Panel: Does Big Money Have Too Much Influence in Politics?

Last fall, Sightline Institute executive director Alan Durning joined Western Washington University (WWU) political science professor Sarah Weir, as well as Washington Policy Center president Dann Mead Smith in a panel discussion of campaign finance in American politics, moderated by WWU’s Paul Dunn.

“96% of Americans believe that big money has too much influence in politics. Unfortunately, 91% of people think there’s not much we can do about it.”

– Alan Durning, minute 9:40

Below is the full panel discussion. You can also watch it here.

The discussion includes a lively debate on the role of money in politics and whether publicly financed campaigns return political power to everyday people and allow candidates to spend less time dialing for dollars and more time interacting with regular voters, or if publicly financed campaigns actually threaten free speech.

The panel also touches on ways to increase voter participation, alternative voting systems (such as proportional representation), and the importance of democracy reform as a building block to larger progressive change in politics.

 

Finding the Missing Middle: Rowhouses, Townhouses, and Seattle’s Affordability Plan

This article is part of a series on Seattle’s proposed Mandatory Housing Affordability (MHA) program. In previous articles I identified inconsistencies in the proposal and presented case studies (here, here, here, here) on several housing types. Next up: for-sale townhouses and rowhouses in MHA’s low-rise zones.

Neighborhoods that are home to people from a range of income levels need all kinds of housing choices. Townhouses and rowhouses provide modestly sized homes for purchase. In Seattle, as in many cities, these homes are called “missing middle” housing because they help fill the gap in the spectrum of housing options between super-expensive single-family houses and higher-density large-scale apartment buildings.

Complementing my prior analysis on missing middle low-rise apartment buildings, this article looks at the potential impact of Seattle’s proposed Mandatory Housing Affordability (MHA) program on townhouses and rowhouses. MHA would allow larger buildings in exchange for a portion of homes priced for lower-income residents (below market-rate) or payment into a city affordable housing fund. If the requirements are carefully balanced, MHA can be a powerful tool for improving affordability by delivering more of both market-rate and subsidized homes—and in a shortage as severe as Seattle’s, we need both to keep prices down.

But MHA as proposed for townhouses and rowhouses is not balanced, similar to my previous findings for other housing types. The cost of the MHA mandates exceeds the value of the increased building capacity, so MHA would impede homebuilding, exacerbate Seattle’s already acute housing shortage, and undermine the program’s own goals. Unfortunately, because of the unique characteristics of townhouses and rowhouses, and unlike other housing types and zones I’ve studied, there is no straightforward fix for the MHA draft in Seattle’s low-rise zones. In fact, because missing middle housing comes in such idiosyncratic forms and yet is so important to Seattle’s housing mix, the most practical fix may be to exempt low-rise entirely.

A rowhouse or a townhouse?

Rowhouses and townhouses are homes attached side-by-side along common walls. The only difference, as the City of Seattle defines them, is that rowhouses line the street, while townhouses may stand behind one another. Both types are typically three stories tall and have one parking space apiece. Because Seattle’s single-family zones have been almost completely built out for decades, rowhouses and townhouses have long provided nearly all of the city’s additional for-sale homes with ground-level access to entries and small yards—features particularly attractive to families with children.

City of Seattle sketches of typical townhouse (left) and rowhouse (right) developments. Used with permission.

Larger units, fewer homes, higher prices

Upzones only increase value for builders substantially if they accommodate extra homes. Enlarging a multi-family building without upping the unit count means larger units, which provide a diminishing return to builders because home value per square foot declines with increasing size. Larger units also have higher prices, which doesn’t help people struggling to afford homes across the city. The quandary is that rowhouses and townhouses have inherent characteristics that in most cases would preclude additional units under the MHA upzones as proposed.  

A bump in size yields a more expensive home–which defeats the purpose twice over.
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Townhouse and rowhouse developments consist of a small number of individual homes, so adding a unit requires a major reconfiguration of the design. Unlike most other multi-family housing in Seattle, rowhouses and townhouses are usually sold, not rented. To enable “fee simple” sales—individual ownership of each home and the land beneath it—they are divided vertically over the entire height of the building. In contrast, apartment homes are stacked, allowing much more flexibility for redesign to accommodate extra units.

The number of rowhouse or townhouse units in a single development depends on the size and geometry of the site and on city rules for setbacks from the property lines, maximum allowed building length, open space, and parking access. Also, to allow for practical floorplans and accommodate a stairway, the “floorplate”—the patch of land that the building sits on—of each home cannot be much less than 400 square feet. Builders already maximize the number of units on each site within these constraints.

Floor-area ratio (FAR) almost never dictates the limit on units per site, so the additional FAR granted by an MHA upzone will rarely allow another rowhouse or townhouse on a site. If the MHA upzone doesn’t allow an added unit, the only way to use extra FAR is through bigger units. Again, the larger the unit, the less it’s worth per square foot, which erodes the value to the builder of the extra FAR. And a bump in size yields a more expensive home–which defeats the purpose twice over.

City of Seattle diagrams of an 8-unit townhouse project before (left) and after (right) the proposed MHA upzone. Used with permission.

Where to put the MHA capacity?

Those problems are just the beginning. To understand the rest, consider a case study: City of Seattle planners illustrated (above) how one proposed low-rise MHA upzone (the one for the LR2 zone) might play out for an eight-unit townhouse project. Look at the plans and you’ll see there’s no room for an extra unit. Instead, the extra FAR granted by the upzone expands the size of the houses, shown in turquoise on the right. On some units, existing floors get larger; on others, homes spout fourth floors.

But getting taller is no good. Although the proposed LR2 upzone grants 10 feet of extra height to allow a fourth floor, most buyers of rowhouses and townhouses will shy away from a four-story home. Who wants to walk up and down four stories? What’s more, building a fourth floor moves projects from the easier residential building codes to the more demanding and expensive commercial building codes. Construction costs go up, typically, by 5 percent (see appendix for details). Furthermore, the proposed MHA upzone requires a 12-foot setback on the top floors, which in some cases would raise construction costs even more, by limiting design options and requiring more complicated engineering.

In sum, building bigger rowhouses and townhouses reduces the sale price per square foot for builders and reduces affordability for buyers. Building four-story rowhouses and townhouses saps buyers’ interest, reducing the sale price even more, while raising the cost of construction.

In the end, most builders would avoid a fourth floor and instead try to cram whatever extra space they’re allowed into three stories. In some cases, it would be physically impossible. In others, it would be possible but would yield units squatting close to each other and crowding the site, leaving less outdoor space and compromising livability (the “L” in HALA).

Rowhouses in Seattle’s Central Area, by Dan Bertolet, used with permission.

Townhouse and rowhouse feasibility case studies

I assessed prototypical six-unit townhouse and six-unit rowhouse projects, each sited on 7,200-square-foot lots in a low-rise 2 (LR2) zone. I assumed they were located in a medium market-strength area for which the proposed MHA in-lieu fee is $13.25 per square foot. Because these projects only have six units, MHA’s “inclusion” option—in which builders can provide a share of units for below-market prices rather than paying the in-lieu fee—would not be practical. Even the highest MHA fraction of 10 percent of units is 0.6 homes, and you can’t build a fraction of a house.

Following the before-and-after method I described previously, I applied static pro formas to estimate how the MHA upzone would change the homebuilder’s return on investment (ROI) compared to a baseline project under existing zoning that would deliver a 20 percent ROI—a realistic target ROI for these small-scale for-sale projects. I assumed the construction cost, cap rate, and other pro forma inputs used in the City of Seattle’s MHA feasibility study (details in the appendix).

As noted above, for townhouses and rowhouses, as unit size increases, the sale price per square foot decreases. To account for this variation in the pro forma, I assumed a range of sale prices based on a survey of 500 sales throughout Seattle in 2016 and 77 sales in Seattle’s 98122 Zip Code from 2012 to 2017, extracted from Redfin sales data (see price-per-square-foot table in the appendix).

Pro forma results for rowhouses and townhouses are summarized in the table below (full pro forma tables are in the appendix). For each building type I tested two scenarios: (1) all of the added FAR accommodated on three floors, and (2) a fourth floor added to accommodate the added FAR. In all scenarios the number of units remains constant at six.

For the three-story scenario, compared with existing zoning, MHA causes ROI reductions of 21 percent for rowhouses and 13 percent for townhouses. These results are similar to those for low-rise apartments. The hit to ROI is smaller for townhouses because the townhouse upzone grants twice as much additional FAR as the rowhouse upzone and therefore creates more value. (FAR boosts for the proposed MHA upzones for each low-rise building type are in the appendix.)

As noted above, the change in applicable building code triggered by increasing height from three to four floors typically introduces a construction cost premium of about 5 percent. As shown in the table above for the four-story scenarios, this cost premium causes a big drop in ROI, illustrating its sensitivity to added costs.

