Seattle: Lower housing costs through more fees, less supply?

Which of the following do you think is most likely to help bring down rising housing costs?

A. Rent control
B. Higher fees on new development
C. More stringent zoning regulations
D. More apartments, condos, and houses

If you answered D, you’re right, of course.  It’s pretty obvious. But trying telling that to political leaders in Seattle. Rather than straightforward policies, they insist on a muddled, hyper-regulated and expensive approach to housing that is somehow supposed to result in lower housing costs in the city.

“More affordable” housing vs. more “affordable housing”
That’s what the debate seems to be about, anyway, but we need to make an important distinction up front. Officeholders and candidates in Seattle are all talking about “more affordable housing” in the city, but those words don’t mean the same thing in every context. Seattle leaders aren’t working on “more affordable” housing, they’re working for more “affordable housing” – more subsidized units, price-controlled units, and government-owned units.

The path forward, some of them think, is to make other housing in the city more expensive. What a novel theory.

Rent control – Socialist councilmember Kshama Sawant has been pushing the city council to officially lobby the Legislature to lift the statewide ban on rent control laws. Her rent control resolution tied on a vote in committee, so councilmember Tim Burgess introduced a compromise, which passed, that asks the Legislature to lift the rent control ban if it can be done “without causing a negative impact on the quality or quantity of housing supply.”

Which is a bit like saying, “We support controlling prices on food sold at farmers markets in Seattle, but only if doesn’t affect the number of farmers who show up and the quality and quantity of the products they offer.” Just think of all the hypothetical resolutions the council could pass with an “assuming any negative consequences magically disappear” clause.

The whole controversy is just a lot of election-year talk anyway. The Legislature is not going to lift the rent control ban and regardless, rent control doesn’t work. It distorts the market through perverse incentives, constrains development of new housing units, and holds cities back.

Development fees – Many of the same people pushing for rent control also want “linkage fees” on new developments. The fees are justified by proponents “on the grounds that development itself is raising housing prices,” as Publicola put it.

How would raising fees on building new housing units help lower the cost of housing? It wouldn’t, of course. Those new units would be more expensive to buy or rent, with linkage fees charged on top of them.

But this goes back to that key distinction. Seattle political leaders aren’t interested in “more affordable” housing. That doesn’t earn them credit from activist groups. That doesn’t give them more goodies to hand out and ribbon cuttings to attend. But building or mandating more “affordable housing” is a political opportunity that also puts more units in the city under government control.

Contradictory goals – Mayor Ed Murray’s affordable housing taskforce rightly identified the need to greatly increase the housing supply in the city. Soon after its report was released, Murray completely backtracked on proposals for greater flexibility in neighborhoods zoned for single-family houses (which is 65% of the city).

That’s unfortunate. Murray faced a backlash from some homeowners, but a city that knows it must add density needs mother-in-law suites, above-garage apartments, and options such as duplexes and townhouses. While some neighbors worry about these types of units, they’re about as low-impact as the necessary changes come.

It may seem odd to quash flexibility in zoning and protect most of the city from more density while at the same time advocating for more housing and greater density but as I said, Seattle has a muddled approach. These instincts (AKA political calculations) also lead political leaders to publicly worry about “gentrification” and “preserving the feel” of neighborhoods as the city grows. “Preservation” is a happy euphemism for “this neighborhood will not be improved.”

Seattle’s current approach to these issues is confusing, contradictory, and certainly won’t lead to “more affordable” housing. A straight-forward approach would remove barriers to even modest density changes and encourage more housing supply, instead of constraining options and intentionally adding new costs and fees.

Instead of a simple approach, Seattle’s political leaders seem likely to continue focusing on rent control, linkage fees, more-stringent zoning regulations, less parking, transit-oriented development, building more apodments (tiny apartments), stopping apodments, preservation of single-family neighborhoods, ride-sharing regulations, ameliorating gentrification, more streetcars, new parklets, road diets, and excoriating Amazon for adding more good-paying jobs in the city. Quite an agenda.
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.