I often find myself frustrated with just about everything and everyone in this town, including developers, builders, and housing providers. Four years ago I was feeling about the same way and I wrote this three part indictment of how screwed up Seattle’s discussion of housing was then. Sadly, things haven’t gotten any better. I’ll post them in order tonight, tomorrow, and Wednesday. Originally Posted on Tuesday, March 7, 2017

When we talk about housing in Seattle, affordability dominates the conversation. Close behind are parking and design issues that tend to bother neighbors, and after that is the notion that somehow we’ve grown too much, too fast and the quality and character of life in Seattle is changing for the worse. But housing prices, expressed as numbers, and how people feel about those prices and the effect they have on people, and what to do about the situation eventually eclipse every other aspect of the discussion. Why and how did housing affordability become the political, economic, and ideological battleground it has become?

Affordability, Price, and Measuring a “Crisis”

Price is a relatively simple thing to understand for most people. If you ask a cross section of people what happens to the price of a product when it is scarce, they’ll certainly say, “The price goes up.” That same group, if asked about whether something is affordable, would likely respond, “It depends.”

For most human beings, whether something is affordable is a complex relationship between utility, values, income, hope for the future, and even things like vanity and personal disposition. Everyone can think of that cheap friend or relative, or the one who spend extravagantly on his car or clothes even though he doesn’t earn very much money.

Price doesn’t mean very much by itself until it hits the real world and people make decisions based on these complex, vague, and qualitative notions of what is “affordable” and what isn’t.

Here’s another factor: poverty. There is a big difference between a person who is struggling what is affordable on a dinner menu at a fancy restaurant and one who doesn’t have enough money to buy food at all. This distinction, one between what Keynes calls marginal disutility and catastrophic poverty is important, and easy to see in extreme cases. But when does marginal disutility become poverty; that is, when does a person’s relationship to price given their income and resources go from being an inconvenience to a crisis?

If you want to throw a monkey wrench into discussions about Seattle’s “housing crisis,” ask the person using the term, “When did the crisis begin.” They’ll have no good answer. The smarter person will recognize the intellectual blind alley you’ve invited them to enter and respond with some point in time at which price started going up. Others might cite month over month or year over year rent increases so often uncritically written about in the Seattle Times. Most will roll their eyes, wave their hands, and say “C’mon, you know what I’m talking about!”

The truth is that Seattle’s “housing crisis” resides somewhere between hysteria and hoax. The housing crisis is what analysts of language and culture often refer to as a shibboleth, something everyone simply accepts as true without much thought. It is happening, and to question it is automatically discrediting to the person questioning it’s relaity.

But if we critically think about how we make economic policy in the wider world, one measure used as common currency is the term recession. A recession has a clear, quantitative definition: a “period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer.”

People of all types – experts, lay people, and politicians – can and do argue about what a recession means, how deep it is, how long it will last, and whether it really reports what’s going on in real people’s lives. But it has a beginning, middle, and end. We know when it starts and when it’s over. But the housing crisis? Nobody has a clue.

That fact itself is easy to dismiss, and the City bureaucracy, the brainiacs at the Sightline Institute, the Mayor and Council, and the Mad Lib writers at the Seattle Times have all just joined in decrying the “crisis” and offering solutions to how to put it to an end. The problem is that how will we know it’s over, the crisis not having any measurable beginning or any quantitative measure to express what not being in crisis is like.

To be accurate, prices have gone up (prices for X have gone up Y percent over X period of time) and we can measure that phenomenon. But when did such rises in price become a crisis? And what do we think accounts for that price increase, who is impacted, and what are the policies that might increase housing production adequately enough to alleviate suffering or disutility?

We don’t know or have even a method to work that out. Sure, we have the sledgehammer of assuming that people ought to spend 30 percent of their gross monthly income on housing, but that’s it. Based on that, the solution to the “crisis” would be that all or most households at least (what percent is a mystery) are paying 30 percent of their gross monthly income on housing. Again, almost everyone on all sides will wave their hands at this as if it is not only unimportant but also almost mean or discourteous.

Finally, we do know that several thousand people will sleep outside, in tents, or in their cars because they have no other good options. Some will be in shelters. Some will stay in dangerous or harmful situations to avoid being without shelter. And some other number of people is facing the real possibility they won’t be able to pay rent next month. For these people, by almost any measure, housing and many other aspects of their lives are in or entering what could be considered a crisis phase as defined in the dictionary, “an unstable or crucial time or state of affairs in which a decisive change is impending.” For many, however, the change for the worse happened some time ago.

Now some will say, “Those are the people I’m talking about.” Really? If that was the case, then our policy discussion wouldn’t be about the rent for a one bedroom apartment in Capitol Hill and it’s change over months, but the urgent need to bring a broad range of resources to address people without adequate shelter and how we might prevent others from joining them. But that discussion has already been going on for decades – remember the 10-year plan to end homelessness that was promulgated well over a decade ago?

Today’s housing policy conversation is one characterized by muddy thinking about what the problem is even though we know that rising prices are an indicator of scarcity, that is, lack of supply. Addressing that lack of supply, still, is a matter of controversy. And even those who agree that more supply is needed, usually hedge, giving in to what they call, “political realities.” I’ll dig into those in the next essay.

Go to Part 2.