Why NIMBYs And Their Haters Can’t Offer a Deep Solution to the Seattle’s Growing Housing Crisis: Part Three

Comments

1
There's nothing you can build or destroy that is "affordable housing". Housing price isn't a fundamental component of a home - it's set by the market (or by using rent control). Each of those demolished units were replaced with a greater number of units. In the end, what sets the price for the cheapest home in Seattle is the price the poorest person that can still afford a home can pay. Build more homes, and you can go down further in price point for that unit. Refuse to build (or demolish) homes, and you go up in price point for that cheapest unit. This is representing the number of people that can afford to live here.

Every additional unit built keeps a household from being pushed out. Defending this "naturally affordable housing" tends to mean you end up with (a lot) fewer units.
2
Matt's right--simply preserving a building that provides "naturally affordable housing" at some level today does nothing to keep it at that level tomorrow, if the shortage remains. The "preserve naturally affordable housing" argument is an exercise in misdirection from the lesser Seattle anti-newcomer crowd--particularly in an environment, like Seattle, where the ratio of new units to demolished units is better than 10-1.
3
A lot of these homeowners are equity rich, but cash poor. If they were to sell their house to buy another house in this area, they would have to use all the equity in their current home as a down payment.

P.S. You know there's something wrong, when homeowners use their house as an ATM machine to pay their credit card debt down, or to buy a new car.
4
Charles, I'd love to live in a European-style country that provides subsidized housing for the middle class. But I don't. I live in a neoliberal (Reagan may have made it worse, but it's always fundamentally been that way) supply-and-demand-based economy. Naval-gazing about the injustices of global capitalism and shaking our fists at the free reign of speculative capital may be intellectually pleasing, but how can we fight that through local housing policy? Vancouver's foreign buyer tax is arguably racist on its face, legally dubious in America and ineffectual (although I'm interested to see how it plays out in the coming months): http://www.cbc.ca/news/business/bc-forei…

There's a lot of people in this city whose opposition to development stems from the knee-jerk aversion to the idea that rich people are making money off real estate, as if this is some sort of new, unprecedented phenomena. Investors made a tidy profit off those 1950s apartment buildings that by virtue of being old are now magically "affordable" - am I supposed to be extra pissed off in the year 2016 because it's happening again? Now that you've stoked this anger with this series of pieces, I'm eager to see your conclusions and hope they're constructive rather than symbolically yelling into a well.
5
In a rational world rapidly growing companies like Amazon would just establish a new base in some metro area which is economically stagnant and would do -anything- to accommodate them. Having one mega-campus is great for Bezos' ego, but practically and economically dumb. The people could live better, while not requiring monster salaries.

Especially when you're hitting the H1-B thing(boo!), those people would live anywhere, by definition.
7
@1 Yes, indeed; let's keep demolishing all those old $400K-$500K SF houses from the last century and replace them with $700K-$800K townhomes. That's lowering the price of housing…right…?
8
@1, @4

Fuck the market, build public housing.

What is to stop the City of Seattle from building apartment buildings, and renting the units at cost (or below) to people at the bottom of the income scale? They could even collaborate with Sound Transit and build it as TOD around the new Link stations coming in ST2 and ST3, establishing transit access for low income folks without the threat of the market pricing them out.
9
@7 - The numbers will always vary on this depending on the neighborhood and circumstances, but here's the general status quo right now: when those 500K craftsmen homes reach the end of their useful life, they're replaced by $1 million+ single-family homes. If you're asking which outcome is better - $1 million SFH or 2-3 $700,000 townhomes - from both an affordability and carbon/climate change perspective, it's no contest.
10
@8 - Political will? We just doubled the Housing Levy, which is great. If we were serious about doing something like that we'd have had to increase it by how much? 10 times? 20 times? I'm hoping we get to that point by 2030, but it's not politically feasible right now.
11
@7 I think the 'urbanists' argument is that if you cut developers loose to lay waste to historic neighborhoods and replace them with pasteboard office park style architecture, when the new shitty buildings are falling to pieces in 10 years no one will want to live there. Voila! Affordable housing.
13
@5 Perhaps they have a different view than you do about how to attract and retain high-quality talent.

@7 Refusing to demolish those houses just bumps up the price of everything else. When you have jobs increasing at more than 3x the rate of increasing housing units, freezing everything in amber won't give you low housing prices.
14
@3: Yep. Even all their equity in their current home for a small townhouse or condo!
15
@7:

Exactly, it's simple math. It doesn't matter how many more units replace the ones lost; if their cost is significantly more (and it always is) it just pushes the average price that much higher.
16
The figures on demolition of affordable housing given in this article are incorrect and vastly overstated. The city tracks it here:

http://www.seattle.gov/dPd/cs/groups/pan…

Since 2004 there have been 6215 total housing units demolished, not 11,000. In the past few years, nowhere near 7000 units have been demolished.

