The (Zoning) Battle of Seattle

If ever there was a time for outsiders to pay attention to local Seattle politics, this is it. It’s a city council election year and the candidates have a better chance than ever before to discuss Seattle’s already declining affordability.

Seattle’s mayor, Ed Murray, recently announced that he was backing off key elements of the Housing Affordability and Livability Agenda (HALA) recommendations that the city had requested. Specifically, there was a loud outburst on the part of homeowners to HALA’s proposal that much of Seattle’s land be “upzoned” – that is, the city would change zoning regulations to allow the construction of multifamily homes (mostly duplexes, triplexes and condos) in areas that currently only allow single family homes.

Seen in the context of all the HALA recommendations, upzoning is a sensible idea that could make possible the radical changes that Seattle needs to maintain its diversity and livability for all. During the raucous few weeks of the plan’s rollout, however, most politicians seem to be content to demonize their enemies (if I never hear the word “fauxgressive” again, it’ll be too soon) rather than discuss real change.

Seattle has the opportunity to build broad based support on the terms of the plan, but the deck is somewhat stacked against sensible changes. The housing issue is boring and can be data heavy. Supporters also apparently shot themselves in the foot with some political missteps.

Viewing this battle from afar gives me a little space to examine the quality of argument on each side. If HALA supporters can somehow resurrect the zoning changes, do they stand a good chance of making an impact on the city’s affordability?

Supply and demand in Seattle

smallzonemapSeattle is a land constrained city with enormous and growing appeal. Like other similarly situated areas (San Francisco, New York, Boston, etc) the price of housing has skyrocketed in recent years. In addition, a vast amount of its land is covered by Single Family Zoning (SFZ) allowing only detached homes placed within a given lot footprint. Up to 65% of the land area is covered by the light yellow shades representing SFZ in the map above.

It’s not a big stretch to see how limiting the size and structure of homes to the least efficient mode translates into higher housing costs. If developers can’t build up or across, they have to make independent, freestanding structures on each plot. Zoning codes also dictate a certain lot size, which makes for an even more inefficient use of land. These factors reduce the supply of housing, increasing the price.

A good background piece from Daniel Kay Hertz (not about Seattle) in Washington Post points out why this is:

…[Z]oning laws restrict the total amount of housing that can exist in any given area, which means that wherever well-to-do people decide to move, they will bid up the price of housing until it’s out of range of everyone else. Imagine, for example, if there were a law that only 1,000 cars could be sold per year in all of New York. Those 1,000 cars would go to whoever could pay the most money for them, and chances are you and everyone you know would be out of luck.

Incidentally, Hertz also references the racial and economic exclusion that is inextricably linked to zoning in this country. HALA did something similar which may have backfired, as a relatively benign mention of this fact in the HALA recommendations caused some pearl-clutching and outrage, largely from the population that benefits from the status quo.

“Infinite Demand”

Advocates for the status quo in Seattle make a few different arguments for why housing is more complicated than “Economics 101”. A comment on an article about zoning and housing prices on Pedestrian Observations provides a concise summary of their position:

The more housing you build, the higher prices become. Build enough housing, and eventually nobody but rich people can live in that city. Building housing makes cities unaffordable.

Economists can’t wrap their heads around these kinds of paradoxes because they’re unable to understand that not all parts of the real world function in the idealized way described by Econ 101. In the real world, there is infinite (or effectively infinite) demand for some goods, and creating more supply creates exponentially more demand in a vicious feedback loop.

…building more housing in America’s most desirable cities doesn’t reduce housing costs, it just lets more people move to those cities who otherwise wouldn’t. Why wouldn’t you, as a resident of Keokuk Iowa where wages run $8 an hour and jobs are scarce, move to Seattle WA, where the minimum wage is $15 an hour and jobs are plentiful? Obviously you would if you could. And when Seattle builds more housing you do move. So do lots of other people. But the number of people who move is always exponentially greater than the number of housing units built.

You’ll see the words “infinite demand” pop up a lot in these conversations. It may be functionally true – there may be many more people that want to live in Seattle than is viable to produce housing for. However, it is difficult to see how, all else being equal, increasing supply would increase prices.

The claim that “the number of people who move is always exponentially greater than the number of housing units built” doesn’t seem compelling – where is the evidence that people move because of the availability of housing itself? Generally, people move because of the signal of availability they get from price. There are not millions more who would move to Seattle if there was an “available house” that cost exactly as much as houses already do. If there were, the housing costs would probably be even higher.

