JLARC: “Why is Housing So Expensive?”

Life is full of surprises. I was on a last minute trip to New Orleans when I found out that Governor Inslee had vetoed a budget proviso we had requested in the state budget. Senator Braun was our champion on this request. The proviso would have allocated $500,000 to study housing costs and compare non-profit costs with market rate costs. I was not happy. I sent a pretty stern message to Inslee’s staff person and wrote an angry post at Forbes, comparing Inslee to Nixon. The point of the proviso was to shine a light on the big cost of subsidized non-profit housing. The reason why Mandatory Inclusionary Zoning (MIZ) was proposed, was to shift money from the market into the coffers of non-profit housing producers. Why? Because their business model is wasteful; when market rate producer costs go up, they raise prices and when the same costs go up for non-profits, they ask for more money. The good news is that in spite of the veto, the Joint Legislative Audit and Review Committee (JLARC) are doing the study anyway. Here’s the proviso we wrote:

NEW SECTION. Sec. 103 Joint Legislative and Audit Review Committee

$500,000 of the general fund state appropriation for fiscal year 2018 is provided solely for an evaluation and comparison of the cost efficiency of market rate housing in Washington versus publicly subsidized housing projects intended to assist low-income households.

(a) The comparison will include, but not be limited to, a comparison of the costs of:

  1. Land acquisition;
  2. Preconstruction activities including development an design, environmental review, permitting, and other state and local review processes;
  3. Construction and rehabilitation,
  4. Capital and financing,
  5. Labor costs,
  6. Construction administrative costs include legal, contract and finance activities
  7. On-going maintenance and operating of the housing constructed, and

(b) The comparison will include a review of the department of commerce housing root cause analysis due to the governor on June 1, 2018 Included in the review will be a consideration of geographic and regional factors affecting costs. The report will include a recommendation for a publically available and easy to read sources and label for each publicly subsidized housing project. For purposes of the evaluation and comparison, publicly subsidized housing project means housing that is funded, in whole or in part, by state, local or federal funds or financing programs to assist low-income households.

(c) The evaluation must solicit input from interested housing stakeholder, including representatives from the Washington state affordable housing advisory board, the department of commerce, the Washington state housing finance commission, representatives from the private rental housing industry, housing authorities, community action agencies, local governments, and nonprofit and for-profit housing developers.

(d) The evaluation and comparison is due to the legislature by December 31, 2018.

I met with the team from JLARC. I went the same day they asked. I am sure they must think I am crazy. But they at least looked interested as I described the whole story about how our efforts to support cities as sustainable solutions to climate change and a myriad of other resource issues got waylaid on the “affordability” issue. They even took notes. And these people are way, way smarter than me. I don’t want to raise expectations, but the folks at JLARC seem truly committed to finding answers. I feel relieved. There are some smart people to help answer the question, “Is non-profit affordable housing more expensive than market rate? Why?”

I think this is a big win for the whole discourse, and I told the JLARC team this. If we had solid data and numbers we could have a argument on the politics. Right now, we’re arguing over terrible measures of affordability (i.e. 30 percent of monthly income spent on housing means it is affordable), and trying to solve a “crisis” with no quantitative measure of when it started and when we know it has ended. I told the JLARC team that the solutions are going to be decided by a political process, but that process would be much better informed by their work.

 

The Way Back Machine: An Election and the End of Neighborhood Planning

This is part of a series looking back at 20 years of land use, planning, and housing policy history leading up to the state we’re in today. Last I covered my thoughts about why neighborhood planning was a good idea.  Apologies for the many, many names and stories I can’t mention and for anything I got wrong or misremembered. Later, I might go back and do more deep research on all this including interviews and more. 

I started working at the City in the spring of 1999 and the other 5 Neighborhood Development Managers (NDMs) started over the following months. Neighborhood plans were also going to the full City Council for final acceptance and approval. There was a lot of work being done to shift our footing from planning to plan implementation. Starting that fall there would be a number of shocks to the local political landscape that would imperil and then end the implementation process.

Paul Schell and Charlie Chong

It’s worth looking at the 1997 election because it was a contest between a classic Seattle insider and developer (yes, a developer!), Paul Schell and the ultimate outsider and opponent of the Comprehensive Plan and urban village strategy, Charlie Chong. Chong was elected to the City Council in 1996 in a special election to replace Tom Weeks who resigned suddenly late in the year. It’s pretty clear that Chong won because it was a high turnout election year with lots of voters that didn’t typically vote in city elections. And Chong had run before.

