All the talk of rent control and linkage taxes on new housing culminated for me on Sunday with a Facebook post. The post was about an article on income inequality. It’s the kind of wonky post I find mixed in my feed with baby pictures and Instagrams of people’s lunches and vacations. The thread, including comments from Councilmember Mike O’Brien champion of the linkage tax on new housing, goes on and on. But a theme starts to form: how do we redistribute wealth. This issue is as old as humanity probably, the nagging sense that there is something systemic that contributes to or actually causes maldistribution of wealth. When it comes to housing, progressives tend to argue, sometimes, against even having a market in housing. After all, housing is a universal need and nobody should profit from people who just need a roof over their heads. Most progressives are a bit more subtle, feeling that some redistributive scheme will resolve housing scarcity.

Facebook friend Ben Schiendelman posted this:

Reading Orfield’s “American Metropolitics”, I’m into the section about fiscal inequality and sprawl. Seattle MSA’s Gini coefficient went up from .11 in 1993 to .21 in 1998 – the largest jump in the US, by far, a 99% increase. In the top 25 metros, the next highest change was 38%, in Phoenix, and then 20%, in Philadelphia. The only major factor I’m aware of in that time period unique to the Seattle MSA was the 1989 CAP initiative, which instituted design review and made sweeping restrictions on height, halting our tall building spree and causing our growth boom to displace older buildings throughout the city instead of the earlier focus on downtown. Voter turnout for CAP? 23%, with 2:1 approval. About 15% of Seattle voters may have doubled our inequality in one May special election.

The Citizen’s Alternative Plan or CAP Initiative passed in 1989 and was a reaction against “all the big buildings” in downtown. It enacted height and density limits presumably for a mix of reasons including trying to reign in “runaway growth” and bad design. The point of the post is intriguing: Did angry Seattle neighbors actually make inequality worse when CAP passed? It’s hard to prove. 

The HistoryLink article on the topic has this paragraph that might sound familiar:

University of Washington public affairs professor Hubert Locke said, “There is a strong feeling that the growth people overplayed their hand.” On the other hand, economist Glenn Pascall defended leftwing CAP opponents such as Walt Crowley as traditional liberals seeking social benefits and expanded employment through guided private development. Despite near-universal editorial opposition in the daily press, the CAP initiative won by a substantial margin. However, an attempt to harness this victory to power a “Vision Seattle” slate of City Council candidates failed in the fall 1989 elections. Jim Street’s bid for mayor also died in the primary and CAP opponent Norm Rice was ultimately elected.

Linkage taxes, like the CAP Initiative, are a cry of pain from the people who are already here in our city. People who see themselves as generous, though, want to find a way to both slow down growth, solve a social problem, and punish (at least a little bit) people who made a lot of money building housing. We’ve seen this again and again. That last point, wanting to punish developers, would be denied by supporters of the linkage tax or the CAP Initiative. But in the comment threads and polls, it’s pretty clear that people feel like someone is laughing all the way to the bank — and it makes them mad. 

Here’s part of the comment I posted in the thread:

I’ve been seeing this thread unfold and haven’t had much time to give it. For what it’s worth, in my view, it’s drifting in the ways we drift around here. “Hey you! You have too much money. Give some to that guy. Man, I sure feel better about myself now!”

Let’s stop. Even Deng Xiaoping said, “I have two choices, I can distribute poverty or I can distribute wealth.”

If we want to help people who are poor we should make more housing and more jobs. I’m less worried about the relative wealth of the “have’s” than the destitution of those who “have not.” It is stilted thinking to push to take from the one and give to the other.

Progressives usually get in their own way, devising schemes to somehow do three things people want at once: slow down growth and change, solve social problems, and ensure that builders “pay their fair share.” Well they already do. But passing measures to stick it to the Man are politically popular and ideologically consistent with the Us versus Them narrative used by some progressives and the politicians they elect. “Put me in office,” they say, “and I’ll protect you from growth and change, help the poor, and punish people profiting from growth.”

And if it isn’t already obvious, trying to do all three of these things won’t help housing prices. They just make things worse for poor people.  Hopefully our discussion leads us toward solutions that include more housing and efficient subsidies to solve the problem, not inefficient redistributive schemes that end up punishing everyone with higher prices, especially new people, renters, and the poor.