Nothing Changes on November 3rd If We Don’t
Next week’s election is certainly the most controversial and worried about election in my lifetime.What does the election mean for housing in this country? In many respects, the answer is, “Not much.” The Trump administration, many states, and local governments of all political stripes have imposed eviction bans that run until the end of the year – at least. No elected official or candidate anywhere has emerged with an efficient plan for rent relief, and everyone in Washington DC has bought into a prevailing narrative: housing providers will be ok without getting rent.
Here’s the rundown of the key issues to think about if you’re in the housing business.
Eviction bans– The reason why we have eviction bans is because bans are easy for politicians. After all, rent is just passive income. If nobody pays, it just means a shorter vacation or a smaller yacht. Eviction bans are popular because housing providers are perceived as bad actors anyway. We have not seen a change in this storyline that precedes the Covid-19 crisis. And it will not change after November 3rd.
Unpaid rent– There are more and more people telling me that they are seeing an increase in non-payers. Add this to growing vacancies and falling rents, and we’re setting up for a big solvency crisis in 2021 as tax bills and utilities will not get paid. People will have to lay off workers. Without substantial and significant action to eliminate unpaid rent at the root of this, we’ll see a financial crisis in the housing sector no matter who wins on November 3rd.
Lack of organization– Remember that story about the blind men and the elephant? Each blind man feeling a different part of the elephant was sure it an elephant is like a snake, like a tree, or like fan. I’ve been on calls across the country and each sounds a lot like the argument among the blind men. Lawsuits have been filed all over the place. People talk about organizing new groups. Efforts are made to lobby legislators and city councilmembers. This piecemeal and stubbornly parochial approach doesn’t seem destined to change on November 3rd.
Do you want a change to these three underlying conditions in the housing world? Are you frustrated? Have national and state trade organizations left you feeling like their efforts are too little too late? Still waiting on that appeal pending at the Supreme Court?
Everyone is making a good faith effort to alleviate the pain. But unless and until we begin a principled and data driven challenge with better ideas none of this will change, especially the narrative that powers the bad policy and interventions. If you’ve read this far, please consider supporting the Center for Housing Economics. The Center is a start up that is based on three elements: challenge bad data every single day, offer practical ideas to help hard pressed families, tell a better and more accurate story about what providing housing means.
Check out the prospectus for the Center for Housing Economics. Take the time to think about it and then, if you agree, give a generous contribution. Not sure? Give me a call. Send an email. Set up a call or a presentation. As President Trump is fond of saying, “What have you got to lose?” Karl Marx’ answer was “Your chains!” They are both right. If we continue on the current course, don’t expect things to change. But if we can motivate to create an efficient response and chart a new path, then things will change. It is up to you.
Bellevue Should Keep Its Housing and Transit Friendly Parking Exemption
Check out the letter we sent to the Bellevue City Council. At a meeting on October 26th, the City Council will consider ending their exemption on required parking for housing within a half mile of transit. We have urged them to keep the exemption. It helps keep housing prices down, supports people getting out and staying out of cars (and not owning one), and uses the market rather than subsidies and taxes to accomplish both these goals.
Sawant Signs New Lease . . . In Your Head
There are lots of people around Seattle who love to hate Kshama Sawant. None of them will debate her in public as I have. And few of them have ever met or dealt with her or staff as I have. Most, if not all, don’t have a about Sawant’s magic mostly becuase the fact that they are obsessed with her is evidence of that magic. I recently saw an email from the recall Sawant campaign asking for more money, and you need to look no further than this recall effort to see why Seattle is in such a state of disarray.
The plea in the email is all about how “grassroots” the recall effort is:
We would like to thank you for joining the grassroots effort to recall Councilmember Kshama Sawant. We have clearly established that we are a grassroots campaign with nearly 3,000 donors and our average contribution is less than $24. Can you please make another donation of $25 or more?
There’s nothing here about how this will help solve the myriad of problems the City government has created itself over the years. Nothing about the plan going forward should such a recall effort get on the ballot.
First, lots of money has to be spent to get the measure on the ballot. Then, once it is on the ballot, the people have to vote. Then, if Sawant is recalled and removed, there is an election to replace her. Who is that person? Last time the geniuses downtown and Amazon backed a young guy who rode a scooter and supports rent control.
Let’s say that somehow the voters decide to fill this new vacant seat with, oh, let’s say ME, then what? Now we’ll have one rational, pro-market vote out of 9 on the City Council. One vote. And imagine how much my new colleagues will enjoy my proposals to repeal Mandatory Inclusionary Zoning, undo the Council’s support for rent control, repeal the first in time legislation, and propose an aggressive effort to reduce and eliminate regulation on new housing, starting with design review. I’m sure they’d all be on board my agenda, right?
And how much money has the real estate community in Seattle raised to do any one of those things I would do if I was in a position of power at the City? None. Zero. Nada. That’s right, nothing. Instead the business and some people in the real estate community are banging the drum for $25 contributions to maybe, possibly, hopefully replace Kshama Sawant with, well, they don’t know.
