Typology: From Shelter to Investment

Here it is one week since our name change. I wish could say it went off without a glitch, but we had some. We were offline due to some kind of hacking from someone planting malware on the site. We got that cleaned up, and our email finally synced up as well, so it looks like everything is rolling along. It is a busy week this week, with some conversations about rent control, back yard cottages, and a visit to Olympia. But I wanted to do a bit more elaboration of the 5 basic concepts or principles we’re going to be advocating for. Let’s start with typology.

Here’s what I said about typology in my last blog post:

Typology – Shelter to Investment. We advocate for improving housing opportunity ranging from better shelter options through rental and ownership to opportunities for investment in the real estate market

Typology typically refers to what a building looks like and its, for lack of a better word, profile. Examples of a type of building would be cottage, single-family home, apartment, tent, or cabin. Typology is a way of describing not so much the use of a building or structure but what it looks like, how much space it takes up, or other physical features.

I see this as a continuum, and I used words right away that sound like use or motivation rather than appearance, “shelter to investment.” I like these two extremes because shelter would include a tent put up somewhere in a right of way like those in The Jungle – something that might be innovative to the point of being illegal. On the political left, shelter is seen as sacrosanct, performing two functions expressing dissent and providing a place to sleep and stay dry and hopefully safe.

Investment is way at the other side; it’s about making money. This is what capitalism is all about, and most of use who advocate for the market know that people makes choices based on price signals and the ability to make their lives better. Like it or not, money is part of making life better. Buying a duplex and renting out one unit while living in the other is an investment; so is buying land with an old craftsman and turning it into 60 apartments.

We are for both of these and, of course, everything in between.

Do we think that tents under I-5 are a sustainable solution to housing scarcity? No. But when people spontaneously and through hard work manage to create something that helps address a basic need, housing, the community and government should not just get out of the way, but ask, “How can we make this better, safer, and build off the work being done by these people.” As I wrote in Forbes about The Jungle and people who’s home is their car we need to see these types of housing as an accomplishment and leverage those to better, more sustainable solutions. Seeing people solve housing problems in innovative ways would have meant that small-lot and microhousing solutions wouldn’t have been outlawed but encouraged.

And as for investment, we need it if we’re going to both meet basic needs for housing and to lower prices. Investment is different than speculation; it is risk, but not reckless risk. Instead, investment is a conscious effort to make one’s situation better through innovation, intelligence, hard work, and data. Housing as a business provides tremendous benefit to people who need housing; by risking capital, investors provide the money that creates the jobs of the people who hammer together and build housing units. This is not a bad thing but a really good thing with wide public benefit. Public benefits don’t necessarily need to be free; think about electricity and the water that comes out of the tap. Then take a leap and think about local bars, restaurants, and other businesses you love; each of them is worth it to you and wouldn’t be there without investment.

The bottom line is that we are for the human spirit, the fire inside all human beings to survive and thrive. If we allow that to flourish, we’ll get all sorts of unusual types of housing solutions, including small single family houses, microhousing, Small Efficiency Dwelling Units (SEDUs), and yes, families who are using their cars as a solution to stay out of The Jungle. Each of these has a lesson and each solves a housing problem, and we’re for learning from and building on each of these to help create a diverse and wide ranging set of housing types for people wherever they may be, surviving or thriving.

We Have a New Name: Seattle For Growth is Here!

You’ll notice a change here and I think it speaks for itself: we are now Seattle For Growth.

I’m still getting used to this switch having been typing our old name for the last five years. I see this name change as an evolution and part of a resolution: always start with what we’re for.

Over the last five years we’ve seen a steady roll back of housing products that were innovative and met people where they were in the market. When we started, we were pushing back on efforts to eliminate single-family housing that was smaller, more compact, and filling in smaller lots. Then there was the efforts to eliminate microhousing and impose a linkage tax on all new housing, and finally, the disastrous Grand Bargain which has the city poised on a cliff of broad uncertainty in the market and higher costs to build housing. All things we have been against.

So the question, “What are you for?” is a mantra to remind us that throughout the last five years we have always been for a lot of great things, especially more housing. When I went through the exercise of developing a new name, here were the economic principles I think articulate what we’re for.

