We Have a Leadership Crisis not a Housing Crisis: The Parable of the Broken Gas Gauge

Over the last holiday I had a loaner car, and I was driving down a narrow road toward my destination. The car was old, but was well maintained, I thought, by the garage that gave it to me while mine was getting maintenance. Suddenly, it started to make noise and lurch a bit. What was going on? And I was on a two lane road with no shoulders. Great! What a perfect way to start the weekend.

Finally, the car came to a halt. It had electrical power, but it wouldn’t start. A long line of cars was building up behind me. What a mess. I called AAA and started the process of getting a tow. While I was doing that a Washington Department of Transportation (WSDOT) vehicle came up behind me. The woman who was driving it came to my window.

“What’s wrong with it?” she asked.

“I’m not sure. It won’t start,” I answered.

“I’m going to push you out of the way,” she said.

Fortunately, there was a turn out less than a mile away where I could wait for a tow. When she finished getting me there she came back to the window.

“It’s almost like you ran out of gas,” she said.

Then it hit me. The garage had told me that they had just fixed a problem with the gas gauge. Could it be that they had failed to repair the problem? The gauge was reading about half full when everything stopped.

“Do you have some fuel you can give me?” I asked.

She did, and she poured gasoline from a can she had into the tank. After a few gasps, the car started up and I was on my way down the road. When I got to a gas station, and I filled up, I had put about 16 gallons in the tank. It definitely had run out of gas.

When you don’t have the right measures you can’t make good decisions. My gas gauge had lulled me into a sense of security. I believed the measure on my dashboard even though I had driven a fair number of miles. Why would I worry about how much gas I had?

The right measure for housing issues is price; price is the critical gauge for cities to decide whether they have enough housing to accommodate the people who want to live there. If prices keep climbing, it means it’s time to take the foot off the brake. Maybe existing rules were ok when demand was low, but when price goes up it’s a clear sign that everything must be done to increase production. But if one ignores the gauges or pays attention to the wrong ones, it can lead false correlation and trouble.

When we use affordability, a qualitative measure, we get focused on feelings. We panic. Rents are “skyrocketing” and people feel like things are out of control. The city is growing too fast. Things are changing and getting too expensive. The feelings of the changing city get falsely correlated with price. The more things change, the higher the prices go. Using affordability, a description of a person’s relationship to price, is like looking at the oil light to determine how much fuel is in the tank.

While this makes sense on a superficial level – looking out the window there is lots of construction – it is the wrong gauge. More housing will reduce scarcity and help lower prices. And poor get hurt most when we don’t get out of the way of housing production; they need more housing and many just need cash to help pay the rent where they are, not a few units years from now.

Seattle is driving down the road with a working gauge and it reads empty. The warning light is on. The light has been on for miles now. For some reason the leadership of the City thinks that driving faster will mean getting to the destination faster and so more speed – or rules and taxes and regulations – is the way to “solve” the problem. Meanwhile, they keep passing off ramp after off ramp. The next one coming up says, “No Gas Next 150 Miles.”

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