Is More Tower Spacing Downtown Dead?

Last week the tower spacing proposal from Councilmember Bagshaw seemed to be making a comeback after disappearing for awhile. The proposal was triggered by angry (and very wealthy) neighbors in the Escala building downtown who are worried about losing their views to new housing development. We’ve taken a strong stand that the benefits of more new housing more than outweighs some lost “light and air” for a few dozen millionaires. Here’s a post from Facebook about a series of presentations going on around town on the Grand Bargain:

Today I heard Brennon Staley (new DPD dept) give an overview of HALA and the new “Mandatory Housing Affordability Program”, which I believe is the official name of the Grand Bargain. At the end of the presentation he brought up the downtown tower spacing issue. Apparently DPD is actually considering some changes to the commercial area to put requirements on tower spacing and possibly limit the number of towers on a block.

No matter what you think about people’s right to privacy protection, light, air, and all that crap – how in the world does a strategy that LIMITS housing production (possibly by full towers in some cases) get lumped into HALA?

That prompted me to write an email to Staley:

Hello Brennon,

It’s come to our attention that you are working on a tower spacing proposal as part of the HALA proposal. I may attend tomorrow night’s open house to hear your presentation.

Is this true? If it is, what exactly is going forward, what is the timeline, and is there a SEPA process for it underway? Has Council Central staff been involved? What’s the Mayor’s plans for introducing this to the Council?

We’ve specifically asked that the Mayor not proceed on Councilmember Bagshaw’s request on behalf of residents of the Escala building to impose a new set of requirements on tower spacing. We’d renew that request and ask that no more work proceed on this request. Councilmember Bagshaw’s suggestion would

1. Put the Mayor’s Grand Bargain at risk by impacting proposed rezones that are part of that proposal;
2. Reduce housing supply and opportunity for new people who want to live downtown; and
3. Unfairly give advantages to wealthy homeowners in one building at the expense of many, many other future residents.

It shouldn’t surprise me at this point, but don’t we have enough on our plate with impact fees, mandatory inclusionary zoning, the Levy, and 60 plus other proposal in the HALA recommendations to be pursing a boutique planning project on behalf of Councilmember Bagshaw and a few of her wealthy constituents?

We’re in a housing crisis remember! And the proposal does nothing to address that issues and in fact makes it worse for no benefit to the Mayor, the HALA, or the wider city.

Roger–

That email went out to a variety of people, including signers of the Grand Bargain. One of the key parties of that agreement was land use attorney Jack McCullough.  He jumped in within minutes:

I completely agree. This proposal is contrary to HALA and the Grand Bargain and will place HALA in jeopardy.

So that evening I went to the next edition of the HALA presentation being done by the City, including Staley’s tower spacing talk.  This time, there was no mention of tower spacing and the slide in the Power Point (see the featured image above) given by Staley earlier was gone. I ran into Councilmember Bagshaw and asked her if we’d see a formal request to stop working on a tower spacing scheme.

She said that in light of conversations with McCullough that she was “talking with [the Mayor’s staff].” And she acknowledged that the proposal was off the table–for now. I said that made me happy–for now. This is the first example of Councilmember improvisation around zoning and land use at the request of neighbors that is putting the politically delicate Bargain to the test. While I’m not a fan of the Bargain, it’s an example of why I’m skeptical that it will hold together once neighbors and their Councilmembers (elected now by districts, remember?) start trying to change how the Bargain works. This is just the beginning of trying to change the rules.

 

 

We Told You So: Microhousing Now Bigger, Fewer, and More Expensive

I told you so. One is supposed to never say it, but in Seattle housing policy, especially when it comes to the City Council it’s almost impossible not to. So here I am saying it again. I told you so. People then said I was too obsessed with microhousing and what would happen if we didn’t stop the legislation. And I suppose I was. When legislation was passed in 2014 that essentially killed microhousing as an option for builders and renters here’s what we said would happen:

• There is no need for a 220 square foot minimum, even if it is an average of all units;
• Fewer units means costs get shared by fewer people, so rent will go, for example, from $800 a month to $1,200 month;
• The proposal still requires a sink in the bathroom. Why? This just makes for more inflexibility in designing units;
• What is the basis for only allowing congregates for non-profits or universities. Why?;
• Congregates can have no more that 25% of the rooms with food prep. Why?;
• Design review thresholds are very low, we’ve proposed 40,000 square feet for full design review, and streamlined design review for everything over 15,000 square feet;
• Microhousing projects would likely trigger SEPA, increasing costs, time, and risk; and
• Why are people renting units less than 400 square feet not allowed to get a guest RPZ zone for their boyfriend, girlfriend, or family member?

Notice that price difference of about $400? A recent look at what happened to prices on Small Efficiency Dwelling Units (SEDUs) the larger replacement of microhousing found about a $300 increase in rents.

What we said would happen when Councilmember O’Brien and angry neighbors got their way: unit sizes increased, supply went down, and prices went up. The KOMO story confirmed both that fact and the fact that people truly want to live in mircohousing but are finding it more difficult and less affordable because of the Council’s action.

We told you so!

Now would you please listen to us on the Grand Bargain?

Can Public Housing be an Alternative to the Grand Bargain?

I watched a video of an excellent lecture called, “The Death of Public Housing” given by Professor Edward Getz given at the University of Washington School of Urban Studies in Tacoma. Professor Goetz is highly critical of the move away from publically built, owned, and operated housing in the United States.

