An Argument for Cheap Housing

Lately, I've been wondering whether there really is, within this political universe, anything meaningful to be done about the widespread decline in housing affordability. Here in Seattle, as I've written before, the condo market is white hot, with tall skinny towers going up throughout the downtown and around 4,500 units of housing lost to condo conversions from 2005 to date.

Great gushing rivers of capital have flowed to Seattle because our market — with its projected job growth and a pricing equilibrium that favors condo buying over housing rental — is just about the sweetest spot an investor could possibly hope for.

That's capitalism, and much as we shake our tiny fists in its direction, it pretty much does what it's gonna do.

My recent read of Robert Reich's Supercapitalism has reminded me of the rules. I even find myself slightly regretting my jabs at luxury housing developer J. Ronald Terwilliger a few weeks ago. The system is geared to deliver the best prices to consumers and the most return to investors, and is unforgiving in its consistency. This makes his advocacy for workforce housing, his multi-million dollar housing philanthropy, and his leadership in Habitat for Humanity something extraordinary. The only way he could go further is to choose to not be a capitalist, in which case someone more ruthless would quickly take his place.

Last year, Councilmember Tom Rassmussen took the lead on a Statehouse bill that would have slightly slowed condo conversions and offered more assistance to those displaced. While the legislation was widely considered timid, even this failed to make it out of committee. House Speaker Frank Chopp, who is probably as strong an ally of human services as could survive in that position, says the bill died because it just wasn't sufficiently on his radar. I'm sure it didn't escape the attention of the developers, but perhaps they forgot to mention anything to Frank.

Whatever. This year, Frank says he'll do better, and advocates will rally around a second attempt.

While there is value in getting this on the books, the problem is that this year is too late. The horse is well out of the barn and across the pasture, and with rental vacancies at an historic low and rents at an all time high and climbing, capital has unerringly sniffed out demand and shifted toward rental housing construction. My big time developer friend tells me the condo thing is basically done. Aside from a few minor projects here and there, Seattle condo construction stops with what's in the pipeline now. Those rentals, however, won't be built for the lower end of the market. There's no money there. Or at least not as much.

Sadly, the odds of any real federal intervention in the housing problem are exceedingly low. Capitol Hill is dominated by financial interests who don't exactly favor the idea of government subsidizing the lower end of the market with public housing and Section 8 vouchers. This has led to three decades of starving the beast and continued cuts to HUD funding, even as the feds pretend to end homelessness. It has also led to the remarkable situation of more than three federal housing dollars to subsidize middle-class homeownership for every dollar spent on housing for the poor.

Add to that the fact that the capacity of government to mitigate poverty has been severely eroded by the war, tax breaks to the wealthy, and corporate welfare, and the prospects for relief become dim indeed. With local and state resources we have been able to make a dent in the housing crisis, but gains in affordable housing stock are more than trumped by continuous market losses.

So what's left? As I'm fond of saying, in a system where housing is produced for profit, those who can provide no profit get no housing. Unless, of course, conditions somehow change to make investment and construction in the lower end of the market more attractive. Urban renewal wiped out hundreds of thousands of units of "substandard" housing stock because people "shouldn't have to live that way." But no real alternatives were developed in its place, and we've grown accustomed to people living in conditions that are, in fact, far worse.

So what would be this look like? If we were able to build K-Mart housing to add another option to the generally Nordstrom quality stock being built, would this be stigmatizing? More so than homelessness? Would neighborhoods allow such housing to be created. Would the reduction in quality actually translate into lowered consumer cost, or would it simply mean more developer profit? Could the trade-off be legally enforced?

If government were able to find the mean between meeting necessary building code concerns for health and safety and lowering standards to make increased private investment pencil out, would more housing get built and more people be housed less vulnerably than they are now? If so, why aren't we doing it?

Obviously, there are arguments to be made against this from both the right and the left, so hardly anybody ever goes there. But what if we did? Click on the photo up top to see a thought-provoking 80s project in Taiwan.

We Bring You This Class War, Already in Progress ...

John Fox of the Seattle Displacement Coalition is losing it these days. When he gets to talking about condo conversions and housing demolition in Seattle, his face darkens by several shades, the veins in his forehead and throat stick out, and his voice jumps a full octave. Seattle is losing low-income housing about twice as fast as it’s being built, and it really pisses him off. In the 30 years he’s been fighting for housing, things have never been worse.

Meanwhile, we’re supposed to be “ending homelessness.” It’s a bitter irony.

