So, I live in Wallingford (the community mentioned here). In one of those Craftsman houses, no less.
Here's the thing: Wallingford will be valuable and therefore expensive no matter what kind of housing you build here. Literally anything. There are some crappy midcentury studio apartments that go for 2k a month not 10 blocks from here, because the location is great even if you don't have a house.
That means that basically everybody who doesn't develop property professionally is misdiagnosing the situation.
The NIMBYs say that rezoning will cause property values to crash. That's just not in line with available evidence from Ballard and similar, and flies in the face of reason besides. When your lot can be a beloved home to another family or a pile of income to a developer, math says the developer will eventually win the bidding war.
Most of the YIMBYs are wrong because housing prices just aren't going to come down that much here, and much of what comes in will be rentals. Those rentals will be luxury units because they can be, and will therefore be 2500+ a month. That's within a few hundred dollars of an existing mortgage (on one of the cheaper houses-- not the million dollar 3000+ sqft thing down the road) but without the potential upside.
Housing prices not coming down from increased unit implies some sort of market-resistant magical mumbo jumbo in that area. That doesn't sound plausible. Everything reacts to changing supply and demand, and increasing supply will always drop prices, somewhere. Increasing luxury units will mean a vacating of those non-luxury units currently occupied by luxury dwellers.
I think what you and others don't understand is that, there is SO MUCH demand, and SO MUCH money that no matter how much you build, the prices simply won't go down.
From a developer's perspective, building a brand new apartment building is ludicrously expensive, you simply MUST charge very high rent, or your whole project is not feasible.
So for one there is no such thing as "infinite demand". We can talk about Seattle having an unmeetable housing demand when the whole city is hundred story condo buildings and the population density is twice that of Tokyo.
Of course in the short term, wherever you lift the crippling shroud of insane zoning policy, new housing will still be very expensive. It is pent up demand. But by building density you exhaust said demand. And on top of that, the denser and larger you build, the most scale you apply, the cheaper it gets per unit to house people. Economies of scale plus a bunch of other scaling effects on construction.
One thing the first bastions of reasonable zoning policy will probably fail to do, though, is remove some fairly insane mandatory minimum square footage requirements, which puts a kink in any reasonable approach to housing - developers need profit, and the smaller you can make units the larger your market can be because you can fit more people into the same building footprint and thus afford to charge less per unit, and thus enabling poorer people to live there.
Without that you do just end up with the luxury 2000 sqft condos that are only better than the status quo because they reduce pollution and traffic. They also dramatically help the local economy by enabling high income earners to live there in greater numbers. But to actually help the poor, you need to unrestrict not just the outside building size but the inside as well.
Yeah spot on. I think the square footage thing, and the various zoning laws and requirements for permits are probably one of the biggest reasons housing is not affordable.
As it is now, if you build more housing, more wealthy people will move in to fill that housing, and more and more, and on and on until you hit a plateau. That plateau will never be affordable for a blue collar worker unfortunately.
My point is that building more houses is not the answer all by itself. Drastic changes to our understanding of property rights and landlording are required as well.
My whole point is that the plateau is only for the luxury first-wave large family condo type housing (at the highest denstiy, at least - if you aren't there yet, you need more density until you get there, then you move on to phase 2) and that if you let builders build housing smaller you can avoid such plateaus because after exhausting the rich you build smaller and more affordable but still net only slightly less revenue per square foot.
This isn't true, unless you're silently inserting caveats like "given that we all know that we can't build enough to meet demand" which turn it into a vacuous tautology.
Consider: if the amount of housing available within Seattle city limits was multiplied by 10 tomorrow, would prices go down?
Yes, I was speaking to the actual situation in Seattle with all the caveats that implies. Most important among those is that HALA is an actual policy that describes what will be rezoned, how, and when. It notably will not permit 10x growth in Wallingford.
Ok, so what you actually meant to say was "the Seattle housing market is totally responsive to supply and demand, but we are consciously limiting supply". Since we both agree that 10x the current number of houses would bring prices down, then there's a far more useful investigation to be done into what the lowest number of houses that needs to be built in order to reduce prices. That discussion is the one that needs to be actually had in order for policies like HALA to come from an informed and rational plan. Claiming "nothing will ever lower prices!!!!!1" is the opposite of that discussion.
edit: wait, you're not even the poster I responded to. What the hell?
