A Global Look at the State of Women in CRE
At Seattle for Growth, we join in celebrating International Women’s Day. In order to advance women’s careers in historically male dominated industries, such as commercial real estate, it is important to have a grasp on where they stand currently. Here is a global look at the position of women in commercial real estate.
Canada
Women represent 37 percent of the overall CRE workforce in Canada. While women have achieved more parity in positions like property and asset management, similar to the US, they fall short in leadership roles. Osler conducted a 2017 report on women in leadership positions at TSX-listed companies in Canada. In the real estate industry, women make up just 16 percent of board directors. Industries with numbers below this are life-sciences, mining, oil, and technology, but others have stronger participation by women suggesting CRE is falling behind compared to other financial sector jobs. One job level down, women in Canada make up 24 percent of executive officers in real estate, still nowhere close to equality.
Hong Kong
The Urban Land Institute conducted a case study on Hong Kongland, one of Asia’s most established property groups. Within the company, there are no women on its management board, but there are a number of women in general manager and senior manager levels, which creates a pipeline for women to advance to higher positions. The company also offers the Jardine Matheson leadership program, reserved for employees who show high potential. The program offers training in special projects in the real estate industry. Iris Chan, an asset manager for Hong Kong Commercial Property participated in the program:
Discussing other key experiences to her success, Chan says that the success of other women at Hongkong Land, and a strong sense of professionalism have sustained her drive. She also notes that the firm can improve in their child care support tools in order to help women further advance in their careers.
Hongkong Land and other firms in the area emphasize the importance of merit. Wendy Chim, a senior property manager at Hongkong Land says, “We advocate equality of men and women. As long as you have a great background and are professional, we’ll give you opportunity.” Offering women skill development opportunities and mentorships has been key at the company, and is also a worldwide trend for women’s advancement in the industry.
Singapore
Paige Mueller, managing director at Eigen10 Advisors and former SVP at GIC Real Estate in Singapore, says that there are many women in CRE in Singapore, but that “the closer you get to money, the fewer women.” Typically, there are higher concentrations of women in property or asset management, but the industry lacks women in investment funds, high-cost brokerage, and venture capital. A large factor of women not reaching senior positions is the pursuit of more family life. In fact, 63.6% of women in real estate in Singapore stay in their positions after marriage, in comparison to men’s 83.8%. Leny Suparman, co-founder of KOP Limited, says that although her journey into luxury development was smooth, she still encounters difficult people during property inspections: “She remembered this one time when the owners brought their dog to the gate to scare them off. “If I was a man, they probably would not have challenged me.”
The United Arab Emirates
In the United Arab Emirates, the pro-business and pro-entrepreneur policies have resulted in more women involvement in the CRE industry. The Khaleej Times interviewed seven women in leadership roles in Dubai’s top real estate and property management firms. Many of the women are not from Dubai, but claim to be based there because of the friendly business environment. Khadija Meziane El Otmani is co-founder of Driven Holiday Homes: “Gender has played the biggest role for El Otmani. When she started Driven Holiday Homes in 2014, she says at first she hired only women because she found it difficult to find men who seemed willing to be managed by women.” She also notes that in the real estate industry, strong-personalities are required to succeed, and as a Muslim woman she has faced bias in this area. Today, her company has achieved gender parity, but Dubai still has much work to do.
With efforts to bring more women into leadership roles in multiple sectors, more parity should be achieved within more industries in Dubai over time. However, the biases and social implications of increased gender parity will be more difficult to overcome.
The United Kingdom
The United Kingdom government conducted a gender pay gap analysis in 2018. They found that in commercial real estate, the pay gap is almost twice as large as the national average. In the U.K., women in CRE experience a 27 percent pay gap, while the average gap is 14%. Additionally, “for the average U.K. company, 40 percent of top quartile earners are female, whereas for commercial property the figure is just 26 percent.” The main reason cited for the gender pay gap in the industry in the U.K. is a higher concentration of men in senior management positions. Of the companies analyzed by the government and Biznow, The Crown Estate is the only company where women are paid more than men. The company noted that three of its four executive committee members are women, and they also have a high proportion of women in senior roles, which would explain the three percent women-leaning pay differential at The Crown Estate.
