Forget Amazon: Local Housing Builders May Have to Leave Seattle Too

Editors note: This post was originally an email responding to a fundraising request. Smart Growth Seattle is funded largely by small and medium sized, family owned business like the one Gary Cobb operates. While the Seattle Chamber of Commerce is just waking up to the deliberate efforts to slow and stop new housing development, builders like Gary Cobb face real hardships because of runaway regulation based on ideological excess. 

Hi Roger,

With the city of Seattle’s new permitting levels, I am faced with a year of no income. I am feeling like I have been fired from my own business. I have 2 projects in for permit totaling 9 new town homes and all should have been completed and sold about now, leaving money on the table and the ability to move on new projects, but the dirt has not been touched, due to lack of permits.  These sales would have given plenty to offer up support to you like I was able to do the past.

I am in serious thought that it will get much worse to build in the city before it gets any better.   With design review, we are faced with permitting that is two times as slow at best.  It now takes up to 2 years or longer to get a 4-unit town home project ready to build.  This makes the turnaround time on a 4 unit to be about 2.5 to 3 years or longer.  In the past or even a year and a half ago we could turn a project from purchase to sale in about 12 to 14 months.  This, and added linkage tax, more income tax for the city, and other proposed taxation will, in my estimation, end a lot of small builders careers in this city.  Yes, they will try and even think they can hang on and some may, but others will go by the wayside under the heavy taxation and lack permitting that disallows them to do their work destroying their businesses not to mention laying good people off.

This thought takes me back to mayor Nickels.  In his first term of office, he came to our meetings explaining that he was making it his goal to support the builders and wanted the jobs that it created, along with the tax base, and the new homes we built for our city.  He made it a goal to speed up the permitting processes, while streamlining the Department of Planning and Development that was out of control.   Back then that we had to wait 4 months for a permit, far, far less time than we are facing today.   With mayor Nickels, I was able to see permits in 2 weeks for 2 multifamily projects.  Yes, it can be done in 2 weeks, believe it or not.   I think this administration wants us gone, leaving only the very big builders that focus on high-rise apartments. This is the future that the city wants for generations to come, or so it seems.

The members of the Master Builders are small family owned businesses.  Yes, some are a good-sized builders, but even when I ramped up to building 100+ homes a year and was the 18th largest builder in King County, it is still possible to get busted down with just one major change in the economy, like the 2007 downturn that takes it all away.

We place everything we have on the line to do what we do.  We give all we must to be out there building.  This is a business of risk and reward with high finance, economic changes, and unforeseen problems at every turn.  One can say it’s all about the money, but more than that we are doing what we love to do and that is build.   We love to create new buildings that blend into our city.  We love to hear from a neighbor that the neighborhood looks so much better when we are finished.  We love to hear from a buyer that we did a great job in building the new home they chose to live in.  We love getting up in the morning to do it all over again.  We love looking at new properties seeing the opportunity, sometimes when no one else could.

Most of the in-city builders are working out of their trucks and spending all hours at night to catch up on the paperwork and emails.  We work nights and weekends and lay awake at night planning our next day; we lose sleep in wonder of how we will cover the bills.  No 8 to 5 here, no way.  We sign our own homes away to guarantee the needed moneys from a banker to build.  Many a builder’s pride and joy, their own home, has been taken by a banker unwilling to give a little to allow the builder to survive in hard times.

Most of us are doing what we do because we love doing it and are willing to take the risk.   We are hardworking honest people that really take pride in what we do day after day, and year after year.  On the other hand our city seems to take a different stand and looks at us as rich people dozing our way through the streets and bulling our weight around the city, all for the money. It seems as they think they found a cash cow to take from and to slow down growth so as not to destroy the pristine neighborhoods we now have.

Roger, as my email states I am concerned about the future of the small builder in the city of Seattle. I don’t want our city to go to large high-rise developments and become a base for large out of state developers and owners.   The small builders live here, work here raise families and grow old here.  We really do care about our future here as well as the city I have called home all my life, born and raised.   If I am not permitted to build here then I can’t run a business here.

