Seattle Fair Growth: An Interview, Part 3 — Affordability Crisis

Introduction

With the goal of bridging the political divide and challenging my own assumptions, I sat down with Sarajane Siegfriedt (SS) and Jon Lisbin (JL) from Seattle Fair Growth, a group of neighborhood advocates who believe that the HALA grand bargain is “deteriorating” our city “from unrestrained development.” Nonetheless, they are adamant that they are not NIMBYs or slow-growth advocates. Instead, they recognize growth is coming and want to find ways to accommodate that growth. They believe that growth should pay for growth, that infrastructure should be built concurrently with housing, and that neighborhood groups should have a larger role in shaping growth.

In the third part of the interview, we touched on property taxes, levies, government housing, retirement planning, Tim Eyman and the middle class getting pushed out of Seattle. We discovered urbanists could find common cause with Seattle Fair Growth in loosening Washington state’s strict condo liability laws and in loosening the rules and lowering or eliminating the fees associated with accessory dwelling units (sometimes called mother-in-law apartments).

Unfortunately, The Urbanist declined to publish Part 3 of this interview after receiving push-back from a small number of readers. In the interest of promoting and disseminating ideas and continuing an important conversation around housing and the future of our city, the final portion is being published here on Medium.

A transcript of part three of our interview is available below, lightly edited for clarity. Check out part 1 of the interview here and part 2 here.

The Housing Affordability Crisis

BC: I want to ask you about the story of our housing affordability crisis. I want to ask how we got here, and where we go to solve it.

SS: Interestingly, you know Jon Grant was the person on HALA that didn’t vote for it, which in itself is a great story. What does Jon Grant know that the rest of us don’t know? Because he was there are the table. I don’t know if 25% affordable housing is the right number for HALA. It seems high to me and it’s a big number. But I’m pretty sure that 2% in South Lake Union is way too low. I watched the debate on the U-District where Lisa Herbold tried to get them to move from 9% to 10% and this represented from $300 per square foot to $302 per square foot. Come on guys! But, they wouldn’t. We’re not getting the whole story, we know that. How much should be given back or shared, how much of all the benefit of this growth should be shared with the public, how much of it needs to be shared in order to maintain or claim livability in the city. Those are really important public topics of debate that we really haven’t talked about. The public doesn’t have enough information to even have an informed opinion, which is a shame.

The underlying question that you’re asking is — that number that every time they raise the rent $100 it increases homelessness by 15%. It’s really clear that the rents going up and that includes the property taxes. I got a postcard a year a go that said levies are 47% of my property tax. We’ve done this to ourselves. The Sound Transit and Move Seattle [levies] were the biggest chunks of what we voted for. Now we’re paying for them. We’re seeing them in greatly increased and escalating property taxes and rents because we all know that rents are passed through one-for-one. Nobody’s going to sit there and absorb the cost to be nice. We know what’s causing it. The other part is that Reagan defunded HUD housing by 90% and it was never restored. The federal government has never done its share. In Europe, you find government housing being 20%, 30%, 40%, even 50% of housing — all housing. In this country, government housing represents 1%. We’re not doing our share. This is what Bob Hasegawa ran on. This is what Jon Grant ran on. We need more government housing. The next question is: how do you pay for it?

JL: I don’t know if we did it to ourselves as far as property taxes. I think Tim Eyman did it to us by capping property taxes at less than the rate of inflation. With all the growth, people are desperate for services around here. The only tool that the city has right now are levies. That’s why it’s a very regressive tax.

SS: Yes. The Veteran’s and Human Services levy is going to be on the November ballot and it’s been doubled. Well, why? We used to pay for this stuff in the general fund. Exactly to your point, since 2001 when Tim Eyman passed that cap, the cost of the essential County services, which is the criminal justice system, the courts and jails and police, sheriff’s office — it’s crowded out everything else. It was Bob Ferguson who saw this coming and passed the first Veteran’s and Human Service Levy. He said we’re going to have to take that off budget and make it a levy. We’ve continued to take things that used to be in the general fund and put them into levies instead. It’s not a good way to work. All 39 counties went to the state legislature and begged them to rescind that cap. And they didn’t do it.