Furthermore, not all of the demolished units were affordable, and not all of the units were demolished to make way for new housing.
17
This seems just to be a longwinded rant. The problem with this is it offers nothing, and the problem with the thinking is that it's a Seattle problem that has Seattle solution. It's not. It's a Seattle problem that can only be solved with a regional solution. The high costs are a factor of too much pressure in our city market--the only way to relieve that pressure is to have people find it attractive to live outside the city (though they may still work within the limits). A robust, efficient, heavy rail system is the only practical way to solve this. People wouldn't mind living in Bothell or Kent if they could get into Seattle in 10 minutes.
18
@9:

In my neighborhood, many of the homes (including several duplex/triplex units) that have been demolished had in no way reached the "end of their useful life"; most were still perfectly habitable, and one across the street from us had actually undergone a fairly extensive remodel only a couple of years ago. And while they're being replaced by four-over-ones or similar, which does increase the total amount of available housing stock, they're all selling at prices that the people displaced out of the older homes, if they were renting, or people who might have purchased them as-is can no longer afford.

We are right now literally building thousands of those units, but developers are still going to charge top-dollar/market rate, and many are far exceeding the asking price because of competitive bidding, so how does that positively impact affordability? Sure, building three $700K units on a lot is preferable to one $1mm unit from an environmental standpoint, but that doesn't help people who can only afford a $500K unit, to say nothing of those for whom even that is out of reach.

The usual retort is "move somewhere cheaper", but when you factor in the additional cost for transportation, not to mention extra time spent commuting - AND the associated negative environmental impacts of pushing people farther and farther away from their places of employment - I can't but wonder if we're are in fact realizing any sort of cumulative net-benefit at all in that regard.
19
I am curious, as a 25 year old millennial, what am I supposed to do?

I am following all of the pointers of my baby-boomer parents:

Live within your means; go to college; don't take out too many loans; realize I am not entitled to anything; work extra hard; be patient; don't whine; take care of your health because heathcare is a privilege not a right; save; save; SAVE; get a second job; don't go on vacation; and again DON'T WHINE.

We just want to buy a small house so our kids can play in our modest yard, and we can participate in our local community. Essentially, we just want part of what we had growing up.
20
@15 You seem to have forgotten that the price of the home which wasn't demolished would also increase. And it might even cost as much as one of those condos. So there would be a single house instead of 3.

@18 Congrats it costs money to live in cool places. So move someplace cheaper, get a job nearby, and make that the new cool place.

Sorry but the only constant is change, and there's not much that can be done to prevent it.
21
@10

Why would we need additional tax revenue? If developers are able to turn profits by building and selling/renting housing, that should leave room for government to borrow the initial capital needed to build the same, then charging just enough in rent to recoup the costs. Government even has advantages over private developers such as being able to borrow at lower interest rates, and the power of eminent domain.
22
Wow. Old houses should be demolished when they "reach the end of their useful life." Same argument used to demolish every old landmark that gets in some developers way. Those old houses can be rehabbed at far less cost than demo and new construction. And any building that is adequately maintained has a "useful life" measured in centuries.

Where's the model that houses folks who are too "rich" for the mayor's affordable (subsidized) housing but not rich enough for market-rate housing being built today. People we used to call the middle class? To the 'burbs with them?
23
"how about inviting newcomers and young people into the civic conversation and collaborating together to find solutions? "

>> Hard to invite them if they can't find a home in the community, let alone a seat at the table.

"One the other side are the self-described urbanists, often professionals in the development sector or young people who grew up completely within the “there is no alternative” neoliberal economic system, who push the only solutions they can imagine: build more supply of housing because they believe the market will balance itself in the long run."

>> In 2014, Tokyo issued permits for 142,417 new housing units. In contrast, the entire state of California — which has three times the population of Tokyo — issued permits for only 83,657 new housing units. Housing prices stayed flat (in real terms) from 1996-2015 while they doubled (real terms) in San Francisco in the same period. http://www.vox.com/2016/8/8/12390048/san…

"And let’s stop blaming the newcomers, OK? Young people with a tech sector salary are not the problem."

>> Actually, job and income growth are one of the primary factors. It *is* OK to blame them, but the solution is not the fantasy of pulling up a drawbridge or walling them out. The solution is to build as quickly as the jobs arrive.

>>A chart that almost perfectly predicts the San Francisco housing market using only three variables:
The number of jobs located in San Francisco County.
The number of places in San Francisco County for people to live.
The total amount of money that is paid to everyone who works jobs in San Francisco County.
Source: https://medium.com/@andersem/a-guy-just-…

"the global 1% using homes as a safety deposit box for excess money, lenders irresponsibly fueling a debt bubble, REITs and private equity funds capturing our starter homes for their rental revenue stream"

>>Ever stepped foot inside a $10m+ apartment? I have. The price is so completely divorced from the intrinsic value of "housing" and materials that it will blow your mind. Suddenly it becomes clear: This price is the cost of a global glut of wealth *AND* a severely burdened supply.

At some point, you’d think a hot new market would cool off when these sophisticated investors think the growth period is ending, and would shift their excess capital to the next feeding frenzy.