Chong rankled his colleagues and decided to gamble and run for the big job. Oddly, thinking back on it now, I was Peter Steinbrueck’s campaign manager that year. Steinbrueck had decided, initially, to run for Mayor. Some musical chairs, though, meant that there was an open Council seat, and he switched. Richard Conlin and Nick Licata were also running in for two different seats. In the end, all three of them got elected with a sense that they were more pro-neighborhood than downtown.

Schell handily defeated Chong, however. As has often been the case, voters sort of sent a mixed message. They elected a developer but also three activists to the Council who had run against downtown.

But by 1999, Schell had emerged very much as the Mayor of neighborhood plan implementation, giving lots of political backing to the effort and real authority to the NDMs. I always got the attention of Department staff and phone calls were returned fast. Schell made it clear that neighborhood planning was a big priority and we were given lots of encouragement to find ways around the bureaucratic nonsense that often plagues City Hall. Even Charlie Chong worked with me on a proposal to replace off street parking backed by Schell. We did have our struggles, but Schell was the real deal.

The WTO, New Years Eve, Mardi Gras, and Missed Opportunities

In late 1999, the World Trade Organization (WTO) was set to have a big meeting in Seattle. I didn’t think much of it at the time. I recalled the Asian Pacific Economic Cooperation (APEC) summit in 1993 and I figured it would be more or less the same. I imagined some traffic and a few protesters and some limos flying by and it would all be over. No big deal. I guess everyone else thought that too.

What a mess. The WTO ended up being called The Battle in Seattle, and the rhetoric wasn’t too far off from what we hear today. There was lots of hysterical ranting about capitalism and exploitation. But nobody expected the size of the protests and mess it created downtown. Ordinary people in Seattle trying to get to work and back home were appalled at the violence and the disruption. They blamed Paul Schell.

Not too long after that mess, a guy was picked up with the makings of a bomb in his trunk and the worry was he was planning an attack on the annual New Year’s Eve celebration at the Space Needle. This wasn’t any New Year’s Eve – it was the millennium. Fresh off the shock of the cities total lack of preparation for the WTO mess, Schell canceled the celebration out of an abundance of caution. This was, in retrospect, a really good idea given the events. But Schell was blamed again. He was on the defensive and was quoted in the Sunday Times, on the front page saying, “I am not a wuss! Jesus.

Meanwhile, Schell hadn’t done anything to get a campaign organized and other politicians smelled blood in the water. I’ll never forget the Mayor’s retreat at Sleeping Lady in January of that year. I had a chance to spend some time with the Mayor. I was going to stay in his house in the south of France – Schell was often mocked for his taste and his apartment in France, but his love of travel and hospitality were some of the many reasons I liked the guy so much. Schell and I talked about France and traveling and I asked him about running again. He still wasn’t committing. It was frustrating. I encouraged him to move faster.

Later I wrote a long memo to him that I never sent. I felt like the Mayor wasn’t being served well by his political advisors and staff. There was so much good he was doing. I asked, specifically, that we start to encourage more intelligent leverage of ribbon cuttings of neighborhood planning projects, school and library projects Schell had championed, and getting him doing more retail politics. His staff seemed self absorbed and unconcerned about the political crisis that was deepening around him.

Then there was Mardi Gras. In a weird twist, police sort of held back as Mardi Gras celebrations got more and more out of control. The police chief supposedly had his forces back away, worried about a repeat of the police violence people saw at WTO. A young man was attacked by a group of people in Pioneer Square; he ran and jumped over what he thought was a parapet and fell to his death. Meanwhile, the Mayor’s press secretary, when asked about the Mayor, said he was at home asleep. Jesus.

The Mayor was finally running for reelection, but by now it was feeling like it was too late. County Councilman Greg Nickels and City Attorney Mark Sidran were now running too, and as the summer wore on it looked worse and worse. A great story that ran in the Seattle P-I that summer probably told it best.

Schell said,

“I want to be the mayor that asks, ‘What can we do together?'”

