One Year Ago: The Great Rent Control Debate

Some called it the Brawl at Town Hall. Ol’ Josh Feit at Publicola called it at the time a “non-sequitur.” Others thought is was a bad idea to engage with the Socialist Councilmember Kshama Sawant during an election year on a dangerous topic. In the end, it was a hot evening in Town Hall but the debate didn’t change much. Sawant handily won reelection in spite of many dollars wasted trying to defeat her, Jonathan Grant a champion of rent control was defeated, and probably because of the businesses community’s ill advised obsession with Sawant and it’s wasteful campaign spending, rent control friend Lisa Herbold was elected in Council District 1. But the debate itself didn’t seem to move the dial at City Hall on time wasting, duplicate and bureaucratic measures in the name of protecting tenants.

A lot hangs in the balance this fall however, since rent control is not allowed by State law. The next chapter of this debate may play itself out in Olympia, especially if Democrats capture a decisive victory in both legislative chambers. The hazard is clear, if the Senate becomes more Democratic that it has been, there is a much better chance that Speaker Frank Chopp’s efforts to allow Seattle to impose rent control could become a reality. Meanwhile Sawant’s anecdote inspired legislation to tie rent increases to more inspections of rental property is already a form of a rent control. And we can expect more chipping away at the preemption of rent control in years to come whether Olympia acts or not.

But if you missed it last year, I’m posting the full debate. You’ll miss the effect of the cheers and jeers and the heat, but I think the issue was fought out well by both sides.

Redfin Confirms: Less Housing Means Higher Prices

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I know. It’s weird that we have to go over this again, and again, and again but if we’re worried about housing prices being too high, the answer is to make more housing. In a recent post at Redfin’s blog by the Urban Institute points this out yet again with a retrospective look at national housing data. Let’s start with what it says about demand for housing.

There were 968,075 new households in 2014, according to the Census Bureau. Data for 2015 aren’t yet available, but we know household formation has been rising. It’s safe to assume between 1 million and 1.1 million new households were created last year. Supply outstripped demand leading up to the financial crisis, by as much as a million units in 2006.

How did we do in keeping up with that demand?

We added together single-family, multi-family and manufactured housing construction in 2015, then subtracted units lost to various causes. The bulk of the new supply, at 968,000 units, was single-family and multi-family construction; Manufactured housing such as mobile homes, added another 69,000 units, bringing the total to just over one million.

To calculate the loss of existing stock we borrowed from a study by Eggers and Moumen which suggests that demolition, disaster and other events reduce the U.S. housing stock at an annual rate of .31 percent. There were more than 134.7 million housing units in the U.S. last year, so by that calculation we lost 418,000 of them, resulting in a net new supply of only 619,630 houses, condos and apartments.

So, as the blog posts headline sums up: “We’re Building 6 Homes for Every 10 New Households. Where Will People Live?”

The lack of affordable stock is already at crisis levels.  We need an array of federal, state, and local strategies to boost construction in undersupplied areas, provide better affordability for renters.

And what is our strategy here in Seattle? If you’ve been reading this blog or the papers you already know the answer: Mandatory Inclusionary Zoning (MIZ).  Unfortunately the Mayor’s MIZ scheme that will pass through the City Council any week now will not “boost construction,” but instead will levy a new set of fees and requirements on the production already underway.

As I’ve pointed out before, when leadership wears ideological blinders or, in this case, a blindfold, influencing housing prices in a positive way for consumers quickly becomes about affordability. And our measure for this qualititative experience for price is lousy. Then the “solution” becomes to make building new housing harder to do and more expensive with mandates for fees and inclusion to, ironically, create a few hundred affordable units. Nevertheless, like hearing that indeed Copernicus, Kepler and Galileo were right about the Sun being the center of the solar system, I guess it’s reassuring to read that science still confirms that if you want lower or stable prices you should build more supply to meet demand.

Herbold on MIZ: The Bargain Will Only Get Worse

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I think there are some people who still think that somehow the Mayor’s Mandatory Inclusionary Zoning (MIZ) can be improved. I think there are even some in the building and development community that believe a compromise on MIZ is possible. Maybe. It depends on the principles held when a person or group walks through the door. I’ve outlined what, if I was asked to negotiate with the City, what I would start with.

