a wide array of people with a diverse set of needs and incomes.

Compromising with bad housing policy isn’t an option; working with the City to find areas of agreement is what we should do. We must point out the deep flaws in the Grand Bargain and Mandatory Inclusionary Zoning, oppose efforts to achieve rent control in Seattle, and push the City to follow other recommendations made by the Housing Affordability and Livability Agenda (HALA) Committee, especially expanding housing supply and reducing the time and cost of producing new housing.

I’ve typically made a reference to a classical figure in these annual summaries. This year, I turn to Cato the Younger who was one of few who stood up to the growing tyranny of Julius Caesar. Seen as morose and obdurate by many, he alone predicted and opposed the inevitable power grab the great general was making even while supported by the majority of Romans. “Now,” shouted Cato, “those things are come to pass which I foretold to you, and the man is at last resorting to open compulsion.”

The year ahead is not going to be an easy one, but it is an important one. We’ve been smarter than most in recognizing our limits but we haven’t given up making our points, even when it makes those in power uncomfortable. If we can maintain our effort through 2017, I believe we’ll have proven our value to our community both in good times and bad.

Homelessness and Encampments: What Can Seattle Learn from Utah?

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Seattle’s Mayor Ed Murray took to the pages of the Seattle Times recently to bemoan the criticism he’s been getting for his proposal to sweep away homeless encampments throughout the city. Murray said that activists and supporters of a different approach were playing, “a tired, old ideological game,” starting a “food fight,” and engaging in “demonization of him.” The Mayor, it appears, thinks he’s being treated unfairly, hardly an encouraging attitude coming from the person that should be bringing people together around a solution. If the Mayor was actually being a leader, what might he take from work done in Utah to address homelessness?

As I pointed out in an earlier post, Utah’s efforts have been anchored in setting clear definitions, collecting the best data possible, and looking for successful outcomes not rewarding inputs or following rules. But how did Utah get through what surely had to be a daunting conversation – even argument – over the definition of chronic homelessness or whether it was a good idea to focus on that one segment of the problem. According to Lloyd Pendleton, an executive loaned to the State by the Mormon Church, it was three key things: champions, collaboration, and compassion.

Champions

Pendleton talked about his own experience with the Ford Motor Company and his own proclivity to get things done. He described a champion as a person who could look at the overall good rather than the good accruing to her own organization or interest. Most importantly, a champion looks not so much at process – although process is important – but at accomplishing the overall goal, even if that means some players feel like they lost or that success came at their expense.

Pendleton benefitted from being at the end of his career, and as an executive on loan not having to be worried about getting reelected or what effect his views or direction might have on his future. He was out of the organization chart, and, “above the silos.” Seattle would benefit greatly from someone outside the City structure and not accountable to Murray but to achieving outcomes to move solutions along. Usually, leadership for efforts here comes from within the City organization chart, meaning the solutions are about Murray’s reelection and his ego.

Collaboration

Murray has tried to motivate this in Seattle but has largely failed. While his Housing Affordability and Livability Agenda (HALA) Committee was working the way Pendleton described, he broke a small group of big developers to cut a deal, a Grand Bargain that excluded everyone else. The Bargain, of course, was and has been touted as, “historic,” of course because it fits the narrative of compromise and collaboration, but it’s anything but that.

Pendleton pointed out that the State’s efforts to reign in the pain of homelessness was not about what people didn’t want – homelessness – but about what the everyone engaged in the process wanted:

Everyone has access to safe, decent, affordable housing with the needed resources and supports for self-sufficiency and well being

This brought various groups together around an outcome that was beneficial to each of their constituencies rather than a Quixotic goal of “ending homelessness.” Collaboration wasn’t easy, but having a positive vision helped rally people around a cause. Murray has a tendency to think leadership means putting stakeholders in a room, closing and locking the door, and pressuring them with foot stomping and yelling to agree on a “solution” within a limited timeframe. That’s hardly establishing a vision and building support for it.

Compassion

Everyone in Seattle looks in the mirror in the morning and certainly sees a compassionate person. But are we really? I could write – and maybe will in another venue – about Pendleton’s discussion with me about the, well, for lack of a better word, spiritual level of engagement needed to work on such a difficult problem. But there must be a high degree of connection with the people who are suffering. The toughness of definitions and data must be combined with genuine love and warmth toward people struggling with the many issues that contribute to homelessness.

Sometimes our local politicians confuse maudlin self-exposure of their own history with compassion. The Mayor engaged in this in the Seattle Times story, pointing to his own hardscrabble childhood as proof that he, “gets it.” It’s tempting to substitute genuine compassion with our own stories of how we’ve suffered. But that won’t help rally people around a cause.

Utah’s Lieutenant Governor Spencer Cox, “gets it:”

The message from the pulpit continues to persuade ordinary people to commit to solving homelessness as well, Cox said.

“I had to have my own conversion and the only way to do that is spend time with the homeless people and talk to them,” he said. “It changes everything.”

Cox did not mention that he and a legislator, who is a board member of The Road Home, donned “ranch clothes” and spent a night sleeping in the shelter, Pendleton later said.

And Cox didn’t tell anyone he was going into the shelter and there was no press conference afterward. He did it completely incognito.

What Can Seattle Learn From Utah?