If some changes are not in the works to fix this problem now then I must assume that the city of Seattle is meaning to create this problem in wanting the builders to leave. It could be worse in that we could be working in Key West FL today. I was just there last month. I can only ask God to help them, as it was such a beautiful place.  I hope it still is…

Kind regards,

Gary Cobb, GNC LLC

Senator Palumbo: Help for Seattle Depends on Allies Outside the City

It’s sad and ironic that I had to make a trip to a farm in the distant reaches of Pierce County to hear a loud and enthusiastic support for jobs and economic growth in Seattle. And who were these people, gathered in a barn at the Wilcox Farm, cheering for jobs and growth? Republicans of course! Meanwhile, miles away, in Seattle Mayoral candidates and local lefties and progressives were actually considering the benefits of fewer jobs and less growth in Seattle. Yes, Seattle socialists and progressives aren’t at all worried about Amazon’s consideration of expanding beyond Seattle; they could care less and even welcome the idea. One Democrat, though, stands out from all the rest, State Senator Guy Palumbo.

I met Senator Palumbo at State Representative JT Wilcox’ annual salmon bake, held on his families iconic farm near Harts Lake in deeply rural Pierce County. What were we even doing there? Well, for me, I long stopped being active in the Democratic party that locally has drifted further and further left, embracing self-defeating policy ideas like an income tax and rent control. I find that Republicans in Olympia speak my language when it comes to housing. I don’t have to spend lots of time persuading them that, yes, supply and demand applies to the housing market.

In Seattle, the Greater Seattle Chamber’s Maud Daudon said that Amazon’s recent discussion of a new headquarters was a “wake up call.” I hope the Chamber enjoyed its nap, because the rest of us have been wide awake over the last 4 years as the city has become overrun with really divisive and destructive rhetoric and policy; over and over again the City Council and Mayor that has enjoyed the Chamber’s undying support, have imposed an ever widening net of horrible anti-jobs, anti-growth, and anti-housing policies. While the Chamber was asleep, the rest of the state has noticed, including Senator Palumbo who represents the 1st legislative district which straddles King and Snohomish Counties.

Palumbo was singing our song recently on Jason Rantz’ radio show decrying the nuttiness of Seattle’s dominant political class, a group that sees job growth as destructive.

There is nothing more environmental that we can do than to build upwards (aka Manhattan) and to have people live and work in the same area … they did the right thing for our city, but somehow, that’s a problem.

That Palumbo sounds like a Republican on this issue isn’t surprising when you consider that the Democratic party in Seattle isn’t for jobs anymore and socialists are tipping the political scale further and further away from the basic notion, supported by Democrats since the 1930’s, that jobs are the path out of poverty and economic collapse.

I have no strong opinion about Democrat Mankha Dhingra, the candidate poised to win a State Senate seat in the state’s 45th district, currently controlled by the Republicans. I have not paid close attention to the details of the race, and like most everyone else recognize that a win by Dhingra means that Democrats will control both houses of the legislature. That’s a big problem for housing policy in the state and in Seattle; legislative Democrats are more conservative, generally, than Seattle Democrats. But having their hands on the levers of power, unchecked, could spell trouble on a wide range of issues and certainly no progress on key issues like trying to figure out why non-profit, subsidized housing, is so unbelievably expensive.

That’s why Senator Palumbo’s role is going to be so critical. Palumbo is a moderate, who supports charter schools and who worked at Amazon. He has demonstrated independence, and he likes data. Those of us in Seattle hoping to at least quarantine the outbreak of a virulent strain of socialism that has infected City Hall are going to have work with both Republicans and Democrats outside the city. The razor thin majority held by the Democrats in the Senate means the moderate and thoughtful Palumbo has leverage over the Senate, and thus over the whole process. Palumbo is principled, but pragmatic. I think he’ll hold the line on efforts to make things worse for jobs and housing in Seattle and, perhaps, work affirmatively to tie the hands of a City government that is increasingly irresponsible and dangerous.

