Hold the Date: How to Build Support for More Housing in Seattle
“How to Build Support for More Housing in Seattle: Advocacy and Grassroots Organizing”
McCormick & Schmick’s Harborside Restaurant
1200 Westlake Ave N, Seattle, WA 98109
Thursday, April 28, 2016 | 6:00 – 8:30 PM
Join Roger Valdez, Director of Smart Growth Seattle, and Sonja Trauss, principal at the San Francisco Bay Area Renters’ Federation (SF BARF) to hear about the latest trends in efforts to increase housing supply in Seattle and the Bay Area.
Trauss leads a grass roots group that agitates in favor of market rate development, because increasing supply is the only way out of San Francisco’s housing problem. Trauss argues that the cause of current housing shortages and the resulting high prices isn’t technological (we know how to build) and it’s not financial (investors are clamoring to invest in the Bay Area). The current shortage and high prices are 100% political. SF BARF has lead petition drives and other actions to protest efforts to limit housing supply in the Bay Area.
Valdez leads efforts in Seattle against policies that increase the costs of housing and reduce housing choice and opportunity. Smart Growth Seattle advocates for more housing of all types, in all parts of the city for people of all levels of income. He was the leading opponent to legislation passed by the Seattle City Council that outlawed many small-lot single-family developments and microhousing. Valdez is the leading skeptic of the so called, Grand Bargain, a mandatory inclusionary zoning scheme that would increase the price of housing, make many projects infeasible, and is likely against State law.
Register now at mbaks.com or call 425-451-792
Facebook: Another Conversation About Markets and Housing
There two things that cause some of us no end of frustration: really smart people mischaracterizing the views of a market approach to addressing housing issues and an odd misunderstanding of what a market is and how it works. In the first case, nobody I know makes the argument that drastically deregulating the housing market will end homelessness or even ensure that every person in Seattle will have housing that is affordable based on the current system of measuring affordability. But it is often pointed out as a weakness of supporting increases in supply that doing that won’t solve the most intractable problems in meeting housing need. But nobody says that and the fact that the market can’t solve those problems all by itself isn’t an argument that the market, supply and demand doesn’t exist.
In the second case, lots of people get muddled up. Here’s part of a Facebook exchange including noted writer for the Stranger Charles Mudede.
The history of capitalism, and financial capitalism, has not been about supply and demand but booms and busts.
What an odd statement. Here’s what I said in response.
Boom and bust is simply another way of expressing the cyclical nature of supply and demand; it’s hardly an argument that supply and demand don’t exist.
Somehow people who want to punish and tax new development because they see it as somehow destructive think that arguing that supply and demand doesn’t work or doesn’t really work to explain housing prices think that making that argument successfully will end the debate; we should tax and limit housing which drives up costs and redistribute the money we collect to build more housing. Allowing the market to produce as much housing as it can is simply a sanctioning of greed and higher profits for a few.
Of course this is folly. As I pointed out before, even if we said housing is a right to a product to be bought and sold, we’d still need to build more of it. Think about it. Let’s say we lived in a socialist run economy in which every person who lived in worked in Seattle was entitled by law to 500 square feet of housing, that housing would still have to be built. Imagine if job growth was booming and thousands were coming to the city, if the supply of the entitlement didn’t keep up with people who qualified the price wouldn’t go up, since there is no price on housing. But the scarcity would mean that people would have to wait longer and longer for what the law said they were entitled to. How to solve that problem? Build more housing!
I wish that those who wade the intellectual discussion about housing would stop arguing about supply and demand. That’s over. The question is how do we create the increase in supply. Anything less than rolling up our sleeves and solving that problem, including figuring out how to punish people who build housing, is a waste of time.
Here’s the whole exchange and I suggested that everyone on the thread watch Ray Diallo’s brilliant video that explains exactly what a market is and how it works. It’s worth watching over again if you’ve already seen it.
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Charles Mudede The market system in this situation is going to explode in our faces. I really do not know why this can’t be seen. Market urbanism is pure utopianism. Density without laissez faire, that’s what we need. Even Ruth Glass knew this.