  • Typology – Shelter to Investment. We advocate for improving housing opportunity ranging from better shelter options through rental and ownership to opportunities for investment in the real estate market
  • Location – Housing everywhere. There should be no part of our city or community where healthy and viable housing opportunities should be limited or restricted.
  • Use – Zero zoning, more mixing. Zoning, the segregation of uses of land, is a 20th century solution to a 19th century problem. We don’t need zoning, but a code and rules that efficiently and appropriately blend many uses together including retail, housing, and even some forms of manufacturing.
  • Price – More housing means lower prices. The central theme of the discussion revolves around housing price. The answer is simple: more housing. But price functions as a proxy for many other issues and as an excuse for bad policy. We will share data and tell stories that prove our point and support better policy. Only poor people suffer from scarcity.
  • Efficiency – More small units. I like efficiency better than density, since density is really an example of being efficient. More people living in a smaller area means land and resources are used more efficiently. Our view is that people ought to able to live however they want, but we should let pricing and policy reward efficiency not prejudice against typology, location, density, or size.

I’ll keep elaborating on these points, but I came up with a sentence that I think captures all these:

Imagine a smaller1, live-work unit2, near transit3, that is less expensive3 in a densely populated, walkable neighborhood4.

1.Typology and Efficiency

2.Location, Use, and Efficiency

3.Price and Efficiency

4.Location, Use, Price, and Efficiency

So while the name helps us keep us thinking about what we’re for a lot will stay the same:

  • We continue to advocate for better policies and explain why policies are consistent or not consistent with our message
  • We continue to have regular meetings with City staff and advocate for process improvement in the permitting and entitlement process
  • Maintain the effort to engage with, represent, and advocate for builders, developers, and landlords in the city of Seattle at City Hall and in the media
  • We are still the consistent voice in the city advocating for solutions that work not just feel good.

I look forward to hearing from you in the weeks and months ahead as we continue our work to improve the regulatory environment and understanding how we can create broad support for these ideas that benefit people of all levels of income.

Merry Christmas, Happy Holidays, and Happy New Year!

As we wind down the year it’s easy to get a bit reflective, even more so now that Smart Growth Seattle has existed for 5 years. In some ways that is a long run. In others, it’s only just a sliver of time. In the battle over what to do about housing and growth, it’s been quite an eventful stretch of time. One of my favorite movies (not just for Christmas) is It’s a Wonderful Life. The movie is really substantially about housing as well as the unknown impact each life has on other lives. Jimmy Stewart created a classic character with George Bailey, a guy who in spite of his big dreams stays at home and keeps the building and loan going. Here’s a couple of my favorite scenes.

First, we see George Bailey standing up to old Potter. Now most see developers, landlords, and builders as Mr. Potter. There’s not much I can do about that today, but our hope is that, someday, people who make housing are truly the George Bailey’s of the world while Mr. Potter is the cynicism of rules for rule’s sake and the notion that if we build more housing it will just get more expensive. Think of Mr. Potter as the ultimate Not In My Back Yard neighbor.

Measly, one horse institution. Sometime’s that’s what Smart Growth Seattle can feel like. But it’s important to have voices to call out when government is making bad housing policy in the name of helping poor people, especially when that policy will do the opposite. It would have been easier for George to let the Building and Loan disappear, but he didn’t. And he always had mixed feelings about it until he realized the larger good he had done.

And one scene I’ve posted about before is the bank run scene.

The bank run scene is perhaps one of the best explanations of how banking and finance works. The money is here, it’s invested in the community. And what the scene shows is how the economy is a web; when one person benefits so do others, and when someone suffers so does another person. We’re connected. I’ve often used the scene to describe why there are not “profits” in development, just take home pay for people that take the risk to build. Meanwhile, investors return value to others who use their returns to pay for things like retirement or college expenses. In other words, things everyone has to pay for.

