There are times in meetings when someone says something that makes your jaw drop open. This week that happened to me. While in a meeting about a complex issue about how Seattle City Light gets service to properties that are being divided up into more than one parcel. It’s a complicated issue involving the City’s land use and electrical code, and, significantly, design review. Builders have been trying to build more housing and they have to divide lots in a way that would allow them to avoid design review. This saves substantial costs, but ends up triggering other problems including technical and legal difficulties getting City Light service to the multiple parcels. Here’s what a City staff person said, as a matter of fact, during the meeting on this topic:

Anytime builders under develop [to avoid design review] it’s bad for the city.

Wow! I jumped on that comment, saying that this is exactly what gets me up and motivated every single day: we need more housing! I want to note, however, that City employees not our enemy. On the contrary, City staff often end up having execute horrible policies imposed by, you guessed it, the Seattle City Council. And the staff person definitely meant city with a small “c,” recognizing the fact that when City regulators make rules that are so onerous that builders avoid triggering them, we lose vital housing supply in a market brimming with demand. 

But why is it that this simple observation, what some people would call “the truth,” is not the starting point of all housing policy and housing discussions taking place in Seattle? The answer is a complicated one, and it’s the reason why we have a housing “crisis.” Here’s my rough notes on why we can’t seem to deal with the housing issue from a basic principle that making more housing and more types of housing all over the city is good for prices and for sustainable growth.

The Conspiracy

“If we let developers build, they’ll just build more, expensive housing units nobody can afford.”

This almost sounds like the Yogi Bearism, “nobody goes there anymore, it’s too crowded.” We’ve been over this one again and again. There is no such thing as expensive housing, unless you’re talking about mansions in Beverly Hills. Even then, to a significant degree, like anything, housing gets expensive when it’s scarce and hard to build because of regulation.

The Trickle Down

“Building more market rate units is just another example of ‘Trickle Down Economics’ that was proven a failure under Ronald Reagan.”

This argument is all about what we often call “filtering,” the concept that when supply expands the newest housing units are, indeed, more expensive, however competition for older, cheaper units isn’t as intense meaning those units stay less expensive. Increasing supply of new housing options so landlords compete with each other for tenants rather than tenants bidding up scarce housing is just common sense. But it’s also economic fact, studied by people like Mike Scott who know the housing market. Calling it “Trickle Down Economics” is a rhetorical device to associate those of us who support more building of housing with Ronald Reagan, probably the least favorite President among Seattle voters.

The Threshold

“There will always be a threshold. We just have to live with it.”

This comes from both the City side and from our side of the discussion; general resignation. Even though avoiding expensive and time-consuming design review creates other problems that reduce housing supply (like the ones builders face with getting electricity to their site) there’s nothing that can be done about the broader problem. There is a lot of frustration among builders who face a myriad of rules and regulations that raise costs and lengthen the time it takes to get a project finished. Ignoring the impact of these costs on housing price can only happen when we ignore the basic principle that fewer housing units and higher costs means the disutility of higher housing prices for everyone, especially for poor people with less money to spend.

Because Social Justice and Equity

“In order to achieve social justice and equity and housing, developers have to be accountable and pay their fair share.” 

This is, as I pointed out earlier this week, the idea that equity and social justice (whatever those things mean) can only be achieved at someone’s expense. That is, you can’t possibly have just outcome unless someone bad suffers negative consequences for what they’re doing to create injustice and inequality. Nevermind for the moment nobody can even define what these terms really mean, what’s important to some people in town is that new housing construction is a bad thing, an impact, that needs to be offset with–are you sitting down?–more housing! The social justice argument is a veil for the status quo in Seattle, and is built on the premise that what builders are doing is a bad thing. So what if more design review rules end up adding costs and slowing down projects; they deserve it.

It’s Politics 

“It might be true that cutting back on things like design review would help lower housing prices, but that’s just not politically possible.”

The truth is that with leadership politics can change. By simply giving up and giving in and not raising the larger issue that City staff person raised, we’re for sure going to get more of the same. When we look at the math, we know design review adds costs to projects that get passed on to renters. When builders find ways to avoid these costs by building fewer units, they trade supply for efficiency. That’s the point of the City staff person’s important and truthful comment. If this fact isn’t presented to politicians as a consequence of their actions creating more design review requirements that make building housing more difficult, how can they be held accountable.

Whatever the excuse is for not making it part of the base calculation of how we consider housing policy in Seattle, we have to start with the principle that reduced housing supply and choice is, as the City staff person pointed, “bad for the city.” If we don’t, then we shouldn’t be surprised by the negative outcomes when they happen.