How Does Seattle City Councilmember Kshama Sawant Plan to “Make Seattle Affordable for All”?

Kshama Sawant Yard SignI drove down to Leschi last weekend, and I saw a surprising number of yard signs promoting the re-election of Kshama Sawant to the Seattle City Council. As you can see in the photo at right (taken from her campaign’s Twitter feed), the slogan on these signs implies that Sawant’s main goal is to “Make Seattle Affordable for All.”

It’s not explicitly stated, but since most people aren’t referring to the price of food or clothing when they complain about a specific place being unaffordable, I think it’s safe to assume that Sawant is talking about housing affordability—probably mostly focusing on rentals. I was very curious how she intends to “make Seattle affordable,” so I headed over to her campaign website to read her measured, thoughtful opinions on this economic conundrum.

Let’s have a look at her “issues” page on the “Make Seattle Affordable for All” topic:

Our city is becoming increasingly unequal and unaffordable. In one Seattle, glittering fortunes are being made for the super–rich and the major corporations that dominate its landscape. The other Seattle, where the rest of us live, faces skyrocketing rents and underfunded services.

I think most people will agree with this sentiment, at least on a high level. I mean, it’s blatantly populist and I don’t think the “us versus them” mentality is a particularly productive form of politics, but at least she’s on-topic so far.

While the Mayor and City Council give sweetheart deals to billionaire developers, we’re left with “stakeholder” committees and empty promises.

All right, what exactly are these “sweetheart deals” that the “billionaire developers” are getting from the Mayor and City Council? Can you cite them specifically?

Instead of investing in desperately needed mass transit, this same arrogant political elite is doubling down on the Bertha boondoggle, threatening to rack up hundreds of millions of dollars in cost overruns while safety concerns mount.

Wait. Hold on. I thought we were talking about housing affordability. You know, “billionaire developers” and whatnot. What does the Highway 99 tunnel fiasco have to do with this? Please explain the connection.

The political system in our city and throughout the country is beholden to corporate cash. A Republican-controlled Congress brazenly champions the interests of Wall Street. Here in Seattle, where the Democratic Party has governed for decades, big developers and downtown business interests nonetheless dominate city politics.

I am starting to get the feeling that she is not even going to attempt to explain how she hopes to address affordability on this page titled “Make Seattle Affordable for All.”

I am committed to building an alternative to this model of corporate politics. We need political representatives who are independent of corporate cash and corporate parties, who will give voice to the needs and aspirations of working people.

In line with the principles of the political party I represent, Socialist Alternative, I pledged to stay accountable to working people by taking only the average worker’s wage. Seattle City Councilmembers pay themselves $120,000 per year – the second highest amount of any city council in the country. Inevitably, such a salary removes councilmembers from the realities of life for poor and working people.

I only accept $40,000 per year after taxes. This amount is roughly the full-time take-home pay of an average Seattleite. The remainder of my salary goes to a Solidarity Fund to help build social justice movements.

And that’s the end of this page on her site. I am rather curious if she is really living on just $40,000 a year, since the mortgage payment on the house she bought last year and refinanced a few months ago would likely eat up about half of her $3,333 monthly pay. But I digress.

If you click through to the fourth page of the “Issues” section of her campaign website, you finally come to a page titled “Affordable Housing for All.” Maybe we’ll have better luck learning her plan here.

Seattle is facing a severe housing crisis and District 3 is at its epicenter. The for-profit housing model is not working, with big developers and speculators pushing workers and even middle-class families out of the city. Meanwhile, the City Council is working on behalf of big business rather than ordinary renters and homeowners.

This sounds more promising. We’re finally getting to the meat of her plan to “Make Seattle Affordable.” Here is what appears to be the crux of her plan:

  • We need rent control as an immediate step to address the crisis of out-of-control rents. The city council should immediately pass a resolution demanding the state government remove the ban on rent control, and bring a legal challenge to it. Most importantly, tenants, unions, and community organizations need to organize, building for major protests in Olympia to demand an end to the undemocratic state ban.
  • Make big developers pay the maximum “linkage fee” possible to help fund affordable housing.
  • Working and middle-class people need an affordable alternative to the skyrocketing private housing market! The city should provide a public option by building thousands of high–quality, city-owned housing units, rented at below-market rates. This can be financed by selling municipal bonds and making use of currently vacant city land.
  • Seattle needs a Tenants’ Bill of Rights!
    • Tenants should have six months’ advance notice of a major rent increase, rather than the two months currently legally required.
    • Expand relocation assistance to those being economically evicted by out-of-control rent hikes. Tenants should receive the same $3,200 relocation assistance currently available for those evicted due to major construction.
    • Cap security deposits and move-in fees at no more than one month’s rent.
  • Housing is a human right! Fully fund an emergency plan to immediately offer decent shelter for the more than 3,000 homeless people on Seattle’s streets.
  • Mortgage relief for homeowners! Over 16,500 Seattle families have lost their homes to foreclosure since 2008. The city needs to stop dragging its feet and finally implement a principal reduction program for underwater homeowners to keep more families from losing their homes.

I’m not going to go over every one of these points, but I do want to address a few of them.

At the top of her list is rent control—the idea that the government can just dictate a ceiling on rent prices or rent increases. Despite being totally illegal here in Washington State, rent control definitely makes for great hashtags and soundbytes. Unfortunately, economists are near-unanimous in their agreement that rent control does not work. You can read study after study after study after study and they all say more or less the same thing. The really strange thing here is that Sawant has a PhD in Economics. This is something that she should understand better than most people.

Sawant also says that the city should “implement a principal reduction program for underwater homeowners.” This too is a terrible idea. If you took out a mortgage that you can’t afford to pay back, there already exists a “principal reduction program” for you: either sell the home or walk away and give it to the bank. The city should not be in the business of bailing out bad borrowing decisions.

Her plans to improve tenants’ rights and build more homeless shelters both seem relatively reasonable, and will definitely help some people. But it’s her suggestion for “building thousands of housing units” that really comes closest to a solution that would actually help make Seattle more affordable. The housing market is subject to supply and demand. Prices are currently rising sharply because demand is increasing more quickly than supply.

You can solve this basic problem in one of two ways: Decrease demand or increase supply. Building lots and lots of new housing units so that supply can catch up to demand is the only reasonable way to address affordability. Now, I’m not sold on Sawant’s suggestion that these units should be city-owned and “rented at below-market rates,” but she does at least get close to the actual solution to the affordability problem with this proposal.

It doesn’t have the same populist appeal as rent control, but dramatically increasing housing supply is something that would actually work, and if Sawant really wants to “Make Seattle Affordable for All,” that is where she should be focusing her energy.


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

112 comments:

  1. 1
    Dave0 says:

    Great post. I live in District 3. I voted to put her into the City Council, but I’ve regretted it. She has caused more problems than she’s solved. Her stance on Rent Control is a deal-breaker for me; I’ll be voting against her in August.

    I am rather curious if she is really living on just $40,000 a year, since the mortgage payment on the house she bought last year and refinanced a few months ago would likely eat up about half of her $3,333 monthly pay. But I digress.

    Her husband is a software engineer at Microsoft making over $100,000 per year according to this Publicola article, which explains why she can afford to donate so much of her city council salary to the Socialist Alternative.

  2. 2
    The Tim says:

    RE: Dave0 @ 1 – That article on Seattle Met (which was posted in late 2013) also includes an update that says she has stated that she is separated from her husband, so I assumed that he is not paying the mortgage on a house she bought in June 2014.

    However, I did notice just now that according to the property sales history the 2014 Warranty Deed filed with King County lists the buyer name as “Priest Calvin + Sawant Kshama.” Calvin Priest appears to be a major organizer of Sawant’s campaigns. He lists his occupation as “Political Organizer,” on his LinkedIn profile so I doubt he’s making six figures either.

  3. 3
    jeff says:

    She seems to think that bad ideas become good if you put an exclamation point on the end!

  4. 4
    I'm just here so I won't get fined says:

    It’s ironic that the wants to increase linkage fees for developers, which only increases the cost to build thus putting upward pressure on housing costs while at the same time calling for the city to build more housing.