To recap, Seattle has a small, easily identifiable group of people suffering from an array of challenges: they are living in the so-called encampments. We know where these people are. It’s probably pretty easy to come up with a definition of the problem that is leading to encampments and really easy to talk with the people, ask questions, then set about to bring resources to bear on the variety of issues that have lead them to solve them with a tent encampment.

This would require work. It would mean the Mayor would have to give away power to drive and control the work to a group with leadership not on anyone’s organization chart. And it would take time and collaboration and process to get to a common vision.

Pendleton said, “When someone really disagreed with me, I’d put them on the committee.” Pendleton was adamant, “You’ve got a point of view and we need to hear from you and get your ideas.” Mayor Murray has done exactly the opposite, banishing some key leaders like Real Change’s Tim Harris to a virtual Siberia.

Sweeping away the encampments would remove and eyesore from some areas in the city. It might even score the Mayor some political points for, “doing something.” Passing legislation might score the Council points too among other groups. But if we really listened to what Utah is telling us, we’d start by listening to the people in the encampments. They’ll tell us what the solution is. Then we need some leadership that is less interested in scoring points than defining and solving real problems.

Solving Homelessness: Notes from My Visit to Utah

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The state of Utah conjures up many things for people, but perhaps most prevalent is the noting that it is a deeply conservative place culturally and politically. So headlines saying that Utah had effectively ended homelessness stood out even more than they might have had say Minnesota made the same claim. However, what I learned from the people I met with in the state offered some pretty straight forward ideas about why they’ve had success and why they haven’t ended homelessness. Here is a quick summary of leaders from non-profits, the state, and the church. I haven’t quoted anyone so that they could speak freely and openly about what they’ve learned.

In some ways, Utah is the perfect place to look at how state and local governments are addressing homelessness. It’s true that the state is conservative, but it was also founded by refugees. It’s easy to forget when looking at the imposing temple in the middle of downtown Salt Lake City that the state was settled by people who were essentially homeless, pushed and hounded across the country over decades by unprecedented religious prosecution. Many families making the trip to what would become Salt Lake City would bury their family members, including many children, along the side of the trail. Everyone I talked to affirmed that not only was it leadership from the church that helped give their efforts direction and gave it political force, but that the culture of communal self-preservation was part of it too.

There were three key points echoed by everyone I talked with. The problem needs a definition, there has to be good data, and the solutions should be based on outcomes, not following formulas or inputs.

Defining the Problem 

The simplest and most obvious definition of homelessness is people without housing. But even that gets complicated. Does shelter count as housing? Is person homeless when their sleeping in a family members basement? What about intermittent homelessness or situational homeless that resolves itself? These and many other questions are all the questions people working on the problem asked. The decision was made to put most energy into chronic homelessness,

Unaccompanied adult with a disabling condition homeless a year or more or four times in three years.

That definition and the decision to tackle that group was not and is not without controversy. There are many homeless people that fall outside that definition. But what I heard was that without a definition the problem becomes unmanageable to solve. The 10 year plan model to end homeless is a model that fails almost immediately because it simply can’t deliver on the promise in it’s name. The question then has to become about what is the worst part of the problem in terms of suffering and cost.

Using Good Data

As I’ve pointed out many times, taking on any housing issue is about getting the numbers right. After arriving at the definition the question was, “how many people are there in Utah that are chronically homeless?” After assessing the population in 2005 that number was 1,932 people. That’s a comparatively small number, but when considering the complexity of the problems in this population along with the length of time they have been living homeless, it becomes a significant challenge. One analysis found that for one year, a person had cost the state $563,000 in emergency room visits. Another chronically homeless person had $937,744 over three years in emergency room visits.

What overlapped in Utah was compassion and cost. The chronically homeless were suffering the most and costing the system the most. But because they are fewer in number they are also better known to the system. That means bigger challenges per person, but fewer people and people who already have a relationship with the system. This also means they are easier to track and gather information about progress toward ending their condition.

Measure Success Using Outcomes

I heard a familiar frustration from those I talked with that was familiar: there are too many limits and rules at the front end of the housing system. Whether it is paperwork and applications to get funding or a system that measures success with the number of encounters or visits or how full a shelter is or isn’t, the problem with the way government works on homelessness often comes down to incentives. If a organizations are limited and rewarded by filling out grant forms, successfully managing a shelter, or making a set number of outreach visits, those things become the measure of progress rather than how many people have moved out of homelessness.

Nobody questioned the motivation of people in the system, but how the system didn’t hold everyone in it accountable to reducing the problem. And there is no way to do that without a good definition of the problem and data about the problem. So outcomes became the focus rather than the “how” of the outcome. The leadership of Utah’s effort had political support to challenge the accretion of bureaucracy to move the dial on solving the problem. By 2015 the number of chronically homeless people had failed from 1,932 to 178.

Did Utah just define it’s way out of the problem? Not really. Nobody suggested that there is no more homeless problem or even that the state will continue to struggle with the problem indefinitely. But what I heard was a lot of political investment from elected officials and moral leadership from the Mormon church and involvement from the private sector. The politicians provided the resources, the church the cultural imperative, and the private sector money. These things matter when it comes to moving a bureaucracy, entrenched interests, and good people protecting their constituents.

In my next post, I’ll suggest what this might mean for our own homeless issues here and especially for the encampment problem.