It’s Time for the Seattle Chamber to Stop Supporting the City Council

So Amazon is now making noises about moving. It’s no wonder, since we have a Council and a Mayor who have fallen all over themselves trying to appease lefties, progressives, socialists, and even communists who think all housing should be run by the government. Yet I read in Publicola that the Seattle Chamber of Commerce is now concerned about all this. That’s weird. They endorsed all these people. And they endorsed Jenny Durkan who is handing out money for free college. Where’s that money coming from? I think Chamber CEO Maud Daudon is about one of the smartest people in town. I even wanted HER to run for Mayor (see my post in Crosscut). It’s time for the Chamber to get real about what Daudon is saying: the Chamber should unendorse the Councilmembers it supported. Symbolic, I know. But it would send a real message. 

Hello Maud,

Ironic seems like the right word. Maybe sad? I don’t know. What do you think?

You were quoted as saying this by Publicola

Chamber of Commerce CEO Maud Daudon said the city has implemented policies that are “at best unfriendly, at worst, outright hostile toward the needs of our largest employers.”

It’s actually kind of funny, I guess, in a peculiar way. The Chamber has consistently supported this Council with the exception of O’Brien, Sawant, and Herbold.

However, all the members you endorsed fell over themselves to pass the scheduling legislation (and other “hostile” policies). What exactly do you say to Councilmember Bagshaw, for example, about that vote? How did you hold Councilmember Burgess accountable? What about Harrell? Is it working?

We tried a few years ago to work with the Chamber. I was more or less uninvited from the CASE meetings by George Allen.

I had members of our group get very upset about the fact that we were mixing with the “downtown people.” Our folks suspected that the Chamber was not supportive of their businesses and that it would abandon them when pressed.

I am pretty sure you’ve supported Mandatory Inclusionary Zoning(MIZ), which is going to have a devastating impact on small and medium sized builders, the builders who build the vast majority of housing in the city.

I wouldn’t be writing this if I had seen the Chamber make a much harsher and public critique of the total abandonment of good economic principles by the Council. And I wouldn’t be writing this if you hadn’t said anything or said that the business community shared the blame for the Amazon situation by coddling the Council and not acting sooner.

But you spoke as if these people were somehow completely out of your influence.

It’s not too late. We need to see the Chamber get more active in opposing these bad policies, including MIZ, a policy that make many projects infeasible, will have an inflationary affect on the housing economy, and, in the end, is completely illegal. We need your help!

Kshama Sawant isn’t the problem. It’s the lack of spine from her colleagues, a condition that has been helped along by the wider business community that has not heaped disapprobation on them for voting along with her, again, and again, and again.

I have to be blunt. We’re running out of time. And if this trend continues with the next Mayor, whoever she is, we’re doomed to have higher and higher housing prices and this group of Councilmembers will respond with even more inflationary policies. Our city is really teetering on the edge.

Roger–

Redmond Mayor Marchione Shows Us What Success Would Look Like

A week ago I was able to get over to the Master Builders Association mixer in Redmond. It had been a while since I had visited the city and the lure of Jack’s Bar-B-Que and connecting with some builders added to the reasons to take the trip over the bridge. I ended up being impressed with Redmond’s Mayor, John Marchione who spoke at the event. Here’s part of what he said:

We’re always trying to work with our customers and make things work well because you know if we’re going to have housing be anymore affordable we’ve got to make things predictable so you guys can predict, so the market can predict, and so we can have that dream. So, thank you all for being part of building the plans that us cities imagine and being a part of building that dream that vision that we keep out there.

You might remember I wrote about the things keeping us stuck when it comes to housing policy and also about what things we could as a community and industry to change the way people think about housing. Today in Seattle we’re still arguing over whether supply and demand is a real thing and how much “profit” people who build housing should make. In Seattle, developers are very much see as the problem. What we need is research and communications that will shift people’s conceptual framework: when prices go up that means we need more. And well meaning left leaning people would see that blocking growth is just as bad as Donald Trump repealing DACA.

