Let’s leave the vitriol aside for the moment. In his most recent Mossback column, condo-critic Knute Berger makes the following claim about Seattle’s gradual move towards denser housing:
“We know that these green-backed policies [i.e., the ones promoting dense development in Seattle] are making the city more unaffordable.”
No, in fact, we do not know that.
Of course, it’s a common complaint. Apparently, lots of people view condo development as the root cause underlying the runup in Seattle housing prices.
But as we’ve argued before, this gets the relationship between condos and housing affordability completely backwards. Condos do not make housing expensive. Expensive housing makes condos.
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If anything, new condos—along with apartments, duplexes, townhouses and the like—have helped keep real estate prices from soaring even further into the stratosphere. This is just plain old supply and demand.
You see, like it or not, the demand for housing in Seattle is rising, because of demographic trends (rising regional population) and macro-economic forces (increasing wealth and income, particularly at upper rungs of the socio-economic ladder) that Seattle policymakers have essentially no control over.
We all know what happens if demand goes up faster than supply: prices rise. And when prices rise, people who own land that’s zoned for multi-family housing do what “market forces”—i.e., other people—are asking. They build more housing.
Mossback seems to think that this is sad; he apparently liked things the old way. That’s understandable, and I don’t begrudge him his nostalgia.
But think of what would happen if there were no new apartments, duplexes, townhouses or condos in Seattle—say, if the city council passed a law that downzoned all of the land that’s currently zoned for multi-family housing, or put some sort of moratorium on new construction.
The supply of housing would thereafter remain fixed, even as demand (i.e., regional population and income) rose. Housing close to downtown would reach even more ridiculous levels. Young folks of moderate means would have no option but to move far away from the city center, to distant suburbs where—quite literally—all of the new housing would be located.
With new apartments and other multifamily housing, folks in the middle income range who are looking to move close to downtown—whether to be closer to jobs or to the bustle of the city—at least have a few options. Even super-luxury highrises can help with housing affordability (for the middle class, if not the poor), since they tend to attract the kind of folks who otherwise would put down seemingly ridiculous bids on single family homes.
But shut down new multifamily housing, and we’re shutting new residents of all income levels out of the city.
And that would send a clear message to anyone who’s trying to make ends meet in Seattle: sorry, if you don’t have enough cash for a detached single family house, you’re just not welcome here.
In the end, I just plain don’t understand Mossback’s vision for Seattle, or what he thinks the region should do in the face of of the demographic challenges it faces. Should we hope for a severe, region-wide economic downturn that keeps potential new residents from considering the city—or even sends existing residents packing, in search of enough money to pay their mortgages? (Shades of the late-1970s Boeing-bust billboard: “Would the last person who leaves Seattle please turn out the lights?”) Or should we aim for a miserable quality of life—say, rising crime, terrible schools, and polluted air—that pushes people away from the city? Or should we ask for a development moratorium in already-dense areas and established neighborhoods, forcing new housing to sprawl across the region’s last remaining farmland and forests and condemning residents to ever-rising transportation costs (not to mention CO2 emissions)?
I don’t know what Knute’s vision for pushing people away from Seattle is. We’ve spent quiteabitofourtimeinrecentyearstryingtopromotefairandhumanewaysofmoderatingtheregion’spopulationgrowth—largely by reducing unplanned pregnancies, and increasing access to contraception and family planning services, so that women can make their own choices about childbearing. But I haven’t heard a peep about what Mossback would do to hold back the tide.
Good post and argumentation Clark. You nailed it.(I think there are other replies to this post in another thread).Your ‘limiting supply’ argument is the one used by those who decry urban growth boundaries, by the way. And what they, the Knutes and certain others don’t mention, however, is the microeconomic forces that drive people here: job type, existing knowledge jobs, and natural & built amenities. The climate and hi-wage economy attract high-wage workers who bid up rents to obtain amenities. Landlords keep raising rents and land prices until people stop paying that price (equilibrium). Keep bidding up prices, keep paying them, landlords will keep raising prices. This is the source of the high housing prices in desirable areas, not regulation limiting supply. Second, growth boundaries are a response to rapid growth in order to preserve quality of life for the mossbacks – and for the newbies who move there because of it. Third, if people didn’t want condos and other single-family attached, they wouldn’t buy them. Period. There’d be no market. Not everyone wants a house on a quarter-acre. Period. Some folks don’t want to admit this to themselves, and nothing we say will change that – they have to adapt or get left behind. Lastly, these same forces – absent growth boundaries – exist in spades in my new town of 41,000. The housing prices and household income are sky-high, and the low-wage service workers who work here reverse commute in from cheaper Denver (like Seattle). AND – most importantly – like Seattle, like Portland, like everywhere, the existing residents resist the provisioning of too much multi-fam because of the fear of lowering their property values – for many the major investment and retirement pool they have. Design is the problem, not density.