The United States
In the United States, commercial real estate is a highly male-dominant industry. Women make up 35% of the CRE workforce, with an average pay gap of $115,000 to men’s $150,000. In a 2015 study done by CREW, it was discovered that there is also an aspiration gap in existence between men and women in CRE. They found that 40% of males aspire to reach C-Suite positions, while only 20% of women do. 47% of women aspire to reach SVP/Partner level, but no further. Among barriers to their success, women cite the lack of a sponsor or mentor as being the most significant barrier. In the U.S. women are 54% less likely to have a sponsor, defined as someone who can provide advice and actively help one advance in their career, compared to men.
Layla Khademi is a Master of Science in Real Estate candidate at the University of San Diego School of Business. She received her bachelor’s in business administration, marketing, and finance from Seattle University in 2019. She has blogged for Reed MIDEM’s MIPIM conference, as well as the University of San Diego Burnham-Moores Center for Real Estate. Layla has worked in real estate for the last six years, having roles at both the Seattle University Board of Trustees facilities and technology committee, and at Starbucks’ real estate department. She currently works in multifamily investment and property management in Seattle.
Renters: Rent Control May Not Be As Good As it Sounds
Layla Khademi is a Master of Science in Real Estate candidate at the University of San Diego School of Business. She received her bachelor’s in business administration, marketing, and finance from Seattle University in 2019. She has blogged for Reed MIDEM’s MIPIM conference, as well as the University of San Diego Burnham-Moores Center for Real Estate. Layla has worked in real estate for the last six years, having roles at both the Seattle University Board of Trustees facilities and technology committee, and at Starbucks’ real estate department. She currently works in multifamily investment and property management in Seattle.
The Long-Term Impacts of Rent Control
In the United States, rent controls in parallel with federal price control laws were enacted in 1942. In New York, rent controls were enacted in 1943, and in the 1950’s nearly all rental units in New York were subject to rent control.[1] Many of these units remain coveted and well below market rent while most developers turned to condominiums in lieu of rental units, unsure about the ability to raise rents in the future. Despite rent controls, New York remains as unaffordable as ever, while cities and states ponder new regulations aimed at dealing with the problem of affordable housing.
Another large city to enact rent controls aimed at protecting tenants was Montreal. Montreal first imposed rent control in 1979, providing economists with another long-term experiment on the impacts of rent control on housing affordability. From these two experiments in regulating rents, we can conclude that rent control in a city with an existing housing shortage is nothing short of self-sabotage.
Historically, Montreal’s economy was fairly insulated from the rest of Canada and North America, since its primary language for government and businesses is French. In the 19thand 20thcenturies, it experienced very low population growth rates, but very high rental residential construction, with a lot of investment from the provincial and federal governments.[2]With a stable population, a healthy amount of housing supply, low wages, and low rents, Montreal’s economy was historically stable until 2017, when it began to surge.
When the housing market in Montreal is further analyzed, there is one common trend that contradicts this supposed stability. Rental housing supply has been continuously declining since rent control was enacted some forty years ago. Many rental units have since been converted to condominiums (which have had stable upward growth in the years that rental growth has declined), and there have been more permits issued for the owner market than rental apartments.[3]The city has not seen new apartment development in years, creating a reputation for older, low-quality units. Tenants simply do not have the expectation of finding high quality, recently built rental units in Montreal. In addition to lessened private investment in housing development, the governing bodies also reduced their investment in low-income housing,[4]resulting in a new housing crisis in the 21stcentury.
These market reactions following the imposition of rent control are not specific to Montreal and New York. They have been analyzed and proven by economists time after time, location after location. Analysts from the Seattle City Council Insight, who conducted a study on Montreal’s rent control impact, conclude:
“Montreal is far from the rent-control paradise that advocates suggest, and it was saved from the worst liabilities of its rent-control policy by a long-term investment in housing. But to the extent that Montreal is now “booming,” the problems with rent control are coming home to roost.”[5]
Montreal shows us that even in cities with rent controls and profuse amounts of past public investment in low-income housing, housing shortages still exist in economically thriving cities. In simple terms, the housing shortage in these cities will exist even with rent control, if not more so. In a city with relatively stable population growth, jobs, low wages, and low rents, the main factor responsible for the reduced supply of rental units in Montreal was the imposition of rent control.
Rent controls actually make housing shortages worse, as construction of rental units consistently decline after the regulations are in place, especially if the population continues to grow. However, this policy with a history of never really working, does not seem to be going away, with old and new forms of it still being considered or imposed throughout the globe.
