Report: Seattle Rents Went Up by 11 Percent Last Month, Biggest Surge in Country

Comments

1
This will become a rent-bubble reinforcing cycle. Investors buying apartments drives up all rents. With rents rising the profitability of renting out apartments rises. The rising profitability attracts MORE investors to buy apartments, further driving up rents, and the cycle continues.
We need rent control on existing apartments NOW. Anyone who wants to build a new high rise and charge astronomical rents on those is free to do so (assuming there is a residency requirement on the renter), and if you want to gentrify an area, you can't just renovate the existing apartments and jack up the rents, you would have to buldoze the apartments and build at least twice as many in the same acreage.
The longer we wait, the more renters will be over a barrel when it comes to housing.
2
If only there were some way to limit ren… Oh well, I guess we'll keep trying rent control, required "affordable" housing, protecting our 65% single family zones, and limiting heights throughout the city. Maybe it'll work this time. (/sarcasm)
3
Oh wait, a quote you forgot to include from the Abodo report: "However, the rise in new construction in many cities may make buyers more cautious going forward."
4
Everyone knows bubbles never pop.
5
Great. Just great.
6
@2 Why not both rent control and not limiting heights? Obviously doing nothing isn't working, why not try everything?

Why do people think that supporters of rent control are automatically anti-density? I'd greet our new rich neighbors if they let me stay...
7
@6 I'll give you that rent control doesn't hurt as much as the other things we try. Of course it's illegal in this state, but I won't strongly oppose your efforts. Though it's a sad waste of energy considering it's failed absolutely everywhere it's been tried and has never put an extra roof over anyone's head. Go check out that link I provided - real data from San Francisco using actual rents since the '70s. SF rent control in the late '70s did nothing. We know what works, it's more homes. Anyway, I'll back off. You fight for what you believe in.
8
@7 Nice selective reading of the actual data.

Yes, Rent control did nothing - to RAISE rents. Or lower them. Shows that rent controls were not the big boogie man all the rent seekers attempted to paint it. Rent Controls did not restrict inventory nor lead to increases. The increases were steady and due to rising incomes.

It did provide affordable housing to a population of people enabling them to climb the income ladder, though.

The data in the actual research at:
https://experimental-geography.blogspot.…

Conclusion from the actual study:
"San Francisco is an expensive city because it is an affluent city with a growing population and no easily available land for development. Sonja Trauss is right that building more housing would reduce rents of both high- and low-end apartments. Tim Redmond is right that building enough housing to make much of a dent in prices would change the visual character of most streets, although the result could be more like Barcelona than like the Hong Kong that he fears. The unsettled question is which of these is the higher priority.

Building enough housing to roll back prices to the "good old days" is probably not realistic, because the necessary construction rates were never achieved even when planning and zoning were considerably less restrictive than they are now. Building enough to compensate for the growing economy is a somewhat more realistic goal and would keep things from getting worse.

In the long run, San Francisco's CPI-adjusted average income is growing by 1.72% per year, and the number of employed people is growing by 0.326% per year, which together (if you believe the first model) will raise CPI-adjusted housing costs by 3.8% per year. Therefore, if price stability is the goal, the city and its citizens should try to increase the housing supply by an average of 1.5% per year (which is about 3.75 times the general rate since 1975, and with the current inventory would mean 5700 units per year). If visual stability is the goal instead, prices will probably continue to rise uncontrollably.

If you want to do your own analysis, the data is all available to download on Github. Please let me know what other explanations you find for the patterns!"
9
@8 "It did provide affordable housing to a population of people enabling them to climb the income ladder, though." Sure, and it kicked other people out of those same units, dropping them down on the ladder. Anything that doesn't put a roof over someone's head is at best harmless. If it slows housing production it's actively harmful. No matter your policy (short of full absolute-control socialism), it will never be the rich that are pushed out of homes.

As I told @6 I don't plan to get in the way of rent control activists.
10
The problem isn't rent control; the problem is we rent regardless of the real value of the apartment.

There are some very badly maintained apartments in Seattle for 1,500+ for a 1bedroom this month. Holes in the wall, Stove from the 60's and the Fridge was made in the 80's.

The response is well; no one will rent those right because they are not worth it forcing the landlord to fix it. Housing is so tight right now; Landlords don't even have to paint an apartment before a new tenant comes in.

