I’m taking a break. And so the blog here is in reruns. Back when there was television, Johnny Carson would sometimes turn over his desk to a guest host. Other times they would run reruns as, “The Best of Carson.” So this is The Best of Seattle For Growth.” I decided this week to go with three posts about Mandatory Housing Affordability (MHA), perhaps the single worst housing policy ever conceived by human beings, best summed up as, “housing is expensive, let’s tax it, raise its price, and then build a few lower rent units, somewhere, a long time from now.” This post, about the chickens coming home to roost, posted earlier this year. 

Laocoon, follow’d by a num’rous crowd,
Ran from the fort, and cried, from far, aloud:
‘O wretched countrymen! what fury reigns?
What more than madness has possess’d your brains?

Vergil, Aeneid, 2.40, John Dryden Translation

The media in Seattle has been lagging in its curiosity about the City’s Mandatory Housing Affordability (MHA) scheme. It was impossible to get the to cover the problems with the idea. So I wrote an editorial in the Seattle Times. I said first,

The fees negotiated for extra capacity were favorable to projects in downtown and South Lake Union, not projects anywhere else. Second, the MHA fees cancel benefits from extra capacity in other neighborhoods.

We have always said that builders don’t need or want extra height and that paying for it would make projects infeasible or more expensive.

But a story on KUOW finds that what we’ve been saying about the consequences of MHA are now starting. By imposing fees in exchange for a little bit of additional development capacity, the City is first making many projects infeasible and second adding costs to new housing that will be passed on to consumers in the form of higher rent or sales price. Here’s what the story tells us about the Miller families efforts to develop in the Alaska Junction.

But the problem for small developers like Miller’s family is that the right to build a taller building isn’t necessarily a gift because it’s so much more expensive. “To do that you’d have to change your whole structure,” Miller said.

For example, in Miller’s case, his part of the neighborhood was upzoned from 85 feet to 95 feet. The extra height would make his building a high rise. High rises are built out of concrete or steel, which is much more expensive than wood. “So it’s kind of like sticking a carrot out there that nobody’s going to go for,” he said. “It sounds nice, but it doesn’t work.”

“Sounds nice, but it doesn’t work.”

Exactly.

And there is more.

Neiman said mom and pop developers are showing up less frequently in his office now. Instead, he’s seeing interest from a different kind of developer: institutional investors.