The New Forms of Rent Control
Rent control has been imposed in Europe since WWII, when rent ceilings were used to prevent wartime exploitations during an unsteady economical period.[6]Since then, rent control has taken many different forms. The traditional form of rent control is the price ceiling, where rent prices either halt at a specific level, or can only grow by a specific amount each year, commonly tied to inflation. In following years, different variations have emerged, like landlords only being able to raise rents to the market price when an existing lease ends. Regulatory agencies have dabbled with different forms of rent control to find one that may work, all without much success.
The “regulatory cluster” is a term typically associated with rent controls. In cities where rent control is introduced, it often comes with other regulations placed on rental units. These regulations dictate how landlords can evict tenants, or how they can rent out their properties. However, the additional regulations need not accompany typical rent controls and price ceilings, as they stand on their own in many instances as well.
The most commonly used rent control regulation other than price ceilings is “just-cause eviction”. These policies typically limit the grounds on which a landlord can evict tenants to non-payment of rent, intentional damage to units, or non-compliance with the terms of the lease.[7]Just-cause eviction provides certain procedures for the landlord to follow when they need to evict a tenant. These evictions tend to take much longer than evictions without the additional regulation, which has resulted in limiting the discretion landlords have in removing tenants. As a result, landlord’s typically have become more stringent with their tenant qualification screenings, and often choose tenants who are more likely not to renew their leases for long periods of time.
Other forms of controlling private property have emerged in the United States in the City of Seattle. Local government agencies have passed a ban on evictions in the winter.[8]This means that landlords will not be able to evict tenants, even with just-cause eviction, between December 1 and February 28. This harsh legislation comes with the intention of not leaving renters homeless during the coldest months of the year, but fails to accept the costs and realities of maintaining rental housing. Conversely, the intention is not backed by facts:
“According to King County’s point-in-time study, only 6 percent of homeless people surveyed cited “could not afford rent increase” as the precipitating cause of their situation, pointing instead to a wide range of other problems — domestic violence, incarceration, mental illness, family conflict, medical conditions, breakups, eviction, addiction and job loss — as bigger factors.”
This drastic legislation warns of future trends. Although Seattle is one of the most progressive cities in the United States, it is likely that more cities will follow this legislation in years to come. The effects of it, however, may prove to be more drastic. The typical impacts of rent control will prevail – lessened supply, more condominium conversions, and low-quality units over time. But this legislation will provide even more tribulations. Landlords will increase pre-lease tenant qualifications for their units, not accepting tenants with less-than-perfect credit. It is likely that some mom-and-pop landlords will be pushed out of the market, selling their properties to institutional landlords, with deeper pockets for legal battles, who may one day control the rental housing market in the city. These potential impacts are immense, and the legislation is not one to ignore, as rent controls become more and more draconian throughout the world.
Where Rent Control Is Emerging
Berlin enacted rent control in June of 2019, but there is a pending proposal to amend it in the early months of 2020. The outline of this rent control proposal is the most radical form of it to date. If the regulation goes through, rents that are determined to be too high will be lowered. Additionally, “the law would be retroactive from June 18th, so that anyone who attempts to jack up prices before it is passed could be fined €500,000 ($563,000). Landlords who want to make renovations that would push up prices by more than €0.50 per square meter will have to seek approval.”[9]There is already a massive housing shortage in Berlin, where the city has grown by 50,000 people annually since 2011, but has only added 10,000 new units.[10]Berliners have consistently voted against large, new developments in the past few years, making the development environment increasingly difficult. If these stringent rent controls pass, it is inevitable that the housing shortage in Berlin will only become far worse, as the long-term effects of rent control loom over the city.
In the United States, California became the second state to pass state-wide rent control, following Oregon, where landlords are restricted to increase rents by only 5% plus inflation each year until 2030.[11]Like the proposal in Berlin, the California law is retroactive to March 15, 2019, and also includes a just-cause eviction ordinance. Rent control is becoming an increasingly popular form of regulation in Unites States cities, where housing affordability crises’ seem to always exist. In September of 2019, socialist presidential candidate Bernie Sanders, “unveiled a proposal fora national rent control policy as part of his overall plan to address the need for affordable housing nationwide.”[12]Although economists have warned politicians and citizens of the negative long-term impacts of rent control, the regulations are alive and well in today’s political discussions.
Those in opposition of rent controls often provide alternatives that would work better in creating more affordable housing. The most common being pro-rating city fees for development to the size of the units being built. With lower overall fees, developers can build smaller, less-expensive units. With the current stagnant, high city fees, it is not financially feasible for developers to build these desired units. Other common alternatives are increasing allowed density (increasing height limits, or reducing minimum square footage requirements), reducing costly parking requirements, and speeding up the review and inspection processes of new developments. These private-market alternatives will allow for supply growth in cities with growing populations, therefore lessening the housing shortage overtime.