I’d add two important things to keep in mind: whatever “deal” that might get struck with Mayoral staffers will be unlikely to hold together for long once the City Council gets involved. I’ve already pointed this out before, and it is rather elementary. For example, Mike O’Brien promised that upzones associated with MIZ might happen “over here” a little “over there,” and maybe none “way over there.” So even, hypothetically, bargaining for lower fees or more zoning or whatever might lead to a “deal,” but that agreement is likely to be the high water mark. The Council will start improvising almost immediately.

Clearly, that means worse policy. The most obvious thing Councilmembers will do, along with pulling back on upzones where neighbors scream the loudest, they’ll also likely dial up fees and inclusion requirements. Already word on the street is that the rates of inclusion and the fees are not nearly high enough. The rate of inclusion of rent restricted housing should be like San Franciscos, above 20 percent. If a 5, 6, or 7 percent rate of inclusion is too high and makes projects infeasible, just imagine what a 20 percent inclusion requirement would do to supply and overall price. In Councilmember Herbold’s response to our recent request for builders to speak up about MIZ, she responded with an e-mail I am posting below.

Her first amendment proposal, while more hortatory than prescriptive, is the opening shot at trying to push up rates of inclusion by trying to develop some kind of one for one replacement formula for existing “lost” affordable units. How will the City decide how much housing is “lost” and how much of a fee to charge is a mystery. And the idea that expensive housing is being built by flattening affordable housing is just as much a red herring as it has always been. But Herbold promised a crowd in the U District opposing upzones there that she’d find a way to stop or slow development of new housing if it displaced existing housing.

She said:

I am going to introduce a policy that will look at future proposed upzones and their displacement impacts on communities as a way to identify strategies to mitigate those displacement impacts; whether or not that means funding for additional services to make those neighborhoods more resilient; whether or not it is a way to disincentivize the development that causes the displacement or a way to replace the housing that is removed.

As I have said before, Herbold is perhaps the savviest and most determined and effective member the Council has. And as you’ll read below she also keeps her promises. But disincentivizing development of housing in the name keeping some housing cheap doesn’t make any sense economically even though it’s pablum for the angry people who don’t want anything to change.

I’ll just post this graph and say again that there is no displacement crisis in Seattle and older, less expensive units are being taken down they are being replaced by lots and lots more housing. If we want prices to be lower the best thing we can do is build lots more housing.

Chart Today

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Dear Constituent,

Thank you for contacting me regarding the Mandatory Housing Affordability framework legislation that is currently before the Planning, Land Use and Zoning Committee (PLUZ).  I appreciate hearing from you about our efforts to develop a new tool to insure that all development in the City includes a contribution to affordable housing.  I believe that this policy should strive to strike a balance between requiring onsite performance (resulting in affordable housing being included within the development) and in lieu fee payment (resulting in even more affordable housing being built offsite – in a diversity of neighborhoods – through the ability of the MHA-R fee to leverage additional funding).

This issue comes before the PLUZ Committee again on July 19.  Amendments will be discussed at that meeting and they may be voted on as well.  If not, then at the next PLUZ meeting on August 2. Materials about the proposal as well as video of previous meeting discussions on July 8th and June 21 can be found here:

https://seattle.legistar.com/DepartmentDetail.aspx?ID=32476&GUID=728065FD-33DC-405E-A4B3-9A243CE588EB

Please sign up for agendas to continue to track this issue. To do so, you can use the following link:

http://www.seattle.gov/council/committees/agenda-sign-up.

I intend to propose amendments to this legislation is as follows:

  1. “The Council intends to consider whether to include higher performance and payment amounts for those areas that have been identified as having a high displacement risk and high access to opportunity in Seattle 2035, Growth and Equity, Analyzing Impacts on Displacement and Opportunity Related to Seattle’s Growth Strategy, May 2016.  For these areas, the Council will consider whether, subject to statutory limits, performance and payment amounts should be established that result in a total number of new affordable units that meet minimum program parameters contemplated by the July 13, 2015, Statement of Intent for Basic Framework for Mandatory Inclusionary Housing and Commercial Linkage Fee plus a number of units equal to those affordable units identified through planning processes as being at risk of displacement.”
  1. If a rental unit is provided through the performance option and it is converted to a condominium, the tenant should be offered the option to purchase the unit as an affordable homeownership option.
  1. Additional language to promote permanent affordability of homeownership units developed with MHA-R funds

Andra Kranzler is the staff person in my office who handles mandatory housing affordability. If you have further questions or concerns, she will be happy to follow up with you.