>> Here's a hint of it:
>>A slowdown in NYC's billionaires' row:
http://www.nytimes.com/2016/07/12/reales…
>> The largest yuppie housing REIT issuing its second revenue warning of the year:
http://www.bloomberg.com/news/articles/2…
>>Hey! It's not just soft in for-sale or year-by-year leasing, it's also in day-to-day leasing:
http://www.bloomberg.com/news/articles/2…
>>"New York is leading the country in new hotel supply, with 7,100 rooms being added this year and 6,700 more coming in 2017" and the article says a projected 7,100 additional in 2018.

"If we want to put Seattle on a different path, and aim for a future that is more inclusive, affordable, and committed to shared prosperity, then let’s roll up our sleeves and get to work."
>> Agreed! Sorry to crib one of the worst potential Vice Presidential candidates in our country's history but, BUILD BABY, BUILD.
24
Charles, if corporate/foreign speculation is having such an impact on our local housing market, shouldn't this be evident in property sales records?

I haven't done any quantitative analysis (this is the Stranger, after all), but a cursory search of recent excise tax records for the properties sold for over $500,000 earlier this month revealed that most buyers appear to be individuals with local addresses and Western surnames. As far as I can tell from the records, most buyers are married couples who are local residents, rather than "institutional investors and global hot money parkers."
25
I'm really enjoying this series of posts, Charles! I'm normally not even a fan of yours, but it's funny how all these comments seem to focus on the problem in terms of local supply and demand, exactly missing your point.
26
RDPence, COMTE, et.al:

FYI, I've just published an article on displacement that explains why replacing a $400-500k house with four $700-800k townhouses is still a net win for affordability in Seattle, as counterintuitive as that may sound:

http://www.sightline.org/2016/08/10/disp…

27
@6 and @12
At 34, I'm told that I still count as a "millenial." I moved to Seattle from Olympia in the year 2000 at 18 and got BA from UW in 2004. I've steadily been working administrative jobs in the financial sector since graduation. I've been renting since I moved here in 2000. For 12 years I have been a participant in this city and this economy, on what, in other cities or other times in history would have been a perfectly decent and livable salary. I have nothing to show for it. No assets, no home, no savings. Only a small 401k that I'm desperately clinging to, which isn't going to support me after retirement as-is. I've lived in my current (and even relatively affordable) apartment for five years, and have paid $60k in rent in that time. That's not even enough for a down payment on a house anywhere near Seattle. So, tell me how my expectations are any higher than someone in my position 20 years ago? They weren't/aren't. At my age in 1990 my mother, who was single and worked a job with a salary which, at the time, corresponded to mine now, had owned her home in Olympia since 1985. It's not about whining, baby millenials who expect things handed to them. Steadily working, what would have been "middle-class"in the past, people in this city cannot afford to live here. We're fucked.
28
Can I call bullshit on your headline and photo caption? It has almost nothing to do with what you went on to write about in your article, but everything to do with the trumped up "war" between homeowners and renters that Seattleites seem to enjoy.

I own a SFH in Fremont and I already live with a crazy quilt of types of housing. I like the vibrancy and I want density, but I also like my neighborhood. I like knowing my neighbors and forging trusting relationships with them. I like my neighborhood to be reasonably aesthetically pleasing and coherent.

We lament the destruction of community in the CD (rightly so) but give a shit about the similar fracturing of the living, breathing thing that is a neighborhood in other areas. I, for one, welcome change, but, jesus Seattle, slow the fuck down and talk to people. And, kids, don't pitchfork me if I say I don't want another tiny cottage that used to house a retired cop torn down (along with its mature trees) and replaced in one month with four slapdash, crap-ass ugly faux-modern boxes that have no relation to the architectural vernacular of my neighborhood (such as it is) and that cost $600,000 each. And that's the sort of shit that HALA seemed to want.

I'm not a capitalist asshole who lives in a "kingdom" because I give a shit about my neighborhood. Neighborhoods matter. Relationships matter. Urban planning isn't about running a bull through the china shop then trying to figure out how to glue the shards back together. I fully believe homeowners want to be part of the solution, but they're asking the city proceed wisely and carefully. And it's not.

Anyway, so fuck your headline and caption.
29
@5 See Quicken's efforts in Detroit and Zappos' efforts in Downtown Las Vegas and the effort to create a teacher's village in Newark. It's not easy. Meanwhile see dozens of Fortune 500 companies moving from suburban office parks to downtowns in Seattle, Boston, NYC (from CT towns to NYC), etc.

Though I have often wondered why people left behind in our increasingly unequal economy haven't recolonized sleepy second tier cities like Everett, Tacoma, Spokane, etc... places with decent urban "bones" and tried starting "real economy" businesses: moderately skilled trades, services, restaurants, etc. Are you gonna get rich? Not unless you really stand out, no, but... Are you gonna have a good life? Probably, once you start putting in the effort to create a great community instead of paying through the nose to have one at the ready for you.