[1]See Michael Cavadias “A Brief History of Rent Regulation in New York” ISSUE 81 | BUILDINGS | DEC 2017
[2]https://www.capitolhillseattle.com/2019/05/scc-insight-seattle-a-worst-case-scenario-for-rent-control-to-be-introduced/
[3]ibid
[4]ibid
[5]ibid
[6]ibid
[7]https://www.localhousingsolutions.org/act/housing-policy-library/just-cause-eviction-policies-overview/just-cause-eviction-policies/
[8]Beekman, Daniel. “Councilmember Kshama Sawant Proposes Seattle Ban Residential Evictions during Winter.” The Seattle Times, The Seattle Times Company, 9 Dec. 2019, www.seattletimes.com/seattle-news/politics/no-winter-evictions-in-seattle-city-councilmember-kshama-sawant-to-propose-ban/.
[9]“Europe Embraces Rent Controls, a Policy That Never Works.” The Economist, The Economist Newspaper, 20 July 2019, www.economist.com/europe/2019/07/20/europe-embraces-rent-controls-a-policy-that-never-works.
[10]ibid
[11]Passy, Jacob. “Rent Control May Not Be a Lifeline for California’s Renters.” MarketWatch, 15 Oct. 2019, www.marketwatch.com/story/why-rent-control-may-not-be-a-lifeline-for-californias-renters-2019-10-09.
[12]ibid
Is the Seattle Eviction Ban Only the Beginning?
A week from Today 11 states will be voting in Democratic primaries, something called Super Tuesday. As of now, it looks like socialist Bernie Sanders is going to pile on to his previous win in Nevada. It looks like he may be on his way to gaining the Democratic party’s nomination. Some polls even show Sanders ahead against President Donald Trump in a general election showdown. People in the Democratic party are worried. Will Sanders do to the Democratic party what Trump did to the Republican party. Most importantly what does it mean for you?
I’m making another warning: If things keep going the way they are, this November is going to be a high stakes election. It will pit Donald Trump — an unpredictable and undisciplined President — against an avowed socialist Bernie Sanders. Many people reading this don’t like Trump and don’t want to vote for him. But a socialist?
Here’s what the editor of Jacobin magazine said in a recent article in Salon headlined, “Why Bernie Sanders is just the beginning of an American turn to the left:”
We must erode the power of the capitalist class. We can accomplish that by, for example, imposing capital controls—measures that stop the free movement of capital in response to changing social and economic conditions. But to pass economic reforms as significant as these, we can’t just agitate in the streets, as important as that is. We have to be in power (emphasis mine).
Editors of Jacobin Magazine
What sorts of capital controls? Housing is sure to be a target. Former Seattle City Councilmember Nick Licata wrote glowingly about the winter eviction ban in Seattle in a blog post subtitled, “The groundwork was laid down through citizen involvement in local government — it can happen anywhere“
Seattle’s eviction legislation may seem like a something that could only happen in Seattle. However, it could be adopted in other cities if they develop government portals to involve direct citizen participation in policy issues and have elected officials who can be organizational leaders. Progressive solutions are not arrived at spontaneously, it takes a road map to reach them.
Nick Licata
It’s all right there in plain site. What’s the plan? Imposing controls on how you manage your private rental property. And the road map? Follow Seattle’s example and ban eviction.
I wish I was making this stuff up. As I keep saying, what’s next is up to you. Help defend your ability to provide housing and manage your property or face the coming onslaught. We’re doing what we can. But we need your help. Please contribute today to our efforts on rent control, eviction, and housing policy.
The Best of Seattle For Growth:Eppur si muove! Housing prices do go down!
Last week we did a rerun of Ol’ Dan Bertolet’s post on workforce housing. Today, a year and a week later, here’s a rerun of my best Galileo post. I remember when I wrote this on a cold, dark morning. At that point we had maybe a dozen posts up. I had watched a documentary on Galileo and I couldn’t help draw the parallel between the people running the City of Seattle and the Catholic Church. If you’d asked me then, in 2014, if I thought in 2020 we’d have made progress on convincing people that yes, indeed, prices do go up and down based on supply and demand, I think I would have said, “Yes.” But it may take a few more hundred years after all. Enjoy!