It’s a Wonderful Life is a movie that happens to be set at Christmas time and is all about how we touch many lives just by trying to do the right thing, even when we can’t see that benefit up close. The movie is really about the economy — not money — but the way what we do for work and livelihood, how we invest, how we spend, and the rules and regulations we make, have impacts on other people. Building more housing is a good thing all by itself, and people who do it deserve some praise for making their living doing it. But it’s also important to remember we’re all in this together, too.

 

On the West Coast Price Control Obsession Continues

A long, long time ago in an empire far away, an emperor decreed that prices were going up too fast and too high and he imposed a regime of price controls on everything from wheat to labor. The penalty for violating the controls was death. The emperor was Dioclectian, and in spite of his track record of following through with threats, the price controls he established were universally violated.  This was 2000 years ago, and from then until now, price controls — including those on rent — always fail, causing scarcity and even higher prices. Still, areas with fast growth like California and Washington still want to try to make them work.

It’s in this context that a study has just emerged pointing out that rent control has accelerated the things proponents claim they’re worried about, rising prices and gentrification. Curbed wrote a post about the study with it’s arms folded:

Those who have griped about rent-control laws all along will point to this research as vindication.

Well, maybe because it does?

From the study:

We find that six percent decrease in housing supply led to seven percent increase in rental prices. These caused an aggregate welfare loss to renters of $5 Billion. This is almost as large as the benefits accrued by the lucky beneficiaries of rent control

I already wrote about this study and how in spite of it people in town still want to do it, even though it it’s harmful to poor people. The answer to the chaos created in the market by bad policy is that the market doesn’t work.

I still keep writing about this because I guess someone had to and the proponents have the momentum. I find the tone of the Curbed post weird, like some academics interrupted the march toward utopia with a bunch of annoying math. I expect a lot more sentimental appeals to people’s deep sense of angst and anger about having to pay for housing every month.

 

 

 

 

 

 

 

 

From the DJC: “Another Example of Why We Can’t Build Enough Housing”

Last week I got an email from a supporter with the words “another example of why we can’t build enough housing” in the subject heading and the following clip from the Daily Journal of Commerce. I’ve put an emphasis on key points in the text.

New plan for Avalon site totals 40 units, not 102

By BRIAN MILLER
Journal staff reporter

Plans for a seven-story apartment building at 3078 S.W. Avalon Way in West Seattle are dead, despite years of effort by different teams.

In July, that project had its fifth design review in five years. During that time, the potential developer changed twice, and the architect changed once.

A master use permit was issued during the process, then subject to a SEPA appeal to the city Hearing Examiner, which was later reversed.

Insufficient parking had been a major point of opposition from neighbors.

The design review board recommended in July that the project go through another round of review. In August, the owner of two of the site’s three parcels cancelled the project.

Now the same owner has filed two separate new plans for 3084 and 3078 Avalon. And Cone Architecture has replaced NK Architects.

The owner of the third parcel is apparently no longer involved.

The plan for 3078 Avalon is now eight townhouses with four parking spaces on a 4,800-square-foot lot. An existing rental triplex will be removed.

The plan for 3084 Avalon is now a midrise apartment building with 32 small efficiency dwelling units (SEDUs) and no parking. The number of floors isn’t specified, but project size is estimated at 18,000 square feet — which indicates six or seven stories. An existing rental triplex will be removed from the 4,800-square-foot lot.

Both properties have been owned by the same family for several decades.

Two different builders are listed for the projects.

Not only will there be fewer housing units available to the market when this project is finally done compared to what was originally proposed, but they are likely to be a lot more expensive. While nothing was happening and the process was grinding down the number of units here, money was being spent on holding costs, lawyers, and architects. All the money that has been spent to deal with this process will end up in the rents of the new tenants and the price of the new homes.

While the Mayor and Council and press keep gasping at “skyrocketing” housing prices they are presiding and standing by a system that produces this result: higher prices. It’s astonishing that elected officials react as if housing prices are some kind of freak of nature when in fact they are the result of bad policy. And they hate when I call it out. Too bad. That’s what I have to do. Someday, I hope, people will realize we have a say in housing prices. We can get rid of the excesses of regulation and process and let the market respond to the demand for housing. I guess that’s just too easy.