In the vast majority of cases, the MHA upzone would not enable builders to squeeze an additional unit on a site. If a seventh unit could somehow be added to these case study projects, my pro forma model projects an ROI of 19.3 percent for the rowhouses, and 21.1 percent for the townhouses, assuming height is limited to 3 stories. In other words, if MHA allowed an extra home and somehow enabled builders to bend space and make one fit, the upzone would be well balanced.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

To build or not to build?

Under MHA as currently proposed, most townhouse or rowhouse projects would try to make use of the upzone’s FAR on three floors. In such cases, compared to existing zoning, the loss of ROI caused by the required MHA fees would result in fewer projects being built—more so for rowhouses than townhouses because rowhouses would take a bigger hit on ROI.

If fitting all the FAR on three floors is not possible, then the builder has two choices: forfeit the FAR and take a corresponding hit on value and ROI, or build to four stories and pay the cost premium that takes a big bite out of ROI, as shown in the table above. Actually, the builder has one more choice: not to build at all. And many would probably make that choice, because both of the other options spell a much narrower margin for profit and a greater risk of losing money. In rare cases, a builder might find a way to utilize the added FAR in an extra unit, in which case the value exchange would be close to equal and the impact on production minimal.

Like modest-scale missing middle apartments, townhouses and rowhouses are usually built by small, local businesses that operate on thin balance sheets. They can’t easily absorb added development costs, as compared to large-scale homebuilding firms that typically have deeper pockets and access to cheaper capital. Thus the projected loss of ROI for townhouses and rowhouses—though less severe than my analysis showed for larger-scale housing prototypes—would likely cause no less harm to homebuilding, hampering Seattle’s goals for adding market-rate and low-income homes across the city. As with any added development expense, construction of rowhouses and townhouses would ramp back up only after home prices rose sufficiently to offset MHA’s net costs. That is to say: the draft MHA currently under consideration would make rowhouses and townhouses more expensive across the city, by making them scarcer.

Townhouses in Seattle’s Central Area, by Dan Bertolet, used with permission.

Bringing MHA back into balance

To avoid suppressing construction of townhouses and rowhouses, MHA must be brought back into balance. For these building types, however, there are no good options for increasing the value of the upzone. Anything greater than a FAR of 1.4 gets increasingly difficult to fit in three stories without sacrificing open space, but going to four floors introduces a big cost premium because of the commercial building code. Additional FAR alone will almost never enable the addition of an extra unit to a project, which means the new homes would almost always grow bigger, draining more of the homebuyer’s bank account, while at the same time yielding less value per square foot to the builder.

Changes to design standards are also unlikely to provide much value. The proposed removal of standards for parking location and access might allow more efficient use of the site but only in rare cases. Reducing setback requirements could enable use of a bit more FAR on three floors or perhaps increase the (minute) chances for an additional unit. But it would also yield built form less compatible with the intended character of low-rise zones because the structures would press in closer to homes on adjacent lots.

To encourage rather than discourage building missing middle homes, the only effective option remaining is to dial back the affordability requirements. In my pro formas, preserving ROI at 20 percent requires lowering the in-lieu fee to $6 per square foot on townhouses, and to just $1 per square foot on rowhouses. But those numbers would only balance MHA for scenarios in which all of the FAR can be used on three floors. For projects requiring a fourth floor or in which FAR can’t be fully utilized, the in-lieu fees would have to be even lower to balance MHA.

Let’s not miss out on the missing middle

Today in Seattle, townhouses and rowhouses are the only for-sale units many families can even imagine affording. They aren’t cheap, typically hitting the market at $500,000 and up, but they are far more attainable than Seattle’s astronomically priced single-family houses, 40 percent of which currently for sale are priced greater than $1 million.

The size and shape that  townhouses and rowhouses come in, the way they fit on a lot, and the quirks of their construction make them unsuitable for a one-size-fits-all MHA program. As the proposal now stands, the city is cooking up a recipe not only for stymied homebuilding, but also for unintended consequences that would arbitrarily favor some kinds of housing over others. Most of the missing middle homes that did manage to get built under MHA would be larger and therefore more expensive.

To avoid a policy that may do more harm than good, Seattle policymakers can substantially reduce the MHA requirements. But even that solution is unlikely to buffer the policy’s unpredictable ill effects on such idiosyncratic housing types. It may be better to nix MHA in low-rise zones altogether than risk nixing the missing middle housing that Seattle so sorely needs.

Thank you to David Neiman who provided invaluable conceptual guidance and did most of the heavy lifting for the pro forma calculations.

 

Appendix

The table below shows the assumed price per square foot sale prices of townhouse and rowhouse homes based on a survey of recent sales extracted from Redfin, as described in the text above. When residential buildings exceed three stories, it triggers a shift from the residential building code to the commercial building code. The construction cost shown below reflects an assumed 5 percent cost premium caused by that change. For a recent townhouse project designed by Seattle builder David Neiman, a switch to the commercial code required sprinkler upgrades, a central monitoring system, rated garage doors, walls, and soffits, a fire alarm system, occupant notification systems, 42-inch railings, and double-sided handrails, adding up a 7 percent premium on the total project construction cost.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

The table below shows the pro forma data for before and after MHA for six-unit rowhouse and townhouse projects, assuming three-story construction.

The table below shows the assumed units sizes and their sale prices based on a survey of recent sales extracted from Redfin, as described in the text above.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

The table below shows the assumed units sizes and their sale prices based on a survey of recent sales extracted from Redfin, as described in the text above.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

Lastly, the table below shows the FAR limits for the four building types allowed in Seattle’s low-rise zones, under existing zoning, and under the currently proposed MHA upzones. The change in FAR—the most fundamental determinant of the value of the upzone—varies substantially depending on both the zone and building type.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

Weekend Reading 3/24/17

Alan

I sat and cried when I read about the large sections of Australia’s Great Reef that are now dead. A mysterious force—call it God, call it the universe—brought us into being on an orb enchanted with life: a miraculous sphere of unimaginable wonders, spinning in the black void of space. Surely, if anything is sacred, it is our home planet.

A big part of the solution to the carbon footprint of long-distance transport (whether air, truck, car, or diesel trains) could be electric-powered fast trains: electric because that lets us power them with renewable sources; fast lets them compete with other modes. If spending $1 trillion on infrastructure were going to mean greening the economy—rather than building monuments to the fossil-fueled past in the forms of highways and pipelines—this idea might figure prominently in public discourse.

The president’s proposed budget would make huge cuts to the Northwest’s world-leading scientific institutions, especially medical research; to EPA; to transit expansion; and more. The list of agencies and programs proposed for elimination includes many I admire for their efficient efforts to correct glaring market failures. One sideline reflection: Most Americans have little love for their federal government because they don’t know what it is. It is largely an enormous institution that collects taxes and borrows money from global financial markets, then distributes checks to others. The entitlement programs, of course, do so. But a huge share of the money flowing through the agencies is also granted to states, localities, tribes, commissions, nonprofits, and other institutions. The only federal enterprises that I can think of that mostly spend their money on their own personnel and equipment are the military, national parks, and the post office (and those three parts of the federal government are among the most respected by the public). Americans tend to like their local government best, their state government middling, and their federal government least. The irony is that the things they do love—their local universities, for example—are often supported by federal funds. Cascadia’s premier public university, for example, is the University of Washington. It gets almost as much money from Washington, DC, as from Olympia, in the form of $1 billion a year in federal scientific research grants. But Washingtonians do not mentally credit the nation when they show their Husky pride. The EPA, for another example, is a small cadre of law enforcers (mostly lawyers), plus a larger number of grantmakers. Local governments get the credit for cleaning up contaminated waterbodies and industrial sites, EPA pays the bills. As if to punctuate this reality came the news this week that the Oregon State Department of Environmental Quality is planning staff cuts because it expects its EPA grants to diminish.

Here’s why going faster doesn’t make you happier; you just drive farther, and mark your calendar for the March for Science on Earth Day. We are called.

Anna

I kind of thought “bandwidth” (in the brain sense) was mostly just corporate jargon or pop psychology, though I’ve definitely used the word myself to describe my own state in frazzled moments. But it’s a real thing. And it can be really serious. Shankar Vedantam (of Hidden Brain—awesome podcast, BTW) got the scoop from two researchers who study scarcity and its effects on our brain function. They show that people in poverty, for example, can compound their troubles by, say spending their last dollars on food rather than saving some of what they have for rent, not because they are foolish or lack foresight, but because the brain’s focus on immediate needs shrinks their capacity for thinking about other things—you actually become less able or unable to expend mental energy on anything else. Scarcity preoccupies and, like a giant file download on a computer, it pushes out everything else. (See, er, hear also: “I’m Right, You’re Wrong!,” Hidden Brain’s research-based examination of why it’s so difficult to change false beliefs, like, fake news claims or climate science rejection.)