I’ve been on a Galileo kick lately. Galileo was the Italian astronomer who, using his telescope, argued in favor of the crazy idea advanced by fellow astronomer Copernicus that the Sun, not the Earth, is the center of the solar system. Both men faced lots of skepticism. “C’mon, Galileo,” even the most friendly church official said, “the Earth moves? It feels pretty firm to me!” The establishment’s resistance to the notion was so strong Galileo found himself in a church prison forced to recant. Legend has it that after he was tortured, as he walked away he muttered, “Eppur si muove!” or “And yet it moves.”
Many of us feel the Galileo sensation when arguing in favor of increased housing supply to stabilize or lower housing prices. The resistance takes the form of outright denial, “it doesn’t work like that, housing is more complicated,” (Housing is not bananas!) to the mild, “sure, more housing will help keep prices from rising, but they’ll never go down.”
Behold the Seattle Times article of last month headlined Seattle-area apartment rents may stabilize, even dip in 2014:
Developers have about 14,140 apartment units under construction and will deliver more than 9,700 in 2014, Cain estimates. Even if job growth remains steady, he said, the swelling supply will spur more competition for tenants and slow rent hikes.
It’s already starting to happen in Seattle’s Ballard neighborhood, which saw a massive buildup of new apartments.
The submarket had the biggest increase in vacancies in the fourth quarter, nearly 2 percentage points, though the overall vacancy rate is still below 5 percent — considered a tipping point in the balance of power between tenants and landlords.
Rents in Ballard still rose, Apartment Insights reports.
The article points out that rents will likely drop in the Seattle because of increased supply. Yes, right there the Seattle Times printed those words: “rents will likely drop.” Is this the result of legalized marijuana impacting journalism? No. It’s simply a boring real estate story describing what people in the industry already know, when vacancies go up, rents go down. I don’t speak Italian but Google Translate says, “Eppure si cadono!” Prices do fall when supply goes up. Will your landlord knock on your door and hand you a notice lowering your rent? Probably not, but overall rents do go down as vacancies increase.
Things are shifting in Ballard but probably not as much as they have in other neighborhoods. That isn’t surprising considering the ways that Seattle’s approach to land use makes it harder and more costly to build housing of all types. And yes, the City Council is looking at changing the LR3 Zone in Ballard to limit density there. This is exactly the wrong time to do that since, as the article points out, there is a shift in the “balance of power between tenants and landlords.” Isn’t that why Seattle voters cast ballots for Sawant, to sock it to The Man? Well the best way to do that is to let him build more housing!
I’ve been writing about how increasing housing supply would help lower housing prices since at least 2011.
We can keep larding up our code with all kinds of limits to the supply of new housing. Lower supply, increasing or steady demand, and then you have “unaffordable housing.” Why is this basic and iron clad rule of economics so hard to understand. I’m a philosophy major! Even I get this.
I have plenty of hair on my head, but I won’t for long if the City Council can’t get their basic economics straight. … If the people don’t come, and we have an over supply of housing, SHAZAM, we’ve just solved our affordable housing “crisis.”
I’m no Galileo, but we’ve got to stop hedging about what will happen to our housing market if we allow more building. If prices drop too low, and developers stop building, then would be the time to kick in real incentives to do so, not fees and tolls we call currently call incentive zoning. The most efficient and economical way to build more housing in a compact place is taller, more densely populated buildings. As we create more jobs and win more Super Bowls, more people will want to move here to join us in building the future of our city. All those wonderful people moving here will need lots of great housing options. Let’s make that easier to do.
Image of Galileo from Wikipedia Commons.
The Best of Seattle For Growth: The Inconvenient Truth About Workforce Housing
It was 2014, when microhousing and small-lot housing still existed. There was no Mandatory Housing Affordability. Low-rise zones were thriving with more apartments than townhomes. I was in the last week of my old job as a housing director at a non-profit. My last day was February 14th, Valentine’s day. I had left that full time job to take on the challenge of being director of Smart Growth Seattle. And a guy name Dan Bertolet wrote a guest post on February 10, 2014. Now, 1000 posts later, I have to reflect on where we’ve been. Maybe you will. But here’s that post. Enjoy!
For the better part of the past decade, both advocates and policymakers have been decrying Seattle’s perceived lack of housing affordable to people with incomes in the lower-middle range—so-called “workforce housing.” As a result, Seattle has implemented and is continuing to expand a program known as Incentive Zoning intended to create subsidized workforce housing through fees imposed on new development.
But there’s one rather important thing wrong with this picture: Available data show that there is no shortage of workforce housing in Seattle.