Like · Reply · 1 · March 26 at 6:40pm
Shane Phillips replied · 2 Replies
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Nate Cormier And what other ways do you see us getting to density…real climate helping, transit and walking, obesity reducing density…without building a lot more housing? And if you agree with building a lot more housing how do we get it other than via the market? Many of us who want to roll back exclusionary zoning also want public housing and publicly financed rental subsidies for folks that can’t make it alone to have help, but the amount of housing we need to really move the needle on urban form and settlement patterns and to make so much of it that it returns to prices that are broadly affordable will need to happen primarily through private investment.
Like · Reply · 2 · March 26 at 10:53pm · Edited
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Charles Mudede But I’m not against building. I’m very much for it. What I do not get is why construction growth has to be left to or dominated by the market forces.
Like · Reply · Yesterday at 5:38pm · Edited
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Nate Cormier I don’t think we can leave it at that, and most of the progressive urbanists I know, even Roger Valdez who would probably shrink from either term haha, have expressed the same. We think that the market should not be constrained by exclusionary zoning and then we as a society should also look for ways to take care of those left behind…SHA style public housing, rent vouchers for low income people, rolling back mortgage interest tax deductions for the rich and giving that instead to folks who can’t afford housing, and on and on. All the folks we always link to…Daniel Hertz, for example…go on and on about these kinds of alternatives to the misguided notions of exclusionary zoning and rent control as ways to achieve affordable housing. Unfortunately, our desire to eat the rich gets in our way and we end up as a society screwing over the most vulnerable and helping the most wealthy with the wrong policies.
Like · Reply · 1 · Yesterday at 5:39pm · Edited
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Charles Mudede I totally understand the zoning issue, and how zoning has this racial dimension and how it made these awful cities we now live in. We speak of the war on cars now, but this history of zoning has been a war on cities, or what cities really mean. So, I’m there with you. Where I part is on the market and its role in development. The laws of supply and demand do not hold without the intervention and management of the state.
Like · Reply · 1 · Yesterday at 5:46pm
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Nate Cormier So, what does that state intervention mean if not zoning…I think I’m understand that you are also exclusionary zoning…? And does it lead to lots more housing happening or does it reduce the “natural” (not constrained by EZ) rate of housing production?
Like · Reply · 1 · Yesterday at 5:48pm
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Charles Mudede The reason why zoning is the way it is is a lot of middle-class white people want to protect their home values. And with good reason: wages have been stagnant over the past 40 years. Solving the issue of zoning will still leave us with the problem ofwages and what is known as “secular stagnation.” Inflated asset values are the only game in town in the age of oversupply. The Schumpeterian entrepreneurialism celebrated by Forbes is a myth or thing of the past. What else is quantitative easing but asset price inflation. This is the market you speak of.
Like · Reply · Yesterday at 5:59pm · Edited
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Nate Cormier So are you for or against exclusionary zoning? Before I thought you agreed it is racist and only enriching incumbent landowners, but this answer sounds more ambivalent…
Like · Reply · Yesterday at 6:08pm
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Nate Cormier I agree with most of your concerns about an unregulated market and could see lots of ways we can attempt redistribution, but exclusionary zoning isn’t doing that. It is having the opposite effect.
Like · Reply · 2 · Yesterday at 6:10pm
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Charles Mudede In my opinion, land-use regulations as they are now must be seen in the context of the market. to challenge them is indeed to challenge the market. maybe we all need to figure what we mean by: market.
Like · Reply · 1 · Yesterday at 6:16pm
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Nate Cormier Ok, press on with the semantics. I’ve always been a bit quick to jump to the application…must be my short attention span. Wake me when there is a policy proposal to which I can react
smile emoticon
Like · Reply · 1 · Yesterday at 6:25pm
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Roger Valdez Nate Cormier you’re right, I don’t like either term. But why can’t people–even geniuses like Charles get that nobody –especially not me– is saying building is the monopoly of the private sector. I’ve embraced Sawant’s idea of using our public debt to build on City owned land. The City could do that. But even she hasn’t pursued the idea. The market always fails at the margins, and that’s where the government can level up the basic for the poor.