He wanted to bring back a time when people pitched in to help others. Like his father, an Iowa Lutheran minister, he wanted to appeal to the better nature of people, though his pulpit would be at City Hall.

That idealism has attracted an intensely loyal group of followers. But idealism — and perhaps political naivete — may help make him the first incumbent mayor in 65 years to be dumped in the primary election.

And that’s exactly what happened. Schell became the first of a succession of Mayors that would go down to defeat trying to get reelected finishing third in the primary.

New Mayor, Old School Politics

Just like that, a decades long era of neighborhood planning and implementation was over. Voters just didn’t care. They wanted someone strong at the helm, and that’s what they got with Greg Nickels, a gifted career politician for whom everything was political. The first thing Nickels did to show who was boss was to fire much beloved Department of Neighborhoods Director Jim Diers. It made sense. The City had come to revolve around neighborhood plan implementation and it wasn’t Nickels’ creation. He could own it, or kill it. He killed it.

Then there as a bust in what was then called the dot com sector. Many of the web based business just couldn’t produce results and folded, wiping out a lot of invested cash in the stock market. Along with the 9/11 terrorist attacks, the economy was now officially in trouble. The survivors were Nickels and Amazon, but for most of Nickels years in office the city didn’t face a lot of issues with rampant growth. Potholes were filled, trains were getting built to run on time, and everyone knew exactly who was in charge. The freewheeling days of neighbors and departments working together to shape projects were over.

I’ve likened what Nickels did with neighborhood planning (by the way I left the City just before the election for Public Health Seattle King County to be a Regional Health Officer) to the way the Bush administration just disbanded the Iraqi army after the successful invasion of Iraq in 2003; those soldiers just wandered off in the desert with their guns and their deeply local and ethnic affiliations and later turned into an insurgent force.

Neighbors were the same. After a decade of planning and meeting and implementing, it was just done. Neighbors just melted back into the neighborhoods and their lawns and gardens. Sure, individual projects stirred up resistance but there was no longer a neighborhood movement to be reckoned with. Even Neighborhood Service Centers and their staff were given a back seat or left by the side of the road. City Hall and the 7th floor of the new City Hall building was where the power was. And with not a lot of growth, there wasn’t a lot to be worried about either. City Council struggled for relevance in the face of a very disciplined machine upstairs. Nickels didn’t have a big vision, but he got things done.

The Calm Before the Storm

In 2002 I ran a losing campaign for the Washington State Legislature based largely on creating a state income tax. I had worked for a decade to position myself for the run, but somewhere a long the way I lost my interest and my passion for it. Raising money was a hassle. People who I thought would be my biggest supporters shrugged. I loved debating, but I hated doorbelling. And my opponent was an unemployed techie who really needed a job. I had a great job with almost no commute. Why did I want to be a freshman state legislator again?

The following years I spent becoming the much-hated Tobacco Tsar, tasked with snuffing out smoking in King County. I learned a lot and didn’t much pay attention to City politics anymore. During those years, the war in Iraq seemed to occupy much discussion, as did the completion of light rail.

I did my job as Tobacco Tsar too well, and in May of 2007 I was abruptly dumped by King County. I wrote a letter to giant grocery store chains Safeway and QFC urging them to stop selling tobacco products in their stores. That along with hundreds of thousands we invested in local artists to counter smoking and tobacco sponsorships in the arts community was too much. I was essentially fired. I worked for a while that summer with Michael McGinn in his start up, The Great City Initiative, studied for a real estate license, and then went to work for Peter Steinbrueck at the City Council for his last months in office. It was an appropriate and ironic entry back into city politics.

Lobbying, Advocacy, and Making Noise

“You have to make more noise than anybody else, you have to make yourself more obtrusive than anybody else, you have to fill all the papers more than anybody else, in fact you have to be there all the time and see that they do not snow you under, if you are really going to get your reform realized.”

Emmeline Pankhurst
Leader of Women’s Movement for the Right to Vote in the United Kingdom
Image from Wikipedia above is one of many times Pankhurst was dragged to prison

 

I remember when I first started out in this business (if it can be called that) in my 20s, people older than I would sometimes share stories. Often it was to cool my enthusiasm or to explain why things were the way they were. I always loved a good political story. I remember one my boss told me about the venerable Lorraine Wojahn, one of the first and longest serving women in the legislature, walking up to him when he was a young staffer, annoyed about something and stabbing her finger in his chest. He was terrified. But he learned from the mistake. I find myself having to tell stories as well, both to validate my own credibility (often to myself) and to redirect other people’s energy. Here’s one.