If I’m being charitable, perhaps these folks are arguing that a new type of person will be attracted as more multi-family housing is built in Seattle – the same people that are currently bidding up the price of single family homes are not the same as the people who will be attracted to denser living. I guess this is a reasonable assumption, but there’s not a clear outcome from this. The families that are more likely to live in duplexes and triplexes are certainly not as

This is not to say that increasing supply necessarily leads to widespread cost decreases. Many, including perhaps most forcefully Jim Russell of Burgh Diaspora, write that high demand is the prerequisite to skyrocketing prices, and supply doesn’t affect the equation much. This is a bit difficult to overcome in a desirable place like Seattle – it’s unclear whether or how we should try to convince people that places that they view as desirable are in fact undesirable.

That being said, the effect of spreading out development over the city rather than only allowing densification in the very few areas that the homeowners will allow would be to decrease the effect on any one district. A citywide (and actually a regional) approach is necessary. It’s kind of bizarre that we live this up to local jurisdictions in this country.

Displacement

Again being charitable that there’s not other influences at play, another potential concern is that upzoning would cause displacement of current residents from affordable single family homes. Bill Bradburd, who advanced out of the primary and is running for a citywide seat wrote an op-ed criticizing the HALA recommendations:

The false assumption inherent in the HALA Report is that creating more supply at the high end will trickle down to increase the supply of workforce and very low-income housing for seniors and people with disabilities.  Tearing down or renovating older, moderate-cost buildings only displaces renters and exacerbates the affordability problem.  In reality, truly affordable housing types can only be produced with subsidies.

The most compelling version of his argument is that developers only have an incentive to build for the high end of the market that makes them the most money. This is undeniably true, and is happening in the hottest housing markets in the country. Take out a neighborhood of moderately affordable renting houses to design a high rise of ultra sleek apartments for the rich, and you’ve forced out people hanging on by their fingernails to the opportunities to be close to jobs and infrastructure.

There’s a couple logical flaws in this argument, the most prominent being that the current system is not protecting low income people. If you’re renting in a neighborhood that would support price increases, your landlord already has an incentive to get you out of there. That is, in fact, what is happening all over Seattle.

The second problem is that zoning is not what’s doing the preservation that is currently going on. It protects far more rent seeking homeowners who bought at the right time than it does income limited renters who need affordable housing. To address displacement, Seattle desperately needs to take measures to preserve, build, and even take off market housing that preserves affordability. Zoning changes are not the sole solution to this challenge, but they also are not the cause.

Bradburd’s objection also ignores the work that the HALA recommendations do to tie affordable housing to for-profit development. If the proposal was to destroy zoning and let the market sort it out Bradburd’s argument would be far more viable. The problem is that it will be up to people like Bradburd, if he wins, to implement the policies that create a system with greater equity and affordability in mind. If he rejects out of hand that anything should change it’s tough to see how a better outcome could happen.

“Character/X comes first”

I put two other rhetorical tools from people who disagree with upzoning on principle in a separate category, because they tend to fail on argumentative grounds, rather than evidentiary ones.

The first I find so uncompelling that I have to try hard not to make a caricature of the position: that the addition of multi-family housing will ruin the “character” of the neighborhood. This is not always meant as a racist or classist dog whistle (although it often is) but does prey on the fear of looming disaster that change represents. Never mind that there are plenty of ways to do things like preserve architectural unity or preventing a gas station moving in downstairs without requiring extensive single family zoning. The boiled down argument usually comes to: I don’t want new people or activities in my neighborhood.

Comments on articles about HALA are filled with people saying “I bought a Craftsman in a nice neighborhood 10 years ago. Why should my needs and desires be dashed for people who want to move here?” There’s a lot wrong with that sentiment – not least that allowing denser construction is actually probably good for homeowners. But on a philosophical level, a desirable large city like Seattle does not owe each and every one of its residents the preservation of what they perceive to be the “character” of the neighborhood, especially when that involves large plot single family homes in a major urban area.

There are a number of claims (some disingenuous and some reasonable) about what Seattle needs to invest in before they upzone. Some people will claim they need better parking facilities for residential areas (this is ridiculous). A more supportable criticism is that Seattle has ineffective public transit and is a traffic disaster, and that allowing densification without better infrastructure is counterproductive. As someone currently based in a city with a very high percentage of triplex houses without effective public transit, this does hit close to home. Although the reading I’ve done about Seattle does seem to indicate that they doing a very poor job on transport issues, this is not in itself a reason to reject zoning changes.

