Seattle needs to get real on housing costs – the whole region does

Raise your hand if you think the best way to make housing more affordable is to impose new costs on developments. Anyone? Anyone?

Bueller?

Of course, there are some who think that makes perfect sense. Some on the Seattle City Council are forever cooking up new ways to “raise costs for affordability.”

On KIRO Radio last week, Councilmember Kshama Sawant called for more “linkage fees” on new developments to fund more affordable housing units. During the appearance, she acted like a previous bid for linkage fees was killed off by “big developers.” That’s simply not true, as pro-development consultant Roger Valdez points out. Those fees are in place today and developers are paying them. Sawant ought to remember; she voted for it.

But regardless, Sawant wants more, no surprise. On KIRO she called for a city income tax and much higher business taxes, adding, “You could also pass a linkage fee on big developers and make funding possible for affordable housing.”

More affordable?
Seattle’s efforts on housing affordability and zoning have been a bit of a mess the last few years. That’s why it was refreshing to read “The immutable laws of affordable housing” for some clear-eyed thinking on the topic. The author has some progressive sympathies on affordable housing but clearly doesn’t fall in with those who think the laws of economics are infinitely malleable.

The article’s first “immutable law” relates directly to Seattle’s linkage fees and Sawant’s call for even higher fees:

1. Developers don’t pay the costs of construction; tenants and buyers do. A developer who doesn’t pass costs on will not be in business for very long. For this reason, anything that makes development more costly for developers makes housing more costly for people.”

That needed to be spelled out, even though it should be obvious. But the question is, for whom are we trying to make housing more affordable? The Seattle approach is set-asides, subsidies, and government-controlled projects. Those require fees and taxes to pay for them.

But what about the people who will never qualify for housing help from these programs but still struggle with affordability in the Puget Sound region? Sawant imagines a world where the “rich” are going to subsidize everyone else. Her approach to housing, however, is going to raise rents on regular people too, not just the wealthy. It’s putting homeownership even further out of reach for them, with no government program riding to their rescue.

Linkage fees are raising their costs, not helping them out. I explained the dilemma in 2015 as the difference between “more affordable” housing vs. more “affordable housing.” I appreciated the “immutable laws” author’s perhaps clearer way of phrasing it. He writes, “capital A ‘Affordable Housing’ is different from just plain affordable housing.” Seattle leaders are interested in Affordable Housing programs and an Affordable Housing system, not in housing that’s affordable.

The main problem
Development fees are just one part of the problem. The overarching issue is that we’re not adding enough housing in our region, including in Seattle, to meet population growth. The Growth Management Act constrains options, and local governments are wary to vote for density.

Despite the clear need for more density, current Seattle mayor Ed Murray caved on allowing more density in neighborhoods zoned single-family. Even in green Seattle, those zoning designations are difficult to change. Too many people would like to see their neighborhood preserved in amber while growth is pushed to some other area.

Our region is booming. We need new houses, apartments, condos, townhouses, mother-in-law suites, garage apartments, apodments, and other options to house everybody. What’s not needed are more government programs or blue ribbon commissions.

If Seattle and our region don’t start identifying and implementing housing solutions soon, we will continue marching down the same path as the San Francisco Bay Area: that region has added far more jobs than housing units in the past few decades, resulting in exploding housing costs and ever-lengthening commutes for workers.

The solution starts with government leaders who accept the challenge and know what needs to be done. There is no use, after all, in fighting against immutable laws – especially supply and demand.
-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.