  5. 5
    Tom says:

    I also find it curious that someone with an economics background would think rent control is a good idea. Then again I’ve always been somewhat skeptical of the “science” of economics, at least as taught in the U.S.

    Rent control sounds nice but it only serves to divide the renters into winners (who have landed and held a desirable rent control unit) and losers (who now find it even harder to locate affordable housing) and creates other negative inefficiencies like locking people into an area even if their job changes because they can’t afford to leave their rent-controlled unit and reducing the number of landlords willing to rent due to onerous regulations and the risk of being unable to evict a troublesome tenant.

    Even more obvious that this is a flawed strategy to control housing prices is our real world examples like SF and NY where rent control has resulted in affordable housing for all /s.

    I voted for her the first time around as well but I’m on the fence now. Rent control would be disastrous but there is no way it will ever come to pass anyhow (dead on arrival in Olympia) so it is not a real concern. I do appreciate a further left (certainly further left than me), truly progressive voice in Seattle politics but I want to see more results and less stunts.

  6. 6
    DB McWeeberton says:

    Unfortunately, the words “rent control” have the effect of ending any thoughtful discussion–the Sawants wave it like a red flag and Free Market advocates tell their NY and SF horror stories, and no one ends up talking about real solutions, or talking to each other. Seattle’s tenant “rights” are a joke, and need real reform, and developers should be encouraged to build much more housing for people who aren’t fiscally in the bottom 30% (for tax breaks, or whatever) or the top 5%.

  7. 7
    Rudolfo says:

    I wonder if she will pull a shell game maneuver here.
    Claim rent control on your platform, clearly knowing it is a foolish idea but which resonates as populist. Then implement the city controlled building plan.
    Regardless, this message will likely get her attention and votes – which is the the main objective.

  8. 8
    Matt the Engineer says:

    Thanks for this post. I’ve always thought it suspicious that she’d even bring up rent control, considering her economics background. The fact that she knows better (and I think the PhD makes that a fact, but I could be wrong), implies she has an ulterior motive for the rent control push. The obvious motive would be populist pandering for votes. Which wouldn’t be so bad (hey, she is a politician), except her actions on the Council have been to fight development. That’s where I draw the line – pander and spin all you want, but when your actions are actively making Seattle less affordable you need to go.

  9. 9

    I had no idea she had any college credits of economics. But a PhD!!!! Truly unbelievable.

  10. 10
    Adam says:

    Ultimately the only remedy to the broken housing situation is the increase of supply, but new construction carries with it a host of other environmental and quality of life issues, in addition to only being a temporary remedy. There are an abundance of single family residences which would otherwise be available for purchase if sensible laws were enacted to remove artificial supply constraints.

    1. Prohibit foreign ownership. Saudi oil barons and Foxconn executives squeezing out American families and inflating prices with over market offers does not serve the citizenry at large.
    2. Prohibit corporate ownership. Similar to the above. If the goal is to remedy historically low home ownership, keep homes available to families.
    3. Establish minimum owner occupied percentages per locality.
    4. Establish maximum ownership quantity per individual per county.
    5. Prohibit disclosure of buyer names to seller. Sellers seeing names just keeps ethnic discrimination going. I’m surprised more lawsuits don’t get filed over this already.
    6. Prohibit disclosure of buyer funding source to sellers. Seller is getting the same quantity of money at closing regardless of buyer situation. Seeing the size of the buyer’s down only furthers economic discrimination.
    7. Establish minimum 30 day close. Closely tied to 6.
    8. Prohibit financial institutions from holding vacant properties.

  11. 11

    RE: Adam @ 10 – I’m not sure any of those would do much, but as to the following:

    5. I’ve never had a seller comment on a name. For most people, everyone’s money is green.
    6. Funding is incredibly important to sellers because they want a transaction to close. People with better credit and higher incomes are more likely to be able to fund. And higher down payments allow some buyers to waive or partially waive appraisal provisions.
    7. That’s just absurd, and in some situations might even result in the seller’s house being foreclosed. And the reasons to accept a cash offer go beyond just the faster close date.
    8. If they’re holding a vacant property there’s typically a reason. Maybe repairs are needed. Maybe there’s a redemption period run or some other title issue.

  12. 12
    David says:

    The logic of “investing in desperately needed mass transit” is that
    a better commute encourages people live outside the city and alleviates
    the housing pressure

  13. 13
    Blurtman says:

    Populism does not necessarily equate to being wrong. It is rather condescending to think that the will of the populace is wrong or naive.

  14. 14
    redmondjp says:

    RE: Adam @ 10 – So, Adam, let me get this straight – you are saying that we should prohibit foreign-born tech workers in our area (who typically make far higher than median incomes and can actually afford to buy a house here) from buying houses?

    Personally, I’m concerned about how expensive coffee has become, despite there being a stand on every corner. I’m going to lobby for $1 coffee (oh wait, didn’t McDonalds do that already?).

  15. 15
    jon says:

    Redmondjp, clearly we need coffee control to set a cap on coffee prices, and we should prohibit foreigners from buying American coffee. Just because people come here from around the world and create jobs locally instead of somewhere else doesn’t mean they should drive prices up for us.

    We need to make Seattle more like it was in the good old days in the 1700s 1800s 1900s 1970s

  16. 16
    Erik says:

    The reason I live in Seattle is because poor people can’t afford it. If I wanted to live around poor trashy people, I’d move back to north Everett.

    The only nasty thing I’ve had to deal on alki beach is someone cut the water line to our water fountain. We are pretty sure who did it, a 75 year crotchety old retiree. Much appreciated change from the thieves, child predators, and meth heads in everett. The only thing I regret about moving out of there is that I didn’t leave sooner.

    Actually I’m at whole foods in Seattle as I type this. At the entry way was an ex renter meth head that would beat his 300lb girlfriend. I kicked him out for smoking crack inside my house in north everett.

  17. 17
    dude says:

    Sawant is such a joke. She’s the one that said “workers should take over the factories and shutdown Boeing” and also “use Boeing’s tools to make buses”.
    http://www.kirotv.com/news/news/seattle-city-councilmember-elect-shares-radical-id/nbxbC/

    I live in an apartment building in Central District and find her signs and flyers everywhere. They even went into our basement garage to put them on car’s windshield.

  18. 18

    By Erik @ 16:

    The reason I live in Seattle is because poor people can’t afford it. If I wanted to live around poor trashy people, I’d move back to north Everett.

    That’s funny–that’s the reason I moved out of Seattle. At the time they did nothing to control trashy people. Apparently they have new laws in effect now, but I don’t know how well they enforce them.

  19. 19

    By Blurtman @ 13:

    Populism does not necessarily equate to being wrong. It is rather condescending to think that the will of the populace is wrong or naive.

    Well, it is Seattle, where they voted to construct a monorail. That pretty well fits the definition of wrong and naive. ;-)

  20. 20
    Erik says:

    RE: Kary L. Krismer @ 18
    Maybe Seattle is trashy and I can’t even tell after living in north Everett for six years.

    I was young and full of life when I moved to north Everett. I wasted 6 years there chasing crackheads off my lawn. I wish I could get those years back. I wish someone would have told me to get out. That’s why I am so vocal about that on this site. If I can save one person from moving there, it will be worth my time.

  21. 21
    Rudolfo says:

    By Blurtman @ 13:

    Populism does not necessarily equate to being wrong. It is rather condescending to think that the will of the populace is wrong or naive.

    Correct. But populism is ripe for exploiting, which is the point here.