In fact, zoning could just as easily be seen as the gateway issue. A lack of density means more people have to have a car because regular transit service isn’t cost efficient. It also ignores the other recommendations of HALA that complement this investment (for example, reducing parking requirements). Also, call me cynical, but I bet the people voting against public transit funding and against upzoning are probably not entirely distinct.

A Small but Commonsense Step Forward

Let’s finish with the obvious: zoning reform is not a silver bullet. To quote someone: there are no silver bullets, just a lot of lead ones.

I was almost ready to publish this post when I read this great piece by Pete Saunders about why Zoning Reform Can’t Fix Everything. If you’ve made it this far in my post, you should read it. Saunders makes a critical distinction that is not well understood by fundamentalists of either camp: upzoning is a useful tool in some contexts, but there are others where it could well be disastrous. Upzoning and letting the market take over in South Side Chicago, which suffers serious perception, segregation, and quality of life issues, will do nothing to change the fundamental characteristics that create “global Chicago” and “Rust Belt Chicago”, for example.

Once again, this proves how we don’t really have a “national housing market”. Renting a house in San Jose is different than buying a house in Buffalo. The problems are actually the opposite of one another, and the search for a single solution is more than useless – it’s counterproductive.

However, I don’t think it would be controversial to claim that a huge portion of Seattle, including many of the single family zoned areas, represent a high demand and constrained market that is not like the struggling areas in Rust Belt or East Coast cities. While not a panacea, I don’t see how to make things more affordable and sustainable in Seattle without the ability to live more densely. The change would create greater opportunities for careful urban planning and development rather than solving the affordability problem in one fell swoop.

The best outcome that Seattle can hope for may be that rents don’t go up as much as they would have. This is still a positive impact, if depressing – Obamacare supporters will tell you that this is pretty weak tea to build support around.

Housing mix is going to depend on the particular levers deployed by local government to carry out development: the carrots and sticks that create a housing market that works for all of Seattle. Make no mistake that the whether the decision today is to embrace change or delay, the city will be living with the consequences for decades.

Update: now Tacoma’s talking about it. Obviously the context is significantly different but you can see all the same tropes on display in this article.

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The Long, Long Road to Fair Housing (Part 3)

I haven’t done a good job in this series delineating between fair and affordable housing. These issues are of course related – many of the policies that keep housing unaffordable also keep access to it unfair – but it’s important to understand the difference to avoid walking into the “it’s class, not race” trap.

If it were simply an issue of class, then stories about how black families were 80% more likely to receive subprime mortgages than white families after controlling for income and credit score wouldn’t make any sense. It’s also important to realize that conflating low income people with people of color is itself part of the problem driving inaccessibility. Lack of housing is an issue of both race and class.

Disturbingly, opponents to either fair or affordable housing often rely on similar language and assumptions about declining property values or the “character” of the neighborhood. Both provoke vocal opposition to government “meddling” or “social engineering” as well as quieter but more effective opposition (through zoning and permitting) to “changes in character” or “overdevelopment”.

For the final part of this series, I want to zoom in on a particular instance of affordable housing development to show you what the barriers look like on the ground. Keep in mind that while the primary focus of this particular story is affordable housing, the same tactics apply to almost any policy that affects fair or affordable housing.

First, some background. A recent CityLab article reported on Urban Institute research showing that there are no counties in the US that have enough affordable housing for their populations. Precisely zero places in the US have housing security according to widely accepted standards, at least at the county level.

Massachusetts gets closer to its goal than any other place I’ve ever lived, but it tops out at about 40-50% of its need met. Some of the Bay State’s relative success is due to a law known as Chapter 40B, which allows the state to challenge local zoning and development decisions against affordable developments if a city’s housing stock is less than 10% affordable. As you might imagine, 40B is a swear word in many circles.

Still, even with the force of the state and supposed good intentions behind affordable housing, it’s still a monstrously hard sell. This is true in places like Newton, a liberal, wealthy Boston suburb. The Boston Globe‘s Dante Ramos recently wrote about Newton’s struggle against affordable housing:

On June 5, the companies behind two stalled projects filed a complaint against the city with the federal Department of Housing and Urban Development… One of the projects, by Boston-based Cabot, Cabot & Forbes, is an innovative effort to retrofit part of an aging office park as a mixed-use community with 334 housing units; the other, by Newton-based Marcus Lang Investments, is a small five-unit project on Goddard Street. Both projects would include some subsidized units. Both had been proposed under Chapter 40B … Newton has rejected both projects, on different grounds. And it’s trying to wiggle out of 40B altogether.