Canadians with cystic fibrosis live ten years longer than Americans with the disease—into their fifties instead of their forties. There is no known cure for this genetic disorder but there are treatments and medications. So, why do Canadians fare better? Researchers compared people on both sides of the border, controlling for factors like age, sex, genotype, pancreatic status and more. There are other contributing factors such as diet. But as Aaron E. Carroll, professor of pediatrics at Indiana University School of Medicine writes in the New York Times, the most significant factor is health insurance. “Canada has a single-payer health care system, which is similar to the American Medicare system. It covers all people in Canada, including those with cystic fibrosis.” Medicare helps take care of those who have it, but many more in the US fall through the cracks. And that’s true for Americans with or without a degenerative disease. Canadians, overall, live longer than Americans and health insurance plays a role—not only in length but in quality of life.

Finally, some clean energy technology eye candy: the Smart Flower. This is so cool.

Eric

Climate activist Alec Connon writes about the six arrestees who went on trial this month for blocking an oil train, and he explains why it was an act of conscience.

Last summer I hiked the 510-miles of the Pacific Crest Trail that traverses Washington, so I was pleased to see the Seattle Times feature the most “wow” worthy parts of that route. Washington state has an embarrassment of scenic riches, but for my money the most spectacular is also the most remote and rugged: the section between Stevens Pass and Stehekin that passes through the western portion of the Glacier Peak Wilderness. I hope the drama of Fire Creek Pass will stay etched in my mind forever.

And I’m ready for summer again. After this endless dark season I’m starting to think the Hungarians are onto something: next year we should try scaring off winter.

Kristin

What if, in addition to the Council of Economic Advisers, the White House had a Council of Social Advisers? Economists bring attention to changes in GDP, but sociologists might bring attention to, for example, the elevated rates of depression, drug addiction, and premature death in the United States. Seems pretty important.

Ontario, Canada, is doing a basic income pilot in areas with high levels of poverty and food insecurity.

This article about “The Decline of Men” has some fascinating statistics, but I found the comments to be interesting: most top comments were some version of “Oh, poor men. Cry me a river.” Which I get, especially when one of the things men have “lost” is a “compliant wife.” But then again, while it’s easy to tell grown men to buck up and carry on without a compliant wife, it’s harder to imagine telling little boys to buck up and soldier on in a childhood that is insecure and an adulthood that seemingly offers them no place. And whether you feel bad for men or boys, the picture is not good for society as a whole. A country full of lost, drunk, violent men who feel they have no role and no roots isn’t good for anyone.

US Climate Attitudes Hit 8-Year High

Is climate change concern among US voters growing because of moves by the US Congress and the White House to stymie pollution-cutting solutions—or in spite of them?

Gallup reports this month that Americans are taking global warming more seriously than at any time in the past eight years.

In any case, Gallup reports this month that Americans are taking global warming more seriously than they have at any time in the past eight years. In March, sixty-four percent of US adults say they are worried a “great deal” or “fair amount” about global warming. This is up from 55 percent at this time last year and is the highest since 2008. And the rise cuts across party lines: Gallup found that 40 percent of Republicans worry a “great deal” or “fair amount,” up from 31 percent last year. Independents’ concern bumped up nine points, from 55 percent to 64 percent. Democrats went from 78 percent to 84 percent.

New data compiled into detailed maps—down to the county and Congressional district level—by researchers at Yale and George Mason reveal that a robust majority of adults in every congressional district in the nation support limiting carbon dioxide emissions from existing coal-fired power plants. Seven in ten, to be precise. And 75 percent of US voters support regulating C02 as a pollutant more generally. As for Cascadians, seventy-seven percent in both Oregon and Washington support regulating carbon pollution, and 71 percent—in OR—and 73 percent in WA favor stricter limits on coal-fired power plants. Notably, numbers stay pretty high—above 60 percent—across blue and red parts of both states. In Alaska, 72 percent say we should regulate C02 as a pollutant and 67 percent agree to stricter limits on coal-fired power plants. In Idaho, it’s 70 percent and 65 percent, respectively.

None of this seems to jibe with Trump’s moves in office to make good on “campaign vows to rip apart every element of what [he] called Mr. Obama’s ‘stupid’ policies to address climate change.”

He is gearing up to kill the Clean Power Plan, roll back fuel-economy standards and other efficiency rules, trash climate change research and prevention programs across the federal government, slash the Environmental Protection Agency’s budget by 31 percent (more than any other agency), and possibly remove the budgeting metric known as the social cost of carbon, as well as blocking or weakening about a half-dozen additional Obama-era executive orders and policies to combat climate change. Republicans in Congress (and some Democrats), the New York Times reminds us, are siding with Trump—if not egging him on.

The Yale maps, based on a statistical model of survey data gathered between 2008 and 2016, show more ways electeds are out of sync with Americans: fully 70 percent of voters know climate change is happening, and 53 percent understand that it’s caused mostly by human activities. In Oregon, that’s 72 percent and 54 percent statewide, respectively, and in Washington, it’s 73 and 55 percent. These numbers drop somewhat across Idaho state lines; 47 percent there say it’s human-caused. For Alaskans, the estimate is 70 percent who say it’s happening but 49 percent who attribute it to human activity. Yale estimates that a whopping 82 percent of American adults support funding research into renewable energy sources.

But the new EPA Administrator, Scott Pruitt, recently said he didn’t believe that C02 “is a primary contributor to the global warming that we see,” calling for more debate. Breaking from Pruitt’s stance, however, and breaking yet another polling record, Gallup finds that as of early March fully 65 percent of Americans now say that “increases in the Earth’s temperature over the last century are primarily attributable to human activities rather than natural causes.” This represents a striking 10-percentage-point increase in a year’s time. Democrats and independents show double-digit increases while Republicans ticked up just four points. For what it’s worth, Oregon’s Senator Jeff Merkley grilled Pruitt on his oil industry loyalty and dismissive attitude toward climate change during his confirmation hearings and Washington Senator Patty Murray urged her colleagues to vote against his confirmation. All four WA and OR Senators voted “no.” Idaho and Alaska senators voted to confirm.

Yale’s model finds that a slim majority nationally (51 percent) agrees climate change is already harming people in the US—that’s on par with Oregonians and Washingtonians—both 52 percent. In Idaho it’s 47 percent, and in Alaska it’s 48 percent. Still, only 40 percent think it will harm them personally—nationally and in Oregon and Washington, too. Even so, the fresh Gallup numbers indicate something of a bump in Americans’ risk perception:

Nearly 6 in 10 (59 percent) today say the effects have already begun, up from 55 percent in March 2015. Another 31 percent, up from 28 percent in 2015, believe the effects are not currently manifest but will be at some point in the future. That leaves only 10 percent saying the effects will never happen, down from 16 percent last year and the lowest since 2007.

Gallup also saw an increase in the share of US adults who believe climate change will eventually pose a serious threat to them or their way of life. Forty-one percent now say it will, up from 37 percent in 2015 and, the highest Gallup has tracked since the late 1990s.

Seeing may indeed contribute to “believing.” A hefty majority (66 percent) told Gallup they’d experienced an unusually warm winter, and the bulk of those attribute it to human-caused global warming. The Yale maps also show climate worry registering higher than prevailing local politics would suggest in places in the US prone to severe weather impacts (droughts, flooding, hurricanes—e.g., parts of Florida and Texas).

The overall picture is encouraging—that is, if you ignore the fact that mainstream attitudes don’t seem to mean much to elected officials with their hands on the levers of power. Maybe it’s the decent folks in those red counties where the locals are experiencing both the heartbreak of global warming impacts and exhibiting growing support for climate policy fixes who hold the key to keeping wayward legislators (and agency heads) in check? It’s March, and in Cascadia that means endless bitter rain tamping down any hopeful signs of spring. I’d readily volunteer for a strategy-gathering field trip to southeast Florida about now! (More on that later.)

The Colorado Family Planning Miracle

Most businesses would jump at the opportunity to invest a dollar that saves them $5.85 over the next three years and then keeps on returning savings, all the while improving service to their customers.

That’s what the state of Colorado accomplished by upgrading family planning services between 2009 and 2014, and other jurisdictions have reported even greater returns over the long run. For instance, when Delaware governor Jack Markell saw Colorado’s results, he got excited and kicked off a copycat process of retooling family planning services across his state, where over 60 percent of pregnancies were unintended. Will Oregon and Washington follow suit?

The Colorado success story, by the numbers

Almost half of Colorado women who got pregnant in 2008 said that the pregnancy happened sooner than they wanted or that they hadn’t wanted to get pregnant at all. That was similar to the US average: the rate of unintended pregnancy has been stuck around 50 percent since the 1960s.