What was powerful about Marchione’s comments was they were delivered matter of factly to a crowd of housing builders. He highlighted predictability and how builders actually make the city happen. Builders aren’t just building housing, they are helping other people build their own dreams whether it is a new home, a job, or a city trying to fulfill its planning objectives.

The fact that Marchione would even show up and say these words out loud is shocking when compared to his elected counterparts in Seattle that want builders to “pay their share” and are making things more unpredictable every day with haphazard rule making, fees, and trying to tax new housing.

My dream is not so much that builders and developers be lauded as the solution to the challenges of housing policy but as part of the solution. The Seattle City Council and Mayor don’t seem to recognize the value of new housing; instead they see it as an impact, something that makes no sense considering housing is scarce in Seattle.

When I heard Marchione’s words I had to imagine how different and better things would be in our city if we had leadership that could be collaborative with us rather than ignoring the expertise builders have at best, and at worst making them out to be villains. When elected officials in Seattle sound like Marchione, I will know our housing “crisis” is over.

Photo is of what I call the Tipsy Cow Building in Downtown Redmond. 

The Seattle Times Responds

I sent a critical letter on a recent op-ed in the Seattle Times challenging the use of a picture. As I say in my follow up to this response, maybe I’m paranoid. Maybe I’ve been doing this too long. But the Times’ Mark Higgins responded in a very complete manner and I followed up with him. I think we do need a full and more in depth dialogue on these topics to move things in a better direction. 

Hi Roger,

Thanks for writing to us and sharing your feelings about our coverage of real estate and your concern about a recent Op-Ed.  You raise some legitimate points and questions, and I appreciated your ideas and openness on future coverage.

I can only speak to your concern about how we illustrated the Op-Ed and not to your larger issue about overall newsroom coverage. I hear what you’re saying and would urge you to reach out to City Editor Matt Kreamer or Business Editor Rami Grunbaum (who edits our real estate coverage). And as you mentioned in your email, you and I did just recently work to publish an Op-Ed that you wrote. I look forward to working with you again.

You’re right, too, that it would have been ideal had we sent a photographer out to Jade O’Neil’s house. However, given our time and limited staffing, that was not possible. When situations like that occur, we look for options to illustrate our work. Ms. O’Neil sent me a photo of her and her daughter, at my request, but the image was not quite right. By way of background, so that you know we don’t take these matters lightly, before we use any staff photo we turn to our Photo Editor(s) to discuss the appropriateness of pairing an image with our opinion pieces. In this case, the Photo Editor agreed with me that, in this case, it was fine to do so.

Respectfully, I disagree with your statements regarding the use of the photo we ran with O’Neil’s Op-Ed. In the 500 or so comments on the piece, I don’t recall seeing a single honest expression of confusion as to whether the house pictured was tied to the incident Ms. O’Neil described. The cutline made that clear.

Your statement that including the photo of the new homes going up in the CD is somehow an indictment of all such housing is, well, ludicrous. As Ms. O’Neil wrote in her Op-Ed, it’s the pace of change that has so rattled Seattle residents. Just read the comment stream. As older homes are bulldozed and new, often larger homes erected, the fabric of our neighborhoods are changing and that is certainly true of the CD, where many long-time families have chosen to move farther south, as this newspaper has documented in multiple stories. As Ms. O’Neil wrote, “Today, it’s different. I’m raising my family here, but sometimes it’s hard to feel at home.”

With tens of thousands of new housing units going up, and as house builders seek new opportunities across the city, this topic of growth and change will be debated and analyzed for months if not years to come. I’m happy to work with you and your clients as we document that profound change and the issues and opportunities that accompany it.