Back in 2015 nobody in town was willing to get on a stage to debate Sawant on rent control. Sawant wouldn’t debate me unless she could bring Nick Licata along. And then it was a condition of the debate that I bring someone along too. I couldn’t find a single person who’d be my debate partner. Not one person. I ended up with a legislator from Eastern Washington as my partner. Nobody had the guts to do it. And I have done it several times, on television, since. And we’re the only organization in town that filed an ethics complaint against Sawant for her efforts to encourage not paying rent.
Sawant is a problem. But the problem isn’t that she has any power herself or her ready made mob that shows up when she commands. You are the one giving her power. I have a banner created by the Republicans last year with Sawant’s image that says, “Contain Socialism.” It hangs on the wall of my apartment. It is a constant reminder of what most of the people I work with see in their heads all the time, Kshama Sawant.
Now I’m going to make an “altar call” or a come to Jesus request. It’s time to evict Kshama Sawant — from your head. And here’s the deal, brothers and sisters, there is no ban on evictions in there. You can call the sheriff and she’ll grab Sawant kicking and screaming and toss her right out along with all her red shirt room mates and all that annoying socialist realism on her posters and banners. All that crap goes right on the curb.
When that’s done, let’s get back to what we know is true. If we’re worried about rising housing prices, let’s build more housing. With more competition, consumers are in the drivers seat and housing providers will have to work harder to keep tenants. If we’re worried about eviction, make sure people have jobs and income. And the best way to boost wages is when there are more jobs than people who need them, that means employers have to compete with better compensation. Fumigate your mind with these ideas.
Then, go to donate button below and contribute to the one organization here in the People’s Republic of Seattle that actually fights for the idea that freedom comes from the free exchange of value in a market place. When people get together they can solve problems, including housing problems. We just have to let that happen. What socialists want is to grant everyone the right to housing but then not build any; that’s a recipe for rationing. We believe in more housing of all kinds in every neighborhood for people of all levels of income.
Finally, if we’re going to reverse the damage done by the Mayor and the City Council with eviction bans (remember the Mayor let the winter eviction ban become law!) and regressive and restrictive housing policy, we have to be for something, not just against one person in a dysfunctional and mismanaged City government. And we simply must be willing to take a stand for what we believe in, that people suffering from housing problems will benefit most from more housing, not less, from fewer rules not more.
CDC Eviction Ban: Making Stuff Up
I have a new post at Forbes about the latest unhelpful intervention in housing by government, a ban on evictions being imposed by the Centers for Disease Control. It is wrong headed, probably vulnerable to legal challenge, and does nothing to help people struggling to pay rent during the Covid-19 economic downturn. From the post:
I get it. Our President waved his hand and said, “Fix it!” This is what the White House and the CDC came up with, an eviction ban based on the idea that millions of infected people, now evicted, would swarm the nations interstates spreading the disease.
Making Stuff Up: The CDC Bans Evictions
I also have a series on where we stand as of today on housing and Covid-19.
As you follow these posts, keep these basic principles in mind. If government acted according to these basic ideas, people who earn less money would not be facing greater housing insecurity, now and in the future. Instead, the reaction to the impacts of economic shutdowns has been eviction bans, lack of rent relief, and growing risk to future housing production.
Series: How Has Covid-19 Impacted Housing Policy And The Poor
Meanwhile, we’re still working on getting rent relief when the Congress returns to the capitol after labor day. Stay tuned!
Forget About Sawant: We Need A Charter Amendment
It was five years ago, and on my Facebook feed all I saw, everyday, all day long were posts about Donald Trump. Were my Facebook friends all supporters of the Trump campaign? No, they were outraged middle to left residents of the general vicinity. At one point I started posting images of jackasses every time I saw a Trump post with a message saying that my goal was to get people to stop talking and posting about Trump! I failed. Are you happy now?
The Sawant Trump Connection
Well, the same thing that was true about Trump is true about Kshama Sawant. Like Trump, Sawant is a performer, an artist who is very good at getting you and others all wound up. Here’s the truth: almost nothing that Sawant has pushed for ever passed in its original form. From the $15 minimum wage to the latest tax on jobs, Sawant jumped around and turned out crowds of people to yell and scream, but in almost every case it was her colleagues on the Council and the Mayor that passed some form of what she was calling for. Sawant can’t do anything on her own; she’s one vote on a dysfunctional legislative body in a City government headed by a Mayor that has lost touch.
What’s amusing is that when I have said, “Good riddance!” at the thought of Mayor Durkan being removed from office by a recall vote, people have actually said to me, “What, you want Sawant to be Mayor?” This is the thrall that Sawant has people in. It’s pure genius in some ways: make a lot of noise, throw out extreme ideas, and watch your Council colleagues bend over backwards to water those down into actual policy in the name of “social justice.” She gets the credit (and the blame) and the city lurches further toward chaos. It’s a story as ugly as the myth of the Titan Cronus.