Global health experts call unintended pregnancy an epidemic because it’s so common, and the toll on physical health, mental health, and child development so large. A cascade of benefits follow from reducing unsought pregnancies: better health and education for women, more financial security for families, healthier babies, and less strain on social services dedicated to helping families with lower incomes or wealth.

After implementation of the Colorado Family Planning Initiative, teen births and abortions dropped by nearly half.

Public health experts have known this for decades, and evidence showing the protective benefits of intentional parenthood keeps pouring in. The challenge has been how to move the dial. That’s why Colorado’s success caught experts’ attention worldwide.

After implementation of the Colorado Family Planning Initiative, teen births and abortions dropped by nearly half. They fell by nearly 20 percent among women aged 20-24. (Note: Under normal circumstances, over 80 percent of teen pregnancies and 70 percent of pregnancies among single women aged 20-29 are unsought, so this change means women’s realities are better matching their family desires.) Second-order births to teens—teens who gave birth a second or third time—dropped by 58 percent. High-risk births, including preterm births, also diminished.

Poor families benefited the most, because unsought pregnancy is four times as common and unsought birth seven times as common among poor women as among their more prosperous peers. With fewer families facing the dire circumstances triggered by an unexpected pregnancy or unplanned birth, the state saved $66-70 million in public assistance, according to a team of economists at the University of Colorado.

Reduced unintended pregnancy by Good Works Group. (Used with permission.)

How Colorado did it: LARCs as the lynchpin

How did Colorado get such dramatic results? Much of the improvement came from a technology revolution in contraception. Couples switched away from error-prone family planning methods that require action every day or every time they have sex—methods like pills and condoms (and crossed fingers)—to long-acting IUDs and implants that make pregnancy prevention easy. These methods are “get it and forget it.” They eliminate contraceptive challenges such as ponying up for pills year after year, or just remembering to take it daily, and they work 20-50 times better than the pill. When a woman wants to get pregnant, her healthcare provider can remove the implant or IUD, usually in a five-minute procedure, and normal fertility returns almost immediately.

A study of 9,000 women called the Contraceptive Choice Project and conducted by Washington University in St. Louis demonstrated that long-acting contraceptives dramatically reduce unplanned births and abortions. It also showed that most women prefer these technologies when high cost and other barriers are removed.

In recent years, protective agencies such as the US Centers for Disease Control and Prevention (CDC) and professional groups such as the American Congress of Obstetricians and Gynecologists have declared these methods far more effective and safer than any other method—even for teens and women who are HIV-positive—and far safer than the risks from pregnancy itself. One of these methods, the hormonal IUD, has bonus health benefits, including protection against some cancers.

But for implants and IUDs to become widely available and popular among Colorado women, health agencies had to upgrade their system of care. And that’s what they did.

The Colorado Department of Public Health and Environment, in partnership with an anonymous philanthropic foundation, launched a process of retooling the state’s clinic system to provide state-of-the-art care. Together, they expanded the range of clinicians and facilities that offer contraceptive care, retrained counselors and providers, updated scheduling and billing practices, and launched a public awareness campaign.

Birth Control Effectiveness Chart by Bedsider (Used under a creative commons license.)

Colorado’s four foundational strategies

The Colorado Family Planning Initiative (CFPI) organized around four strategies.

  1. Increase access to quality services. CFPI adopted a “no wrong door” approach that brought services to women wherever they might encounter the healthcare system. Grants to over 100 public health centers, including school-based and rural clinics, supported training for residents, advanced practice nurses, and others, allowing them to improve counseling and to insert (and remove) implants and IUDs. More flexible hours at these health centers improved access for working women. CFPI integrated family planning into primary care, labor and delivery, and post-abortion care.
  2. Increase availability of IUDs and Implants. CFPI funding made all methods available with no co-pay, a standard that later would be incorporated into Obamacare (now on the chopping block, of course). Implants and IUDs are cheaper in the long run than other forms of birth control, especially if you include the costs associated with an unplanned pregnancy. But until recently, the up-front price of long acting contraceptives has made these methods unavailable to many women.
  3. Promote healthy decisions and planning. Better access to better birth control doesn’t do much good if people don’t know about it, so the CFPI worked to normalize conversations about sexual health. Young Latinas, who have a higher-than-average teen pregnancy rate, talked with each other in culturally proficient after-school programs. Social service agencies offered sexuality workshops or provided onsite access to educators. A website, BeforePlay, offered practical information about contraception and sexual health, as well as specific resources available across the state.
  4. Improve public policy and practices. When it came to building the policy framework for intentional parenthood, advocacy organizations, public agencies, and legislators all played their part. Data from Denver Health and the University of Colorado led the state to change reimbursement policies so that women could get an IUD or implant of their choice immediately postpartum in hospitals. The state Department of Education is developing new standards, and about a third of Colorado children now receive age-appropriate, science-based sexual health education. Despite objections from some religious conservatives, the Colorado State legislature extended funding for the updated health services.

The key to Colorado’s success lies in the interplay between these four strategies. The result has been a dramatic shift toward intentional parenthood as a new norm, one that empowers young people to live lives of their choosing and helps Colorado families to flourish.

A model for the Pacific Northwest to follow

At the start of CFPI, teen and unintended pregnancy in Colorado were significantly worse than in the Pacific Northwest. Now they are nose-to-nose. So, the question is whether Cascadia will deploy some of Colorado’s methods to leap ahead.

Today, despite improvements, Oregon and Washington (and Colorado, too) would still be considered part of the global unintended pregnancy epidemic. In contrast to most of Europe, rates of unsought pregnancy in Washington and Oregon remain close to 50 percent. (Note: More recent state figures put unintended pregnancy in Washington at 37 percent because of a change in the way it is measured. The new figure does not count women who were “unsure” if the pregnancy was intended.)

Groundwork in Oregon

Although Oregon has not yet launched a state-wide initiative akin to Colorado’s, Governor Kate Brown recently affirmed that she and the Oregon Health Authority “place a high priority on improving women’s health and reducing unintended pregnancies by implementing pregnancy intention screenings and providing effective contraceptives to women who do not wish to become pregnant.” Oregon nonprofits, public agencies, and care systems are moving forward on both fronts.

Pregnancy intentions screening: The Oregon Foundation for Reproductive Health has developed a technique—now a national model—that makes it easier for primary care, chronic care, and mental health providers to open up conversations about family planning. It is called One Key Question, and the question is: Would you like to get pregnant in the next year?  If a woman says yes, this leads to a conversation about preparing for a healthy pregnancy, called “preconception care.”. If she says no, she has an opportunity to explore contraceptive options, including top-tier methods that might not be familiar. If she says I’m not sure or I’m ok either way, she receives both.

Contraceptive access: In January 2016, two new laws went into effect in Oregon expanding access to oral contraceptives. Following a California model, retail pharmacists can now prescribe oral contraceptives or patches. A second law, the first in the nation, requires insurers to cover a 12-month supply of birth control at a single prescription fill.

Aligning incentives: In 2015, Oregon began to assess how many women served by regional Coordinated Care Organizations receive contraceptives that are considered “more effective” (like pills) or “most effective” (like implants and IUDs). This new measure allows the Oregon Health Authority to link payments to high-quality care.

Setting standards: The summer of 2017 will see the publication of new quality guidelines for family planning care along with self-assessment tools to be used by care systems. The advisory council creating these guidelines includes representation from the state, local, and private and public health sectors. The council has the goal of providing primary care and family planning clinics with clear, state-of-the-art standards of excellence for contraceptive care.

In 2016, the Population Institute, an international nonprofit that promotes high-quality and voluntary family planning services graded Oregon in its top tier for reproductive health and rights, second only to California. The grading system covers effectiveness, prevention, affordability, and access. Several factors contributed to Oregon’s positive rating, including a mandate for comprehensive sexual health education in public schools and expansion of family planning coverage through Medicaid.

But part of the reason Oregon rated well is because the United States as a whole rates so badly. Despite promising trends, the US teen pregnancy rate is far higher than any of the other 34 countries in the Organization for Economic Cooperation and Development. Oregon’s rate is 44 per 1,000—below the national average of 52 but still leaving plenty of room for improvement. Across all age groups, the percent of Oregon pregnancies that are unsought—46 percent—also leaves room for improvement. What would it take to establish a norm of intentional parenthood in Oregon?

Next Steps for Oregon

With national healthcare policy hanging in the balance, Oregon officials may have to scramble to protect residents against funding cuts that could make things worse: a reversal of Medicaid expansion, elimination of the ACA’s contraceptive mandate, cuts to Title 10, or defunding Planned Parenthood. But regardless of how these funding issues play out, there will be opportunities to increase intentional parenthood in Oregon through practice improvements and better public awareness.