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Michael Cornell The answer is, and always has been about SUPPLY. More housing supply eases price increases.
Like · Reply · Yesterday at 12:30am
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Dan Bertolet i’m guessing that the blow up Charles is alluding to is the current housing market situation in vancouver, yes charles?
Like · Reply · Yesterday at 5:25pm
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Charles Mudede The history of capitalism, and financial capitalism, has not been about supply and demand but booms and busts. This is not a controversial thing to say. It is understood that markets, in the financial sense (meaning, the dominant sense), and housing isdeeply financial because most need to borrow to purchase property, prefer booms and busts to the utopia of supply and demand. this is in the record. i do not get why this fact is ignored or why we think the boom/bust model can provide the good we all want: density
Like · Reply · 1 · Yesterday at 5:39pm · Edited
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Nate Cormier So what other mechanisms besides private investment are you suggesting will get us massive amounts of new housing? I’m open to other ideas and can see lots of publicly financed or subsidized channels adding supply as well…just hard to imagine them happening at the pace we need, especially if we continue to have much of the organic supply constrained by exclusionary zoning.
Like · Reply · 1 · Yesterday at 5:43pm
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Dan Bertolet Hmm, isn’t the boom/bust cycle of real estate development what created the high density we already have in places like NYC?
Like · Reply · Yesterday at 5:45pm
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Charles Mudede In philosophy, we have a name for this kind of thinking: accelerationism. I’m in the school that believes you can have growth without the pain of busts, which always (or often) lead to a concentration of wealth.
Like · Reply · 1 · Yesterday at 5:50pm · Edited
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Roger Valdez Boom and bust is simply another way of expressing the cyclical nature of supply and demand; it’s hardly an argument that supply and demand don’t exist.
Like · Reply · 17 mins
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Dan Bertolet Charles Mudede: “Tighter land use regulations may exacerbate house price bubbles. Gyourko, Glaeser, and Saiz (2008) demonstrate that cities with more restrictive zoning and thus a more inelastic housing supply have historically been more likely to experience house price bubbles and that these episodes of elevated prices tend to last longer.”
https://www.whitehouse.gov/…/20151120_barriers_shared…
Like · Reply · 1 hr
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Roger Valdez I know it’s longer than a snapchat video or IG video. It’s almost as long as an episode of MASH. Anyway maybe this will help.
https://www.youtube.com/watch?v=PHe0bXAIuk0
How The Economic Machine Works by Ray Dalio
Housing Economics: What Made Me an Un-Democrat
As I sat in my usual coffee shop Saturday I could help but feel a little left out. I kept hearing, “On my way to the caucus!” and “Yep, heading for the caucus!” Well, I wasn’t. And it wasn’t because I don’t care about presidential politics. Of course I’m interested. But for me to show up to a Democratic meeting of any kind in Seattle these days would be kind of like Banquo showing up to Macbeth’s dinner party — an unwelcoming haunting by someone thought long gone. You see, my views on housing economics have made me an Un-Democrat. Here’s why.
People often don’t get that I was a die hard Democrat. In fact, I was a delegate for Jerry Brown to the 1992 Democratic Convention at Madison Square Garden in New York City. We were, essentially, the same tie-dyed, socialist leaning, anti-establishment crowd now rallying around Bernie Sanders. We stood on chairs on the convention floor yelling, “Let Jerry speak!” until we were hoarse. I remember going to cool parties sponsored by The Nation and rubbing shoulders with Tom Hayden. Yes. Tom Hayden! I even sat next to Oliver Stone on the convention floor for awhile.
Later, when I moved back to Washington after graduate school in California I worked, like all Democrats, to stop anti-gay initiatives, opposed efforts to repeal affirmative action, and for expanded health care and housing for Farmworkers. When I ran for the State Legislature I campaigned FOR a statewide income tax, the first Democrat to actually run for office on that idea (now I wonder, “Why do we tax work?”) No one would touch it, including my opponent who was opposed to an income tax even though it was part of the party platform. Here’s what the Seattle Times said when they endorsed me:
Valdez is too bullish on an income tax as a solution to the state’s economic woes. He needs to focus on what’s do-able rather than academic or theoretical. Still, he is the best of five seeking an open seat created by redistricting.
