The end of the year always brings reviews of the past twelve months and prognostications about the future. Here are mine about the past year and next year in housing policy and politics. 

Warning: Be Careful of what you conclude about the rejection of the “Head Tax”—Lots of people in the business community, I think, are patting themselves on the back, assuming that the backlash against the Seattle City Council’s efforts to tax jobs was about people supporting business and the jobs that have been created. That is a big mistake. 

In talking over polling data with people who saw it up close and having been in the room where a mob gathered in Ballard to express their feelings about the tax, I have to say this was about homelessness not about jobs or taxes. 

When people eagerly signed petitions to put the tax on the ballot, they weren’t saying, “I love Amazon and all the jobs it creates!” they were saying, “No more money for the City Council until they “clean up” the homeless problem, especially the tents down the street!” 

These are very different messages. Many of the same people who oppose the tax on jobs also opposed microhousing, small-lot development, and pushed for downzones in the low-rise areas of the city.  

These angry neighbors will be back in 2019. They will likely push for and get higher rates of inclusion and fees in the City’s Mandatory Housing Affordability (MHA) scheme. That’s not good news at all. The neighbors know that higher rates and fees mean killing new housing. The Council is likely to oblige and, ironically, call it a compromise for housing.

The election will be ugly—The Head Tax debate was nasty from both the socialist left and from the angry neighbors. Expect more of this in the upcoming election. Candidates will be pilloried from both sides based on litmus tests about the Head Tax, views about sweeps of encampments, and on MHA. The attacks from The Stranger on candidates deemed insufficiently doctrinaire will be brutal. And people aligned with various groups pushing for legal action against homeless camps, and against MHA will be similarly personal and bare knuckled. We’ll likely see some candidates implode even before the primary. 

Will there be a pro-growth candidate?—It infuriates some people when I say that there simply isn’t going to be a “pro-growth” candidate. Many in the development and business community are hungry for candidates that are willing to listen and even do something about overregulation, taxes, and the latest scheme to show just how liberal and anti-Trump Seattle it. 

But don’t be fooled. Some candidates will fill their mouths with words that sound like they know what they’re talking about. I won’t forget sitting in my office listening to Rob Johnson talk about how he would pay attention to the business cycle when making housing policy. Those were words I wanted to hear. But Johnson turned the corner and wouldn’t even help work behind the scenes on things he said himself were bad ideas like rent control and efforts to make MHA worse. 

There will likely be lots of smart and nice people tossing their hats in the ring, but don’t forget the basics: no MHA, no rent control, and no head tax. The answer to each isn’t a lot of words, only one: no! Anything less tells you the candidate wants to win. Ironically, winning in Seattle means punishing people who make and operate housing. That’s the zeitgeist. We need to change that, but it probably won’t happen in the next 6 to 12 months unless we invest in deep research into what might persuade people to support a truly pro-growth candidate. 

The two “parties” in Seattle—And we have two parties in Seattle as I suggested above, the socialists-lefty axis, and people who are growth resisters and want homelessness cleaned up. We don’t have Republicans in Seattle, but this second group is what you’d loosely call the “right.” The left is angry at developers and landlords who they blame for high rents and displacement, and the right is angry at the City for not locking up the homeless.  

In the end, I think both of these groups are small in number, maybe a quarter of the voters on each side. People in the middle, mostly Trump haters and lefties themselves, will be the battleground in 2019. Candidates from each side will both bash developers and landlords. Both will likely support some form of tax on growth and new housing (including impact fees). And both will make the argument that growth is mostly a bad thing. 

Oddly, most people don’t agree with that. Research from the Quinn Thomas firm found lots of support for growth. But we have yet to get solid research on what a moderate candidate would say to persuade people to turn their general support for the good parts of growth and the opportunities and possibilities it provides into votes. Without that message that resonates with those in the middle, they’ll have to choose from candidates whose base is built on a minority of people angry about growth. And those candidates will offer punitive taxes and fees on growth, not expanding it. 

What will happen in Olympia?—My crystal ball is hazy here. This is Speaker Frank Chopp’s last session as Speaker. Chopp has been receptive to messages about making non-profits more efficient but resistant on doing anything about it. Some suggest that the left leaning parts of the caucus will win the day and proposes lots of heavy-handed regulation and lots of taxes. 

Others say wiser heads will prevail, and a speaker from outside the Puget Sound will be selected to balance the leftward drift of the House of Representatives after Democrats picked up seats. This is a plausible outcome. 

Most agree that the Senate will continue to be skeptical of things like another carbon tax and a capital gains tax. But that chamber lost its moderate edge too with more Democrats being added there. This uncertain dynamic from both houses means it’s going to be an interesting year for housing policy. 

Will we find some principles in 2019?—I wrote a post at Forbes about the principles we should follow on housing. I’m not optimistic that we’re going to suddenly find advocates and elected officials getting their minds around the notion that more jobs and more housing are good, period. The dominant culture in our city and state is that making money is a bad thing, especially when someone else is suffering. That sounds compassionate on the surface, but its really selfish. 

As I pointed out many times in 2019, we don’t need more affordable housing, but we need more housing so that it will be affordable. Even in the debate about single-family housing, I marvel at the discussions about wanting duplexes and triplexes all over town. But nobody talks about who is going to build all that housing. When I remind them that people would make money building that housing, there’s a blank stare from “urbanists.” I point out that we tried to expand single-family housing in single-family zones by allowing building on smaller lots; angry neighbors squashed this idea. 

So as long as we see new housing as an impact and the people that build and operate it as greedy, we’ll never solve the housing price problem. It’s that simple. The entrepreneur is the best person to build and operate housing because they have a motivation to be efficient and produce product that people want to live in and can afford to live in. If we let them do this, prices will fall and people will create jobs, pay more taxes, and yes, make more money. Anything less than this will fail. We must learn to include the producers and operators of housing; they know how to make and operate housing. Why are they being excluded and vilified? 

Is there any hope for the year ahead?—Yes. If we can keep Seattle For Growth powered up, good ideas will continue to have a voice. And we’ll have a critical voice to speak against ideas that won’t work. There simply isn’t any other organization or voice in the city or the state that can speak to the issues facing the housing market with the clarity we do. A big message I’ve been repeating is, “Efficiency is compassionate.” Wasteful programs fueled and funded by what I call grievance taxes—schemes like MHA and the Head Tax—don’t help poor people. Instead they raise prices and produce very few units of housing. Making housing more expensive in the name of creating a few subsidized units because housing is expensive probably fits the definition of “crazy.” We need someone to keep making the case that we can have a healthy productive and prosperous economy for everyone but only if we get out of the way and let it happen.  

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