Oregon’s One Key Question is a case of “local kid done good,” and by implementing the model statewide, Oregon has the chance to become a national leader in healthcare integration. This will mean incorporating routine pregnancy-intentions screening into primary care, labor and delivery, chronic care, mental health, and drug treatment programs—and doing so in a way that reduces rather than increases the burden on already harried physicians.

To reap the full benefits, clinical settings across the state will need to retool to be fully capable to support IUDs and implants, so that women can obtain the family planning methods they desire with minimal barriers. Upstream USA and the Bixby Center at the University of California San Francisco offer evidence-based training and consultation to help clinic team members streamline scheduling and billing procedures, improve contraceptive counseling, and get skilled at inserting implants and IUDs.

Lastly, the story must be told. Metrics that document downstream cost savings and improved wellbeing will help build durable public support for these programs and ensure that savings can be invested in other services for Oregon families.

Groundwork in Washington

Public officials in Washington have paid close attention to the models in St. Louis, Colorado, and Delaware, and they are keenly aware that better pregnancy prevention and birth timing can improve lives.

Like Oregon Governor Brown, Washington Governor Jay Inslee’s office has voiced support for upgrading contraceptive care statewide. The governor’s Results WA measures aim to reduce unintended pregnancy by 10 percent in five years, recognizing that achieving this goal will likely require broader and easier access to implants and IUDs. When Planned Parenthood showed that low reimbursement for IUD insertions had become an obstacle for clinics serving poor women, the state changed reimbursement rates.

Local and regional players also have stepped forward to upgrade contraceptive services and facilitate a technology shift to “get it and forget it” contraceptives for those who want them:

  • School-based clinics in Seattle now offer the full-range of birth control options to high school students, and Neighborcare Health, which runs several of these clinics, employs educators who help teens and their parents explore options.
  • The North Sound Accountable Community of Health, which is a front runner in Washington’s Medicaid Transformation process, has launched a series of continuing education trainings to ensure that clinicians in small and rural clinics can provide state-of-the-art care: initiating conversations about pregnancy desires, counseling women effectively about pre-conception health and family planning options, and providing implants and IUDs as desired.
  • King County, the state’s most populous county and home of Seattle, has a miracle of its own: a 55 percent drop in teen pregnancy over seven years. Although some factors are unknown, this didn’t happen by chance. In 2008, King County Public Health secured a small grant to train and provide technical assistance to school-based health centers so they could offer IUDs and implants on-site, with follow-up support from Public Health. Three of these health centers hired half-time sexual health educators, who taught in biology and health classes, and provided contraceptive counseling to teens and their parents. These services currently only reach Seattle teens, but the Best Start for Kids levy will help fund new school-based health centers in other King County cities. Not content to stop there, the County Executive’s office and Public Health Department have convened a team of experts—Title X family planning providers, community health centers, school-based health centers, and University of Washington’s Family Planning Division—with the mission to improve birth timing and reduce health disparities for local families.

Next Steps for Washington

Like Oregon, Washington gets high marks from the Population Institute, but statistics on teen and unintended pregnancy remind us that those high marks are rather like being near the top of the class in a B-grade school. The stats on teen pregnancy (47 out of 1,000) and the percent of pregnancies that are unintended (48 percent) come in slightly worse than Washington’s West Coast neighbors.

Routine screening for pregnancy intentions and a statewide upgrade of contraceptive services, if coupled with a public awareness campaign, could radically change those figures. Proven practices from local front runners like Neighborcare’s school-based clinics and the North Sound clinician training project could be inserted into the Medication Transformation process as it rolls out across the state. The Upstream model for retooling clinic practices could become a “shovel-ready” optional project adopted by Accountable Communities of Health across the state.

Changes like these would mesh well with another Washington State imperative—addressing the epidemic of opioid addiction. Neonatal care units are overflowing with newborns suffering from Neonatal Abstinence Syndrome, a form of withdrawal. But much of this suffering could be prevented if more priority were given to helping addicted women manage their fertility. Eighty-six percent of pregnancies in opioid-addicted women are unintended, suggesting that simply helping them to not get pregnant when they don’t want to could prevent a significant part of this suffering.

Looking to the Future

Within a few decades, a surprise pregnancy may actually be surprising. Men likely will have contraceptive options that rival those of women today, and intimacy won’t feel like a roll of the reproductive dice. Nobody will be forced to take action every day or every time they have sex for decades on end simply to prevent ill-conceived pregnancy. With long-acting methods offering years of protection and with each person in charge of his or her own fertility, children will come into the world by the mutual consent of two people who want to create a child together. Intentional parenthood will become the norm. This is the shape of the future.

Today, better birth control for men has yet to emerge from the laboratory, but that doesn’t mean we are stuck. States like Colorado and Delaware are moving rapidly in the direction of intentional parenthood simply by ensuring that all people have access to the information and tools currently available.

In the next few years, Washington and Oregon thought leaders will face policy and health delivery choices that could either stall improvements now underway or accelerate our own trajectory toward intentional parenthood. With Colorado’s model in front of us, the possibilities are exciting.

Who Should Pay for Tacoma’s Last Big Clean-Up?

There’s a modern-day monster lurking under Tacoma’s industrial lands. Mixed in with the groundwater is a stew of pollution from a shuttered chemical plant: PCBs—toxic chemicals the EPA banned in 1979—and volatile organic chemicals so alkaline that it’s actually stronger than drain cleaner and, according to the company responsible, is actually dissolving rocks into jelly.

The core plume of toxic chemicals under the Tacoma tideflats is as tall as the Seahawks stadium and more than four times as big in area—and it may be inching its way toward the waters of Puget Sound. The cleanup for Occidental Chemical, or OxyChem as it’s known, is the last big remediation in Tacoma, a city that is undergoing a remarkable rebirth and transformation from its sometimes noxious past. But the company responsible may get away with a half-hearted treatment.

The core plume of toxic chemicals under the Tacoma tideflats is as tall as the Seahawks stadium and more than four times as big in area—and it may be inching its way toward the waters of Puget Sound.

OxyChem is a wholly-owned subsidiary of Occidental Petroleum, a multinational oil and gas company based in Texas. Its Tacoma facility was built in the late 1920s on the shoreline of the Hylebos Waterway, where for nearly 80 years a chlor-alkali plant produced a range of caustic chemicals for industrial uses, including sodium hydroxide and chlorine. Decades of poor management on the site resulted in profoundly contaminated soil, along with groundwater that now threatens Commencement Bay and Puget Sound. If the pollution reaches a waterway—and there is reason to worry it will—it would pose a direct hazard to salmon, shellfish, and even the orcas that frequent the south Sound.

Complicating matters, manufacturing chemicals from the OxyChem cleanup location have migrated over time to the planned building site of a liquefied natural gas (LNG) facility on the Hylebos, a development that could well unleash a new array of pollution hazards. Portions of the site are within the footprint of the OxyChem cleanup site and contain groundwater tainted by industrial solvents including vinyl chloride, which is associated with brain cancer, leukemia, and other illnesses.

In December 2015, the local Puyallup Tribe mounted a legal challenge, arguing that the environmental analysis of the LNG proposal did not address key questions about whether construction would result in potentially serious water contamination from OxyChem’s legacy pollution. (The LNG project backers subsequently eliminated their plans to build a vessel fueling station on the Hylebos.)

After years of study, the Washington Department of Ecology has narrowed down its cleanup plans for the site. Yet many environmental advocates believe that none of the options is sufficient. One local group, Citizens for a Healthy Bay, has excoriated the plan for being too lenient, offering only choices that are comparatively cheap rather than effective. OxyChem itself is pushing for a plan that would cost them about $80 million over the course of 30 years (less than $2.7 million per year) while treating not even half the pollution. Meanwhile, the company annually makes 200 times more money than that figure, reporting pre-tax profits of $152 million in the fourth quarter of 2016 alone.

By a curious turn of history, OxyChem is linked to Love Canal, one of the best known environmental disasters in American history, in which hundreds of people were exposed to staggering levels of toxic contamination after a neighborhood and school were built essentially on top of a chemical waste landfill. In 1995, OxyChem ultimately agreed to pay restitution of $129 million ($206 million in today’s dollars) after a federal judge found the company negligent in handling the waste and selling a dump site to the Niagara Falls School District.

The severity of the Love Canal disaster was a major contributor to Congress passing the “Superfund” law in 1980, which pays for cleanups and holds polluters at least partially responsible. It is a curious irony that the company whose reckless pollution engendered a landmark federal cleanup law is now trying to wriggle off the hook in Tacoma.

Washington Department of Ecology is accepting public comments on its draft cleanup plan until April 27. (You can email them to kerry.graber@ecy.wa.gov.) In the meantime, Citizens for a Healthy Bay is hosting a public forum and expert panel to discuss the matter at the University of Washington-Tacoma on April 5 from 6:30-8:30pm.