  22. 22
    Martin Ranger says:

    I have no view on Kshama Sawant, but this attempt at a take-down is rather pathetic. If I did not understand the connection between public transportation and keeping Seattle affordable, I would at the very least cut back on the snark. It is also not entirely clear what the rather unnecessary ad hominem about her earnings and house purchase has to do with her policies. Are you claiming she pockets more money than she claims? That would be a fairly serious allegation and would require, maybe, a bit of evidence, no?
    Now to your statements about rent control. There is a very clear case against rent control. This is well understood and documented, and I am sure any PhD, including Kshama Sawant, will know this. What a PhD, however, might also know (and you and “most people” perhaps don’t), is that none of those studies you linked to perform anything even close to an analysis that rent control “does not work”. To be able to claim that rent control “does not work”, you would first have to define what “working” means in that context. What these studies show is that rent control distorts the market for rental housing and therefore is (Pareto) inefficient in some way or another. If this is your definition of “working”, fine, but efficiency is not a particularly useful measure of welfare. A more appropriate focus, therefore, might be on welfare directly. While a free market (under some circumstances) can maximize welfare, this maximization is subject to the initial endowment. It does not normally lead to an unconstrained welfare maximum. Neither will rent control, but whether it leads to a higher level of welfare or not is not as obvious as you make it sound. Now add externalities and distributional issues, and it becomes even less clear.
    I won’t write much about the foreclosure issue, but foreclosure imposes significant transaction cost, so a “principal reduction program” might actually not be such a bad idea.
    As a rule, I think, it would be more productive to be less condescending about someone else’s views when trying to debate them; especially because your own level of knowledge might not be quite as deep as you think.

  23. 23
    boater says:

    RE: Kary L. Krismer @ 18
    Don’t worry Kary they’re still there. My property manager complains all the time about human feces on the stairs and in the garage at my place on Capitol Hill.

  24. 24
    pfft says:

    By Blurtman @ 13:

    Populism does not necessarily equate to being wrong. It is rather condescending to think that the will of the populace is wrong or naive.

    EXACTLY!

    Also, in the US vs. THEM situation you can always bet that THEM is well represented. People don’t like unions but why can’t regular workers(and people) have representation. Why can’t regular people have someone fighting for them? You can bet that corporations and small business owners have lawyers and lobbyists You don’t think that the Seattle REIC isn’t lawyered up? You think they don’t have an army of lobbyists and interest groups?

  25. 25
    pfft says:

    By David @ 12:

    The logic of “investing in desperately needed mass transit” is that
    a better commute encourages people live outside the city and alleviates
    the housing pressure

    and spending less money on getting to work could allow you to take a better job across town and better be able to afford a house or a rental both because of lower transportation costs and and a better job.

  26. 26
    Jonness says:

    My question to Kshama Sawant is, since you’re running for “re-election,” can you tell me what you did during your last term to keep Seattle house prices affordable? I mean,, they shot up on your watch despite all of your well-intentioned “schemes.”

    It sounds to me like Kshama is living in the wrong town. All she has to do to get everything on her wishlist is to move into a trailer way out in the country. That would give her plenty of time to refresh her memory of what free market economics are and why this country was founded upon their principles.

    But I do have a great idea to contribute. Maybe we could tear down the Space Needle and put a trailer park in its place. But why stop there? We can tear down all of the greedy rich people’s buildings and turn the entire city of Seattle into one gigantic trailer park.

  27. 27
    pfft says:

    By Jonness @ 26:

    refresh her memory of what free market economics are and why this country was founded upon their principles.

    you mean slavery?

    could you clarify what free market economics you are talking about?

    Remember the country was founded on hyperinflation? We by law HAD to use continentals. I only say this because I have a suspicion you are of the Austrian economics persuasion.

  28. 28
    pfft says:

    Hmmmm.

    The economic arguments against rent control are often based on its oldest versions, i.e. strong rent control applied to virtually the entire rental housing supply; in many jurisdictions, rent control has since been reformed, for example adding vacancy decontrol and exempting new construction. “Second-generation rent controls are typically mild and so can be expected to have only modest effects on the housing market… As a result, expert opinion on the effects of modern rent control policies has become increasingly agnostic.

    https://en.wikipedia.org/wiki/Rent_control_in_the_United_States#Arguments_for

  29. 29
    Jonness says:

    By pfft @ 27:

    could you clarify what free market economics you are talking about?

    Let’s get started by kicking out Gates, Allen, and Bezos. Those clowns have no business putting skyscrapers where we aught to be putting more trailer houses.

    We can create a law where building wood and steel structures on permanent foundations is illegal. If it’s not made out of particle board and doesn’t have wheels on it, then it doesn’t come into Seattle. This will ensure everybody can afford to live here. Then we can all quit our jobs, and live off the government. If people insist on working (like Russel Wilson and Richard Sherman because we’ll all need to still see them win Super Bowls on our new big screen TV’s), by law we’ll cap their salaries at $40K per year. This will ensure Seattle forever remains affordable to all of us.

    Hey! Since I’m the guy that thought of it first, I get to have a downtown waterfront trailer with a boat slip. But since you’re not keen on my idea, you’re trailer is going to be placed in South Seattle next to a sewer treatment plant.

  30. 30
    Jonness says:

    By Dave0 @ 1:

    Her husband is a software engineer at Microsoft making over $100,000 per year

    When I was an up-and-coming musician, I survived off of $5K per year without welfare, food stamps, reduced rent, and free giant bricks of government cheese. $40K is a walk in the park. But to be fair, that needs to be combined household income. So if her SO is making more than $40K, he needs to donate the rest, and she needs to work for free. Otherwise, she hasn’t a clue about what living in poverty is all about.

    IMO, her entire campaign is founded upon a disassociated pipe dream.

  31. 31
    Jonness says:

    By Martin Ranger @ 22:

    As a rule, I think, it would be more productive to be less condescending about someone else’s views when trying to debate them; especially because your own level of knowledge might not be quite as deep as you think.

    Touche, but have you taken a look at yourself in the mirror lately?

  32. 32
    Rudolfo says:

    By pfft @ 24:

    By Blurtman @ 13:

    Populism does not necessarily equate to being wrong. It is rather condescending to think that the will of the populace is wrong or naive.

    Why can’t regular people have someone fighting for them? You can bet that corporations and small business owners have lawyers and lobbyists

    They can. I know of no law in the US that states one cannot have someone “fighting for them”.

  33. 33

    Walk the Talk

    She sounds like a politician who spouts out ethics and fairness; but her personal life is “me first” with contradictions galore.

  34. 34
    Martin Ranger says:

    RE: Jonness @ 31 – Absolutely. Condescension breeds condescension.

  35. 35
    Nathan Peterson says:

    RE: Martin Ranger @ 22 – Spoken as if you were Kshama herself (?) Many here have worked with Ph.D’s long enough to know that they’re not always right, and don’t always know what’s best. Many even have the potential to earn a Ph.D. but just didn’t have the time or money to obtain the status. It’s not condescending to passionately disagree with someone, but the fact you’ve chosen that word says quite a bit.

  36. 36
    pfft says:

    By Rudolfo @ 32:

    By pfft @ 24:

    By Blurtman @ 13:

    Populism does not necessarily equate to being wrong. It is rather condescending to think that the will of the populace is wrong or naive.

    Why can’t regular people have someone fighting for them? You can bet that corporations and small business owners have lawyers and lobbyists

    They can. I know of no law in the US that states one cannot have someone “fighting for them”.

    word.

    https://en.wikipedia.org/wiki/Right-to-work_law

    Populism at times is used as an even more evil form of liberalism. As if doing things that appeal to people is wrong. That’s what all politicians do. They are all populists. It smacks of that Mitt Romney article.

    my college kid, the baby sitters, the nails ladies — everybody who’s got the right to vote — they don’t understand what’s going on. I just think if you’re lower income — one, you’re not as educated, two, they don’t understand how it works, they don’t understand how the systems work, they don’t understand the impact.

    Actually lower income people know exactly how the system works. You work for rich people and get peanuts!

    http://www.theatlantic.com/politics/archive/2012/07/the-best-quotes-from-guests-at-romneys-hamptons-fundraisers/259554/

  37. 37
    Scotsman says:

    Her ideas have nothing to do with reality- don’t get suckered in. It’s all about the hash tag and the sound bite- nothing more. That she has a PhD in economics and continues to spout this crap should tell you everything you need to know.

