Harrell's office announces higher rents are the solution

The Seattle Times reported this weekend that many of our subsidized affordable housing providers are suffering from a surprising rise in vacancies, with both Seattle and King County seeing 10% to 11% of apartments sitting empty.

As the authors noted, this is because we’ve built enough apartments that a market rate home price often isn’t that different from a subsidized building’s rent rate. “A studio in Thai Binh was listed in June at $1,546 per month. Across the street, a similarly sized unit at the market-rate BEAM Apartments leased for $200 less and didn’t require the extra paperwork subsidized housing does.”

Something is clearly wrong—high homelessness alongside empty subsidized homes should set off all kinds of alarms and prompt a rethink of our policy.

What is Bruce Harrell’s solution? Make market rate housing more expensive so that the subsidized stuff is more enticing.  

As I have documented extensively, Harrell has done just about everything he could to make it less likely that we have enough housing to match the coming growth, meaning his plan will make rents get much more expensive.

What I didn’t expect, was that they would say the quiet part out loud.

When the Seattle Times put the question to his administration, the answer was that, in the face of an impending shortage of housing and thus upcoming price rises in market rate housing, “The vacancy issue should self-resolve at some point.” 

As the Times noted, “That approach is infuriating to some.” 

Count me among them. 

Can you imagine thinking this way? Can you imagine that being your Labor Day message? Harrell’s plan is basically—Don’t worry, it might look like we are doing a bad job, but we will look better when the housing market we have stifled finally gets so expensive our subsidized housing starts to look like a good deal by comparison! 

Can you imagine living in America in the last couple years and thinking that increasing the cost of living is a solution to today’s policy problems? It is genuinely hard to imagine how a person and his staff could have their heads this far….um, in the ground.

All of this tracks with a man who made the following statement at a Queen Anne event this summer:

An actual look at the problem

Some of this increased vacancy is due to poor planning and playing for the crowds. The insistence on lowering the cost-per-unit so we can build more homes with public money sounds good—but it has meant we are building lots of affordable housing units for not-very-poor people, since they need less public money. These are set as “affordable” for people making 80% of the median income, which means households making over $80k a year. We have overbuilt subsidized housing for this category, while underbuilding “very affordable” and “deeply affordable” housing, which is for people making 60% or 30% of median income. 

Some of this issue is also due to a very good thing—the opposite of Harrell’s solution. A building boom in apartments that started before Harrell’s term (and ended during it) significantly slowed the increase in market-rate rents. It worked so well that a lot of these market-rate units are competitive in price terms with these subsidized-for-80%-of-area-income units.

Unfortunately, the building boom has crashed, which means that if the city doesn’t get its shit together, apartments are going to get much more expensive. Even if we do get a good Mayor, it’s going to take a while to address the mess Harrell has set up.

Still, we could use public money to recapitalize or outright purchase some of these buildings and shift them toward housing for people making far less money. This might be a (relatively) affordable way to generate thousands of units for people making 30% or 60% of the average income. Perhaps even some of them would be suitable for permanent supportive housing, with on-site-behavioral health support, which is the only proven long-term solution for the chronically homeless. Imagine if this offers a path to getting a thousand chronically homeless people housed! 

There are many important policy questions that come up: Will this require more subsidy? How can we build better for future demand? What sorts of metrics should guide us as we build? Should we directly subsidize renters through vouchers? One of my favorites is this one: “if the market has proven it can provide housing that is affordable to people who earn 80% of the average income, how do we keep building aggressively enough to make sure that is always true?”

If only the Harrell administration bothered asking such questions.