Check out the people in this article starting new small businesses in Jersey City: http://www.nytimes.com/2016/02/14/reales…

In December, she and Mr. Sabochick, 31, opened Jersey City Fish Stand on Jersey Avenue, with another partner, Kevin Pipchick, 31. “We couldn’t find any fresh seafood,” Mr. Sabochick said. “So we decided to open a store.” Fuck yeah, nice job!
30
@19

Work, save, marry, and wait.
You can afford a decent house in the Seattle area on two incomes (even incomes below the median). Sure you won't be in Wallingford or Queen Anne, but there are plenty of other neighborhoods that are out there.

First time home-owners don't buy median houses.
31
@19 YES THAT. Even though I work full time and have a salary, I'm also working odd-side jobs just to make ends meet. And I didn't even bother having kids because there's no way I can afford a child and a place to live with a child here. And I make decent money. I have no loans and very little credit card debt, literally never travel, and yet I am always living paycheck to paycheck. Reading this article just breaks my heart because it voices actual stats to the impeding sense of doom I've felt for a few years now. I've never lived outside of this city as an adult, but I'm going to have to unless I want to end up a childless, single lady renting a one-bedroom for the rest of my life.

@30 What if you don't have two incomes? I have to get married to be able to own a house in Seattle? That's not a solution to the problem.
32
Callie (& Kenzsmith), you're not fucked. I understand you've invested a lot of time and energy into trying to make it work living in Seattle, but you have other options. You could move back to Olympia where there are many many state agencies (as well as nonprofits, if that's your thing) that are always hiring admin assistants. I know many people (and since you're from here, you probably do too) who began at that level and within several years had moved up to much better positions. Or, if you don't want to live in your hometown, research some place else with similar possibilities. People don't just need to LIVE (rent or own) where they can afford it, they should also FIND JOBS THERE TOO. Maybe in 10 or 20 years whatever proposals we'll read in Charles's Part 4 will have come to pass, but in the meantime you gotta do what's best for you. And what's best for the rest of us: extreme commuting isn't good for the environment or for the hope that people will get involved in the neighborhood where they go to sleep at night, etc. Make a list of pros & cons of where you've been living: Is easy access to a wide variety of cultural events, restaurants, etc, being given more weight than being able to save money? You know, you can still come back & partake of its riches, when it fits your schedule. I came up Friday and got a haircut at the Belltown Rudy's & went to the Mariner's game. The stuff in that column doesn't need to be discounted out of hand, if you begin to make decisions more based on the other column.

Of course, the extremely poor and outright homeless can't afford to move out of town, so that's a different matter that I'm no expert on.
33
@21
City, County, State, and Federal government all pretty much do this now-- they forego profit to provide rental housing at cost.

But no housing anywhere is built with 0% equity and 100% debt. It would be very hard for such a project to pencil out, even with government's lower borrowing costs and its other perks. The debt service is just too high.

The way to pencil it out is to contribute equity; you essentially capitalize a large portion of the housing's costs. That's a large upfront payment that Seattle doesn't have sitting around. So we raise levy revenue for it. Seattle's levy revenue tacks onto similar County, State, and Federal funding sources.

With affordable housing costing something like $300-$400k per unit (all-in), the equity cost adds up very, very quickly, and the supply of affordable housing from government funding can't keep up with the demand.

So HALA and the multifamily tax exemption program etc etc are supposed to be ways to incentive the private market to build some affordable housing.

Funny thing is that the private market found a way to built a certain type of affordable housing, aPodments and the like, and we fucking killed it: http://neimanarchitects.blogspot.com/201…
34
A few comments on the the lack of clear thinking in this article:
1. "Naturally Affordable Housing". Aint no such thing. Virtually all the housing in Seattle, both SFR's and apartments, was built for the market with potential profit the driving force (Except for an insignificant number of public housing units). These buildings all have a service life, and if not replaced or rebuilt periodically will fall into ruin. Check out the concept of "depreciation expense allowance". "Affordable" just means they are nearing the end of their service lives. "Nature" has nothing to do with it.
2. There is almost no "Wall Street or international capital flowing into Seattle to own SFR rentals. They are crappy investments for everyone except the Mom and Pop hands on investors. Please show me if I am wrong.
3. If you think strongly constraining growth will ameliorate the price / demand spiral, check out Boulder, CO. Really.
4. Ultimately, it is supply and demand driving the prices. There are a lot of people seeking a limited commodity. We can use fancy terms from the high finance theory world, but that is really fluff at the margins. Want lower relative prices? Increase the supply by increasing density or expanding horizontally through improved transportation.
5. I have lived in Seattle since 1978. The first house we bought was a piece of crap bungalow in West Seattle, and it took two college graduate entry level professional salaries to make that fly, and at that it was a stretch. I have never in those 38 years seen a situation where a single person on an administrative salary could by a house except in the most outlying parts of the city, or the near burbs. the past was not that rosy.
6. Seattle has no natural monopoly, and nothing is static. Businesses, people, and capital are all quite mobile. This is a boom and bust frontier town.
35
Let's not forget the basics: Seattle, like most American cities, lacks density. There are whole neighborhoods made only of houses instead of apartments. And that's not only damaging prospective homeowners. Less density also means more traffic jams, less security, less public transportation, etc.
36
@20:

But it doesn't increase in value by 30% within a matter of months, which is what happens when you knock down a $500K house and replace it with a $700K house.