Too bullish! There he goes again. I was a lefty on tax policy when being a lefty wasn’t cool. So what changed?
It’s all right there in the cafe. I get to my spot when the place opens, and I watch as the lines for coffee and crepes get longer, and longer. Soon the line is out the door of the small cafe. I watch the despair and let down of individuals and families hoping for coffee and breakfast who say, “The line’s too long!” Then they start thinking of alternatives and walk away. There’s a margin at the end of a long line for anything that falls away, gives up. Either they don’t get anything or they walk up the street to Starbucks. The supply of labor and space in the shop simply can’t meet the demand, so the price in waiting time “skyrockets,” and people on a schedule simply have to move on or go without.
Hardly a tragedy. But this is the story of housing in our city. Not enough supply. I have heard the stories of people who are at the end of that line. Instead of coffee options, they have to decide whether to pay more for less housing in Seattle where they want to live or give up and move somewhere else, like a Starbucks suburb. Like the people waiting in line, their wait isn’t because of a greedy business owner but by the constraints of space and what’s available. If you want less lines for coffee, then build more coffee shops; if you want lower housing prices, then build more housing.
But Democrats in Seattle don’t see it that way. They rail against the cafe owner. Somehow he should make the wait shorter. They’d impose a mandate to expand into the neighboring space, hire more staff, and reduce the wait time of people who qualify for faster service. This Mandatory Inclusionary Coffee scheme would be managed and operated by the city and, of course, paid for by all the profits the coffee shop owner would get from all the extra coffee he’d sell. And forget about the fact that the expansion wouldn’t get financing because even with marginally more coffee sales, the revenue wouldn’t cover the loan payments for the remodel or the expense of the lengthy permitting process.
Silly isn’t it. If it wasn’t so serious it would be funny, but this is exactly how local left leaning progressives think: it’s always the private sector’s fault and gouging when prices go up, never a function of regulatory and other limits on production. Never mind that even if housing was a right, as many on the left claim that it is, rather than a commodity, we’d still need MORE housing to accommodate growth. Nothing would change about the nature of the demand for something that isn’t available. Scarcity is scarcity whether you’re a socialist or a capitalist, and the solution is the same too: make more!
But all this is lost on the local lefty hegemony. On the contrary, they argue, allowing more housing would actually make it more expensive and line the pockets of the evil corporations and the one percenters. Of course not every Democrat in Seattle sees it that way, but enough to make it the dominant view. And that view becomes policy and makes things worse for people at the end of the line, fueling more unhappiness, poverty, and then more bad policy.
I can’t look at the disappointment on the faces of people at the end of the line and blame the private sector. I blame the frustration of under housed and over spent people on a ideological view that can’t hold two ideas together at the same time: the need for compassion for people with less on the one hand, and the reality of supply and demand on the other. Of course we need subsidies. But penalizing builders of housing doesn’t help people with less. It doesn’t and never will. So I’m no longer a Democrat I guess. But, as Georg Lukacs wrote of Lenin’s prescient view of political party discipline,
If the party is not capable of immediately adjusting its interpretation to the ever-changing situation, it lags behind, follows instead of leads, loses contact with the masses and disintegrates.
No party or policy with compassion as its core principle ought to let ideology interfere with what actually works to make life better for real people, or if risks irrelevance and oblivion. Real leadership in the party would find the nexus of how compassion and the market can work together.
Councilmember Johnson: Should We Be Optimistic or Pessimistic About Neighborhoods
Last week I did a presentation and moderated a panel with new City Councilmember Rob Johnson. The slides I used to set up the panel are above. Basically I told a story about how politics and the need for a victim (renters), a villain (builders and developers), and a hero (politicians) has over shaped and impacted our discussion on housing. As I pointed out last week too, stories matter. My view is decidedly pessimistic. I see the Council influenced too much by angry neighbors looking out for their own property values by keeping new people out with lots of red herrings about design and height and parking; they just don’t want anything to change. Ironically, they often use high rents (caused by their resistance to new housing) as the basis of making their case the builders of housing are greedy. Put all this together and you get a recipe for more and more rules, taxes, fees, and limits to new housing and higher rents. Then repeat. It’s what I call the San Francisco Death Spiral.
