The real-estate discourse can be confusing in a red-hot housing market like Seattle’s. Anecdotally, complaints are common: The Eastside and Seattle are becoming remarkably expensive, and that’s not fun for homebuyers and renters alike. But from a broader perspective, a booming real estate market is a good thing. Housing starts are a major economic indicator, and increasing home prices boost an owner’s wealth and signify a strong jobs center (just like another hated characteristic of our cities, traffic).
Three stories this week touched on the causes and side effects, good and bad, of booming real estate markets. Let’s start with a column from Seattle Times writer Brier Dudley, who throws a bucket of water on the notion that increased housing volume inherently boosts affordability for all.
Rezoning single-family neighborhoods to allow multifamily development has been a heated debate over in Seattle, but many folks feel that smaller, denser housing is necessary to drive prices down. But Dudley brings up a valid point: The prices that would go down are almost exclusively monthly rents, which doesn’t do much to help folks who want to buy a home.
“This is presented as an affordability measure, but it would have the opposite effect on those trying to buy a home, which the vast majority of renters aspire to do someday,” Dudley wrote. “This policy change would make it harder, if not impossible, for people of modest incomes to fulfill this dream.”
Dudley’s logic is that lots filled with three homes instead of one home are attainable only by developers or super-wealthy individuals. Yes, boosting the rental stock will eventually drive down rents, but you don’t see many mom-and-pop rental operations in Seattle.
What urban housing policies like these might do is restrict the population who can benefit simply from living in an in-demand city. A New Yorker piece spells this notion out:
The price of the creation of these imperial cities is that they actually provide decreasing opportunities for many of those who already live in them, or for those who move to them and are not already armed with resources, status, and education. Everyone living in New York or San Francisco understands the general contours of this. Artists get pushed out of the center, the middle class gets pushed into the suburbs, and bus riders are asked to make way (literally) for tech workers.
Sound familiar? Our region hasn’t reached San Francisco levels yet, but it appears headed that way (booming economy, beautiful scenery, geographic limitations, San Franciscans already moving here in droves…).
Mark Gimein, the author of the New Yorker story, spells out research suggesting that boom cities like Seattle are providing opportunities for those who are already, well, killing it. Urban migration pre-1990s was taking place across income levels — everybody started going to big cities for better opportunities. Since then, however, the folks moving into big cities, presumably for better opportunities, already possessed high-wage jobs. In short, since the 1990s tech boom, American cities have been where the rich get richer.
There’s no starker evidence of the accompanying cultural shift than the teardown. Across the region, old homes are being leveled and replaced with bigger, boxier, and more expensive houses. This trend is particularly acute in the Eastside’s most affluent burgs, including Mercer Island and Medina.
Many see these new homes as signifiers of gentrification, of being pushed out of a neighborhood. But are teardowns inherently bad? Dan Bertolet, a Sightline Institute researcher, told the Times that these teardowns both increase the overall housing stock and give wealthy residents housing options; otherwise, they’d be bidding up the price on smaller, more affordable homes.
The beneficiaries of the area’s housing boom are primarily affluent; not much consolation can be offered for the $40,000-a-year Seattle worker who’s been pushed from Beacon Hill to Renton to Kent. But, 20 years from now, will we look back at this time and say that we completely botched housing policy and let economic development change the city unchecked?
Maybe not. Consider University of Washington architecture professor Rick Mohler’s take on the aesthetic element of the teardowns: “I’m not a big fan of a lot of these boxes, believe me. These house are just big,” Mohler said. But “part of this is a basic resistance to change. It happened when the bungalows were built, and it’s happening now. I think we’ll see other forms come back. Everything in design and fashion is cyclical.”
Perhaps everything in economics is cyclical, as well. If the economic boom can somehow buck the trend and provide opportunities for everyone on the income scale, then Seattle’s low-income residents may one day be living in the million-dollar boxes that are popping up now.
Elsewhere on the Web
Speaking of housing, don’t buy a McMansion.
Amazon’s not selling automobiles … yet.
I’m no public-health expert, but it seems scary robots might not be the best way to convince kids to use birth control.
Japan is getting into the jet-making business.