For reference, workforce housing is typically defined as housing that is affordable to households with incomes between 60 and 100% of area median income (AMI). In Seattle, 80% AMI currently corresponds to $49,440/year ($24/hour). Assuming the standard that 30% of income is spent on housing, that translates to an “affordable” rent of up to $1342 per month.
For all the attention workforce housing gets, there’s surprisingly little up-to-date, hard data available on how much housing is out there priced at workforce affordability levels, compared to how many households there are that need it. King County analysis based on a 2009 survey of market-rate rentals found that a whopping 83% of units in Seattle were affordable to a household earning 80% of AMI. For 50% AMI, 37% of Seattle’s rental units were affordable. Across King County and the greater region, data reveal a similar pattern of excess housing supply at workforce income levels, along with a sharp increase in need the further income drops below workforce levels.
Based on the raw numbers there would seem to be plenty of existing workforce rental housing in Seattle, but one complicating factor is that some households may be renting housing that is cheaper than what they could afford according to the standard 30% formula. This “downrenting” has the effect of reducing the availability of housing that is affordable to lower incomes. The affordable housing advocacy group Housing Development Consortium has published some analysis by the Seattle Office of Housing on downrenting, and the results are summarized in the table below:
Looking specifically at households with incomes between 50 and 80% of AMI (yellow column)—which is the lower portion of the workforce range—there was a surplus of over 32,000 housing units with affordable rents. Put another way, for every 100 households in the 50-80% AMI range, there were 219 affordable rentals in Seattle.
After subtracting the number of units being rented by households earning more than 80% of AMI, there is still a surplus of 4,745 rental units affordable and available to 50-80% AMI households; for every 100 households in the 50-80% AMI range, there were 118 affordable and available rental units in Seattle. In other words, even when downrenting was accounted for, there was still no shortage of workforce housing.
Since 2009 housing costs have risen faster than incomes, so current data would likely show some reduction in affordability. And rents vary significantly between different neighborhoods. But even with those caveats, it’s hard to imagine how anyone could interpret the available data as proof of a dire need for programs to subsidize workforce housing in Seattle. Yet currently Seattle City Council’s affordable housing efforts are focused on an extensive examination of how to do exactly that using Incentive Zoning. Here’s how Council justifies it:
“For example, a public school teacher’s starting salary of $42,000 suggests that he or she should not pay more than $1,050 per month (30%) for housing. Yet the average rent in Seattle for a 2 bedroom / 1 bath apartment is $1,466.”
That’s right, we have a workforce housing crisis because a single person earning far less than the City’s average income can’t afford the City’s average rent for an apartment with an extra bedroom, never mind the half of the housing stock that rents below the average. And so apparently therefore we need to exact a toll on new development through Incentive Zoning so that someone making up to $49k can live in a subsidized apartment in a brand new downtown high rise. Seriously—if any of you reading this were in those shoes, would you feel entitled to that?
Meanwhile Council balks when it comes to solutions that would support meeting workforce housing needs through private development—no public expense necessary—such as microhousing, accessory dwelling units,meaningful upzones in lowrise zones, removing off-street parking requirements, and other strategies that could reduce the cost of producing housing.
In previous posts I have pointed out the numerous flaws in Incentive Zoning—how it defeats its own purpose by restricting supply and increasing the cost of housing production, how it’s based on an outdated paradigm that sees dense development as negative impact to be mitigated rather than a critical sustainability solution, and how its inherent limits preclude it from ever generating more than a drop in the bucket relative to the need.
Now we can add to that list of flaws the fact that Seattle’s Incentive Zoning Program was designed to subsidize workforce housing, even though the data indicate that the City already has enough. Available workforce housing may not be brand new housing. But even if new housing has rents higher than workforce affordability levels, it will still help preserve the availability of workforce housing by absorbing demand from high-income renters who would otherwise be competing for, and driving up the prices of existing housing.
The City’s real housing need is at the deeper affordability levels, as the data clearly show an increasing deficit of affordable rentals as incomes drop below 50% AMI (see data table above). And yet another pitfall of Incentive Zoning is that even though it doesn’t address the real need, it creates the false impression that electeds are taking meaningful action to solve a housing problem. That is, Incentive Zoning is a politically expedient distraction.
To sum it up succinctly: Why are we applying an counterproductive tool to solve a problem we don’t have? We can and must find better solutions to address Seattle’s actual affordability needs.
>>>
Dan Bertolet is an urban planner at VIA Architecture and blogs at Citytank.