Johnson sees it another way. He is more optimistic about what’s going to happen as Mandatory Inclusionary Zoning (MIZ) makes its way through the neighborhoods. He’s optimistic.
- The last election (including his) didn’t reward anti-growthers with any significant wins. In fact, Johnson argues, there was an explicit rejection of NIMBYism; some candidates ran on it and outright lost because of that view;
- Johnson thinks the neighborhood world is divided into thirds, with one third being mostly anti-growth, a third being open to it depending on what it is and where it is, and a third that genuinely embrace growth; and
- Johnson sees the apparent fervor of support for the broader Housing Affordability and Livability Agenda (HALA) recommendations as being a sign, also, that the city at large wants to support growth.
I had to say at the panel that I totally disagree. While his first point is demonstrably true–NIMBY candidates running on that platform lost–he’s missing the fact that district elections mean that Councilmembers are going to have a lot more pressure from a smaller, more neighborhood specific perspective making demands on them. While Councilmembers might play off opposition in their district by casting a losing vote on something local but also knowing the outcome because of yes votes from other districts, that may not always work; this is especially true of the area wide upzones called for in the Grand Bargain. Neighbors showed support last year not for upzones but for downzones; either the Council was just plain wrong to listen to those people (Johnson’s NIMBY third) or those same people will be out in force to oppose the Grand Bargain. Will there be enough support from everyone else to give Councilmember’s comfort to proceed anyway, undoing what they did just last year?
I tend to agree that, for the most part, there is a hard core of support for growth and a hard core opposition. I am not sure it so easily divided. One thing the City could do to make this work in favor of good housing policy that welcomes growth, is bring back Neighborhood Development Managers (NDMs). The NDM role was critical in addressing the sometimes small but significant doubts neighbors had about change and growth. Listening to neighbors and getting concessions or compromise from builders through diplomacy was something NDMs could do to turn doubters of growth in to supporters of growth and new housing. But the City isn’t doing that today; mostly the City is pushing unit counts and mandates for rent restrictions, hardly something that will ameliorate the neighborhood concerns about parking, noise, height, and overworked infrastructure.
Lastly, as I have pointed out, I still here people everywhere, even on the panel and out in the wider community, talking about HALA and the Grand Bargain as if they are interchangeable or the same. Many if not most of the vocal and public supporters of upzones are non-profits housing builders and other social service organizations that will see direct cash subsidies from fees paid by downtown developers as part of the bargain. They love the Bargain. But what’s in it for the neighbors? More growth and development, exactly what’s been causing all the friction. Sure people are showing up to meetings and cheering HALA, but are those neighbors? Or are those people who support growth generally and supporters of the non-profits? I can’t say I’ve seen a surge of neighbors enthusiastic about more density because it will include rent restricted units.
I find Councilmember Johnson’s optimism refreshing. In a way, I hope he’s right, not because I think MIZ will work, but because perhaps there is a mostly silent middle in the neighborhoods that is waiting to be tapped. Maybe those folks in the middle, whether it is a third of neighbors or more or less, will show up and cancel out the red herring NIMBYs that have dominated the process. It’s too early to tell. But perhaps that optimism will get more people interested and spark a rebirth of the neighborhood planning movement that died at the end of the 1990s that turned skepticism into support.
Putting Growth in Perspective: Latest Market Up-Date from Mike Scott
I was planning to post this video and I thought about the presentation Mike Scott of Dupre + Scott made to Council on March 14th. I told Scott he has tremendous patience to do presentations about the housing market only to have the data ignored in favor of old census data cobbled together by City staff. And he does, along with an amazing ability to present arcane real estate data in an interesting and even funny and clever way. I only wish that the City would hire Scott to help them make better policy. Until then the rest of us are fortunate to have skills as a resource.
Here are Scott’s slides for that presentation.