Lobbying and advocacy are very different things. Lobbying is a professional service like hiring a lawyer. Usually, those services are billed hourly or using a retainer. The idea is that a person is busy running their business or their organization. A lobbyist can help make a case on a particular matter or many that will benefit that business or organization.

Advocacy is a bit different. Advocates are often volunteers or lead non-profit organizations. Advocacy is not about a particular issue but about a set of broad principles that impact many people over time. Advocates typically are working for the long haul and trying to make big and lasting changes to a system or sometimes to make an entirely different system. And advocate or advocacy organization can work for years on many issues before the benefits can be achieved.

Lobbyists have a skill and advocates have a mission. There isn’t any value judgement in calling this out any more than saying a plumber fixes pipes and an architect designs houses; we need both. And sometimes, one person can end up doing a little bit of both of these functions, focusing on very narrow technical issues while pushing a broader point.

Back when I was about 25 years old and working for the Washington State School Directors Association (WSSDA), an organization representing elected school board members, we spotted an alarming section in a huge bill about youth and families called the Becca Bill. The Becca Bill was aimed at trying to fix the juvenile justice system and to give parents and schools more power to intervene when kids were acting out and getting into trouble. The bill was a combination of more and stronger penalties and more social services.

The thing we found was a mandate that school districts with the highest truancy would lose up to 5 percent of what was called complex needs funding. These were dollars that went to mostly urban districts with many immigrant families, kids getting free or reduced lunch, and with a variety of other challenges. This is where I started. I looked at which districts would be hardest hit. One of the districts getting millions in complex needs funding at the time was the Tacoma School District and the Senator representing Tacoma was a well respected African-American legislator, Senator Rosa Franklin. The sponsor of the bill was blustery Senator Jim Hargrove from the Olympic Peninsula. I knew Senator Franklin could take on her fellow Democrat on the Human Services Committee where she was co-chair.

I took my facts and figures to Senator Franklin thinking this will be great. She’ll get it. Urban versus rural and all that. Plus it was a significant amount of money the district might lose. I figured Franklin would just get this notion of penalizing districts for truancy. I was wrong. Franklin, as it turned out, was very unhappy with the Tacoma School District. She wanted something done about truancy and this would get the districts attention. I was stunned. That was my whole plan, play the urban Democrats against the rural ones, the bigger, more complicated school districts against the legislators from rural areas trying to punish the unruly cities with lots of poor kids. It failed.

Well was this truancy thing even a problem? Maybe by showing that the whole truancy thing was a red herring I could get a story in the press pointing out that this was a sledgehammer versus fly type of thing. So I called my colleagues at the Superintendent of Public Instruction. What were the truancy rates or attendance issues in all the districts in the state? Let’s see those numbers. They didn’t exist. Schools didn’t uniformly track attendance or report it aggregate. I had no way of pushing back because we had no clear data. How many kids ditched school in Kent last month? We had no good numbers.

I went to Senator Hargrove. We used to stand outside the doors of the Senate chamber and send in notes. If the Senator felt like it he or she would come out and talk. Hargrove had a weird habit of talking with women outside the doors, but with men like me, he’d take us inside the chamber and we’d sit on one of the big leather couches in the wings. I told the Senator again that this was a bad idea. Didn’t matter. He had the votes and the support of Senator Franklin. OK. How about this, since I looked and we have no data, why don’t we track it first, set a threshold and then attack the actual problem not penalize districts. We had a deal.

I thought I had a win. But my colleagues were pissed. Now schools would have to track attendance. Districts would go bankrupt hiring staff to track all the paperwork and to run around trying to get kids back to school. They all went off to get those numbers together. It was awkward. Among all the education organizations we were the only ones making a deal with the dreaded Senator Hargrove. They testified against our plan. And some argued, because at the end of a string of truancies the prosecutor would file a case against the kid AND the parent, that we’d crash the courts too.

In the end, our compromise passed. The world didn’t end. And twenty years later I have met school people who say it works fine. I even met a person who actually got caught up in the truancy system we proposed. I’m that old.