Best,

 

Mark

Mark Higgins | Deputy Opinion Page Editor | THE SEATTLE T I M ES

206.464.2094 |@markhiggins | mhiggins@seattletimes.com

 

Hello Mark,

Thank you very much for the thoughtful and complete response. I know you get lots of helpful advice about how to do your job, so I also appreciate your patience.
I think you addressed the concerns and I will concede that as a person who spends just about my whole life immersed in this issue, the economics and politics of housing and growth in Seattle, I have a very high level of sensitivity to the relationship between what is covered as news, what local papers and writers say as opinion, and how these things interact with policy. So maybe I am just paranoid.
I think we’ll just have to disagree about the picture’s importance in terms of the broad generalization that new housing is the problem. You said,

it’s the pace of change that has so rattled Seattle residents. Just read the comment stream. As older homes are bulldozed and new, often larger homes erected, the fabric of our neighborhoods are changing and that is certainly true of the CD, where many long-time families have chosen to move farther south, as this newspaper has documented in multiple stories.

But let’s consider climate change for a minute as an analogy. Many doubters will point to a weather event (e.g. snow in June in Wyoming) as proof positive that there is no climate change or global warming. It sure does feel cold and I can see the snow, but wider trends indicate something different. Small shifts and aberrations in weather outside my window will confirm my bias. But what is going on beyond what I see and feel.
My issue with coverage broadly is that to write stories about a family that moved, even when placed in the context of data, tends to reenforce the idea that massive numbers of black people are being “forced out” of neighborhoods because we’re building more housing. I can just about assure you that that contention is false. If you read my Forbes article our city is changing, but there is zero quantitative data to support the statement “black people are being forced out of Seattle because white people are moving in.”
Framing matters in these issues. What’s really going on is that populations are, indeed, redistributing themselves as many factors change.  What I’d like to do is engage with your ed board and reporters in a discussion, perhaps a series of meetings, with people who research and build housing  (not just me) on the following issues.
  • Gentrification and displacement — I have yet to see a sustained and peer reviewed definition of these terms, and I have yet to see a way to measure them quantitatively. It is simply irresponsible to use these terms in the discussion without first asking what they are and how to measure them. Something is going on, but what? Are these terms about the feelings about the disutility of change versus an actual consequence of policy? Is it appropriate or even ethical to create a normative standard of racial mix in a set of census tracts? What is the correct racial mix and ratio of white people to other people?
  • It’s too hard to build — I am sure you believe in supply and demand. Again, I don’t want the Seattle Times to agree with our point of view, but each aspect of this issue and story would greatly benefit if you could hear from actual builders about the hassles and difficulty of getting their product to market. If we were talking about a food shortage, the front page of your paper would be frequented by stories about the many hurdles, mostly political and bureaucratic, that a slowing down the production of and thus boosting the price of food in grocery stores.
  • The high costs of non-profit subsidized housing — As I pointed out, this is worthy of investigation. And as I have only partially joked with reporters, it’s an award winning story. I want to point out, that the Chair of the Mayor’s HALA Committee, Faith Pettis is an attorney that make millions of dollars from transactions related to tax credit non-profit housing, the very thing that her committee advised needed more money from our builders to sustain. That’s a big story. If Jack McCullough had been chair of that committee, you would have written about the conflict. We need to shine a light on how the non-profit industry is driving policy in a very unhelpful way. Again, that’s my opinion, but it’s worth a story or two or three.
  • What are the solutions? — Obviously we all want to answer these questions. And I have appreciated the Seattle Times’ efforts over the last several years to create a dialogue on this topic. We need more. And frankly we need help. Today, the dialogue is taking place in a largely unmediated and unfacilitated political arena dominated by Kshama Sawant and her allies. People in the community concerned about this issue are being offered demagoguery and promises about lowering their rent and policies are being considered and implemented without any consideration or consultation with people who build and operate housing. We must widen the menu options for the community to consider.
I’ll repeat: I’m not trying to make the Seattle Times “pro-developer.” The truth is that the person on the street likely already believes you, the City, and the elected officials already are “pro-developer.” This makes our job much more difficult and frustrating because we are in a cycle in which we are blamed for high prices, displacement, and anecdotal stories of pain while at the same time we have almost no influence over the process, media, or the larger public discussion. We’ve got the worst of both worlds.
Let me know if you’re interested in a get together on any of the topics I mentioned.
Roger–