JL: Another factual reason is, since the housing crisis, homeowners who were underwater were not selling homes. That has continued. You cannot sell your home if you want to stay in this area. If you do, you’re going to the same market so you’re not going to get anything better. There’s very little availability of homes, of houses. That’s also driving up the price of homes.

SS: If you get to be retirement age, you start thinking about where you’re going to live for the next twenty years or so. Very few people have long-term care insurance, which would help you stay in your home longer. About 5% of the population owns a long-term care policy. You’re looking at eventually going into an independent living facility, then an assisted living facility, or a nursing home. Something like two-thirds of all the Medicaid costs are going into nursing homes, for which you have to spend down all your assets and be poor [editor’s note: while 62% of nursing home beds are paid for by Medicaid, only about 42% of Medicaid funding is dedicated to long-term care] . I obviously need to make my retirement in my home last as long as I possibly can because I can only afford to live in that independent/assisted living facility for two-to-three years. God knows I don’t want to end up in the nursing home, which is by most accounts not very nice. Many of us are trying to age in place in our single family homes.

One of the other things I really want the urbanists — I challenge the urbanists to do is join with me in getting the legislature to change the condominium liability law because we’re not building any. There are no middle-class condos going up. High-rises downtown, but no mid-rise. Whereas, for many of us, that was our first rung on the ladder of homeownership. I owned a condo.

JL: Same here.

SS: That’s how we got some equity together and got in a house. That’s what’s missing. Not only the missing middle but the missing bottom rung is that condo market. And there are no [mid-rise, middle-class] condos for sale. You just can’t find any.

JL: That’s exactly right. But there’s a lot of people who feel that single family homeowners are rich, they’re wealthy, they’re protecting their investments. To some degree, maybe that’s true. I can certainly empathize with apartment dwellers. Before I got married, around 40–45, I always lived in apartments and I always had roommates. It’s not like we weren’t in the same situation. Then I finally purchased a condo. Then when I finally got married, we were able to move into a house. We feel very lucky. At that time, housing was about a third of what it is now. It was a big deal to move into Ballard. We’re very empathetic about the plight of millennials right now because I can’t imagine having to pay that much for a house.

SS: But nor did we start with a house. Why would anybody think that they should just go from renting to being a single family homeowner. No, it doesn’t work that way.

JL: Having these homes is paper money. It’s like the stock market. We don’t really get to benefit from it. We have a house. And we can’t really sell it because we’d move into the same housing market. It doesn’t mean anything to us. It’s a house. That’s what it means to us. But it doesn’t increase our wealth, really. Unless we moved into another country at this point. Nobody wants to. We want to live here.

SS: My friend lives half-a-block from Greenlake. Obviously the property values have gone up and up and up. She just told me she has to sell, she has to sell right away. Her property tax is $16,000 [per year]. Who just has $16,000? She doesn’t have any kind of a tech job. She’s kind of a consultant. She doesn’t know where her next dollar is coming from. She has to leave — that’s it.

The Chair of the 46th District Democrats, Halei Watkins, ran for [Seattle City Council] District 5 [in 2015]. She was a great candidate. We just loved her. We elected her Chair of the 46th District [Democrats] in January. In [March], she got a $400/month rent raise in Northgate. She and her husband said for that rate, they could be paying a mortgage. So they went shopping for a house and closed on a house in Renton in May. Now we don’t have a chair. Our friends are leaving left and right. This is not going to happen. It has happened and it is happening. The middle class is being forced out of Seattle as we speak. I give those examples because Halei is gifted and immensely popular and took on a leadership role at a very young age. She’s like 30 [Halei is 28]. To have these valuable members of our community forced to leave is just tragic.

BC: Do you two have any final words of advice or requests for urbanists?

JL: I do. In order to resolve these major issues, whether it’s homelessness or traffic or housing affordability, I think everybody has to work together. I think if we’re sitting around in a circle and shooting each other, there’s no way we’re going to solve these major issues that are happening right now. That’s why I appreciate this interview.

SS: Thank you very much for the interview. I would love for us to work together on this community-wide conversation on livability. We need to understand what that is for all of us and work towards it. The missing middle, if we can figure out where it goes and what it looks like, that would be great. Let’s get rid of those damn mother-in-law limitations so we can have a couple thousand more affordable units. There’s a lot of stuff that we can join together on and I’d love to do that.

Image courtesy of Wikimedia Commons