Moon and Durkan: Neither Candidate Has What We Need for More Housing

I’ve got some good news and some bad news. We’ve looked at 21 resumes, done the interviews, and winnowed it down to two candidates. The bad news is that when it comes to housing, neither of the finalist are qualified. We’re gonna have to open up the position again. That’s what I’d do if I was the hiring manager bringing on a new Mayor after watching the two final candidates, Jenny Durkan and Cary Moon, answer questions about housing in a recent debate on KOMO. The Seattle Times has the whole debate on line. Let’s look at two key answers to see why we have to go back to the drawing board.

The question is what would you do about housing prices?

Here’s part of Durkan’s answer:

We could make almost every single-family lot into a triplex over night. But we’re having impediments. We need to make it a priority and the Mayor needs to say to the zoning and housing people we’re gonna speed up affordable housing, we’re gonna give people the ability to have density and then we’ll move forward.

Does Durkan really want to turn every single-family lot into a triplex over night? I doubt it. Not even advocates for densifying single-family neighborhoods have said anything like that. And if she really did, how would she accomplish such a technically and politically ambitious goal? She acknowledges that we have “impediments.” Like deep and ugly opposition to density among single-family homeowners who have convinced the City Council, in succession, to stop development of single-family homes in single-family zones with crushing legislation ending small-lot development, legislation ending congregate microhousing, and legislation essentially downzoning low-rise zones, zones that already allow the so called “missing middle” housing in Seattle. It isn’t missing, it’s just really hard and expensive to build with growing regulatory requirements like water main extension and many others. And there is more coming, like Mandatory Inclusionary Zoning, impact fees, and more design review.

How would Mayor Durkan overcome these “impediments?” She would talk to the “zoning and housing people.” Who are the zoning and housing people? I can just imagine Mayor Durkan on her first day in office asking, “Let’s go talk with those zoning and housing people. Where are they anyway?” Well, Mayor, they work for you. And what in the world does, “speed up affordable housing” in this context mean? Putting rocket boosters on an Seattle Housing Authority high rise? Clearly Durkan is just tossing a very special housing word salad. The recipe is “affordable housing” with “duplex and triplex” and a dash of “zoning” tossed vigorously with “speed.” Durkan simply doesn’t know the housing issue and doesn’t want to get any better. But she is doing a great Casey Stengel impression.

How about Moon’s response.

This housing market with these steep price escalations, rising twice as fast as any other city in the country, is simply not natural. There’s something happening in our housing market that we need to understand and it’s speculation and we need to look at the data the shows exactly the dynamic and put in the right disincentive to stop it.

Hmmm. Something happening. Something not natural. Something terrifying. Something not of this Earth! Run for the hills!

Of course Moon is speaking of THEM, the evil cabal of foreign investors mostly from China who are pouring vast amounts of capital into Seattle, buying up lots of housing, emptying it out and leaving it empty. Except this isn’t happening. And I was profoundly disappointed first to hear Moon still rambling about this nonsense, but in such conspiratorial terms. Not natural? How bizarre. Of course it’s natural: it’s called supply and demand. See, if you have a lot of people wanting something, and there isn’t a lot of that thing, well….well. Well, forget it. Moon isn’t listening. I would have been satisfied had she spoken of the need to gather more data and to figure out if there is a “speculation” problem. But her ranking that as the first thing she’d do and her weird conspiracy take means she’s still not connected to how the housing economy works.

So on the one hand we have a candidate, Jenny Durkan who knows nothing about housing economics and is doing her best to say lots of words that make people think she does, and another candidate who seems to know about housing but has all the wrong ideas. Neither candidate has evolved or shown any interest in talking with people who actually build housing in the city. Maybe Durkan really is looking for those, “housing and zoning people.” Well, we’re here! And I suppose Moon will keep looking for Bigfoot. In either case neither candidate has demonstrated an ability to get to the main problem we have in Seattle with housing: we’re not making enough. And if we are going to be smart about subsidies we need to make sure that we don’t boost the price of market housing so high with overreaching regulation that people making $100,000 qualify for assistance. It’s actually pretty simple: build more, then build even more, then build more than that. Whoever is still struggling with housing costs after that gets lots of help.