Thanks to reviewers Tarika Powell at Sightline Institute, Sheri Tonn at Pacific Lutheran University, and Melissa Malott and Ryan Cruz at Citizens for a Healthy Bay.

Seattle Gets MHA Right in Downtown and SLU

This article is part of a series on Seattle’s proposed Mandatory Housing Affordability (MHA) program. In previous articles, I identified inconsistencies in the proposal and presented case studies (here, here, and here) on several housing prototypes, in all cases finding that MHA would suppress homebuilding and backfire on the city’s affordability goals to varying degrees. This time: MHA in downtown and South Lake Union, where the city got it right.

Seattle’s proposed Mandatory Housing Affordability (MHA) program has the potential to deliver two things Seattle residents need most: more new homes overall to address the city’s housing shortage and help keep prices in check for everyone, and more new subsidized homes for people without the means to afford what the market offers.

But if ever there was a policy where the devil is in the details, it’s MHA. Because if the affordability requirements are pushed too high, the added costs could make homebuilding projects financially infeasible. And when that happens, the city loses out on both subsidized and market housing, losses that hit the city’s most vulnerable the hardest. My previous analyses showed that, unfortunately, MHA as proposed for other areas of the city is likely to yield that lose-lose outcome.

This article analyzes the city’s proposal for MHA in the downtown and South Lake Union neighborhoods, finding that in these places, the city got the MHA balance right. If adopted as proposed, MHA will deliver on its promise to link growth and equity by creating the diversity of home options that Seattleites so desperately need.

Seattle downtown skyline, by Dan Bertolet, used with permission.

Background: The two flavors of MHA upzone in downtown/SLU

Seattle policymakers have proposed two separate systems of MHA affordability requirements: one for downtown and South Lake Union (SLU), and one for everywhere else in the city. This article addresses the residential portion of MHA, for which the city projects a yield of 900 subsidized homes in downtown/SLU over the next ten years.

For each of the 23 zones in downtown/SLU, planners have set a specific inclusion rate and in-lieu fee based on the amount of extra capacity granted by the MHA upzone, though with some exceptions to that rule (see table in appendix). In contrast, they did not apply any standard formula to set the MHA requirements for the rest of the city.

For zones in downtown/SLU currently subject to the city’s existing Voluntary Incentive Zoning Program (VIZ), the MHA requirements were set according to the Grand Bargain agreement’s stipulation that the added capacity granted by the MHA upzones would be “charged at the existing incentive zoning rate.” In other words, the total in-lieu fee paid for MHA on a new building would be equivalent to the in-lieu fee that would have been paid for affordable housing with the same capacity increase under VIZ. The proposed MHA requirements cover the 60 percent of the VIZ fees that currently go towards affordable housing, but in addition, the developers would also have to pay the remaining 40 percent portion of VIZ that’s applied to transferred development rights (TDR) or amenities such as open space or daycare.

For zones not already subject to VIZ, planners calibrated the MHA requirements against a benchmark 5 percent inclusion rate for a 15 percent capacity increase. According to preliminary estimates provided by the city, existing capacity for residential development in downtown/SLU is split roughly half and half between zones with and without VIZ.

Construction in the Denny Triangle neighborhood of downtown Seattle, by Dan Bertolet, used with permission.

Pro forma results: The plan in action

Following the before-and-after method I described previously, I applied static pro formas to estimate how the MHA upzone would change the homebuilder’s return on investment (ROI) compared to a baseline project under existing zoning that would deliver a 15 percent ROI. I assumed the rents, construction costs, cap rates, and other inputs used in the City of Seattle’s MHA feasibility study (see input table in appendix), although the city did not include analysis of downtown/SLU zones in its study.

I ran pro formas on two prototypical buildings, one in the SM-SLU 240 125-440 zone, following the example recently presented by city planners, and the other in the DMR C 280 125 zone, which is not currently subject to VIZ. On request, city planners provided their capacity estimates for both prototypes. Results are summarized in the table below, which shows a 7 percent increase in ROI for the SLU building and an 8 percent decrease in ROI for the DMR building.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

The SLU prototype demonstrates MHA done right: the value of the MHA upzone offsets the cost of the affordability requirement and therefore does not degrade ROI. For the DMR prototype, the value of the upzone is not quite enough to preserve ROI. The math is convoluted by the interplay of VIZ, but the simple reason for this difference is that the DMR project pays more for the added capacity granted by MHA.

Here’s the math: For the SLU prototype, I assumed the baseline building uses all of the capacity available under VIZ and so is 400 feet tall. At the current VIZ rate of $22.65, the required payment is $6.54 million. For the upzoned SLU building, the MHA in-lieu fee is $10 per square foot, which comes out to $4.88 million, and the 40 percent VIZ charge is $2.62 million, for a total payment of $7.5 million. Taking the difference, the developer pays an extra $958,000 for 42,000 square feet of MHA capacity. That converts to $22.82 per square foot—an almost exact match to the city’s existing VIZ fee, right in line with the Grand Bargain. In comparison, for the DMR prototype, the developer pays $4.09 million for 44,800 square feet, which converts to $91 per square foot.

Another way to think about this is in terms of the cost imposed by MHA per additional housing unit that the MHA upzone allows. Developers commonly assess these costs in comparison to how much they would have to pay per unit for raw land to build on. For the SLU prototype, the MHA charge is equivalent to $17,200 per unit, and for the DMR prototype, it’s $68,800 per unit. For comparison, in my pro formas, the cost of land per unit is $34,000 for the SLU prototype and $49,000 per unit for the DMR prototype. In other words, for the SLU prototype, MHA is cheaper than buying bare land, but for the DMR prototype, MHA costs more than land. These differences reflect the ROI results shown in the table above.

Diagram of MHA upzone for a 400’ residential tower, by City of Seattle (public domain).

Why it works: A collaborative process, a balanced formula

The city applied a consistent formula to define the MHA requirements for all the zones in downtown/SLU that currently have VIZ. That means that for all of those zones MHA as proposed should be as well-balanced as my above analysis indicates for the SM-SLU 240 125-440 prototype. In short, the city nailed it: MHA will deliver more homes and more subsidized homes.

It’s no coincidence that these particular MHA numbers work so well. They were defined through negotiation and compromise between private development interests, non-profit housing providers, and city officials. Furthermore, the proposed MHA numbers for these zones err slightly on the pro-feasibility side of the value exchange equation, which, as I have argued previously, is a smart approach, given the swirling variability of real estate markets. In contrast, erring on the opposite side increases the risk of sacrificing both the affordable homes and the market-rate homes.

In short, the city nailed it: MHA will deliver more homes and more subsidized homes.
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For downtown/SLU zones without VIZ, the city also applied a consistent formula, although it’s one that yields MHA requirements higher than those for zones with VIZ. Thus for all the zones without VIZ, MHA would tend to result in a loss of ROI similar to the 8% drop my analysis shows above. That these MHA numbers missed the mark for equal value exchange should not be surprising: planners did not conduct sufficient feasibility analysis before setting them. Fortunately, the ROI damage is not as severe as my analysis has shown for MHA as proposed for other parts of the city. For the DMR prototype pro forma, lowering the in-lieu fee from the proposed $13 per square foot to $9 per square foot would balance MHA.

A win-win for Seattle home-seekers

After so much MHA bad news in my previous MHA analyses (here, here, here, here), it’s encouraging to find that the city of Seattle’s proposal for MHA in downtown and South Lake Union gets it right. For roughly half of the new housing that could potentially be built in these areas, MHA as proposed would deliver the win-win outcome of more market-rate housing and more subsidized housing. For the remaining portion, MHA may cause a mild suppression of housing production, though the MHA balance is not far off and the damage done likely minimal.

In light of the technical complexities and political challenges, on my assessment the city’s MHA proposal for downtown/SLU does a superb job of creating a balanced program overall, and it should serve as a good model and precedent as policymakers refine the MHA proposal for the rest of the city.

Appendix

The proposed MHA requirements for 23 different upzones in downtown/SLU are listed in the table below (don’t get hung up on the cryptic zone designations—they’re just shown for reference). Most upzones come in the form of height increases, but a few allow for a boost in the allowed area per floor, or “floor plate” (illustrative examples are here).

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

Pro forma input assumptions were taken from the city’s MHA feasibility study and are summarized in the table below. Based on feedback on my previous MHA feasibility article that the construction costs were too low compared to current norms, I raised construction costs by 10 percent, corresponding to the upper limit the city’s study applies in its sensitivity testing. I also increased the per-stall cost of underground parking from $35,000 to $40,000.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

Pro forma data are given in the two tables below. To maintain consistency between the before-and-after MHA prototypes, the present analysis assumes a consistent parking ratio. The number of required affordable units was based on an assumption that all of the increased development capacity granted by the upzone would go to residential use (the retail floor space remains constant on both buildings). Because the math never yields an exact integer number of required affordable units, the leftover fractional part of a unit was converted to an in-lieu fee, according the city’s method, documented here. The DMR pro forma does not include the potential added cost caused by the upzone crossing the 240’ height threshold that triggers requirements for structural peer review.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

Original table, compiled by Dan Bertolet, Sightline Institute. Available under our free use policy.