  38. 38

    While I’m not a fan of Kshama Sawant, and think she’s nuts, I do want to address a couple of points.
    1. Whether rent control “works” depends on where your place is. If you invest in real estate, or are a landlord, or someone looking to move to Seattle, it doesn’t work because supply is diminished: New apartment buildings aren’t going to be built if the landlord’s are severely restricted on how much they can charge for rent.
    But on the other hand, if you are an existing tenant in a building, rent control can be a godsend.
    Rents are going crazy in Seattle, the increases from five years ago are astounding. Maybe we’ve seen a bit of increase in the median income over the last five years, but not anywhere close to the rate of the rising rents.
    There used to be a large variety of apartments available in Seattle if you made the median income.
    Not so much anymore.
    If you don’t care about a large chunk of the population who already live here, then let the market find a solution. But I’m not convinced that by letting the market decide, it will benefit existing tenants. Oh, sure, they’ll build more apartments, and at some point there will be an economic downturn. But the way the tax system works, with generous allowances for owning rental property, cushions landlords to a great extent. I’m just guessing here, but I’d wager that in times of recession, etc, rents have never fallen as high(in percentage) as home prices have. It’s good to be a landlord. When times are bad, people are losing their houses and need a place to rent. When times are good, more people are moving into town, and need a place to rent.
    I think rent control could work, if done right. You’d have to allow for landlords to increase rents from renovation fairly generously, and with inflation. But I don’t think it’s going to happen in Seattle. The majority of the Seattle city council may be liberal, but they’re of the corporatist-capitalist variety.

    Speaking of capitalism, the Tim was looking for examples of how Seattle elected officials are subsidizing billionaire developers?
    It’s not a direct subsidy. They’re upgrading the infrastructure to make the neighborhoods/buildings more attractive. They out in streetcar lines. It’s less about providing transportation, and more about ensuring that property values rise disproportionately. And that’s how it’s connected to Bertha.
    Tearing down the viaduct was enthusiastically supported by a coalition of developers and business interests, who convinced everyone else that opening up the view would be such a benefit.. The value of property along the central waterfront is going to become stratospheric when the viaduct eventually comes down. That’s a lot of taxpayer money going to benefit a select few.
    The Mayor wants to add 50,000 new housing units over the next ten years, something that has never been done before here. They’re already building apartments like crazy within Seattle, but that doesn’t seem to have had much effect on rents(yet). There is a linkage fee in Seattle, a tax on developers for affordable housing. There is a group opposed to that linkage tax, made up of developers and the Downtown Seattle Association, called the Coalition for Housing Solutions. They may end up getting their way.
    Kshama Sawant may not represent the majority of the council, or the citizens. But there are a lot of people within the city who make less than the median income, and don’t want to have to downsize from a 1000 ft apartment to a 400 ft apartment for the same rent, because density is good. Good for developers who want to build apartments. But not necessarily good for the existing people who live there.

  39. 39
    mukoh says:

    We need to also implement control on everything:

    BMW should be a right, as well as Ferrari. We need to make it affordable for everyone.
    City should get free cars from manufacturers and give it to anyone needing one. Can float a few bonds on that.
    Clothes being a right not a privilege should be no more then $20 for Burberry jeans and shoes from Nordstrom should all be cost adjusted for anyone being able to afford it with even a minimum wage.
    Counsel members should decide who to distribute things to of need, starbucks cards for all.

  40. 40
    pfft says:

    Except for rent control(we don’t know what she is proposing), most of her ideas are what the democratic party and many Americans believe nationally. A higher min wage is not controversial.

  41. 41
    pfft says:

    By mukoh @ 39:

    We need to also implement control on everything:

    BMW should be a right, as well as Ferrari.

    it’s pretty sad you are mocking homelessness and poverty. often putting people in homes is a lot less expensive than shelters.

    Do you know that a lot of homeless people are vets? I guess you don’t want to do anything about homelessness?

    Nobody said people would get mansions.

    Are you against the mortgage interest deduction?

  42. 42

    By pfft @ 40:

    Except for rent control(we don’t know what she is proposing), most of her ideas are what the democratic party and many Americans believe nationally. A higher min wage is not controversial.

    A, yes it is. And like rent control, at $15 it doesn’t work and is only good for the lucky few. And if she has a PhD in economics, she knows that, but just doesn’t care that she’ll hurt a lot of people. Getting reelected is more important.

  43. 43
    mukoh says:

    RE: pfft @ 41 – In which one of my “fair” proposals did I mock homelessness?

    I am against any deductions. :) I am for flat tax.

    Love the idea though of passing the buck from businesses who concentrate on making sure output is more then the input to accommodate the such market based proposals as rent control, minimum wage being determined not by output of the earner but by a counsel member.
    Then we can move to more fair proposals that a developer has to donate part of property to the city to accommodate people living in a market area that can’t afford it just because they lack skills, education, personal habits, neck tattoos, majored in history of native culture, and can’t get a job for some reason.

    No sarcasm.

  44. 44
    pfft says:

    By Kary L. Krismer @ 42:

    By pfft @ 40:

    Except for rent control(we don’t know what she is proposing), most of her ideas are what the democratic party and many Americans believe nationally. A higher min wage is not controversial.

    A, yes it is. And like rent control, at $15 it doesn’t work and is only good for the lucky few. And if she has a PhD in economics, she knows that, but just doesn’t care that she’ll hurt a lot of people. Getting reelected is more important.

    links to studies kary. links. most studies show the min wage has a positive affect.

  45. 45
    pfft says:

    By mukoh @ 43:

    RE: pfft @ 41 – In which one of my “fair” proposals did I mock homelessness?

    I am against any deductions. :) I am for flat tax.

    Love the idea though of passing the buck from businesses who concentrate on making sure output is more then the input to accommodate the such market based proposals as rent control, minimum wage being determined not by output of the earner but by a counsel member.
    Then we can move to more fair proposals that a developer has to donate part of property to the city to accommodate people living in a market area that can’t afford it just because they lack skills, education, personal habits, neck tattoos, majored in history of native culture, and can’t get a job for some reason.

    No sarcasm.

    hey we’ve moved on to make fun of native americans too!

    “minimum wage being determined not by output of the earner but by a counsel member.”

    and those opinions are based on academic research that says a min wage will be mostly positive.

    I guess all of a sudden and out of the blue people can’t afford homes because they are stupid?

    btw a flat a tax is a terrible idea as it shifts the tax burden from the rich to the poor.

  46. 46
    jon says:

    https://www.cbo.gov/publication/44995

    “Raising the minimum wage would increase family income for many low-wage workers, moving some of them out of poverty. But some jobs for low-wage workers would probably be eliminated and the income of those workers would fall substantially.”

    ” the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects ”

    “Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.”

  47. 47
    David B. says:

    RE: Adam @ 10 – Minimum owner-occupied percentages are an absolutely terrible idea. They basically tell anyone who cannot afford a home: “take a hike, Seattle is for the affluent only and not your sort.”

  48. 48
    David B. says:

    RE: pfft @ 44 – “links to studies kary. links. most studies show the min wage has a positive affect. ”

    That’s impossible, given that he claimed “at $15 it doesn’t work” and it hasn’t even been fully implemented yet, so we honestly can’t say one way or another yet. Kary’s claim was about the demonstrated effects of a law that was fully implemented, not about academic studies and forecasts about such a law.

  49. 49
    The Kraken says:

    This probably was a rhetorical question:
    By pfft @ 41:

    Are you against the mortgage interest deduction?

    I hope they are. To me it appears to be regressive (the more house you can buy, the more of a deduction you get to take), to distort (raises) housing prices, and to encourage people to expose themselves to more risk through leverage. All things that I wouldn’t wish for the middle or lower classes.

    With interest rates so low, it would be a great time to end, or start reducing it.

  50. 50

    By David B. @ 48:

    RE: pfft @ 44 – “links to studies kary. links. most studies show the min wage has a positive affect. ”

    That’s impossible, given that he claimed “at $15 it doesn’t work” and it hasn’t even been fully implemented yet, so we honestly can’t say one way or another yet. Kary’s claim was about the demonstrated effects of a law that was fully implemented, not about academic studies and forecasts about such a law.