So, people who have lived here for decades, some for literally their entire lives, have to move BOTH their residence AND their job, just because someone else (who has probably lived here for much less time) decided where they live is "cool". M'kay then.

And yes, change is inevitable, but HOW change is manifested is something that can be managed, so that the negative impacts are minimized for those who, for whatever reason, are going to suffer most through the transition. But, that would require compassion, empathy, and a bit of humility; qualities evidently in short supply around here...
37
@31

Then buy a 1br condo in Burien, or Renton, or Mountlake Terrace.

When was this magical time in the glorious past when 30-something admins were buying homes by themselves?
38
@32
Seattle is my home. I've lived here my entire adult life.
@32 I have "moved up through the ranks" over the years. I'm not an admin assistant. I'm the executive assistant AND the office manager at my office. I make decent money. I should be able to afford to live here. That's my point. It has gotten beyond ridiculous here. To the point that I, with a $54k/year gross salary, spent my evenings and weekends delivering pizzas for four months around the holidays this last year. I am single and childless with basically no debt and a full time, salaried position and even *I* can barely afford to live here. That is fucked up.
39
@37 with what?? I just said I have no savings and I live paycheck to paycheck. I guess the 80's, because my mom did.
40
And for those who keep harping on the "build more and the prices will come down" mantra: that only works when there is an increase in the supply of lower cost housing to offset the new construction of higher cost housing and bring the average down accordingly. Right now we're tearing down the former in order to build more of the latter, which is why the average price continues to move ever upward. So, it really doesn't matter how many new units we build, it's never going to create a lowering of average or even median cost, because pretty much ALL of it is already on the high side of the current Seattle median price of $585K (which incidentally has increased by nearly 17% just in the last year, and is expected to rise another 8% this year). You can't force an average down without increasing the numbers below the average, and we're only increasing the numbers above it.

The simple truth is that, no matter how much or how quickly we build out, people are moving in at a much faster rate than we can accommodate, and the housing that is being built to meet that influx is significantly more expensive than what it's replacing and what many of those already here can afford. That is NOT a formula for sensible growth, or for maintaining even a semblance of economic diversity.
41
@32 "You could move back to Olympia"
What that lady describes is not something whats is unique to her.
It's a problem for the whole generation.
Yeah, lets all of us move to Arizona or Alabama! Or better to Belize!
"Very smart". So all rich Chinese can move into Seattle. Right?
42
@37 "When was this magical time in the glorious past when 30-something admins were buying homes by themselves? "
So 30 is not the age when it is time to buy a house?
What is the appropriate age then? 50? Should we take 30-year mortgages at age of 50?
43
We have residents in wealthy neighborhoods who don't want any more development nearby.

And we have poor neighborhoods, full of unused land in the form of vacant lots and ruined buildings, that would absolutely love to see more investment. (No really, we do. Go take a ride on the Light Rail down MLK Way S if you think Seattle has run out of unused land to build on)

And we have developers that want to maximize the return on their investment-- which, under currently law and incentives, means building in rich neighborhoods, mostly on occupied land.

So, um, maybe we should change the laws and incentives?

Let's make it more profitable/possible for developers to build on unused land in poor neighborhoods, and less profitable/possible to build on used land in rich neighborhoods.
44
@37:

"When was this magical time in the glorious past when 30-something admins were buying homes by themselves?"

See pretty much the entire time period between the end of WW-II and when Reagan took office.
45
@31: You don't have to marry to partner up on a house. Find some like-minded individuals and make a business partnership to pool resources, or build renters into your purchase plan. The single family house occupied by a single person is really an anomaly historically. The funky little one bath crappy kitchen three small bedroom house that you can't afford? It was occupied by Mom, Dad and four or five kids when it was originally built. Buy a shitty house in a ratty neighborhood and fix it up. You will probably find that you have the greatest neighbors one could imagine. Manage your expectations, and quit whining. Real estate is a way to get rich s-l-o-w-l-y. Get moving.
46
@40 "that only works when there is an increase in the supply of lower cost housing to offset the new construction of higher cost housing and bring the average down accordingly"

I totally understand where you're getting that. If you keep adding expensive units and removing cheap units, how on earth would the average price ever go down?!? But it's not that simple. There's no such thing as an "expensive unit" or a "cheap unit". There's just units that people are willing to pay some price for. People are willing to pay a high price for new units because they're the best units out there. If we didn't build new units they'd pay the same price (actually, more) for old units that are the best units out there.

Why would they do this? What on earth would make someone pay $2.7M for an old ranch-style home in Pal…? Because that's where their job is, and they're willing to pay to outbid the other people whose jobs are there.