How Seattle Killed Micro-housing, Again

Last year, I described how Seattle killed micro-housing through a series of legislative actions and administrative policy shifts that enacted a virtual ban on congregate micro-housing, pushed developers to build a larger and pricier form of micro-housing known as Small Efficiency Dwelling Units (SEDUs), inflated the size of SEDUs through new rules on minimum unit sizes, and denied SEDUs access to incentive programs that would make their rents more affordable.

Shortly after I published that article, I was pleased to get word that one of the various decision-making bodies that was the source of some of these reversals would reassess its particular role in this story. At the request of the mayor of Seattle, the Construction Code Advisory Board (CCAB), an obscure but powerful citizens’ panel that oversees interpretation and revision of Seattle’s building codes, agreed to take a second look at some of its recent interpretations, this time with Seattle’s affordability goals in mind.

The CCAB convened a special subcommittee to study how the building code regulates minimum unit size and how the Department of Construction and Inspection (SDCI) applies these rules to SEDUs. The building department has made it increasingly difficult to build SEDUs (which are theoretically legal down to 220 square feet) of a size anywhere close to the minimum. In many cases the new rules were producing SEDUs that were not meaningfully smaller than a conventional studio apartment (which started at 300 square feet before the new rules came into effect).

I was a voting member of this subcommittee and attended each of the meetings over several months. While the meetings were at times quite contentious, it appeared until the last that we might come together behind a helpful recommendation. In the end, this was not to be. The subcommittee voted five to three in favor of making some small improvements that will help with design flexibility but will do little to allow 220sf SEDUs as intended by the city council in its 2014 legislation.

When the subcommittee’s recommendation came back to the full CCAB, the board approved it, with one board member dissenting. When prodded by his colleagues for an explanation, he cited as one of his concerns that he did not accept the premise that the issues at hand had anything to do with affordability. Two other CCAB members concurred, stating that they “did not buy it.” Given this rejection of the underlying premise of the whole exercise, it is perhaps unsurprising that the CCAB was unconcerned by the prospect of failing to fix the problem.

During these meetings, I had a front row seat from which to listen to the concerns of CCAB members and participate in the discussion. Since CCAB is a technical review board, I had expected that its area of review might reasonably be confined to the purview of the building codes, namely issues of structural integrity, life safety, and health. The committee exhibited no such restraint. The meetings produced free-wheeling discussions touching on urban planning, politics, and morality that generated more heat than light. Along the way, some recurrent themes emerged that reflect deeply held beliefs on the part of the committee members. These beliefs are significant not only because they blocked progress to providing housing choices to thousands of mostly young, mostly moderate-income singles in Seattle, but because I suspect they are widely held among the general public. I recount them below, but first I set the scene.

SEDU apartment at LIV Wallingford by Paar Development (Used with permission.)

What is the CCAB?

Seattle’s Construction Code Advisory Board (CCAB) comprises architects, engineers, and representatives of various construction trades. The mayor appoints members to three-year terms, and they advise the city on how to administer, adopt, and amend construction codes. They also weigh disputed code interpretations. For example, if a permit applicant disputes the building department’s interpretation of the code, the applicant can appeal to the CCAB for a hearing.

The problem

In 2014, Seattle amended its land use code, effectively banning congregate micro-housing (small private rooms with shared kitchens) while promoting small efficiency dwelling units (SEDUs), which are scaled-down studio apartments with complete kitchens and baths, and a minimum size of 220 square feet (sf). The building code has a parallel set of requirements, requiring a 220sf unit but also setting minimum dimensions for closet size, kitchen work area, and requiring a 150sf living room. As time went on, the building department (SDCI) began to tinker with the interpretation of these rules, excluding certain areas of the unit from counting toward its minimum size. The practical effect was that the 220sf minimum became almost impossible to achieve in real life; the smallest units expanded until they were at least 250sf and averaged around 280sf.

Chapter 1208 of the Seattle Building Code contains a requirement that a habitable room must measure 7 feet in any direction. The International Building Code Handbook explains that this clause means that any habitable room must contain a 7-foot diameter circle. If the circle fits cleanly inside the room, it meets the requirement. SDCI rejects the handbook’s interpretation, concluding that 1208.1 means the 7-foot minimum dimension must be met throughout each and every bit of the required room area.

 SDCI’s interpretation is not “wrong” per se. The handbook’s interpretation is not wrong either. The language of 1208.1 is ambiguous and requires the building department to decide what it means based on the practical effect.

The practical effect: Less housing, more expensive

The current SDCI policy makes micro-housing less micro, inflating the size of the units, which does two things: the rent for each unit goes up, and fewer units fit in a building. Obviously, apartments of 280sf rent for more than apartments of 220sf. Less obviously, if the units are 20 percent larger, each construction project produces about 20 percent fewer units, exacerbating Seattle’s housing shortage and keeping much-needed affordable housing off of the market. In 2015, homebuilders permitted about 1,000 SEDUs in Seattle. Had this rule not been in effect, the number would have been higher, perhaps by as much as 200 units. Those missing units pushed an equal number of people back into the race for housing, competing harder for other available homes, bidding up rents, and pushing the losers of those bidding wars out of the city altogether.

Myth-busting

Pitted against the plain, empirical facts that smaller micro-housing is less expensive and more plentiful are a series of objections that were raised and addressed, only to resurface again at the next meeting. As these beliefs appear to be as tenacious as they are disprovable, a detailed review may be helpful. I counted five recurrent themes:

Myth #1: Human dignity

“A 220sf apartment is too small. Below a certain point, small housing is beneath human dignity. At a minimum, a person’s housing must accommodate conventional furnishings including a bed, table, and chairs.”

Sightline’s Alan Durning underlined the classism of this argument three years ago: housing expectations are socially defined and rise with affluence. To say that 220sf per person is beneath human dignity is to declare unfit for habitation the housing occupied by most people around the world today and by most people throughout history. Indeed, most people in most places throughout time have had available to them less than 200sf per person. Implicit in banning such housing choices as beneath human dignity is the implication that it’s better to live in a tent or under a bridge than to be “forced” to live in a home that is moderately cramped, at least by the standards of the middle-class professionals who sit on the CCAB. As Alan pointed out in this speech, “small is normal.”

But ignore all of that! We don’t even have to go there. I presented to CCAB a series of sample plans in various widths and depths to demonstrate that 220sf apartments with various floorplans (see below) can accommodate a suite of middle-class furnishings: a bed or sofa-bed, a table, and chairs.

Myth #2: Fire safety

“Overly dense housing may be unsafe in a fire.”

Reflecting historical concerns about tenements as fire traps, CCAB asked the Seattle Fire Department (SFD) if it had any concerns about minimum unit size. The fire fighters shrugged. If the building is built to code, SFD has no concerns about life safety. All new apartments are equipped with fire-rated walls, floors, and ceilings; fire alarms; and numerous other active and passive safety features, including full building sprinkler systems. The simple fact is that people don’t die from fire in sprinklered buildings.

Myth #3: Public health

“Overly dense housing may be a health hazard, causing psychological stress, or the spread of disease.”

Committee members brought this up time and again. If you’re inclined towards this view, a Google search can easily provide you with opinion articles to confirm your bias. At CCAB’s invitation, experts from the University of Washington’s School of Public Health came to a meeting and gave an eyebrow-raising presentation. They had this to say about density:

  • Density is good for people. Dense communities provide the population and tax base needed to support quality infrastructure, transportation, amenities, and services. Density helps create livable, walkable neighborhoods that promote healthy lifestyles, and it facilitates connections between neighbors that can improve people’s lives and well-being.
  • Density is not a disease risk. Density and crowding were concerns a century ago before antibiotics and modern medicine. Today, they are not.
  • Dense communities benefit from well-designed common areas that bring people together and help build social capital. Ironically, Seattle chose the opposite policy direction in 2014, killing congregate housing with common areas in favor of buildings full of self-contained SEDUs.

The health researchers also introduced to CCAB the National Healthy Housing Standard (NHHS), the public health field’s minimum performance standards for a safe and healthy home. It is written to help property owners and government agencies, using language that puts modern public health information into housing code parlance.

The NHHS minimum standard for a habitable room is 70sf, less than half of the 150sf living room size required for SEDUs. The NHHS is evidence-based, and the public health literature provides nothing that forms a rational basis for concern about unit size. The alternative to minimal housing is often no housing at all, NHHS notes, so maintaining a standard that is arbitrarily high can have real and terrible social costs. (Learn more here.)

