Outside City Hall: Sightline study whitewashes the housing crisis

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Housing demolitions: the magic of trickle down or just plain greed?

  • column written by Carolee Colter and John V. Fox: reprinted from a shorter version in the Madison Park Times and other Pacific Publishing Newspapers

The anti-neighborhood pro-developer Sightline Institute recently posted a story attempting to prove that demolition of low income and affordable housing is not a problem in Seattle. The author cherry picks 19 developments where only 21 existing housing units would be removed but replaced with 1764 spanking new market rate rentals.

For the author this is prima facie evidence that displacement is a minor problem best solved in Seattle by letting the market work its magic.  Allegedly, by dramatically expanding the stock of newer market rate units eventually some affordable housing will trickle down to the poor.  While those who are displaced should get some relocation assistance (of course at public, not developer expense), the net gain in units outweighs any inconveniences faced by these few.

The author’s conclusions based on such limited evidence doesn’t pass even a laugh test.

According to city planners, 6365 units of existing housing have been removed between 2005 and 2016 with applications pending for removal of another 1892. Our sampling of the buildings being demolished indicates that about 70%-80% were affordable rentals. Many were larger affordable single-family homes  located in “transitional areas” zoned for higher densities especially along or near arterials.  

These larger units torn down are a critical source of affordable family housing (especially families of color who disproportionately rent).  In other instances they can be occupied by up to eight unrelated low income individuals.  This of course means the number of larger units demolished does not reflect the far greater number of individuals who wound up being displaced. Another significant portion of total demolitions were lower density multi-family rentals –  older duplex, triplexes, or 2-3 story red brick and garden style apartments.

Consider that over this roughly 10-year period when all these unsubsidized affordable units were demolished, the city committed $150-$200 million dollars in voter approved housing levies that produced 2200-2500 new subsidized low cost units. In effect, for every one subsidized levy unit taxpayers created, developers destroyed three times that number.

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The natural order of things or just plain greed?

The Mayor’s so-called “Housing Affordability and Livability Agenda” (HALA), aimed at upzoning the entire city for still more development, will only accelerate the loss of existing units and increase this disparity unless measures are first put in place either to prevent demolition or ensure developers replace 1-for-1 at comparable price what they’re removing.  So far our city leaders have been unwilling to consider these actions.

Yes, as shown by Sightline’s study and the city’s demolition chart, there was a very substantial net gain of total units (new construction minus demolitions) over the last decade, and especially the last five years. But so what? How do the new units priced at over $2200 a month or more serve the needs of several thousand lower income households whose homes were torn down – units they could barely afford that rented for $800 to $1000 a month or even less?

As far as the Sightline author is concerned, the families that were displaced (and those at risk of displacement) must find solace in knowing that while they “won’t be renting a brand new apartment anytime soon, perhaps the family that does will leave another more modest home available” for them.  

This is a textbook ‘supply-side’ argument ungrounded in any attempt, either to actually grasp or analyze in real terms, the hardship faced by hundreds of households displaced each year in our city due to market forces.  As shown by numerous studies most displaced households don’t wind up in a “modest” priced home.  A more likely scenario is that these folks will be forced out of the city, or forced to double up with extended family or friends, or forced to rent a place they cannot afford while paying 50-60 percent of their income on rent.  And, yes, some will wind up sleeping in their cars, or tents, and under bridges.  

As shown by the accompanying city-posted chart, here in Seattle there is little or no “trickle down,” (or “filtering” as planners describe it), even at these record levels of new construction.  Not even units built 25-35 years ago (between 1980-89) are affordable to low income folks whose incomes are at or below 50% of median. On average they rent for about $1200 a month and roughly affordable to those whose incomes are at 60% of median or above.

screenshot-2016-10-07-at-2-43-31-pm-editedFor those low income households now being displaced, looks like you’re going to have to wait a good 35 years or more for that new housing to trickle down to you.   You’ve got to go back to pre-1980 rental housing to find that ‘modestly priced’ unit affordable, or even in the ballpark affordable, to you.  But wait, come to find out, this is precisely the type of housing we’re allowing developers to destroy.

In Seattle, there are about 75,000 households in Seattle with incomes below 50 percent of median income.  Only about 20,000 of them are living in subsidized units, so that’s 55,000 or so depending on what’s out there offered at affordable rents in the private market.

Many of those folks have incomes below 30% of median and are disproportionately made up of seniors, people of color, and those with disabilities: classes whose needs, under our City’s race and equity initiative, our leaders have pledged to address.  These groups rely heavily on this older ‘second tier’ stock of naturally occurring rental housing built before 1980.

The vast majority of units developers are demolishing just happen to be this older affordable stuff – units that were built before 1980.  As long as developers are allowed to destroy these, we can add new units until we’re blue in the face, the wealthier families moving into them won’t be freeing up a ‘modest” unit affordable to lower income families any time soon.   The llottery is a far better option than waiting for the magic of trickle down.

Like the author of this Sightline piece, the pro-density acolytes sometimes acknowledge that simply letting the market take its course doesn’t necessarily prevent displacement.  But they fall back on the argument that more displacement occurs when you restrict or slow rates of new residential construction: “supply is tighter driving up rents on the existing stock etc etc.”

Frankly, it’s intellectually lazy to fall back on (or rather hide behind) and continuously regurgitate versions of the same simplistic Econ 101 textbook argument especially when loads of real world evidence contradicts it.

The influx of young professionals and other more affluent usually smaller households – the folks scarfing up the higher priced (and usually smaller) amenity rich new rental units – generally aren’t interested in and don’t contribute to the demand for older more affordable and usually larger existing rental units.  So when you demolish (or implement upzones that accelerate demolition) and otherwise restrict this “second tier’ supply (while a flawed economy virtually guarantees increasing numbers of lower income people seeking out these units), that’s a recipe for more not less displacement.

wreckConversely limiting growth in areas where there are high concentrations of these larger older affordable rentals at least slows the rate of demolitions, rising property values (and rents) and rates of speculative turnover.  This can at least extend the life of this unsubsidized stock at more affordable rents while giving the nonprofits more time to get in there acquire and maintain them at affordable rents over the long haul.

Secondly, if it’s true, as Sightline suggests, that most new residential development occurs on parking lots or other sites that do not require removal of any existing units, then why not impose a two-year moratorium on demolition of existing low-cost older buildings of 4 or more units? Our studies of demolitions show this would only affect about 5%-10% of all new developments, barely slowing record rates of new market rate construction in the city (and barely denting Seattle’s excess zoned capacity). In other words, it’s possible to continue to expand supply of new expensive units w/out demolition of older low income buildings.  Regulating the market (not simply giving it free rein with across the board upzones) would enable us to manage where and how growth occurs so that it does not ravage our existing stock.

This is in fact what the city did once before in 1987 in order to preserve low-income buildings in downtown until measures could be adopted and monies found to acquire older buildings threatened by rezones there. As a result, the city was able to save a lot of those older low-income apartments. In the end, there was a net loss of low-cost units, from 10,000 to about 6000. But at least we were able to save many, and of those that remain today, nearly all are subsidized nonprofit units.

Let’s adopt a moratorium again to give the city time to adopt an effective “one-for-one” low-cost housing replacement requirement all developers must meet when they tear down existing low-cost units.

But watch Sightline and their developer friends kick and scream if a moratorium is even considered. Their professed concern for those displaced and their bogus arguments that runaway growth means less displacement remind us of a line from a song by the great union organizer and songster Joe Hill referring to what rich often say to poor: “Work and pray, live on hay, there’ll be pie in the sky when you die”.

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About John V. Fox

Director, Seattle Displacement Coalition
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