This puts in even sharper relief a news story I came across recently about affordable housing construction in Shrewsbury, Massachusetts, Worcester’s richer neighbor to the east. A 300 unit development is in the works there that, thanks to 40B, has 75 units available for people with “low and moderate” incomes. Based on the local income limits calculated by HUD, low income in this case means earning as much as $65,800 for a family of four. That’s right: 25% of the units are for people who earn less than $66,000. Radical, right?

From the Worcester Telegram article about the development:

The Board of Selectmen and dozens of neighbors have vehemently objected to the project. The concerns include excessive building heights, potential reductions in property values because of the height and proximity of the buildings, impact on classroom sizes in the already crowded local schools, increased traffic problems on heavily-traveled Route 20, increased risks to pedestrians and child safety, economic impact from the loss of limited land zoned for industrial use and the project’s density.

…The only support came in a letter signed by 17 area business owners. They said the proposed residential development would stimulate the local economy, expand the local customer base and greatly improve the appearance of this section of Route 20. They also said the project would have significantly less negative impact on traffic than most of the commercial and industrial uses permitted in the district.

I tend to agree with the second opinion. It has to be seen as somewhat disingenuous that suddenly there is great concern for pedestrian safety or the economic potential of the land in areas that look like this:

One has to be somewhat attuned to the dog whistles of housing opponents to recognize the common tropes here: affordable housing brings “decreased property values,” “traffic,” “excessive heights”, “school crowding.” Look for the examples in your area, and I guarantee you’ll hear the same. Each and every affordable housing development in the country that is not an absolutely 100% economically segregated area has to deal with this.

So ask me again why I’m doubtful a tepid ruling from the Supreme Court and signs of life from HUD will result in real change. I hate to say it, but lack of affordable housing seems like a complete breakdown in the social contract rather than something requiring a minor fix.

I’ll end this depressing series with my pitch for a new slogan for housing advocates.

Housing: it’s not that bad. It’s worse!

The Long, Long Road to Fair Housing (Part 2)

I’m coming to the conclusion that it’s the really boring issues that have the greatest effect on people’s lives.

It’s those highly technical topics that are complex and dominated by special interests, and yet are essential to basic quality of life, that have a vast, invisible impact on our society and economy.

Housing policy is a clear example – almost sinister in its monotony. Everybody needs it and no one understands it.

Making meaningful changes in the field requires a knowledge of zoning rules about floor-to-area ratios, or construction project management, or the financing structures of the real estate market. These topics are difficult to understand for people who deal with them every day.

Add that housing is tied to poverty, race, property and schools – among the easiest topics to discuss in America – and you’ve got a perfect storm of dysfunctional politics.

Misconceptions About Fair Housing

If I go back to what my perceptions were about the housing market, say, after high school, I understand why many people have misconceptions about discrimination against poor people and people of color in housing. Here are the facts as I understood them:

  • There is a difference between de facto vs. de jure segregation. De jure segregation is now illegal, and you can’t do anything about where people choose to live.
  • People are mostly free to live where they want. Their housing decisions are guided by free choices in the open market.
  • There are a few bad people who discriminate, but they are isolated and on their way out. And they live in the South.
  • Government actions do not materially affect housing decisions anymore, and actions to decrease segregation usually backfire.

If you’re familiar with the field in anything more than a cursory way, you probably chuckled at a few of these – but such is the result of a public school education on civil rights and the history of the 20th century.

If you take these assumptions for granted, a whole worldview emerges. People should be able to move out of bad neighborhoods. Government has already done its duty to break down barriers. Individuals don’t benefit from discrimination in any ways that they have the power to change.

The reality is massively more complicated.

This country has a shameful history of private and public discrimination, mandated and abetted by every level of government. It’s taken place everywhere, not just the South, not just in conservative areas. As part of my continuing reeducation I have assembled a short, incomplete list of discriminatory policies and tactics that continue to affect us today. Some are for the exclusion of poor people overall, and are merely disproportionately targeted at people of color, others are used explicitly to foster segregation.