When you add "expensive" new units to the top end, you drop the price of a unit at the low end. If there were room for 300,000 households before, there's now room for 300,001 households. And that 1 household that would have been booted out isn't the richest - they're closer to the poorest.
47
@44

I think you mean Nixon, not Reagan-- during the '70s wages were stagnating and both prices and unemployment were rising. But yeah, there was a time when buying a home and having a couple of kids before you turned 30 was an entirely reasonable plan for a median wage-earner.
48
@38

I'm sorry, but if you can't save money as a single person in Seattle with 54k gross, than yes, the answer is you will never be able to afford a house.
49
@45 Haaahahahahahah. I'm not whining. I'm saying that the housing/rental market in this city is appalling and unrealistic unless you make six figures and I'm a perfect example. Middle class, educated, with a salary on which I SHOULD be living comfortable. And I'm one of the lucky ones, in that I can still afford to rent. Find a "business partner" to buy a house with?? Is that what you did?! I'm not talking about real-estate as a way to get rich. I'm talking about a place to live. You're ridiculous.

@48 I know. That's my point.
50
@47. Not in Seattle in my post college graduation (1978) lifetime. Maybe 1950 to 1965?
51
@45. OK, you win. There is no possible solution to your problem. I'll zip it.
52
Callie, sorry if I glossed your profession before. I was making a practical suggestion for what sounds like an untenable situation for you (and, sure, a whole "generation"). For a long time, I thought I'd move back to the East Bay, where I grew up and where much of my heart still is, but at the same time that I began to get a sense of the crazy changes down there I began appreciating the family-raising possibilities of the medium-sized city I'd moved to for college. As I said, everyone here who's more in the know than I about economics and Seattle housing can hash it out with Charles until the cows come home, but how different really will your options be in Seattle in 1 or 2 years?

And @41, suggesting a Seattlite move to Olympia is nothing like suggesting one move to Belize or Arizona (which I don't think is an area that can naturally sustain human life anyway). She'd still be an hour from her friends & big city amenities, the move is affordable, etc. But if resorting to hyperbole is all you've got...

And if phantom Chinese stream in to claim their phantom condos and join me at the Paramount to rock out to Phantogram -- well, good luck to them in dealing themselves with these same problems were discussing here.
53
@5 - I've also wondered why companies that operate in the digital marketplace don't build more secondary campuses in affordable markets. There's no reason the polar-fleeced 20-something crowd wouldn't enjoy Spokane, Middlebury, or Oberlin as much as they enjoy Seattle, San Francisco, or Boston.

Beyond the cache of being headquartered in a well-known city, I suspect a big part of it is the same as it ever was—you go where the money is. The tech might be virtual, but the VCs still need their backs patted and hands shook. If company loyalty were still a thing like back when we build cars and whatnot, you might want to be where you could afford a home and raise a family, but the tech sector isn't looking for settle down types.

A lot of generalizations, I know, but still...
54
@23

I use the phrase "more housing -- by any means necessary"...
57
@46:

Actually, there IS such a thing as an "expensive unit" and a "cheap unit"; one only has to look at the total range of pricing in a market, because there's a top (most expensive) and bottom (least expensive) and that establishes everything in between. For example: the lowest price for a condo within the Seattle City Limits currently listed on Zillow.com is $153K; this is for a regular sale, no auction, land only, or pre-forclosure property. Soundproperty.com has a listing for a Queen Anne mansion at $15mm. Granted, that's an outlier, but there are also numerous properties in the $8mm - $12mm range. So, let's just say that's our range: anything near $153K is "cheap", and anything above, say, $6mm is "expensive", or rather, "very expensive". Now, presumably these prices are set by what the seller believes the respective properties are worth in terms of how much someone is willing to pay. Clearly, everyone (or nearly everyone) can probably afford something at $153K. Using the standard "home price = no more than 4.5 times annual income", that would require annual earnings of about $34,000; easily within the means of most full-time wage earners. But, that $15mm or even $6mm home; not so much, obviously.

Looking at new homes currently for sale on Redfin.com, of the 170 listed, the cheapest is $372K, while the most expensive is $4.2mm, Using the 2015 median income of $89K for the area, and the above formula, the median home price in terms of affordability should be around $400K, that is, roughly half the population should be able to afford something below that amount, and half can afford something above it. Want to know how many new homes on Redfin list for $400K or below? Three. 3 out of 170, meaning more than 98% of the new homes being built in Seattle are above the recommended price range for half the people who live here. And that's not even factoring in the general inability of most people below the median being able to scrape up 15 or 20% of the list as a standard down payment, because who can save that in this market without being left the sum by a deceased relative?

So, yeah we CAN say there are expensive units (what most people can't afford) and cheap units (what almost everyone can afford). And unsurprisingly, almost literally all the new units going on the market don't fit into that latter category.
58
@56:

Well, all I can say is: have fun living in the cultural mecca of Colville, or Dayton, or Forks or wherever you end up. I'm sure you'll enjoy yucking it up to your heart's content, sitting there on your 10 acres, inside your deluxe double-wide with the pellet-stove going full-blast to keep you company. You'll probably have satellite, so ESPN will still be within reach, but you'll need cable if you want to be able to go online and gloat it over us citified rubes scratching out a meager existence here in the Big Shitty. OTOH, we'll have more "quality of life" than driving 30 miles to the nearest Stop-n'-Shop for groceries once a week, drinking in the one redneck tavern within reach (where everyone will despise you just as much as you despise us, because you're not from around there and had the bad judgement to live in a place with more than three stop lights to begin with) or watching moss grow on the sides of trees for entertainment.