And by the way, Sawant isn’t up for reelection until 2023, and the last time the business and real estate community tried to take her out with a kid that supported rent control, it failed spectacularly. Remember that? Want to do that again? Even if you could make her disappear right now, today, it’s too late, this Council is already dominated by people who support her ideas.
Can you say, “Please, Mayor Gonzalez?”
So stop worrying about Sawant. Start worrying about Mayor Gonzalez, the real political powerhouse at City Hall. Gonzalez shut down efforts by Sawant and Councilmember Tammy Morales to pass a jobs tax, until the unrest after the killing of George Floyd. Now the tax is law, because Gonzalez, President of the City Council, reversed course and let it happen. Gonzalez is a brilliant politician, with very little driving her agenda but accruing more power; the best politicians always are. She knows she has to balance what’s going on in the streets, with Sawant, and what is rational policy. So far, she’s played it perfectly, setting up the Mayor to look impotent while casting herself as the champion of social justice and a rational actor compared to the apparent lunacy of Sawant. She is our own local Francis Urquhart (not the rip off, the real one on the BBC).
Again, who’s getting the blame in the business and real estate community for the chaos in the streets, the new tax, and the departure of Chief Best? Not Gonzalez who crushed the Mayor by overriding her veto of the tax and pushing for slashing Best’s salary and laying off police officers. Weirdly, Sawant gets the blame. Guess who the business and real estate community is going to start paying obeisance to soon? That’s right, it is Councilmember Gonzalez who, if Durkan does get tossed, will become Mayor. And if I was advising Gonzalez, I’d be planning my Mayoral campaign against the wounded Mayor and the inevitable crush of left leaning wild eyed candidates that will emerge next year, not to mention the right leaning, “lock ’em up” crowd as well. Gonzalez, a lawyer like Durkan, will seem like the best most moderate candidate. She’s not a moderate, however, but an opportunist (as long as we’re not letting our liberal arts education go to waste, they’re in the vestibule of hell in Dante’s Inferno).
Who’s to Blame and Will They Do it Again?
The business and real estate community are to blame for this mess, constantly focusing on the next six months and the four corners of their pro forma instead of the next six years, always worried about keeping “friends” at City Hall in hopes of making some kind of deal. And legal challenges and lawsuits take too long and only confirm the “greedy landlord and developer” narrative. No, lawsuits won’t pressure City Hall to do anything differently, it will only make the Council look like they stood up for the right reasons against people who claim they’re struggling during COVID-19 but want to evict people into homelessness.
The difference between making a deal in the real world and making one in politics is vastly different; in politics, like the story of Cronus, its a battle for power and dominance, not a better rate of return than treasuries. Like I said, if I was Gonzalez or advising Gonzalez, I’d be gathering support and money now from the inept and cowering Chamber of Commerce and others who want to “make a deal.” Gonzalez will take your money and then do whatever she wants and you will not be able to stop her.
The madness in this city will get worse with this dynamic, not better. Getting rid of Durkan and containing the left led by Sawant by paying homage to Gonzalez and the “moderates” only feeds the bad housing policy (tax housing to make it less expensive), the bad public safety policy (defund the police to make the city safer), and bad economic policy (create opportunity by disincentivizing job creation). Gonzalez supports and embodies these perversions because that’s where people’s heads are at; corporations are bad, tax the rich! As Christopher Matthews said, in good times regular people like the rich because they think they might get rich, and in bad times they hate them because they’re worried they’ll be poor.
What we need is fundamental change in the form of an amendment to the City Charter, something that can be done every odd year — and I don’t mean odd like weird, I mean any year that cannot be divided exactly by 2, like 2021. Last spring I wrote up a sketch of a charter amendment. I’m posting it below. If you like this idea (there are a lot of details to be worked out) let me know. If something like this is going to happen, we need to start working on it now.
Is the Seattle City Council working for you?
The Seattle City Council doesn’t seem to be listening to the people. When voters expressed anger about the proposed “head tax” on jobs, people quickly signed petitions to repeal the tax. The Council wrongly said that the business community lied to voters to get signatures. When the documentary Seattle is Dying aired, the Council dismissed it as right wing propaganda rather than taking the concerns about drug use, mental illness, and crime seriously.
It’s time to change the City Council to make it more representative of the people who live, work, and own businesses in the city!
Charter Amendment Proposal
- Change number of council districts to 25 based on population;
- Councilmembers will be elected to two-year terms with a term limit of 6 years;
- The compensation for Councilmembers will be set at 60 percent of Seattle’s Area Median Income ($42,150 in 2018) as established by HUD;
- Child care will be included for members of the City Council as part of compensation as well as health benefits and one staff person who will be compensated at the same level as the Councilmember;
- The Councilmembers will be elected by ranked choice voting using the model that took effect in San Francisco in November 2019; and
- Each year the Mayor’s Budget proposal must be presented to the voters for an advisory (approve or disapprove) vote before submission to the City Council for approval.
