Alexa Vaughn on Seattle's spiking rental rates:
Widespread increases are evident in rent statistics from Zillow, an online real-estate database: In the last two years, the median rent for Seattle studio apartments has gone up $434 in Wallingford, $419 in Capitol Hill, and $306 in Ballard....
What’s fueling rent increases most is development itself, said Jonathan Grant, the Tenant Union’s executive director. If almost all new units cater to wealthier tenants, he said, increasing supply is no path to getting rents to go down or even level off.
To bring down rents, we need apartments that are less valuable. As Vaughn's article points out, new units built all over Seattle "cater to wealthier tenants." We're building a city of luxury apartments. If you look at new apartments on Zillow, the one-bedroom units tend to exceed 700 square feet. Many exceed, 800, 900, or 1,000 square feet, and they're priced around $2,000 a month and soar from there. Regulated as the market is (and isn't), that's what makes sense for developers to build.
There's no way those big apartments—designed for only one or two tenants—are going to rent at the $600-$900 price point that most local workers can actually afford. This problem isn't just specific to Seattle: A Harvard study recently found half of American renters are "cost burdened" with rent more than 30 percent of their income. One solution? The planning office and Seattle City Council must craft new incentives for developers who agree to build smaller units that, due to market forces, rent below a certain price point but still pencil out. For instance, the city could offer several floors of additional height in certain neighborhoods, tax exemptions, parking waivers, or whatever else they can come up with that makes it more lucrative for developers to build this way. The tools must also produce more apartments that can satisfy the unmet demand, which is a major factor driving up rents. These incentives should apply not only to studios and one bedrooms (renting from $500 to $700), but also to three- and four-bedroom apartments that families can afford (I've been talking about the need for family-friendly apartments for more than five years).
If the units aren't built for luxury, they won't be priced for luxury. Regular folks have enough demand for this product and they're happy to sacrifice some elbow room to live in the city they love.
This architect built herself a 196-square-foot home for only $11,000 and loves it. And if developers can build enough of these units on a lot, it will still be worthwhile. I also support microhousing and aPodments (the small studios with shared kitchens), too, although they're no panacea for this ailment. Folks who claim microhousing is a silver bullet are deluded, and critics who claim I believe aPodments are a singular cure for Seattle's housing problem are chock to their tonsils in horse crap. Small apartments are only one piece of the puzzle, not the only solution. But promoting all of these things—from tiny studios to humble one-bedrooms to four-bedroom apartments that average around 250 square feet per resident—will help with this problem.
Some neighborhood scolds will scream that the units I'm talking about are too small, that they're inhumane, that they have too many bedrooms, or have an unpleasantly simple design. They claim we have a moral obligation to give everyone a big apartment with a gorgeous design and a low price. Ignore those people. They're living in a fantasy: The current market proves that building only big, fancy units produces an unaffordable rental market. What's important here isn't the aesthetic of every building. Or that everyone has a grand home. We're not living on a movie set, Seattle. We need workers to live in town, not shunted into the suburbs. And that means building affordably—again, smaller one-bedrooms and compact family apartments—near the city's jobs. Because new construction will never stop. This trend will continue unless we change the new construction. And the anti-growth activism that slows down development with silly legal challenges or protracted debates will make housing even more scarce, further driving up demand and price. And stunting new buildings' height will only necessitate that developers yield more money from the short buildings, forcing them to make new buildings even fancier.
For too long, we've been pissing into the wind while patting ourselves on the back—typically with "affordable housing" incentives that make a negligible dent (giving developers an extra floor in exchange for a handful of units affordable to people who make, like, $60,000 a year). We also won't meet demand by making developers pay a pittance into an affordable-housing escrow account, which simply defers the construction of affordable housing years down the road.
But does the city have the guts to face this issue anew—to take the heat from anti-density scolds who use false moral arguments, to pass bold incentives that promote this sort of construction? I'm skeptical. After all, most recently the city council was toying with a freeze of all microhousing construction. That's the flat-ass wrong direction. But doing nothing is also backward. The city's inaction is a tacit blessing of this trend going on forever, building new apartments that rent for a ransom.
Under Mayor-elect Ed Murray, who finally brings new blood to City Hall, we have a chance to get this right.