Light regulations and every city/locale has it's own team to help tenants with the law because there is no one in the government.

----

Let's not forget that Renting used to be a way we would save money before we bought a house; it has now become a way to live for live.

11
@7 /looks at data

Rent control in San Francisco caused rents to rise 2.5% YOY. Meanwhile, Seattle, without rent control, had rents rise 11% in a month.

Yup, Rent Control is a demonic force. I'm sure glad we don't have it here.
12
@11 That's 6.6% per year. Seattle tends to fall around 2.7% per year. Anyway, I'm not claiming the difference is rent control, just that you should be more careful with math.
13
This discussion on rent control is good, and I think two things:
(1) it is mostly moot, because it's "illegal" in this state (which is bullshit, but I don't know how to change that.) So I'm in full favor of the activists trying to make it happen. Tell me how I can support you.
(2) It does work to slow down rent spikes, which definitely throws people out of their abodes, something I consider specifically harmful. We shouldn't be shifting lower income people out of a place they have been in, just so a higher income person can live in it, that's bullshit too, and unhealthy for a vibrant city population.
Eg. I have friends who live in NYC in a rent controlled place in Brooklyn, they are artists and have been able to stay there & afford it for well over a decade, despite NYCs booming population. W/o rent control, they'd be living in New Jersey, and driving in to the city (adding to traffic congestion, & pollution, & personal expenses).

The other main point is this "is not strictly about supply and demand but about leverage, interest rates, spreads, stock indices, and yield-hungry surplus capital." Financial speculation. The very thing that brought us the 2008 'Great Recession'. Oh, and the 2001 dot-com bubble too.

So a critical focus should be on stopping financial speculation. Without that, anything else we do will have only a very minor effect on the incoming tides. I, for one, have no idea how we can stop the runaway speculation train. I would be very interested in hearing thoughtful solutions.

So Yes to more supply, but one should point out that short of a real catastrophe (economic, warfare, geological, etc) rents never go down. So we can build and build, but new apartment stock is going to come online at "market rates"... not, cheaper, never cheaper. And not stopping the financial speculation will only mean that rents will spiral upwards.
14
Compare the rise in residential rents (astronomical) to commercial rents across cities. In San Francisco both are going up quickly. In Seattle I only see residential rents ballooning. So do we have a problem with discouraging development, or a problem encouraging the wrong sort of development? All those clamoring for dismantling zoning regulations might want to tackle that issue first.
15
@12 I like that your data is 6 years old.

Over the past 6 years, Seattle rent has increased by 9% annually, or 10% for one bedrooms (in real dollars).

Tell me again about the evils of rent control.

https://www.rentjungle.com/average-rent-…
16
@15 From your site:
"The average apartment rent over the prior 6 months in Seattle has decreased by $102"
"The average apartment rent over the prior 6 months in San Francisco has increased by $317 (9.2%)"

Over the past 6 years, San Francisco rent has increased by 19.5% annually (same rentjungle site).

Anyway, you're not going to win the *Seattle's rent is going up faster than SF* except with last month's data. If you have an explanation for what that has to do with rent control, I'm all ears.
17
"Sure, and it kicked other people out of those same units, dropping them down on the ladder."


@9 My lord man, where did you study logic.?!? at Monty Python and The Holy Grail University?

Rent controls didn't "kick" anybody out of those units anymore than ANY single rented unit - controlled or not - kicks somebody out of a unit rented to somebody else.

As for sending them "down the ladder" well, again no more than any... oh, why should I bother. Really. I mean. Come on now. That's just dumb. Seriously fucking dumb.

Look. If you had read the original study it pretty much defeats the vain talking point that Rent Controls RAISE rents over all. (of which there are many, many different methods some as of yet untried - some spectacularly successful as in the case of Berlin) Or cause some sort of vague social harm of clinging insiders. That was simply fear mongering.

Sure. Rent controls applied selectively also does NOT lower rents in growing healthy cities. So what. What they are for is help sustain a percentage of working class populations inside a city. And they do that pretty well.

You know what else this study proves doesn't LOWER rents? Building more housing in growing healthy cities with rising incomes and geographical limitations.

According to the data at best - AT BEST - adding more inventory MIGHT help stabilizing rents in growing cities with rising incomes. Which is all anybody can do until either a bubble pops or local governments grow some balls and subsidize housing.