    In addition, most the studies I’ve seen have been in the Silicon Valley, which has a booming economy where the minimum wages has little impact. Also, they’re likely studies with a pre-determined conclusion.

    But you’re getting into an area pfft doesn’t understand. For example, he repeatedly has demonstrated no ability to understand that Obamacare was only about 98% fully implemented just 18 months ago, and before that it was only about half implemented because the individual mandate had not yet kicked in.

  51. 51

    By Ira Sacharoff @ 38:

    But on the other hand, if you are an existing tenant in a building, rent control can be a godsend.. . . But I’m not convinced that by letting the market decide, it will benefit existing tenants.

    I don’t think anyone disputes the fact that tenants whose rents get restricted will benefit. It’s the side effects of the program that cause harm. For example, people with a rent controlled apartment may be less likely to give it up, effectively reducing the supply. Or they may do some sub-letting that might otherwise not be allowed. And of course there’s the main concern that fewer units will be built in the future due to rent controls.

    It’s very similar to the minimum wage. Yes some people will benefit, but many will be hurt.

  52. 52
    David B. says:

    Rent control tends to be blamed (particularly by landlords) for more harm than it actually does. A classic example is blaming rent control for housing shortages, when virtually all real-world examples of rent control exclude new construction precisely to avoid acting as a disincentive to same. Zoning is typically the biggest hurdle to housing creation in an existing urbanized areas (zoning codes typically have maximum densities and not minimum ones, housing tends to be constructed at or near allowed maximums, so built-up areas can’t easily densify).

    While rent control’s harm tends to be exaggerated, its benefits also seem exaggerated. The examples of cities that have instituted rent control point to it not being very effective at promoting housing affordability. San Francisco and the other California cities which have it are not precisely known for being affordable places in which to rent. Neither is New York City. All those places started out expensive, got rent control, and stayed expensive.

    Rent control also doesn’t allocate housing based on actual need. For many years, Milton and Rose Friedman (yes, that Milton Friedman) paid low rent on their luxury SF apartment simply because it was in an older building and thus rent controlled (and they had been there for a long time). Meanwhile, new middle class and working residents were paying far more rent for far smaller apartments, despite having less disposable income to spend, because their tenancies began recently (or they were in newer buildings exempt from rent control).

    I’ve heard intriguing things about rent control in Vienna, Austria, which manages to avoid some of these issues by virtue of there being significant local government involvement in housing construction (it acquires the land, and leases it to private developers to develop into apartments, at a profit, but subject to rent caps). That also requires significant government spending, and would require butting heads with the NIMBY crowd who wants Seattle to stay mostly suburban in character. Do that, and add some sort of income qualifications, and rent control starts to look sensible.

    I don’t think Sawant is currently proposing anything like that, however. I think she’s proposing SF-style rent caps.

  53. 53

    By David B. @ 52:

    Rent control tends to be blamed (particularly by landlords) for more harm than it actually does. A classic example is blaming rent control for housing shortages, when virtually all real-world examples of rent control exclude new construction precisely to avoid acting as a disincentive to same.

    There’s two sides to shortages. I mentioned the one of people staying in a rent controlled apartment longer than they would otherwise, just because they don’t want to give it up. That causes shortages.

    But on exempting new construction, unless the new construction is exempted completely and forever, it will still deter construction.

  54. 54
    dale allen says:

    Kswama Sawant is nothing more than a publicity hound.What has she accomplished ,nothing.She didn’t help run Shell out of town.They left when the said they would.She takes credit for the $15 dollar min.wage.The problem with that is that there were 2 plans.One was the mayor’s,one was Sawant’s.The plan that is currently in place is the mayor’s not Sawant’s

  55. 55
    Alex Reynolds says:

    Whatever the answer is, simply letting developers and their investors keep doing what they are doing — building up high-priced, high-density housing — clearly doesn’t seem to be working well for the city, or we (as a city) wouldn’t be having this discussion over and over again.

    That kind of build-up doesn’t seem to encourage positive economic growth, beyond allowing the Amazon monoculture to become a bigger weak point for the city’s economy, and it doesn’t seem to be a plan that maintains, let alone improves quality of life for current denizens.

    I guess we can keep badmouthing that socialist Sawant and her crazy socialist rent control schemes, but where are the real-world suggestions for alternatives that can allow this city to grow in a rational, non-bubble manner? I don’t see that from the critics — just more of the status quo that has gotten us in this mess.

  56. 56
    Mike says:

    By Jonness @ 30:

    By Dave0 @ 1:

    Her husband is a software engineer at Microsoft making over $100,000 per year

    When I was an up-and-coming musician, I survived off of $5K per year without welfare, food stamps, reduced rent, and free giant bricks of government cheese. $40K is a walk in the park. But to be fair, that needs to be combined household income. So if her SO is making more than $40K, he needs to donate the rest, and she needs to work for free. Otherwise, she hasn’t a clue about what living in poverty is all about.

    IMO, her entire campaign is founded upon a disassociated pipe dream.

    Misogyny! Sexism! You’re basically calling her a bored housewife political activist! (Despite all of her hard work to avoid that label)

    Regardless, you’re right. If she wants to make her personal income part of her platform, it’s fair to be skeptical.

  57. 57

    The whole city and surrounding metropolitan area has become unaffordable for anyone making under six figures unless they have cash from mega-bonuses, shady investment cash (cough — China), retirement savings or have a home already. Period — end of story. The entire planet is experiencing this.

    When the IMF starts warning that the pitchforks are coming unless something is done — you know we are in for a world of hurt and the IMF just released commentary and reports on this very fact.

    Is there a bubble — yes!

  58. 58

    By Alex Reynolds @ 55:

    Whatever the answer is, simply letting developers and their investors keep doing what they are doing — building up high-priced, high-density housing — clearly doesn’t seem to be working well for the city, or we (as a city) wouldn’t be having this discussion over and over again.

    The problem is it takes a long time to build housing, so things get out of balance. And note things get out of balance both directions, but no one really gets all excited when landlords have high vacancy rates and have to offer incentives to get new tenants. But the swings happen with surprising frequency.

    I really don’t think there’s much of a solution to housing talking so long to build, except perhaps speeding up permitting, and I’m not sure that’s a good idea.

  59. 59

    This is the type of nonsense you get out of Seattle City government. Apparently the mayor doesn’t realize that some men apparently were poorly raised and never trained to lift a toilet seat before using a public restroom. So now women will have to clean seat/use ass gasket just so that transgender people can comfortably use the type of restroom that they were already most comfortable using (assuming they have such issues). Talk about a solution looking for a problem to solve.

    http://www.kirotv.com/news/news/mayor-introduces-new-legislation-requiring-all-gen/nmkRW/

  60. 60
    boater says:

    The rapidity of the change is what’s getting everyone up in arms and doing the damage.
    In more gradual times developers would have seen vacancy rates head near zero and built housing at the top end of the market to absorb capacity like they are doing currently. What’s different this time is we had a huge deficit of apartments brought on by the 2000s housing boom artificially pushing folks into SFHs and making apartment building extremely unattractive.

    Now we have a booming economy, lots of new residents and a compressed timeframe. I suspect the best solution is to plan on handing out rent subsidies for the next ten years while easing apartment building requirements so things can get closer to equalibrium.

    I’m not sure how to get a developer to develop mid-low range apartments unless you do something like allow 3 extra floors but cap rental prices for the building which they do to some extent now.

  61. 61
    David B. says:

    RE: Kary L. Krismer @ 53 – “But on exempting new construction, unless the new construction is exempted completely and forever, it will still deter construction. ”

    I doubt it has to be “completely and forever”. Regardless, in California by state law new construction is exempted completely and forever. What’s stopping new housing in places like SF is zoning and the (extremely difficult) permits process, not rent control.

    Both rent control and home ownership facilitate the presence of shortage-inducing zoning policies, because they allow current residents (the only ones with standing to vote for the politicians writing laws) to be shielded from the price consequences of the restrictive laws they advocate.