Again, thank you for writing to me regarding this important issue.

Sincerely,

Lisa Herbold

District 1 Councilmember, Chair Civil Rights, Utilities, Economic Development, and Arts Committee

206-684-8803

lisa.herbold@seattle.gov

 

Mayor Murray: Hoping to be Dealt an Ace from a Deck of Jokers

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I have for a long time been a critic of the hegemony of angry single-family neighbors over land use and housing policy in the city. In fact, I described single-family neighbors “as angry, entitled, immoral, classist and racist, as zoo animals and as bloodthirsty dinosaurs.” I was also a neighborhood activist and planner myself in the 1990s, working with the City’s planning office and Department of Neighborhoods (DON). Later, I became a Neighborhood Development Manager working at DON to implement 7 neighborhood plans. Based on that experience, and my years advocating for growth and density and more housing in this city, I am unimpressed with Mayor Murray’s recent Executive Order that would scramble the 13 District Councils used by the City to gather input and review for various City initiatives and programs.

First, let’s consider what the Executive Order actually says. It starts out by “establishing public engagement and outreach principles and mandates that City departments would have “equitable outreach and engagement practices that reaffirm the City’s commitment to inclusive participation.”

So far so good, pretty standard boilerplate inclusion language for any local government in our region. What’s the outcome that the Order hopes to achieve?

To build relationships and improve outcomes, especially for under-represented and under-served communities, including, but not limited to, renters, immigrants and refugees, communities of color, people experiencing homelessness, LGBTQ, low-income households, youth and seniors [by] successfully engaging community members in decision-making processes increases the likelihood of public support and better outcomes.

Oddly, many of the people who, even less than a year ago when the Times article quoted my sobriquet for angry neighbors, said I was too mean in my characterization single-family neighbors have jumped on that anti-single-family band wagon. Today, Facebook feeds of “urbanists” are often rife with articles pointing out the financial, economic and racist motives of single-family neighbors. And many of these people are constantly sniping at single-family zoning, calling for it’s elimination or at least its attenuation.

I don’t disagree. I was anti-single family when being anti-single family wasn’t cool. But I’ve also argued that bashing single-family neighborhoods might be a waste of time. Maybe we should let them have their suburban wonderland if they’d agree to let the City abolish zoning in urban villages, areas in our city designated in our city’s real Grand Bargain, the Comprehensive Plan. But OK, I’m on board the idea of breaking up single-family hegemony that keeps a wall against change around single-family neighborhoods and launches expeditions outside the castle walls to de-densify other zones as they did with low-rise legislation and microhousing, not to mention Downtown, South Lake Union, and the U District.

But here’s the non sequitur in the Order:

Avoid characterizing District Councils as representative bodies reflective of the communities they serve [and] ensure growing demographic groups are represented in City decision-making processes and barriers that discourage people from participating are eliminated . . . all City departments to develop community involvement plans

The implication, not missed by Publicola, is that the District Councils are the source point for neighborhood hegemony that have led to our horrible trajectory in land use and housing policy. But Publicola and many breathless posts on those same Facebook feeds have missed the point and have over subscribed to the idea that District Councils were somehow the heated staging ground for NIMBY opposition to growth. That simply hasn’t been the case in my 20 years in this town dealing with NIMBYs and District Councils. Sure there are NIMBYs that attend District Council meetings, but they also ride the bus, go to the local market, and ride bikes all over town. There isn’t anything in the Order or anywhere else, including in the Auditors report cited in the Order, that establishes that the fact of District Council’s lead to the exclusion of all the groups listed in the Order, or as a hotbed of NIMBYism.

The “to do” section of the order is full of stuff that DON should be doing anyway. Why aren’t they already working to

  • Improve and expand inclusive outreach and engagement, as well as the creation of more equitable representative systems that are more reflective of, and accessible to, communities throughout the City of Seattle.
  • Create well-designed, responsive and culturally-relevant public involvement plans.
  • Build community capacity for meaningful participation and authentic outreach and engagement.
  • Provide a wide range of opportunities for obtaining information and involvement in decision-making processes.
  • Achieve greater equity with meaningful involvement of under-served and under- represented communities.
  • Effectively and efficiently manage the use of all resources, including community members’ time

If DON hasn’t been doing these things it kind of makes me wonder what do they do all day long?

What is the big punch line of the Order?