We’re losing, and it’s all about political will.

Today, I attended the Seventh Annual Interfaith Task Force conference on Building the Political Will to End Homelessness. I’ve been to several of these things, and while I want to be supportive of my allies, it looked like the smallest one yet.

On the way there, I stopped for breakfast at the Westin Hotel. There, roughly three times as many developers, bankers, non-profit housing providers, city officials and others paid $65 each to hear J. Ronald Terwilliger — the CEO of Trammell Crow Residential and the chairperson-elect of Habitat for Humanity — make the business case for providing workforce housing in Seattle.

There were dozens of corporate sponsors. It’s amazing how the rich will line up to fork over money to the rich when it’s in their interest to do so. I showed up dressed as I always do. My long-sleeved green thermal T-shirt stood out in the room of about 250 suits.

Terwilliger is a man who, a few years ago, was tragically edged out by Time Warner in his bid to buy the Atlanta Braves. Terwilliger is Donald Trump lite, but with better hair, and has what, in his circles, passes for a full-blown social conscience.

An affluent society such as ours, he said, needs to provide housing for those who attend to our needs. Otherwise, various problems such as traffic congestion and pollution, low workforce morale, and a tougher hiring environment for corporations undermine the region’s ability to compete.

While Trammell Crow is very active in Seattle, and Terwilliger’s heart is with affordable housing, his pocketbook has other opinions. All of their projects involve luxury condos and apartments. There is no market incentive, he said, for them to build workforce housing in this city. In Seattle, Terwilliger would define that as housing for those who make up to 150 percent of median income. That’s somewhere above $90,000 annually.

Let me repeat that. There’s no incentive in Seattle, he said, for developers to build housing for people who make less that $90,000 annually.

To do that, Terwilliger would need code relaxations, tax breaks, and zoning incentives. Do this, he said, and people like him will be able to make the sort of profit they expect building the sort of housing we need. The economy will then hum like a new Lexus.

This morning’s gathering at the Westin might well have been called, “Building the political will to help developers make maximum or near-maximum profit while servicing a corporate-friendly market niche.”

Maybe someone else can come up with more elegant title.

Making as much money as you possibly can isn’t just a job. It’s a way of life. And, make no mistake, the wealthy in this country have successfully pursued “structural change.” They can never get enough of it.

Down I-5 a ways, at Grace Lutheran Church in Des Moines, today’s other gathering to build political will was a much more relaxed affair. They had no corporate sponsorship. They were, however, much more comfortably dressed.

The activists and church members gathered in Des Moines do what they do with minimal resources. They’re good people who are working to make a difference. But most of their efforts are directed toward charity and good works. That whole structural change thing is a bit of an afterthought, and there’s no real funding for it anyway.

This, in a nutshell, is the problem. It’s why John Fox looks like he’s about to have an aneurysm, and it’s why we’re losing.

Downtown social worker Joe Martin challenged the attendees to “inconvenience themselves in the cause of justice.” He called us to embrace a sense of the sacred that rejects an increasingly dehumanized future and engages in a fight for justice as though something real were at stake. It was an amazing, moving, radical speech, and I hope we get to reprint it sometime.

The audience clapped politely, and then ran toward the barricades. No, they didn’t. They ate lunch. And life went on as before.

When Matter and Antimatter Collide ...

Today, I'll spend my early morning at an Urban Land Institute forum at the Westin, listening to a multi-millionaire named Ron Terwilliger talk about the need for workforce housing in Seattle. Terwilliger's message is that tax incentives and deregulation can offer incentives to developers to build housing for moderate income people. This will reduce the inefficiencies associated with commuting and make our local economy hum like a new Lexus. The place will be crawling with developers and bureaucrats. Fun.

Then, I'll mosey on over to Grace Lutheran in Des Moines where the Interfaith Taskforce on Homelessness is once again Building the Political Will to End Homelessness. Keynote speaker Joe Martin has promised a thundering Jeremiad to knock us out of our accommodating complacency, and John Fox will be there, as always, to point out that we are losing ground on housing and need to develop a sense of urgency to match the moment. I'll join the afternoon panel on gentrification, and sometime between now and then will figure out what I'm going to say. John will come armed with charts. I will not. I will, however, reproduce John's charts here.

Afterwards, I'll try and make some sense of this phenomenon of housing advocacy in parallel universes, and try to answer the question of what would happen were those universes were to collide. Hint: Click on the picture of Spock for the answer.