Housing at Risk (shorter published version)

Housing at risk in Seattle

Published in the Seattle Post-Intelligencer  Thursday, December 4, 2008



When housing is in short supply, why are we making it more complex and expensive to build?

For more than a decade, Seattle has experienced an unprecedented building boom during which prices were always up, money was cheap and wealth was inflated by rapid appreciation.

The boom followed the anti-tax, anti-immigrant movements that slashed government revenue and led to policies requiring new developments to pay for every imaginable impact. Planning and building departments were ordered to cover their costs through fees, creating many new hurdles and passing the costs on to developers. Fees, professional services and interest now add thousands of dollars to the cost of every new house, apartment or condominium.

Cities once understood that development generates community wealth through sales and property taxes, construction wages and new economic activity. Permit fees were low, impact fees unknown and cities funded their planning and building departments from general revenues. Municipalities considered streets, sidewalks, utilities and public services as investments that would generate community wealth over time.

Today, Seattle penalizes new development rather than waiting patiently for taxes that flow in their wake, generating three problems.

First, additional fees and processes increase the initial project risk and costs. These costs are marked up and passed on to the buyer or renter. Second, the higher risk and costs inhibit development and reduce market supply, further increasing prices. Third, the city’s enthusiasm to offload costs to the private sector results in policy gimmicks, such as incentive zoning.

The elephant in the room is the private sector provision of affordable older housing. Almost all work force housing has been and will be provided by older homes and apartments in the private sector. We need to remove barriers to housing development and build the large numbers of new housing units required to moderate rents and housing prices.

Public and philanthropic investment should focus on providing permanent affordable housing that maximizes the return on our investment, such as land trusts and mission-driven, nonprofit-owned housing. Housing levies, the primary traditional mechanism for local funding of affordable housing, are a good example. Seattle residents overwhelmingly have supported housing levies, leaving no justification for an end-run around voters.

During an economic downturn, pay-to-play barriers cobbled together during the boom will reduce our housing supply and rapidly inflate prices. With political will, Seattle can dramatically increase the supply of housing through policy changes. Significant increases in zoning capacity, new clarity and stability in codes and a return to funding infrastructure through broad-based taxes are all measures that will increase housing supply, moderate prices and lower the cost of mission-driven affordable housing, too.

Our primary strategy for affordable housing must be to build as much quality housing as possible to increase supply. Our secondary strategy should be to directly fund as much affordable housing as possible, all in permanent ownership by public and not-for-profit housing agencies.

Public policy that increases the cost of developing dense, green, quality housing equals more expensive housing overall and less affordable housing. There are times for cities to be pro-development. When the world, country, state and city are in recession, or worse, and housing is in short supply, that time is now.

David Schraer is a Seattle architect with in-plain-air architects and was the first executive director of the White Center Community Development Association.

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