In his new book, New Deal Ruins: Race, Economic Justice and Public Housing, Prof. Edward Goetz tells the story of the dismantling of the public housing program over the past 20 years. Nascent patterns of disinvestment in public housing during the 1980s gave way to a full scale policy shift in the 1990s toward demolition of public housing in favor of subsidized units in mixed-income communities and the use of tenant-based vouchers. These policies, most fully articulated in the HOPE VI program begun in 1992, were justified by claims that they would improve the social and economic conditions of public housing residents while simultaneously revitalizing inner-city neighborhoods. Since the early 1990s, hundreds of thousands of people have been displaced and more than 250,000 units of public housing have been demolished or sold off.

I agree with Goetz on some points, especially the idea that the concept of scattering residents of public housing doesn’t necessarily lead to a good outcome. Rather than preserve the concept of subsidized housing being entirely in the public realm, the Federal government has undertaken an effort to get out of the housing business. They’ve done that by privatizing subsidized housing through tax credit programs, vouchers, and mixed income redevelopment of Seattle Housing Authority (SHA) projects like High Point using Hope VI funding.

But what’s wrong with the City or SHA using publically owned land to create lots of subsidized housing? Nothing! It’s a great idea! The problem comes from resistance by City staff to giving up City owned land and using the City’s borrowing authority.  Also, there is a bizarre argument that says two totally opposite things: Seattle’s subsidized housing is all concentrated in the south end of the city, but we also don’t want to gentrify neighborhoods like the Rainier Valley with new development. In other words, poor people are all concentrated and that’s bad but mixing different levels of income is a bad too.

The argument that lots of poor people living in the same place is bad drives the move to end public housing described by Goetz. Then, those same people argue that new people of higher incomes moving to the Rainier Valley is bad too.  The truth is that subsidized housing is everywhere in Seattle, in every quarter of the city. And that’s a good thing.

But Goetz’s point, that government can and should have a role in solving housing makes sense. Well managed public housing on publically owned land using public financing is something we need as part of the solution. Unfortunately, this idea didn’t make it into the recommendations of the Housing Affordabilty and Livabilty Agenda (HALA) Committee. And the Council voted down Councilmember Sawant’s efforts to get an outside consultant to study the idea. It’s an idea that’s legal, possible, and could generate lots of housing options, something that can’t be said about the Grand Bargain. It’s not too late to give this another look.

 

 

Smart Growth Seattle on the Radio

I went on the local National Public Radio affiliate KUOW’s Weeek in Review show on Friday with Bill Radke. I debated the week’s news with Erica C. Barnett from The C Is For Crank and Jess Spear with the Socialist Alternative Party. It was a wide ranging discussion including a sustained one about whether housing should be a right or a commodity, preservation of historic buildings, and broader issues about the Presidential election. Take a listen here.

 

 

Local Builders Skepitcal of NYC MIZ Scheme

The city that never sleeps, New York, is in the process of developing a Mandatory Inclusionary Zoning (MIZ) Program like the one Seattle is considering. An article in City Limits tries to get to the bottom of some of the math being used. In spite of some good reporting  the article only finds the same questions we have about MIZ we have here: is it legal and feasible?

What the article does do is point out the age old issue of trust. Policy makers don’t seem to want to believe the numbers given to them by people in the industry, so they hire consultants. The consultants to the City said

Assessed financial feasibility using “yield on cost”, which basically takes the point at which a building is fully leased and divides total income by project cost. A developer is not likely to take on a rental project, according to developers and industry experts, if they cannot achieve a yield greater than 6 percent.

What do developers here think of that?

One I asked said

The 6% yield number rings true, but of course that number moves drifts up & down with market cycles & the yield for competing investment alternatives.

That said, the whole NY methodology smells fishy. Seattle should be doing a “value creation/value capture” methodology, where we establish a fair value for the extra FAR (equivalent land value), and we turn that value into an annual discount stream by dividing it by a cap rate. What they are doing in NY sounds like some agency decides what “enough” profit is and then tries to skim off the rest of the proceeds for the MIZ program.

And another,

NYC sounds unusual and complicated. It should be simple. Also, I wouldn’t do a project for a 6% yield. The return varies based on cost of capital, location, product type, timing, etc.

Exactly. And so far the Grand Bargain seems to be relying on the inflexibility of the land use code to peg rates of inclusion and value, something that doesn’t account for the “drifts up and down” of the market. New York seems headed for a confusing and complicated system that’s likely to make things worse

The article does make the obvious point,

For officials and advocates disagreeing over whether to implement a citywide overlay, the question may come down to economic theory. Many economists see affordability as a matter of supply and demand: the city has not built enough housing to accommodate a growing population, they say, and, due to the short supply, prices are rising for families across the income spectrum. According to this argument, the more housing we can produce—whether market-rate or below-market rate—the more we will ease demand and lower rents.

More housing is what we need, and even newer housing at higher prices helps overall affordability. It does. The MIZ scheme is complicated and likely pushed legal limits against reducing the value of private property. New York’s efforts will likely be influential here, so it will be worth watching how they organize and implement their MIZ proposal. Some might think if MIZ can make it there, it can make it anywhere including Seattle; but that all depends on the math, politics, and the law.