Frankly, I don't think starting out with spherical cows and a neoclassical economics textbook is a rational approach to the housing problem. If you want to engage in it that's cool and you do you, but it's a bit like expecting everyone to start speaking Esperanto just because you happen to think it's a good idea.
In my view, any successful policy is going to have to be both incremental and carefully balanced to take everyone along for the ride. That will piss off lots of people who think the other side is trying to destroy or deny them the things they love, but it's pretty much the only way forward.
Even if that were true, that's not an argument to not build. People need houses, the pricing is reflecting a shortage, denying house is denying people housing and there's no way to spin that reality.
I agree with you, building must commence. But it will not help lower income people or make things more affordable. It might lower the price from astronomical to, very, very high, but really what it will do is create more housing stock for more upper middle class people to move into the city.
So what you'll be left with is even more wealthy folks coming in, and never anything affordable for the blue collar folks.
So therefore that demand needs to be satisfied. Seattle isn't the only place that has that problem. San Francisco, and most of California suffer from it. So did Tokyo, but they've ballooned to provide a quality living for over 10 million people.
No need for mumbo jumbo. Supply greatly outstips demand and HALA is not that ambitious of a plan (and took many years to get through). There just aren't enough new units in the plan to cause prices to drop.
I agree completely. I live in portland, and just next door they tore down a nice craftsman bungalow which the developer purchased for 450k, and then built an enormous 3-story monstrosity in. All the other homes in the neighborhood are 1 or 2 stories, so this gigantic building sticks out like a laughably sore thumb.
There are six 2-bedroom units, and each unit will probably sell for 500k. There is no parking since the building fills up the entire lot.
You know who lived in the bungalow before? a low-income family. Do you think this new condo building helped them have affordable housing? NOPE!
All this development does is push people who were already here out, and allow a flood of rich folks to move in. It does nothing for affordability.
Housing prices in Seattle will only come down if there's a downturn in the tech industry. But that doesn't mean it's wrong to encourage density to reduce prices.
I'm... not sure of this. A sharp spike in interest rates could make mortgages less attractive and dampen demand. Or, more positively, the Northgate or Othello areas could come up and start to look more like Ballard and increase the attractiveness or property away from the urban core. Either would dampen the hottest markets.
If the concern is that it takes roughly $60k/household just to live in Seattle, the answer is higher wages. Even if that acts as a drag on King county GDP, the King county housing market is north of 100% of GDP; better to endanger the smaller value. And personally, I don't think higher minimum wages will be a net negative in the long run-- but I could be wrong. If I was, we could fix it later though.
If you're trying to solve the problem of not being able to rent a place you like independent of not being able to afford a baseline place, the only answers are market distortions in your favor. The proposals I've heard for that are sort of a "fair, cheap, effective-- pick two" deal.
Personally I think the best approach is more and better transit, since that raises the utility (and therefore underlying value independent of market value) of homes both close and far from the urban core. But it is definitely on the fair, effective, not cheap side of that triangle.
Here's the thing: Wallingford will be valuable and therefore expensive no matter what kind of housing you build here. Literally anything. There are some crappy midcentury studio apartments that go for 2k a month not 10 blocks from here, because the location is great even if you don't have a house.
That means that basically everybody who doesn't develop property professionally is misdiagnosing the situation.
The NIMBYs say that rezoning will cause property values to crash. That's just not in line with available evidence from Ballard and similar, and flies in the face of reason besides. When your lot can be a beloved home to another family or a pile of income to a developer, math says the developer will eventually win the bidding war.
Most of the YIMBYs are wrong because housing prices just aren't going to come down that much here, and much of what comes in will be rentals. Those rentals will be luxury units because they can be, and will therefore be 2500+ a month. That's within a few hundred dollars of an existing mortgage (on one of the cheaper houses-- not the million dollar 3000+ sqft thing down the road) but without the potential upside.