    I don’t think the housing affordability crisis in California (and Seattle if Seattle follows California’s footsteps as it seems to be doing) will be solved unless there’s a Federal-level inheritance tax that does not exclude housing except for an allowance based on nationwide median prices. When existing homeowners’ children will face getting priced out of their cities (because they can’t inherit a home from their parents), then there will be some motive for existing residents to rethink the policies they advocate. For the same reason, it’s a bad idea to let a rent control tenancy roll over to children, too (this is presently being proposed in SF).

  62. 62

    RE: David B. @ 61

    The Answer is Simple

    Leave the area like they’re doing in the NE states in droves. Once the people leave, we’ll have to start housing all over again at normal national prices. Oh, that’s right Seattle is so special. It doesn’t sound special based on the blogs above…

    Maybe we can trim a Boeing or MSFT off our clogged freeways that way.

  63. 63
    pfft says:

    By jon @ 46:

    https://www.cbo.gov/publication/44995

    “Raising the minimum wage would increase family income for many low-wage workers, moving some of them out of poverty. But some jobs for low-wage workers would probably be eliminated and the income of those workers would fall substantially.”

    ” the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects ”

    “Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.”

    the CBO used an old methodology. almost all studies show that increasing the min wage will have a neutral to small positive effect on employment

  64. 64
    pfft says:

    By Alex Reynolds @ 55:

    Whatever the answer is, simply letting developers and their investors keep doing what they are doing — building up high-priced, high-density housing — clearly doesn’t seem to be working well for the city, or we (as a city) wouldn’t be having this discussion over and over again.

    That kind of build-up doesn’t seem to encourage positive economic growth, beyond allowing the Amazon monoculture to become a bigger weak point for the city’s economy, and it doesn’t seem to be a plan that maintains, let alone improves quality of life for current denizens.

    I guess we can keep badmouthing that socialist Sawant and her crazy socialist rent control schemes, but where are the real-world suggestions for alternatives that can allow this city to grow in a rational, non-bubble manner? I don’t see that from the critics — just more of the status quo that has gotten us in this mess.

    exactly. Developers aren’t going to develop low-income housing unless they have too. they build luxury condos and mcmansions because that is where the money is. the poor can’t afford those. so how is low income housing going to be built? we’ll just get a oversupply of luxury units. are we supposed to wait until they build so much luxury housing that luxury becomes affordable for low-income people? In NY apartments have been converted to safety deposit boxes.

    America’s Housing Developers Are Almost Exclusively Building Luxury Units
    http://thinkprogress.org/economy/2015/05/22/3662239/luxury-housing-80-percent-developers/

    http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign-wealth-flows-to-time-warner-condos.html?_r=0

    Let’s also not forget race. people don’t want section 8 housing or low-income housing projects in their suburbs. they moved to get away from black people and low income people.

  65. 65
    pfft says:

    The Troubling Fine Print In The Claim That Raising The Minimum Wage Will Cost Jobs
    http://thinkprogress.org/economy/2014/02/19/3307661/cbo-minimum-wage-methodology/

  66. 66
    pfft says:

    I was just thinking…housing is only affordable where you don’t want to live and it’s only affordable because you don’t want to live there.

  67. 67

    RE: pfft @ 66
    Yes Pfft

    I do hope this irrational exuberance in Seattle goes on for some time, even though I logically oppose it. I sound like a typical politician now….LOL.

    High priced real estate pumped up taxes that benefits my family member, who as an adult, depends on social supports….Republican Kansas and no ACA “watered down” Medicaid to the masses keeps the poor folks out of that state and real estate super low [my kind of retirement]. But alas Pfft, I won’t be moving soon, I’m a case manager father and my Blue Cross beats the evolution to Medicaid’s walk-in clinics with only nurses and aspirin.

    Stay tuned to the next chapter in the Seattle Bubble, it may surprise everyone how fast change happens to our neighborhood. Do I pay my fair share towards taxes? Hades no, I live like a selfish investor, hoarding money, socking cash away and staying out of debt…but yes, a family member still benefits from the $500K+ homes.

  68. 68
    Matt the Engineer says:

    RE: pfft @ 64 – Remember that this is a macroeconomic problem. Looking only at the new units ignores what happens overall. Each unit added – at any price point – allows one more household to live here. That household looking for a high-end unit won’t just go away if they don’t find one – they’ll just rent/buy something cheaper. And on down the line until the person that could barely afford a place is displaced.

  69. 69
    jon says:

    The historical way that affordable housing has been obtained is when buildings get older and less attractive to high income people, multiple families move in to the old large houses or apartments. Laws are written now to prevent that, in order to keep “those people” out of good neighborhoods. The alternative, of providing new construction to house low income people is begging for resentment, resistance, and graft.

    Sawant’s plan to steal from the property owners to give to the renters has already been proven not to work past the initial euphoria. There is no easy answer.

  70. 70
    redmondjp says:

    RE: jon @ 69 – Exactly correct!

    Yesterday’s mansions used to be turned into today’s boarding houses.

    This pattern has been repeated in every major city in this country as the rich died off and/or moved to the ‘burbs.

    But now, those pesky city planners have banned this in many places, which restricts supply. But there are ways around this – here on the Eastside, married H1Bs buy a large house, and then before you know it, their parents (seemingly in the cover of darkness) have moved in. Then, the kids come. So three generations under the same roof. Very efficient use of housing space, and one that us Americans don’t often want to do.

    Divorce has also caused a much less efficient use of housing stock in this country as well. Maybe we could ban divorce and force couples to stay together under the same roof!

  71. 71
    pfft says:

    By jon @ 69:

    The historical way that affordable housing has been obtained is when buildings get older and less attractive to high income people, multiple families move in to the old large houses or apartments. Laws are written now to prevent that, in order to keep “those people” out of good neighborhoods. The alternative, of providing new construction to house low income people is begging for resentment, resistance, and graft.

    Sawant’s plan to steal from the property owners to give to the renters has already been proven not to work past the initial euphoria. There is no easy answer.

    the only way to do this is for the government to build low-income affordable housing. the government has been trying to do this in many areas and has run into problems that you cite. today the supreme court ruled on just this issue.

    Supreme Court upholds housing discrimination law
    http://www.usatoday.com/story/news/nation/2015/06/25/supreme-court-housing-discrimination/26097319/

    The Texas case involved a decision by Dallas officials to make most federal low-income housing vouchers available in poor, minority neighborhoods rather than majority-white suburbs.

    http://www.usatoday.com/story/news/nation/2015/06/25/supreme-court-housing-discrimination/26097319/

  72. 72
    pfft says:

    By redmondjp @ 70:

    RE: jon @ 69

    But now, those pesky city planners have banned this in many places, which restricts supply.

    it’s by design. it’s to keep poor and black residents out, it’s not pesky city planners.

    it’s not a bug it’s a feature.

  73. 73

    By pfft @ 64:

    exactly. Developers aren’t going to develop low-income housing unless they have too. they build luxury condos and mcmansions because that is where the money is. the poor can’t afford those. so how is low income housing going to be built?

    There are a lot of income tax incentives for building low income housing. It happens on a huge scale.

  74. 74
    pfft says:

    By Kary L. Krismer @ 73:

    By pfft @ 64:

    exactly. Developers aren’t going to develop low-income housing unless they have too. they build luxury condos and mcmansions because that is where the money is. the poor can’t afford those. so how is low income housing going to be built?

    There are a lot of income tax incentives for building low income housing. It happens on a huge scale.

    see my link above about how the majority of new construction is luxury housing. plus if people don’t want it in their neighborhood because of things like racism that can artificially reduce supply.

    if there is no political will for low income housing then you will have no tax breaks or a small tax break program.

  75. 75

    By pfft @ 74:

    if there is no political will for low income housing then you will have no tax breaks or a small tax break program.

    Is there any limit to the things you don’t know squat about?

    http://www.huduser.org/portal/datasets/lihtc.html

    https://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credit

  76. 76
    jon says:

    There are different meanings of affordable housing: housing for people who cannot afford any place to live versus housing for people who can no longer afford a pleasant apartment because they are competing with Amazon employees. The problems are different and so the solutions will be different. HUD is not intended to help people displaced by tech geeks. A bunch of baristas would be happy to share some large old house, but they can’t because they aren’t related. Maybe the solution is to redefine a family to include all people living together. Everyone is self-identifying these days anyway.