Yep, sounds like fuckin' paradise, mate - enjoy.
59
@58, No no, @56 is one of those guys in the last scene in the Season 1 "Mr Robot" finale. Who knew that, while sipping cognac & smoking cigars by the fire, they were actually furiously thumbing past 50 comments by us plebs, trying to get to that empty Comment field so they could deign to drop their truth bomb on us.
61
@60:

Dang, sure wish I could be the proverbial fly on the wall when you pull that attitude on some 45 year old career waitress shortly after your first entrance on-the-scene at the local squat-and-gobble. Watching her - or perhaps one of her regulars, if it's the breakfast rush and she's busy - grind you into a pulpy gob of excrement and viscera would be a sight to behold for certain.

Do tell us how it all turns out...
63
@62:

I'm doubtful you could hold your own against Ruth Bader Ginsburg...
64
It appears that this thread is played out.
65
I like reading the Stranger to find out what is going on in Seattle's art and music scene, but the level of idiocy the show when talking economics is staggering. This is purely a supply and demand issue no matter how one looks at it. Of course when the government artificially limits supply through regulation, or artificially cheapens money by increasing the money supply it makes things worse, but that is not capitalisms fault.
67
@65
Government artificially limits supply in favor of the developers. You do know who funds most politicians campaigns, right?
68
@66
Cashing out your 401(k)? Who gave you that financial advice? Sounds like you're the clown that needs to go back to school.
69
@66:

So-called professional economists can't even agree on the fundamental drivers of economic activity; that's why we currently have two competing philosophies of economic theory: the "Chicago School" free-marketers who follow Friedman, and the Liberalists who back the theories of Galbraith.

As far as borrowing from a 401K, you DO realize that, in addition to paying the mortgage on the outstanding equity for the property, you ALSO have to pay back the disbursement from the 401K itself; most of the time this turns into a wash, as the amount needed to repay the latter offsets the savings from the former. Not only does this NOT save you money in the long-term, but it can actually seriously reduce the amount of income available after retirement, since some plans may prohibit you from making additional contributions until the amount borrowed is repaid, which means whatever is still invested is appreciating at a significantly smaller rate over time. And even if the plan doesn't have such a proscription, it still becomes very difficult to pay the mortgage and property taxes,, the retirement account repayment, AND make new contributions all at the same time.
There are all sorts of other reasons why premature withdrawals from your 401K are a bad idea, but regardless, borrowing for a home purchase, unless one already has a significant amount of the down payment saved, is simply the first step towards digging ones self into a financial hole out of which one may never be able to crawl.
70
A little perspective. Forty years ago, I got my first "real" job, one with a 4-digit monthly paycheck. I rented a nice 1-bedroom apartment on Harvard Ave. between Roy and Mercer. My rent was exactly 1/7th of my monthly gross income. Any my situation was typical, not anomalous.
71
@57 I think you misunderstand me. There's nothing about the $153k unit that makes it a $153k unit. It could certainly be a $100k unit if there were more units available on the market (or if incomes go down), or a $200k unit if there were fewer units on the market (or if incomes go up). I've seen very poor people living in luxury hotels when the market goes one way, and very rich people living in what used to be a run-down warehouse when the market goes another way.

Demolishing a $153k unit and building a dozen $300k units in its place doesn't mean you've increased the value of homes overall - you have to look at all of the homes that suddenly drop in price (since there's now room for 11 more households).
72
@33 aPODments were never "affordable."
73
I have never in those 38 years seen a situation where a single person on an administrative salary could by a house except in the most outlying parts of the city, or the near burbs. the past was not that rosy.


Wrong. I did. In 1992 no less. On Capitol Hill. I make considerably more now and have owned multiple properties since then. But that first home was the foundation for wealth.

Most households existed on single incomes previous to the early 1980's. So all these boomers telling millennial's they are entitled and they just need to suck it up are delusional.

Boomers, of which I am on the cusp, are the most entitled group on the planet. Thought their young adulthood in the post-war period through the early 1970's college was cheap. Inflation was low, gas was cheap, insurance was cheap.

And thanks to the insanity of libertarian chico school free-marketeers who con'd the country on trickle down economics all that is gone. Millennial have ever right to be frustrated. They got ripped off.
74
@66/69 - I borrowed against my 401k—needed a little extra to make the 20% down payment. Paid it back over 4 years at almost zero interest. I did have to reduce contributions during that period, but I don't think I need to tell you which was the better investment.
75
@71:

The selling price is based as much on what the home offers in terms of general condition, features, and amenities as it is on competition in the market. You could have 50 homes selling at $100K, but if they offer less square footage, yard space, electrical upgrades, etc., etc., they aren't going to have any significant effect on the price of a $153K home offering more of those things. Now, if you have 50 homes selling for roughly $100K, sure there's going to be some downward pressure, but again it's not just predicated on availability per se. They would all have to be roughly equal in size, in location, in construction, in age, in features & amenities in order to truly make an apples-to-apples comparison; otherwise, any of those factors could create significant differentiation in price, regardless of just how many total units there are to buy-and-sell.

