Politics of Housing and Growth

What story are we telling?

The Conflict

Greedy developers buy land and build new housing with cash, wait for demand to rise, then price housing as high as possible for more profit, then they laugh all the way to the bank while current Seattle residents suffer with higher prices, more traffic, and overworked infrastructure.

The ResolutionThe best way to solve the problem of higher prices created by developers building high priced housing is to impose a mandatory program of inclusion: make developers build lower priced housing in exchange for modest upzones. City Hall now calls this “The Grand Bargain.”

The Reality?• Seattle rents have changed over time• Measure of the “problem” is vague and sloppy• The solution, therefore, is vague and sloppy

(thousands of units promised but based on what data?)

• HALA and Grand Bargain are different• Grand Bargain benefits downtown and SLU

developers• All other builders are finding it infeasible and

likely illegal under RCW 82.020

The Grand Bargain Ain’t So Grand• Projects likely infeasible• If fee is lowered outside SLU and DT, will anyone build the

magic 6000 units promised by the Mayor• If fees are high enough, but projects infeasible with additional

construction costs and reduced rents, builders will sue under RCW 82.020 and on Constitutional grounds

• Maybe projects will work by raising rents in remaining inventory to compensate lost revenue; this is antithetical to the whole point of the Bargain.

• Neighbors have been demanding and getting lower density development, why would they embrace upzones now?

• And nobody at City Hall can answer the question, “Even if the Bargain works, will it actually lower prices?”

What We Know: Politics, Premise, and More Problems

• Politics matter• Rents go up and down over time• Prices go up when supply is low and costs and

demands are high• Adding costs and reducing supply will increase

prices• Subsidies are needed where renters and buyers

can’t pay rents to cover costs of land, construction, and operations

Where to Now?

• Can we change the narrative?• Can Mandatory Inclusion work? What are the

alternatives?• Can’t we use existing programs like the MFTE

and the Levy to create more rent restricted and subsidized housing?

• How are neighborhoods going to be convinced to allow more growth in single-family and adjacent zones?