Interesting about micro-economics, Dan. I hadn’t really thought about that, but it’s clearly right. As the largest city N of San Fran and west of Minneapolis, Seattle is by default a major hub for lots of specialized services—finance, banking, lawyering, and the like. Plus, as the largest university in the same region, UW attracts lots of researchers & spinoff companies.These sorts of jobs can command high wages—which bids up housing prices.So it’s not just a generally “good” regional economy (whatever that means) coupled with population growth that drives people closer to Seattle’s downtown. It’s the specific nature of the kind of business that gets done here. Cities attract money, money attracts people, people bid up housing prices.
And housing supply fuels the city, thus a vicious cycle?In other words do amenities create demand which fuel amenities thus supply can not catch up? Jobs can be a limiting factor, but we have no problem creating more of those as well here. Thus demand is relatively elastic and enlarging the growth boundaries won’t help.I’m trying hard, but I’m not sure I buy this, there should be a degree to which supply helps.
Cities attract money, money attracts people, people bid up housing prices. Absolutely. Knowledge jobs attracting more knowledge jobs attracting educated folks attracting more educateds is called ‘agglomeration’. And, amenities create demand. The recent ‘New Urbanist’ or infill developments all supply copious amenities, likely to charge a premium to recoup higher costs, as these developments still are not standard and take longer to approve.Supply is very complicated. Here is an interesting arty in the NYT (sub.) about a NU development in NJ. Dense, walkable, in high, high demand. And this development is making congestion worse. What’s the point? Nice neighborhoods are in short supply and folks want them, so they bid up prices. People are mobile and will seek out the neighborhood they want – one with good schools, nightlife, quietude. Simply supplying…supply won’t solve the problem, as people are mobile. So, if you slap up some cr*ppy-looking apartments to gain supply, maybe you’ll fill them, but the neighbors will delay the project to protect their investment. That’s why I said we have a design problem.Supply, as Glaeser says (me too) is limited also by people creating zoning ordinances to shut out supply. One must also deliver services to…service supply. If a city has no money for infrastructure (because it can’t tax property because of referenda)**, it won’t get built as you can’t tack on all the cost to the developer – they’ll go elsewhere if they can’t turn a profit. Affordable housing is problematic as developers must turn a profit and material, land, and time work against enclosing spaces. My solution in Buckley was to propose smaller lots and limit house size, as that was what was acceptable to the community (doesn’t look like it will fly now that I’m gone, unless a miracle happens). Regards,**Why I oppose the return to the 1% cap on property tax increases – it is less than inflation and you never catch up. This is why I opposed Chris Hurst, as he wants it. This is also why infrastructure repair is behind in WA.
FYI, Clark’s piece was resposted at Crosscut, so commenters might want to go there as well: http://www.crosscut.com/mossback/2084/
As Ze Frank might say: s-s-s-something from the comments: (on crosscut’s site)”Add 200,000 units of high-rise condos to downtown Seattle. Those particular people won’t be sprawled out across the region. But their doormen and domestics, nannies and baristas, busboys and grocery clerks, all the low-wage jobs that support high-wage households, will have to be housed somewhere, and it won’t be in Seattle unless Seattle decides to allow new inexpensive urban housing, i.e. tenements.Seattle is too Progressive to allow market-rate low-income housing within city limits, and doesn’t have the political will to subsidize enough low-income housing for all the low-wage workers it will need. So it will export its low-wage population, creating demand for growth outside city limits.”What do any of you think about the argument made here? Is there any evidence to suggest that denser cities require more service workers…and that those low-income individuals have no choice but to sprawl? Looking at some of the numbers out lately (50% of Seattle’s workers commute in) without any context for how those numbers are changing over time might give that impression. I genuinely don’t know the rate of change of that statistic…so I’m asking the other commenters here…
The point with densification is to provision housing for all wage classes. Of course, we don’t know how to do that without taxing everyone else. The idea is that the tavern worker will live in an apartment a few blocks away in a dense city. Does it happen? Sure, sometimes. But denser cities of equal income require no more service workers than other areas. The key is disposable income and service demand. High-income residents demand more services. They have more money to drive the economy…er…waste on handbags or golf accessories…er…spend on amenities. For every 1,000 population you need x10,000 sf of commercial space (varies by region). That doesn’t change. The addition comes when affluent people “need” doggie day care, a Starbucks on every corner, a day spa, somewhere to buy bath crystals, etc. This is a function of disposable income. Yuppie families in Belltown need the same basic services as yuppie families in Wenatchee (!?!). The difference is the services required across socioeconomic gradients – White Center residents eat out less than Belltown residents, so there is less commuting into WC than BT by burger-flippers to serve the people spending their disposable income. So, coming back around, it’s more complicated than that, RMC, but in Seattle it’s a decent rule of thumb, and supported historically and right now.