The reason those new $300K homes cost that much isn't just because of the sheer number, but because that's what the developer needs to price them at in order to recoup the cost of construction and to make a profit - and because they KNOW they can get that, or more based on current market conditions. And it doesn't necessarily mean other units in the vicinity are going to automatically drop in price, particularly if they're not already at a similar price-point already. And even if they ARE similarly priced, there may still be other things about them, like some of those listed above, that compensates against the downward pressure.

And the one significant factor that rises above all of these is that this is a white-hot sellers' market with far more people looking to buy than units available to sell, an imbalance that has far outpaced current rate of new construction. Until there is more equilibrium between the two - something that could take years, if ever - price pressures are going to continue to go UP, not down, which is precisely what we're seeing. Buyers are typically bidding up units, regardless of age as fast as they come on the market in order to beat out the competition. According to Redfin 75% of homes for sale in the Greater Seattle Metro area receive multiple offers, and 56% are selling above the original ask. So clearly, the glut of new construction isn't creating any downward pressure on existing units, and it won't until there are more - a LOT more - available to meet the ever-increasing demand.
76
@74:

"A little extra" is probably prudent, but ONLY a little extra, say, 1/10th or less of that 20% down payment. And you have to hope you do it when the market is on an upswing so that your investments don't suffer an even great hit by additional loss in value.
77
@76 yes, there certainly are a lot of determining factors like—I think it was actually about 1/4 of my downpayment now that I think of it. Made sense in my case in 2011, might not make sense for others in 2016.
78
@77:

You got lucky: the markets took a dip late in the year, but the stimulus was in full-swing, so your portfolio had already lost about as much as it was going to at that point, and if you repaid it by 2015 you should have been registering a healthy increase in value relative to where it had been when you withdrew it. If you had done this four years earlier when the markets started tanking, you would have been well and truly screwed
79
NIMBY is an innacurate, bullying word. It should banned from civil conversation. The reality is more nuanced. Seattle has majority (52%) homeowners, yet we just passed a Housing Levy by a huge margin and we want affordable housing policy to be inclusive in all neighborhoods.
81
@80:

What would you prefer all us renters do - move out of our rentals and live in tent-city-like refugee camps? Or move 40 miles (or 300 miles, which seems to be YOUR plan) away from where we work, where our friends and relatives live, where the businesses and cultural institutions we patronize are located, where we've put down roots for several decades, and spend an extra 400 or 500 hours per year sitting in traffic like all the "smart people" who moved to the suburbs?

Me, I'll gladly take the bump in my rent if it means creating housing opportunities that will enable people less fortunate than myself to continue to live within the city limits and enjoy all the same economic and cultural amenities I now enjoy. Because I'm not a self-absorbed, narcissistic ass who thinks Randian/Libertarian Wild West Individualism is a workable solution for 21st Century problems.
82
@78 - You're exactly right, and as much as I'd like to pretend it was a shrewd business move, the reality was I could only afford to buy at the market's absolute lowest point. I am very fortunate, however, that I actually (finally) got a place I wanted and am still very happy with. I might have settled for less at the time.
84
@83:

I'm sure nobody will be missing you upon your departure. But do let us know how things fare in Galt's Gulch or Hayden Lake or Metaline Falls or whatever low-tax, high-unemployment, subsistence-level situation you find yourself. Just watch where you step when you're walking in the woods, though; the local survivalists tend to leave little "presents" for unsuspecting interlopers.
86
@85:

If you have to move that far away just to reduce your living expenses by 2/3rds, my guess is financial acumen isn't your strong suit.

As for the 9.0, well, when that does happen, guess where all the money and resources will be going? Not to rural Eastern WA, that's for sure. Hope you're prepared for subsistence living at a pre-20th Century level, because without the tax revenue from our kind and the resources we make possible, that's what you'll be reduced to. But, I'm sure your new neighbors will be more than willing to pitch in together to get everyone through the rough times. Of course, being the newbie you might find it a bit more of a challenge, but then, relying on the kindness of strangers is a long tradition where you're going, no doubt.

And guns are only good until you run out of ammo; then they're just useless hunks of metal. Besides, you won't have anything of value anyone would want to travel 300 or 400 miles out of their way for, not even your delightful personality. The folks down the road, OTOH might see a few items of interest; they're the ones I'd really be worried about if things get as bad as your wet dream fantasy.

Enjoy life when the motor of your world stops...
87
When a place starts to suck, people should move. Especially if the economic dynamics of that place are holding you down. This has always been the American solution.

No jobs in your crappy former coal town? Impossible to live in your crappy former emerald city? Too old to maintain your house and high property taxes are driving you nuts? Pioneer a track for your friends and family.

Perhaps low unemployment , low housing cost meccas such as Nashville or Houston or Boise?

It is a big beautiful country with a lot of open space.

88
@79 Get fucked. How's that for a "bullying word"?