Ever-increasing List of Discriminatory Tactics in Housing and Mobility

Adding to the list, the question that emerges is not “why can’t poor people just get it together?” It is “why do we continue to dream up progressively more complex and sinister ways to segregate ourselves economically and racially?”

Housing segregation is just as harmful as educational segregation. If the housing you’re allowed to access isn’t as high quality, is a financial trap, or gains little value over the years, it is the difference between having the next generation’s college fund and not.

Discriminatory practices are the major reason for the wealth gap that exists today in black and white households today – whites have had several generations of access to high quality assets, and blacks have not.

Pew Wealth Gap
According to the Pew Research Center, the median white household has 13 times the wealth of the median black family. If you don’t count cars as assets, the gap increases to 69 times (Slate).

Imagine your family’s wealth was reduced to 1/13th (or 1/69th) of its current value and how it would affect your quality of life.

What exists today can seem like a minor barrier compared to Jim Crow or redlining. But small culturally enforced biases, backed up by years of government policy, cement into an insurmountable wall of discriminatory practices.

I told you not to come here looking for good news.

The Long, Long Road to Fair Housing (Part 1)

Segregation in metro Chicago
Source: Salon.com

Recent news might suggest that the US is about to enter a golden age of fair and desegregated housing. There has definitely been better news recently. In the least noticed of a trinity of big wins for liberals/President Obama, The Supreme Court ruled that the Fair Housing Act (FHA) can challenge local policies that create segregation. The US Department of Housing and Urban Development (HUD) released new rules targeting segregation in housing across the US, something civil rights groups have been pushing for for decades.

Unfortunately, these actions aren’t really the victories that the headlines proclaim. Serious political leadership is still needed for these actions to be anything more than symbolic, and housing as a field has seen some decidedly non-symbolic setbacks in recent years.

If this seems pessimistic, you have to understand that fair and affordable housing in the US is not the place to come looking for a hopeful story.

Let’s start with the Supreme Court’s ruling. A bare majority of five justices held that the FHA allows the government to deal with discrimination arising from “disparate impact” – that is, policies that have a racial impact even when policymakers do not justify their decisions in explicit racial terms. This was an unexpected victory, but should be couched more in terms of dodging a bullet than moving fair housing forward. The ability to sue based on disparate impact is already a (barely enforceable) power that states, cities, and HUD had; no circuit court had ruled against HUD in previous court challenges. A Supreme Court ruling against the government would have made it impossible to prove discrimination unless government zoning documents, for example, read like a speech at a Klan rally.

There is a case for extremely guarded optimism on HUD’s new rules, which require municipalities to submit data on patterns of racial bias and a public report every three to five years. Many are probably shocked that HUD did not already collect and report on this kind of data. While moving towards better data and holding municipalities to higher standards is important, when it comes time to actually withhold HUD money – when states and cities really begin to howl – we will see how serious the government is about enforcing desegregation.

HUD hasn’t been able to play a major role in housing desegregation since George Romney (father of Mitt) was HUD Secretary in the 1960-70s and tried to withhold funding from areas that were not “affirmatively furthering” fair housing. Nixon slapped Romney down in this effort so hard that the sound is still reverberating around HUD headquarters, and HUD hasn’t been able to play a major role since. For a must-read account of this episode and its effect today, see Nikole Hannah-Jones’s 2012 ProPublica article “Living Apart“.

Nothing in HUD’s new rules proves the government ability to act on its findings of discrimination, and given the perception of the issue – some of which was on display in the Supreme Court’s dissenting opinion in the disparate impact case – it’s going to be an even harder fight now than in the 70s.

Is this pessimism really justified?  Racial segregation (although not income segregation) is slowly decreasing in most places, after all. Maybe these symbolic rulings are just hopeful signs as we make a committed cultural shift away from segregation.

The problem is that desegregation has never just happened on its own. Right now, even as people of different income levels and races are beginning to once again occupy many of the same physical spaces in cities, they are failing to occupy the same social spaces, and form a community.

We have a unique opportunity to mix things up to create more equitable housing patterns, but the gap between promise and reality is stark; if we continue on current trends, I am worried that we will just see an inversion of flight from cities in the 20th century, where the poor are forced out to crumbling suburbs as inner cities are “rediscovered”.

Symbolic actions shouldn’t be dismissed out of hand. Symbolism is extremely important in areas like housing that are intimately tied to government action and also important in challenging racism, as shown in recent debates about the Confederate flag. Symbolism can be the important first step. But it’s not time to congratulate ourselves yet.