Two comments to make here.First, density is, by far, my new favorite enviro-topic in this town. For me, it is finally the fight I’ll be on the winning side of in this city. In my decade-plus time here, I’ve lost the monorail, the commons, and a full light rail system to Everett. But this one, Density, is unavoiadable. The others all died because of the small-minded, old school Seattleites. Thankfully, we can’t pass a law against new people moving into Seattle so it will HAVE to get dense.Here’s the thing though, people who have been in this city for much longer than me still persist in beliving that it is a quaint small town on the Western fringe of the country and not the big city it has become. They decry the new density because they don’t know the people living in the new 10-unit condo next door to their Great Grandmother’s house in Ballard where they now live(I actually heard this as an argument against density on KUOW the other day).Now, I am all for sentimentality and perservering historic structures and community feeling in a neighborhood. But some of those old houses are going to have to be torn down in order to make more room in this city and improve the environment and honestly, how many Craftsman-style homes do we need in Ballard/Wallingford/Wedgwood?So I wonder how to convince those who are afraid of losing “the old Seattle” that it is already gone and moving forward is in their best interest too? How do we bring them into the fold? My second point is actually a question. It is something I often wonder about: Seattle may be moving in the right direction by becoming more dense, creating a Master Bike Plan and instituting Smart Cards on Metro (slated for 2008, thank God!) which, as we all know, is great for the environment and for liviability. One might even call all of that elements of a sensible growth plan (if Seattle had such a comprehensive forward-thinking document).But what of the areas outside of the city’s borders? How do we get them to do the same thing? Arguably, Bellevue is moving in that direction as is evidenced by this article about that city trying to improve it’s walkability, and the county as a whole is thinking about it, but each time I head to the East side, I see nothing but more urban sprawl popping up and no thought toward density. How do we get those towns, those people, thinking that their suburban oases are no longer such a smart choice? How do we get them from their SUVs and into Smart Cars? In short, how do we make those suburban towns become urban cores?As I write that, I realize that I am asking the question that is at the heart of Sightline (or Aquestion at it’s heart anyway) and so don’t expect an answer here in any short time. But man would I love one!
I feel like a lot of the criticism of density is just a kneejerk reaction to change, and I think Charlie is on the right track with that: people have to realise that the mythical “Old Seattle” is going, and all these newcomers are moving here whether we like it or not, so we’d better accommodate them in a better way than LA. So the basic idea that density=evil is worth just discarding, but we must be careful not to throw out the baby with the bathwater. Mossback does make some good points, the most important of which I think is the one that Charlie picked up on: if we achieve the illusion of density by outsourcing our sprawl, like Portland to Vancouver or SF to the greater bay area, we won’t really have done anything useful.Ironically, I think the solution is to regulate multi-family development less, so that we can have more supply within Seattle’s borders and keep prices under control. Which is not actually what the developers want, because that would reduce the profit they could make per project compared to under the current regime of artificially-created scarcity.
To address some Charlie’s questions on how we influence many of these towns outside of Seattle I’m sure Dan would have much to say about his example. We need incentives for creating more density, those inside city limits are actually allowed to vote on such things ;). Otherwise density loses to NIMBY instincts. How do we get them from their SUVs and into Smart Cars? – Here I’ve proposed before we take the model that Japan adopted a few years ago. We use taxes and work with the insurance industry to greatly reduce the cost of ownership for such vehicles. Basically again taking an incentive approach. Impossible to do locally though.How do we make those suburban towns become urban cores? —That’s on of the $64k questions this site is all about. I’ll also through my hat in with Eldan’s comments on encouraging multifam development where possible. Completely throwing out supply as part of the solution is dangerous – if only because it encourages rationalization of unthinkable regulatory schemes. It does reduce demand – the debate should be to what degree.
PSRC was still doing their growth plan scenario analysis for their Vision 2020+20 when I left. There is still time to make your voices heard.I attended planning meetings last fall to get our hands around growth patterns to deal with the coming population. They were still working on preferred scenarios when I left, and densification of suburbs to Orting and Mt Vernon was one of the scenarios. Of course, that was what I was already doing in Buckley so I was all for that one. This densification pattern has important transportation ramifications, of course, that we can’t solve under our current social order, but many of them can be addressed by implementing solutions such as those Arie offers. And I urge you again, Arie, to make your voice more widely heard. If you need a go-between to get your voice heard, Eric has my new e-mail and I’ll see if there’s something I can do. Anyway, until you have truly regional planning with regional goals, and a majority understands the common good is served, you’ll get hit-and-miss density. Why? Developers will go down the road to the next place that offers them cheap land (likely because the place thinks – erroneously – that growth pays for itself). It’ll start happening anyway when gas is $6.00/gal, but how many more car-dependent McSuburbs will be built before then?The other thing I return to is: we don’t have a density problem, we have a design problem.
What about all the cars being brought in with the people? Seattle will simply soon burst from all the cars. People don’t take up that much room, but cars do. That’s the real problem. Really hard to design out of.
The ‘dense suburb’ growth scenario attempts to make living wage jobs in the suburbs to reduce ADT and VMT.
bgold: I’d totally agree that cars are the real problem. Anecdotally, I believe that “that town is too crowded” mostly means “that town has too many cars”, not “that town has too many people”That said, I believe congestion pricing combined with good transit can do a lot for the too-many-cars problem.