  77. 77
    pfft says:

    By Kary L. Krismer @ 75:

    By pfft @ 74:

    if there is no political will for low income housing then you will have no tax breaks or a small tax break program.

    Is there any limit to the things you don’t know squat about?

    http://www.huduser.org/portal/datasets/lihtc.html

    https://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credit

    can you honestly be this dense? READ WHAT I WROTE! Did you also not see what I linked above?

  78. 78

    RE: pfft @ 77 -Yes, something you said about something else proves you were not wrong about the topic I was discussing and quoted you on. /s

  79. 79
    Jonness says:

    By Mike @ 56:

    Misogyny! Sexism! You’re basically calling her a bored housewife political activist! (Despite all of her hard work to avoid that label)

    I like the way you put it better than the way I put it. It seems a lot more accurate in that form!

  80. 80
    redmondjp says:

    Well let’s borrow another great idea from our big sister city in CA: renting out a tent in your back yard!

    http://sanfrancisco.cbslocal.com/2015/06/24/mountain-view-man-renting-small-tent-near-google-for-nearly-1000-per-month/

    Perfect for those working in the Amazon, don’t you think?

  81. 81
    Matt the Engineer says:

    Hey, I just paid $100 to go “glamping” in a tent in North Bend. I’m completely expecting to see tents on AirBnB in Seattle backyards any day now.

  82. 82
    mukoh says:

    RE: Kary L. Krismer @ 78 – Pfft knows nothing about the economics of HUD programs or how they work. The requirements are horrendous for a developer to build HUD projects, rent out at least 30% of the units below the market, and be forced to do it for at least 3 years. The returns are ok, however with rates on normal housing it is not economically worth while.

  83. 83
    pfft says:

    By mukoh @ 82:

    RE: Kary L. Krismer @ 78 – Pfft knows nothing about the economics of HUD programs or how they work. The requirements are horrendous for a developer to build HUD projects, rent out at least 30% of the units below the market, and be forced to do it for at least 3 years. The returns are ok, however with rates on normal housing it is not economically worth while.

    I don’t really follow. what are you disputing?

  84. 84

    RE: mukoh @ 82 – They are mainly done for the tax benefits, not the returns.

    Note though the required stay might end up longer than advertised. I once had a bankruptcy estate that owned a FHMA project and they kept extending the time that it had to be held!

  85. 85
  86. 86

    RE: Irrational Exhuberance @ 57

    Yes Irrational Exuberance

    Snippet:

    “….Loss of the bank funding is a big blow for Boeing, which utilizes the loan guarantees to reduce the cost of selling aircraft to some international customers. Ex-Im is often called “the Boeing bank,” because more than half of the transactions are for Boeing aircraft. The Ex-Im loss could affect Boeing’s ability to compete against Airbus….”

    http://www.bizjournals.com/seattle/news/2015/06/26/big-blow-for-boeing-as-congress-allows-ex-im-bank.html?ana=yahoo

    Boeing is hit hard when IMF funding is shut off too. Ask Senator Cantwell.

  87. 87

    RE: jon @ 76

    There’s One Big Problem With Sharing a Kitchen

    The mooch eats all the food and doesn’t contribute. Some of my friends were sharing apartments and they opened the refrigerator….an orange and a yogurt was all it contained, they ate most meals fast food. I knew one cohabitant and he put a lock on his bedroom door and installed a small refrigerator [locked up when he was gone].

  88. 88
    Deerhawke says:

    We started on rent control.

    There are a tremendous number of studies on the topic to show that it does not achieve the benefits/goals intended for it and creates huge inefficiencies in the provision of housing. It is not just that you are taking money from one group of people and giving it to another group of people (which does happen with rent control). You also get a great deal of what economists call dead weight loss. This is a situation in which no one wins and everyone loses.

    From the late 60’s onward, the city of New York became the largest landlord in the country as landlords stopped paying property taxes, stopped maintaining their buildings and then just walked away from their buildings. (Worse yet, many decided to try to collect on their insurance by hiring arsonists to burn them down.)

    Anyone who has taken even a few courses in economics is acquainted with the literature and the cases. It is the one topic in economics that is so well researched and so thoroughly documented that there is virtual unanimity about the topic of rent control among economists.

    Swedish economist Assar Lindbeck famously wrote that, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.” That quote says it all.

    Sawant is an ideologue who spouts the party line, but she could not make a realistic economic case for rent control if she tried. Her real long-term goal is creating more socialist true believers. Her short term goal is winning elections.

    I think there is basically zero chance that the city council will be able to do much about rent control, because it is prohibited by state law which trumps. So it is an easy thing to say you are for, since you know it won’t happen.

    Cynical? Sure. But it seems effective.

  89. 89
    Deerhawke says:

    The more dangerous idea that the city council is playing with is linkage fees or transfer taxes. It is advertised as a robin hood tax. Tax the rich/bad developer to pay for nice housing for nice poor people.

    But what really happens is that you tax the efficient developer/builder to pay the really really inefficient affordable housing lobby.

    Builders have to be thrifty or they don’t make a living.

    The affordable housing groups on the other hand, have no incentive to be thrifty. That is why they create “affordable” housing at $450 per square foot.

    When you dig into how much it costs to create an affordable unit in this city, you would be shocked by the swamp of waste. It makes Pentagon contracting look good.

  90. 90
    pfft says:

    By Deerhawke @ 88:

    Sawant is an ideologue who spouts the party line, but she could not make a realistic economic case for rent control if she tried. Her real long-term goal is creating more socialist true believers. Her short term goal is winning elections.

    you don’t even know what she is going to propose so how do you know it doesn’t work?

    did you miss the quote above where it said newer

    “Her real long-term goal is creating more socialist true believers.”

    Oh god not that! anything but that. we need more of the capitalistic thinking that led to the housing bubble! Bank fraud. Banks lobbying to take more risk. Lenders and their non-doc loans. financially engineering “AAA” mortgages. capitalism baby! we can then have Greenspan telling how everything is fine the market will self-regulate.

  91. 91
    pfft says:

    By Deerhawke @ 89:

    The more dangerous idea that the city council is playing with is linkage fees or transfer taxes. It is advertised as a robin hood tax. Tax the rich/bad developer to pay for nice housing for nice poor people.

    But what really happens is that you tax the efficient developer/builder to pay the really really inefficient affordable housing lobby.

    Builders have to be thrifty or they don’t make a living.

    The affordable housing groups on the other hand, have no incentive to be thrifty. That is why they create “affordable” housing at $450 per square foot.

    When you dig into how much it costs to create an affordable unit in this city, you would be shocked by the swamp of waste. It makes Pentagon contracting look good.

    there is a market failure. it’s much more profitable for builders to build luxury housing so they build that. the problem is regular people need housing too. cites just say while you are at it build some affordable housing/units too. builders and landlords get plenty of tax breaks for their businesses. why can’t we get some affordable housing out of it?

    “Builders have to be thrifty or they don’t make a living.”

    right. all of those thrifty builders who built the last housing bubble. where did get the idea that affordable housing groups don’t have to be thrifty? they often are on the ground so to speak and operating on shoestring budgets. they are trying to help as many people are possible with sometimes not enough money.

    I wonder who are all those people riding around in $50,000 “work” trucks purchased with the help of a tax break?

  92. 92
    m-s says:

    Well, OK. I have heard a lot about what won’t work. Does anyone have a suggestion as to what will? Rent control? (Nope, inefficient!). Linkage fees? (Nope, insidious!). Build more high rise? (Nope, nope, takes too long, and NIMBY!). Wait for a crash? (Nope, everybody will be poor then!). Earthquake? (Nope, all the surviving housing stock will be too expensive, after fixing it up!). Move to S. King, N. Everett, or Bellingham? (Nope, nope, nope, there’s no transit and we won’t build more, and besides, who wants to live there!)