 

 

 

McNellis on Housing: It’s Not About More Money but Fewer Rules

A while back at a Urban Land Institute event I had a chance to meet John McNellis who writes brilliantly on housing in California. He’s singing my song yet again in his review of a bunch of legislation recently passed by the California legislature. I didn’t need to know a lot about the legislation to know that I agree with his assessment in the headline: it is a band aid. It always will be, mostly, from west coast legislatures that are controlled by Democrats.

When you don’t believe the market works, it becomes about wringing money out of market rate development. Always. It’s what distinguishes a true believer and a market skeptic. You can read my post about worries about lowering prices resulting in higher profits not lower prices. When a person doesn’t believe that reducing costs will lower prices, they always want more money for subsidized housing. Always.

It is not about more money. It’s about too many rules and pandering to the angry neighbors. Period. McNellis says:

To solve the housing crisis, the state needs to encourage market-rate housing through streamlining the zoning process, pay for low-income housing through general taxation and stand up to all of those who would either prevent new housing or render its cost prohibitive.

And those out there who always want to throw a bone to the non-profit housing industrial complex, go ahead and throw it. But that bone should be widely distributed taxes on property, particularly taxes on inefficient use of land, like large lots of single-family housing in the city. If you want to redistribute some wealth, take it from where it is: single-family neighborhoods. Otherwise all we’re doing is making the problem worse, adding costs, slowing production and then wondering why prices keep going up.

Master Builders Association Housing Summit is on October 17

The annual Housing Summit convened by the Master Builders Association (MBA) is next week, October 17th. Here are the details:

Tuesday, October 17, 2017 – 7:30 AM to 11:30 AM
Meydenbauer Center,Bellevue
Your Price: $0.00

For more information on the agenda you can find more and register at attend at the MBA website. Here is a commercial highlighting the event as well.

Built Green 2017: Panel Highlights Mayor, Council Races

A little less than a month ago I caught part of a panel discussion between candidates for Mayor of Seattle and for the seat on the City Council formerly held by interim Mayor Tim Burgess. There wasn’t anything shocking in the exchanges I saw and I didn’t hear much about housing economics that corresponded with what I know is true: we need more housing in Seattle. I’ve heard a lot of local political debate over the years. Candidates nervously, sometimes, try to deal with issues they know are big with their audience. Other times they go for applause lines. My overall impression is that both candidates weren’t in their element. At one point Jenny Durkan, the supposedly pro-businees candidate talked about condominium development and said the problem with condo liability laws was shoddy builders, or words to that effect. There was no audible gasp, but I shook my head. Neither candidate for Mayor seems to understand the difficult job of getting housing to the market place efficiently. I’m posting panel for your consideration. The election is just about a month away.

FRONTLINE Documentary is an Important Warning

The PBS investigative program FRONTLINE has an important film about the runaway prosecution of a Chinese family bank that is worth your time to watch. The reason I suggest it, is that it presages what might happen in Seattle if the obsession about foreign investor being behind rising housing prices. I’ve written about this before here and at Forbes. It is truly bizarre to see Seattle liberals who bash President Trump’s immigration policies indulging in paranoid speculation about Chinese money being “parked” in Seattle. The notion that foreign investors are buying up housing, taking it off the market, then leaving it empty is absurd; in order for it to account for a small up tick in price would require thousands of units being bought this way. If we’re not careful, we could end up seeing immigrant communities targeted unfairly. It’s yet another example of the lengths some people will go deny the basic fact of supply and demand; want prices to go down, just let us build more!

The film is the featured video above the headline and you can also watch it here: