Housing: short vs long views

If you know contemporary Seattle, you probably know that we have a housing crisis. If you know me at all, you’ve probably heard about how I grew up in London and most of my school friends can’t afford to live anywhere in London, which terrifies me about Seattle’s future. So it should be no surprise that housing affordability is a huge issue in local politics, and one that I pay a lot of attention to. Equally unsurprising: even among people who agree that we have a problem and it’s important, there’s wide disagreement about what to do, and these disagreements often get very bitter.

Against that background it was a relief this evening when a panel discussion about the housing crisis managed not to bring out any of that vitriol, and stayed a respectful, interesting airing of differing views. At the risk of caricaturing the panelists’ views a little, I would summarise them as:

  • Hodan Hassan of Got Green, making a strong and convincing moral case against displacement and for paying particular attention to the displacement of minorities, and opposing market solutions because capitalism and land ownership are themselves the problem.
  • Zach Lubarsky of Seattle Tech 4 Housing [full disclosure: I’ve done a tiny bit of volunteer work for this org], arguing that the market has to be used in solving this problem, and the reason it hasn’t worked so far is restrictive zoning getting in the way.
  • Laura Loe, who did an outstanding job of threading the needle between these two positions, which is what I really want to talk about.

After a long rambling more-of-a-statement-than-a-question from an audience member (to everyone’s credit, the first of those in 90 minutes of discussion) about how evil capitalism is, Loe responded with something along the lines of “look, in the long run you’re right that we need more fundamental change than just housing policy, but housing policy is the thing we can change this year and we can help a lot of people that way”. It was a synthesis I had been longing to hear.

What struck me is that Hassan’s anti-capitalist stance and Lubarsky’s market-using stance are much more compatible than they look at first. They’re just looking at completely different time scales.

In the long run, I mostly agree with Hassan: capitalism itself may or may not need to fall, but the status quo of most land being a privately owned investment and most homeowners’ biggest financial asset being their home is disastrous. At best it creates a strongly motivated, well-resourced anti-affordability constituency from the already-wealthy who have an asset to protect + the struggling-on-the-ladder who are afraid of getting underwater on their highly leveraged mortgages. At worst, I suspect that it guarantees pricing out at least some people from any city that’s working well enough that people want to live there, and when a city runs into hard times it multiplies the problem for the people who do own homes there.

But if we somehow got a radical anti-capitalist President of the USA next week, they wouldn’t be able to just wave away capitalism overnight. Even if we had a fully formed alternative to put in its place, it would take years or decades to bring about a change that fundamental in the way a huge country organizes its affairs. And in reality we only have bits and pieces of alternatives, demonstrated on very local scales, with a lot of work to do to build broad support for them. But the displacement is happening now, and we need to also use tools that work faster than this.

That’s why I find myself working with the market urbanists even while I share the anti-market peoples’ belief that the market itself is a problem. We need to work on three time scales in parallel:

The short term interventions available to us fit into two groups: massively liberalising zoning to reduce the cost of new market rate housing, and subsidising a portion of new housing to keep its cost accessible to people who the market won’t serve. These are the things that can have results within a year or two, and they work much better together than individually. The market will never serve the poorest people, but we also can’t get out of this with subsidised housing alone because as long as there’s the artificial land pressure caused by restrictive zoning, housing will keep getting more expensive to build as we fill the available land capacity. Seattle’s actually on the right track with the Mandatory Housing Affordability program, which explicitly ties these two approaches together, though I want to see both sides of the equation go much further. The upzones need to cover the whole city instead of exempting the ~70% that’s zoned single-family, and allow much more than the one added storey near major transit/employment nodes, while the affordable housing / payment in lieu requirement should be much bigger for developments that take advantage of the biggest zoning changes.

Medium term still looks pretty technocratic:

  • Replace property taxes with a land value tax, because this pushes value from the land itself to buildings that can actually house people or businesses.
  • Replace sales taxes and the only slightly less regressive way Washington taxes businesses with a progressive income tax and a carbon tax, because income inequality is itself part of the problem.
  • Kill the mortgage interest tax deduction, because that’s part subsidy to those already well off enough to own a home, and part just a straight transfer from public money to the mortgage lenders.
  • Find ways of taxing investment properties, second homes and vacant properties that don’t just turn into a discriminatory tax on immigrants, and put all the proceeds from that into affordable housing in the areas with highest displacement risk.
  • Build out a lot more high capacity, traffic-separated transit, because that spreads out the area in which people want to live, decreasing pressure on the existing displacement hot spots.
  • Support land trusts like Africatown’s, which promote minority ownership of property, because that provides a hedge against communities getting priced out en masse.
  • Support other alternatives to for-profit developers, such as Baugruppen, because they can fill a gap between market-rate and government-subsidised housing, and start showing us how to get past our current dependency on the for-profits.
  • Attack discrimination in the rental market with the kinds of things Seattle is trying right now, like the first-in-time rule (I’m calling this medium-term because it’s been hit with a legal challenge and may need changes in state or federal law to stand).
  • Help renters stay in their homes with interventions like short-term rental assistance, a right to counsel in eviction proceedings, and try to figure out ways to do rent control that address the problems and loopholes it’s run into elsewhere.

Long term, I think all of the above have their limits, and we do need more radical change in at least two spheres: houses-as-investments, and the extreme income inequality that prices people out. But we have to do everything else meanwhile or we’ll have already lost.