18
If 93% of environmental scientists agree that global warming is caused by humans and is bad for the environment, then we kind of have to agree. They study the subject more than we do, and we should defer to their judgment

If 93% of economists agree that rent control is bad, then we should similarly agree that that is the case

Let's build affordable housing, so that people have a place to live. But let's not go down the rent control path; it's one of the most studied and most derided forms of economic control out there.

And @13, housing prices do indeed go down relative to inflation. They are unlikely to remain down in the city, though, as the current generation doesn't like to drive, and would prefer to live in the city. When the demand for city housing goes up, and the supply doesn't match, we would expect to see the price go up.

Also, new housing is likely to be near the top of market prices, yes, just as new cars are. If we don't build new housing, then in 10-20 years, there won't be any good middle-of-the-road housing, and anybody with money will still have to pay the same prices for shitty housing and everybody else is going to be priced out of the city.
19
@18 if your going make claims like 93% of so and so say something and studies prove something but don't prove or cite that something... you can be totally ignored.

Not to mention economics is a pretty soft subjective and controversial social science with radically diverse schools of thought from classical, Marxian, Keynesian, and the Chicago School. None agree 93% on fucking ANYTHING.

So to compare it to something as empirical as a hard science like Climate Science already kind of makes your point laughable.

Really. Appeal to Authority and Just so fallacies are very 2003.

I mean. Jesus.
20
@17 It's simple. Rent control doesn't add any housing, and it doesn't remove any people that need homes. So if you allow some that would have been displaced to stay in your homes you are in fact displacing others.

"What they are for is help sustain a percentage of working class populations inside a city." At the cost of removing the same percentage of workers that would have sustained themselves. We're not talking about the rich being displaced here - we're talking about a group of people making just about the same money as the group you're protecting.

"According to the data at best - AT BEST - adding more inventory MIGHT help stabilizing rents in growing cities with rising incomes." Read it again. Short of removing jobs it's the only thing that can affect rents. The only thing. You seem to be arguing that rent control doesn't hurt. I won't block your fight for it. But can we work together to add supply? Can we agree that reserving the large majority of land area in this city for a single family per 5000sf is actively harmful to affordability? Can we agree that limiting heights and requiring large set backs and parking spaces isn't helping anyone put a roof over their head?
21
@18,19 - I believe Hitchens' Razor applies here: "That which is asserted without evidence, can be dismissed without evidence."

Q.E.D.

Economics =/= Climate Science, not even a little bit. Largely because Economics is fantastically subject to operator bias and frequently used for the justification of unconscious morality.

"If economists could predict the next day’s stock market move with anywhere near the accuracy that meteorologists can predict the next day’s weather, they would be billionaires in short order."

...93%... my ass.
22
@20 - Wait, what? If you don't displace someone (paying rent controlled rent), you are "displacing" someone else (who would pay higher rent) (in that same space)... Is that what you are saying? WTF, man, that doesn't make any sense. Damned if you do, damned if you don't? They why in fact are you arguing for anything at all?

Yes, let's add more housing stock, who's actually arguing against you there? But while we do that, let's not sweep lower-income groups out to sea with the rising economic tide.
23
I'd imagine a lot of this has to do with inflation and interest rates being in the basement for nearly a decade now. If you're a well-to-do person, where would you rather invest your money? Into a 0-interest bond/savings account or into a rental property with 4% mortgage interest and 12% annual rent increases?

Of course it makes sense to start buying up all of the homes you can, with dirt cheap mortgages, and start renting them out. There was a time (the 1980's) were 15% mortgage rates were the norm. Heck, in the mid 2000's, a 6% mortgage was considered cheap.

In today's market, unless Federal interest rates are kept at near zero, investors freak out. This "stag-flation" market makes it ripe for rampant investment housing speculation - leaving renters high and dry as affordable single family homes are steadily being placed into rental status and putting upward pressure on apartment stock.
24
So, ignoring the rent control discussion, this data is absolute garbage. Seattle rent has increased about 12% YoY which any number of sites have sources have reported. This is just some no name site trying to get a headline. It's completely misleading and cherry-picking. I have no idea why the Stranger is quoting this unless Abodo is a paying advertiser or something to that effect. Total non-story.