Now why did I tell you this long boring story. Because I know what I’m doing, and I want you, the reader, to recognize what happened in that story. There was interests aligned at cross purposes. The goal that everyone had was helping prevent a repeat of the circumstances that led to the death of Becca, the young girl the bill was named after. There was lots of money involved and systems that were larger than this one problem. But people, legislators, my colleagues from other education organizations, and others used data to make their cases, and rational arguments. When we failed with one legislator we “worked” another one. If one angle failed, we’d try again. We went to the press. We tried everything.

In today’s discussions of land use and housing it isn’t working like this. Mobs of angry people show up at City Hall and the Council passes legislation. There is no data and there is no rational consideration of arguments. When it came to the Grand Bargain and now Jenny Durkan’s transition, builders and developers who actually build housing aren’t at the table. We’ve been locked out. Imagine the story I told if we were simply told the bill was passing and it didn’t matter what schools thought or how they functioned. That’s why I make noise.

When I write scathing critiques or my language is strident or I sound outraged it isn’t because that’s my default setting. I’d much prefer to work with the system to get a solution for today’s issues and tomorrows opportunities — and for the people who need housing in this town. But that’s not even on the table. What’s shocking about the City Council is that it is homogeneous ideologically but Olympia is hyper partisan and divided between urban and rural. Yet the Council simply doesn’t want to know anything from people that understand and actually build and manage housing. And neither, apparently, does the new Mayor. So I’ll say what I’ve said over and over again, we’ll meet with anyone, anywhere, at anytime to figure out ways to create more housing of all kinds in all parts of the city for all levels of income. All I need is an address and a time. Until then, like Pankhurst, we’ll keep making noise.

 

 

On the Radio: So Far, Not So Good for Mayor Elect Durkan

I was on the Dave Ross show last week and KIRO has posted our full almost 20 minute interview. In our talk I cover a lot of our key messages and points about housing in Seattle. If you have the time it is worth a listen or you can read an article digest of the talk too.

The interview was done before Mayor Elect Durkan made her first appointments to her transition. The first three people she’s chosen to look at housing and transportation are Paul Lambros of Plymouth Housing, former County Executive Ron Sims, and Shefali Ranganthan from the Transportation Choices Coalition. I have no problem with Ranganthan, she and her organization have been long time champions of incentivizing options other than driving a single-occupancy vehicle everywhere.

Lambros is a huge red flag, and the choice indicates exactly what I was concerned about: Durkan has bought into the non-profit housing industrial complex. Lambros is a signer of the so called “Grand Bargain,” a deal between big downtown developers and non-profits like Lambros’ to shake down market rate developers to fund his projects, housing that is ringing in at as much as $500,000 per unit.

I had a horrible thought walking home last week: what if Durkan appoints Ron Sims head of the Office of Housing? This would be sort a make work project for a politician with not many places to go (Sims ran for Senate and Governor and lost) and could be rationalized because of Sims’ job at the Department of Housing and Urban Development. Who knows, maybe Sims would break out of money cranking routine that housing bureaucracy usually engage in and actually support innovative housing policy in collaboration with the market. Maybe. But that would be going against this whole career as a Democratic politician.

So yes, we do have “hope for new era with Mayor Jenny Durkan,” but so far it doesn’t look all that good.

Photo from the Seattle Times 

Durkan Transition: One Market Rate Developer, Seven Non-Profits, No Landlords

I know. I’ve already been taken to task for being to hard on the new Durkan administration. Not even a week has passed and here I am being critical. But look at the long list of people Durkan has appointed to her transition team. Lots of bright and highly motivated people, so no criticism there. But there is only one market rate developer represented, Vulcan. Vulcan pushed the Grand Bargain and Mandatory Inclusionary Zoning (MIZ), a tax that will end up going to non-profit developers. How many non-profit developers are on the team? I counted seven (bolded below). How many landlords? I don’t see anyone in the rental housing business although I might have missed something. Yet lefty critics will point to Vulcan and the Chamber being on her team as proof that Durkan is part of “The Establishment.” I have no choice but to point this out. It isn’t a good start. Room has to be made at this table for people that make housing on the market and who manage it; it’s not about wanting to go to more meetings, its about being fair and collaborative. There is still time.