A new citywide framework and strategic plan for community engagement, including the creation of a Seattle Community Involvement Commission

So more meetings about meetings about meetings is the proposed answer to, “What do we replace the District Council system we just blew up?”

Mayor Murray often seems to prescribe medicine that doesn’t seem to line up with the condition of the patient, like pushing for Mandatory Inclusionary Zoning (MIZ) which will likely boost overall prices in the name of responding to “skyrocketing” housing prices. It’s kind of like treating a headache with Preperation H.

As for the “urbanists,” (I’ve started calling them ‘clickers’ because they love clicking ‘like’ uncritically on Facebook and in real life) I feel like the whole attack on District Councils is like shuffling a deck of single-family jokers in hope of getting dealt an ace — a person of color who is a renter and supports MIZ. The Order changes absolutely nothing about the fact that City Councilmembers listen to NIMBYs who are very good at organizing themselves without the District Councils. Remember One Home One Lot that goofed up small-lot legislation, and Too Much Building and Not Enough Sky that beguiled Sally Clark to start disastrous low-rise downzone legislation?

If the Mayor want’s to eliminate the greatest barrier to advancing progressive, innovative land use and housing policy, he shouldn’t prorogue the District Councils but the City Council itself. And if he wants to repeal other bad policy with the stroke of a pen, he can eliminate the Directors Rule that drives the last nail into the coffin of microhousing. The first is unconstitutional and the second, although within his power, is unlikely. But District Councils are dead; long live the Community Involvement Commission.

Mark Huber: “Building the relationships is just as important as building the homes”

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Local builder Mark Huber has been featured in a blog post at the National Association of Home Builders (NAHB) that highlights his work with communities here and internationally building housing. We’ve featured Huber before in our City Builder series that featured stories about the actual humans that build housing for other humans in Seattle. I have two points to make. First, we’ve heard a lot in the last few days about not attributing the motives and actions of individuals to the groups of which they are part. I agree. And second, Huber has a lot to teach us about how we deal with the challenge and work of how we meet housing demand.

First, one of the most serious problems housing faces in our region is that many, many people harbor resentment for developers and builders. One Councilmember, Tim Burgess even told me that when I get up to speak to the City Council he discounts what I say because I represent people who make money from housing. Yes, Councilmember Burgess, it’s called earning a living. But somehow, unlike many other professions or callings, people who build things are supposed to be greedy. Greed is a character trait, not a business model. And people who build housing are engaged in doing what they love to do and what they produce is a benefit to people who need housing.

Locally, Huber is working with many others to rebuild a family’s home that burned down. The family had no insurance and was faced with a problem that many families experience: where will we sleep tonight. Huber’s work on this project is an example of how a team of people are using their building skills to help real people in need, right now. And I think the vast majority of builders and developers in our city get that there are serious housing problems that need a solution, but our political system would rather tax them for their “fair share” than marshall their knowledge and skills.

Not all builders are as socially driven and conscious as Huber, but his work here and in other countries shows a commitment to the person who needs housing and meeting their needs. From the NAHB post:

“This isn’t about us simply building something and then turning it over to whomever is going to use it or live in it,” Huber said. “A lot of what we focus on is learning how and why these people live they way they do. When you come to that understanding, then it’s easier to identify the best way to work together and address their needs.”

And that brings me to my second point. I’ve written about The Jungle, the spontaneous housing solution put together by a couple hundred people under I-5. Is that the best solution? Probably not. But it’s working for the people who are there at the moment. What the City has done is to give the residents of that neighborhood two choices: leave or move into a conventional subsidized unit or shelter.

The problem is that if there was a subsidized unit available, why would anyone sleep in a tent under a bridge. And shelter options don’t work for many families. The City doesn’t seem to be able to cope with any housing solution that works but doesn’t fit their conventional model of what housing is supposed to look like. I’ve pointed out that this was exactly the case with microhousing, because of its size and unique place in the code it was hounded out of existence. It was different so it had to go, even though it was working well for many people.

I wish the City would engage with builders and developers and ask them, “How should we address the challenge of finding housing for everyone that wants it in Seattle?” If it did, the City would tap a valuable resource. Instead, we vilify developers, deny them a place at the table, and set up schemes like Mandatory Inclusionary Zoning to squeeze cash out of their projects to subsidize enormously expensive subsidized units. Mark Huber is a great example of a builder who could help the City not with fees and an inclusionary unit here and there, but developing an efficient and compassionate and useful system wide solution. If only they’d just ask.