Myth #4: Responsible stewardship

“Seattle’s construction boom is producing mostly small studios for single people. We need housing for families, not more micro-housing. Where does this stop?”

This was a widely cited concern, reflecting a belief that micro-housing makes up the lion’s share of housing production in Seattle—a belief has no basis in fact. According to researchers Dupre + Scott, the most reliable source of apartment data in greater Seattle, the homebuilding industry is producing 56 percent one-bedroom apartments in Seattle, 24 percent two-bedroom apartments, and 15 percent studio apartments. Even those studios are fairly large, at 465sf on average. Micro-housing is a niche market—an important niche in terms of providing market-rate affordable housing but decidedly not a substantial portion of overall housing production.

Increasing production of three-plus bedroom units for larger families is a legitimate concern, but suppressing micro-housing does not increase family housing. To the contrary, micro-housing helps keep houses available for families. The primary constraint on the production of family-sized housing is the general lockdown on land that is appropriate for “missing middle” development—rowhouses, townhouses, duplexes, stacked flats, and the like that are illegal in single-family zones, constrained to small areas of the city, and hampered by process bottlenecks that limit production. To the extent that micro-housing and family-sized housing are linked, they are complements: micro-housing allows singles to rent places of their own, rather than combining income with friends and roommates to bid up the rents of single-family houses.

Myth #5: Flim flammery

“This isn’t about affordability at all. This is about micro-housing developers trying to pad their profit margins.”

When push came to shove, most of the CCAB rejected the very notion that accommodating small studios in urban neighborhoods is an affordability priority. They “didn’t buy it.” It’s a jarring perspective that runs contrary to everything I’ve learned in architecture and development. I had to listen long and hard to understand what they meant.

Sightline focus groups of other Seattle residents find this perspective is surprisingly widespread: the idea that homebuilders are “just being greedy” and could “still make money if they charged reasonable rent.” The belief seems to be that, because housing used to cost less, it would still cost less were developers not seeking immoral rates of profit. The implication seems to be that allowing developers to rent apartments smaller than middle-class people would choose to live in is to “let them off the hook.” Rather than seeing the economic problem of a housing shortage—spiraling land prices, rising construction costs, sclerotic permit processes, bidding wars among homebuyers, rock-bottom vacancy rates in apartment buildings, surging local population and incomes—they tend to see a morality play. Developers have gotten greedy. They should knock it off and “do the right thing,” which apparently means building conventionally sized apartments and leasing them for the prices of yesteryear. It’s an appealing argument, but it’s little more than wishful thinking—the tempting notion that you can blame housing affordability problems on a small group of black-hatted villains.

The reality is more complicated. Virtually all of our housing stock is, and always has been, built by for-profit developers. Like all businesses, developers require profit in order to operate, and they seek to maximize profit where they can. But they also have to compete with each other for land, construction labor, and renters, which inherently limits their profitability. In a constrained housing market, the true beneficiaries reaping windfall profits are the owners of residential land. In Seattle, most of the residential land is the property of individual single-family homeowners. As the saying goes, “we have met the enemy, and he is us.”

The empirical case for the relationship between apartment size and rent is unimpeachable. It’s not even controversial. The figure below shows rents and sizes of all apartments in the greater Seattle area, according to Dupre + Scott. (It’s from the firm’s fall 2016 survey of all rental properties of 20 or more units, and it shows rents in 50sf ranges. You read the bottom axis as “up to 200sf, from 200sf to 250sf, from 250 to 300sf,” and so on. The values marked on the axis are the top values of each range.)

Original Sightline Institute graphic, available under our free use policy.

The figure shows that average apartments of fewer than 200sf (congregate dwelling units) rent for $868 a month, on average. At 350-400 square feet, average rents are already more than $1,000 a month. They rise to almost $2,200 a month for a large apartment of 1,450 to 1,500sf. Because these figures span parts of three counties and mix new and old apartments, they understate the price escalation by size in urban markets, where units are smaller and space costs more. Still, it makes clear the general relationship. Anyone in the housing business will agree that rents and sizes rise in lockstep, all else being equal. The real estate industry measures and discusses rents by the square foot, just as the rag trade measures fabric by the yard and grocers think in dollars per pound.

On micro-housing, it appears that the issue is settled: SEDUs will remain super-sized until further notice.
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Perhaps CCAB members understand that rent and size correlate to one another but mean something different by affordability? In terms of housing policy, affordability has a conventional definition. If you are paying less than 30 percent of your income for your housing, your rent is considered affordable. At the lower end of the spectrum, you would expect a small (220sf) SEDU in a central location to rent for around $1,100 per month. (That’s more than in Dupre + Scott’s figure, because I’m talking about a brand new, in-city apartment.) A larger SEDU (280sf) might rent for around $1,300 per month. According to the Seattle Office of Housing’s rent tables, the small SEDU is considered affordable for someone making $44,000 a year, whereas the larger SEDU is affordable to someone making $52,000 a year. That’s a big difference, but when the CCAB members declared that they “didn’t buy it,” I don’t think they were necessarily denying that the smaller unit rents for less or rejecting a relationship between unit size, rent, and affordability.

Instead, I think CCAB’s rejection of the affordability nexus is rooted in a values system that says if you want to call your project affordable housing, it needs to be comparable in size and features to regular housing, but it simply needs to rent for less. From this point of view, affordable housing is what non-profits build—conventional middle-class housing with generous amenities and subsidized rents. If you hold to this ideal, when for-profit developers use affordability as a rationale for loosening restrictions or building smaller, the argument rings hollow as some kind of a con job, reframing pursuit of profit as a virtue.

There is not much one can say to combat this way of thinking. It is part of a widely held worldview, where policies founded on a mix of altruism, idealism, paternalism, and anti-capitalism generate housing scarcity, soaring rents, and displacement of poor people, all in the name of standing up for their rights and dignity. This is the template for how many prosperous cities with progressive electorates do housing policy. San Francisco has demonstrated exactly where it leads. Unless Seattle consciously charts a different course, it is doomed to follow the same path.

The Housing Affordability and Livability Agenda (HALA), on which I was honored to serve, was intended to achieve a more rational and effective housing policy. It produced a great blueprint, but it doesn’t mean much if the city doesn’t follow it. On micro-housing, it appears that the issue is settled: SEDUs will remain super-sized until further notice. CCAB had a chance to give a partial reprieve. It declined.

Seattle micro-housing is still dead.

 

Thanks to Dupre + Scott for use of its data and permission to publish it. Alan Durning edited and contributed to this article.

 

Weekend Reading 3/17/17

Alan

More about groupthink (the inverse of the wisdom in crowds) from

Kristin

Rebecca Solnit describes how democracy can be captured by Tyranny of the Minority—the small group that thinks it knows best and tries to exclude the masses.

Vox has an interesting take on left-wing economics and right-wing populism in Europe and the United States: countries with the most robust social safety nets might also have the strongest far-right movements.

Eric

At the New York Times, the latest installment of what is becoming a genre: our emerging understanding of the severe limit of cognition and rationality. The key point, I think:

The key point here is not that people are irrational; it’s that this irrationality comes from a very rational place. People fail to distinguish what they know from what others know because it is often impossible to draw sharp boundaries between what knowledge resides in our heads and what resides elsewhere.

This is especially true of divisive political issues. Your mind cannot master and retain sufficiently detailed knowledge about many of them. You must rely on your community. But if you are not aware that you are piggybacking on the knowledge of others, it can lead to hubris.

Also at the New York Times, Nicholas Kristof writes about new research showing a truly precipitous decline in sperm quality and male fertility. There’s good evidence that the culprit is chemical endocrine disruptors, which are loaded up in the plastics, cosmetics, couches, pesticides and countless other products we use every day.

At the New Republic, Kevin Baker has a sardonic and mostly tongue-in-cheek proposal for separating blue states from red, though he makes a few good points along the way.

Last week, a loaded ethanol train in Iowa derailed and erupted into flame. (Ethanol behaves very much like crude oil in rail accidents.) It was perhaps a helpful reminder for the planning commission of San Luis Obispo County, which this week rejected building plans for a big oil train facility there.

Listen In: BC’s LNG Ambitions

On Tuesday, Sightline senior research associate Tarika Powell joined KBAI’s Joe Teehan to discuss her latest report detailing the 20 liquefied natural gas projects proposed for the shores of British Columbia. The projects would stretch from the Salish Sea in the south to Stewart, BC, in the north, with major hubs at Kitimat and Prince Rupert. The province’s LNG ambitions could make it the world’s largest LNG exporter.* Listen in below (from 2:30 to 19:35), or find the full program online here.

*Note: At minute 3:57, the word “importer” was used rather than the word “exporter.” We apologize for the error. Please see our recent article BC Wants to Produce Four Times as Much LNG as World’s Largest Exporter for more information.