Adrian Z. Diaz
Lieutenant, Seattle Police Department

Angela Stowell
United Way, Campaign Co-Chair and Co-Founder of Stowell Restaurants

Anne Lee
TeamChild, Executive Director

Asha Mohamed
Women’s Advocacy Center, Co-Founder

Behnaz Nelson
PTE Local 17, Executive Director

Bill Hallerman
Catholic Community Services of King County, Agency Director

Brianna Ishihara
Community Member

Caleb Banta-Green
University of Washington, Alcohol and Drug Abuse Institute, Principal Research Scientist

Charlene Strong
Washington State Human Rights Commission, Chair

Charles Royer
Former Mayor of Seattle

Cherry Cayabyab
Community Activist

Colleen Echohawk
Chief Seattle Club, Executive Director

Dave Gering
Manufacturing Industrial Council, Executive Director

Dave Stewart
Vulcan, Executive Vice President and General Counsel

David Della
Former Seattle City Councilmember

David Rolf
SEIU 775, President

Diane Sosne
SEIU Healthcare 1199NW, President

Eileen Sullivan
Amazon, Senior Manager, U.S. State Public Policy

Eileen V. Quigley
Clean Energy Transition, Director

Emilio Garza
The Washington Bus, Executive Director

Ezra Teshome
Community Leader

Gordon McHenry, Jr.
Solid Ground, President & CEO

Helen Howell
Building Changes, Executive Director

Jan Drago
Former Seattle City Councilmember

Jerry Everard
Capitol Hill and Belltown Business Owner

Jordan Royer
Pacific Merchant Shipping Association, VP for External Affairs, Manufacturing Industrial Council Board Member, and Washington CeaseFire Board Member

Jorge L. Barón
NW Immigrant Rights Project, Executive Director

Juan Cotto
El Centro de la Raza, President of the Board, and Board Member of Sound Mental Health

Kathleen Taylor
ACLU – Washington, Executive Director

Lauren McGowan
United Way, Sr. Director, Ending Homelessness & Poverty

The Honorable Leonard Forsman
The Affiliated Tribes of Northwest Indians, President and Suquamish Tribe, Chair

Leonard Smith
Teamsters 117, Director of Organizing & Strategic Campaigns

Linda Di Lello Morton
Greater Seattle Business Association, Board Member, and Terra Plata, Owner

Lisa Daugaard
Public Defender Association, Director

Louise Chernin
Greater Seattle Business Association, President & CEO

Lt. Kenny Stuart
Seattle Fire Fighters Union, IAFF Local 27, President

Marcos Martinez
Casa Latina, Executive Director

Mariko Lockhart
National Coordinator, 100,000 Opportunities Initiative – Demonstration Cities, The Aspen Institute’s Forum for Community Solutions

Martha Kongsgaard
Kongsgaard-Goldman Foundation, President

Marty Hartman
Mary’s Place, Executive Director

Mary Jean Ryan
Community Center for Education Results, Executive Director

Maud Daudon
Seattle Metropolitan Chamber of Commerce, President & CEO

Mohamed Sheikh Hassan
East African Community Leader

Monisha Harrell
Equal Rights Washington, Chair

Monty Anderson
Seattle Building and Construction Trades Council, Executive Secretary

Nicole Grant
M. L. King County Labor Council, Executive Secretary Treasurer

Norm Rice
Former Mayor of Seattle

Ollie Garrett
Tabor 100, President

Patrice Thomas
Rainier Beach Action Coalition, Strategist

Paul Lambros
Plymouth Housing, Executive Director

Riall Johnson
De-Escalate Washington, Campaign Manager

Ron Sims
Former King County Executive and Former Deputy Secretary of the United States Department of Housing and Urban Development

Roxana Norouzi
OneAmerica, Deputy Director

Ruthann Kurose
Community Leader

Ryan Calo
University of Washington School of Law, Lane Powell and D. Wayne Gittinger Associate Professor

Shefali Ranganathan
Transportation Choices Coalition, Executive Director

Sheila Edwards Lange, Ph.D
Seattle Central College, President

Stephan Blanford
Education Researcher

Taylor Hoang
Ethnic Business Coalition, Executive Director

Thatcher Bailey
Seattle Parks Foundation, President and CEO

Trish Millines Dziko
TAF, Executive Director