    I’d like all those Nopers to just admit; people who make less than the median salary will not be living in Western Washington anymore. Then we can discuss the consequences of that. They aren’t appealing.

  93. 93
    boater says:

    By m-s @ 92:

    Build more high rise? (Nope, nope, takes too long, and NIMBY!)

    I still think this actually can work and is probably the only solution that can over a longer term but if you need a solution tomorrow that will suddenly create affordable housing stock I can offer a couple suggestions. Remove or raise the cap on unrelated family members living in a house. That and allow by default ADU’s on all lots. Come up with some pre approved building plans that will allow folks to easily and quickly get them put in their yards.

    By m-s @ 92:

    Move to S. King, N. Everett, or Bellingham? (Nope, nope, nope, there’s no transit and we won’t build more, and besides, who wants to live there!)

    You can commute from Federal Way to Seattle. Nothing stopping you and my family members have done it for decades. The commute time sucks but you don’t even need to go that far south to find affordable housing in King county. You do have to leave the hot parts of Seattle but the fall off on prices is pretty quick as you move south.

    By m-s @ 92:

    I’d like all those Nopers to just admit; people who make less than the median salary will not be living in Western Washington anymore. Then we can discuss the consequences of that. They aren’t appealing.

    People who make less than the median will not be able to live in the popular areas of Seattle.

  94. 94
    m-s says:

    Fair enough, and an honest assessment.
    In my family, there are some whom I wish were unrelated ;)

  95. 95
    Rudolfo says:

    RE: m-s @ 92

    If the solution was easy, it wouldn’t be the long-term topic of discussion by smart people that it has been.

  96. 96
    pfft says:

    One answer is for the government to build affordable housing.

    Another answer is to tax homes and condos that aren’t lived in:

    Don’t Let Rich People Own Apartments They Don’t Live In
    http://gawker.com/dont-let-rich-people-own-apartments-they-dont-live-in-1621527767

  97. 97
    boater says:

    By pfft @ 96:

    One answer is for the government to build affordable housing.

    Another answer is to tax homes and condos that aren’t lived in:

    Don’t Let Rich People Own Apartments They Don’t Live In
    http://gawker.com/dont-let-rich-people-own-apartments-they-dont-live-in-1621527767

    Come on what percentage of Seattle’s housing stock do you really believe is sitting vacant? And in what end of the spectrum?

    I seriously doubt it’s enough to impact the market for anything other than the very high end. We don’t have the rent control problem NY is dealing with perversely driving construction of ultra high net worth housing stock. The apartments being built in Seattle are being occupied. Someone else here can tell me if we have a massive condo boom but to my knowledge it doesnt exist.

    What little out of state / country vacant homes we have are essentially just providing tax dollars and using no resources.

    All you’ve done is engaged in irrelevant class warfare.

  98. 98

    RE: boater @ 97 – What? You don’t believe that if we followed pfft’s proposal that below median income earners would suddenly find themselves living in condos which used to be worth over $1,000,000? /s

  99. 99
    pfft says:

    By Kary L. Krismer @ 98:

    RE: boater @ 97 – What? You don’t believe that if we followed pfft’s proposal that below median income earners would suddenly find themselves living in condos which used to be worth over $1,000,000? /s

    never said that. maybe your memory is bad?:)

    critics would say of my proposal(or more accurately half of my proposal) that this will hurt housing prices…which is what we want! Hoarding unoccupied condos during a housing shortage is like hoarding water during a drought!

  100. 100
    boater says:

    By pfft @ 99:

    By Kary L. Krismer @ 98:

    RE: boater @ 97 – What? You don’t believe that if we followed pfft’s proposal that below median income earners would suddenly find themselves living in condos which used to be worth over $1,000,000? /s

    never said that. maybe your memory is bad?:)

    critics would say of my proposal(or more accurately half of my proposal) that this will hurt housing prices…which is what we want! Hoarding unoccupied condos during a housing shortage is like hoarding water during a drought!

    If you count me as a critic I would say it will have zero effect on housing prices. There are plenty of millionaires around Seattle and keeping a few external millionaires out will have almost no effect on the ultra high end of the market and no effect on the affordable end.

    We are in a short term problem. The massive drop off in apartment building from 2005-2008 due to inflated home buying followed by limited lending and then a sudden recovery of the tech market in Seattle has lead to a massive shortage in apartments. That’s pretty rapidly being fixed. All in all in five years the middle market should be getting a better deal than they might have gotten under a normal continuous build cycle. This ramp up means a building built 5 years ago is going to be one of the “old” buildings compared to the large number of apartments coming on in the next year or two.

    I am not saying it is a painless situation at all and the impact on peoples lives is real. I think a semi reasonable response to this problem would be to try and do a rent increase freeze that lasts for no more than five years and would require a 75% majority vote of the electorate to extend. That kind of limited rent control could give the market time to build itself into a more even supply/demand situation.

  101. 101
    redmondjp says:

    Yeah! Another 100-comment thread on SB. I guess you could say that lately, things are really heating up around here, in more ways than one.

    I still think the backyard camping option should be pursued by the Seattle Planning Dept.

    We can call it ACA for Accessory Camping Area. Many of the older SFH lots are large enough for tents in the front, side and back yards!

    A Tent City in every yard. Somehow that seems fitting for Seattle.

  102. 102
    Rudolfo says:

    By pfft @ 96:

    One answer is for the government to build affordable housing.

    https://en.wikipedia.org/wiki/Cabrini%E2%80%93Green_Homes

    You seem well intentioned, but naive.

  103. 103

    RE: redmondjp @ 101 – Why do you hate Nickelsville? ;-)

  104. 104
    redmondjp says:

    By Kary L. Krismer @ 103:

    RE: redmondjp @ 101 – Why do you hate Nickelsville? ;-)

    We need more tent city free-market competition. That would really drive the prices of tent spaces down. I’m going to start up Dimestown, just as soon as I can fine a local city that will give me the necessary permits (oh, and I’m looking for old pallets and brown, not blue, brown tarps, so hit me up if you can donate any).

    And Seattle’s current mayor, in keeping with his existing political platform, can mandate that the tents be rainbow-colored. This is a brilliant marketing idea IMO, as it would certainly distinguish our fair city from all of the other left-coast cities with tents in the back yards.

  105. 105
    David B. says:

    RE: Rudolfo @ 102 – Cabrini Green is not representative of public housing. It is a worst case.

  106. 106
    David B. says:

    RE: Deerhawke @ 88 – “There are a tremendous number of studies on the topic to show that it does not achieve the benefits/goals intended for it and creates huge inefficiencies in the provision of housing.”

    That depends on what your goals for it are. It actually works pretty well at stopping current tenants from getting gentrified out of their apartments. It works very poorly at promoting general housing affordability for all.

  107. 107

    And article on NY and NYC’s tax incentive system to build affordable housing. The goal in NYC is 80,000 units over a decade.

    http://www.capitalnewyork.com/article/albany/2015/06/8571214/421-deal-brings-more-anxiety-real-estate-developers

  108. 108
    boater says:

    By David B. @ 106:

    RE: Deerhawke @ 88 – “There are a tremendous number of studies on the topic to show that it does not achieve the benefits/goals intended for it and creates huge inefficiencies in the provision of housing.”

    That depends on what your goals for it are. It actually works pretty well at stopping current tenants from getting gentrified out of their apartments. It works very poorly at promoting general housing affordability for all.

    True so then the question is why should everyone else agree to pay more not to help the poorest or but instead to help a select few who may or may not even need the help.

  109. 109

    By redmondjp @ 104:

    By Kary L. Krismer @ 103:

    RE: redmondjp @ 101 – Why do you hate Nickelsville? ;-)

    We need more tent city free-market competition. That would really drive the prices of tent spaces down. I’m going to start up Dimestown, just as soon as I can fine a local city that will give me the necessary permits (oh, and I’m looking for old pallets and brown, not blue, brown tarps, so hit me up if you can donate any).

    Wow, you really have the ear of government! ;-)

    http://www.kirotv.com/news/news/homeless-encampments-coming-three-seattle-vacant-l/nmphq/

  110. 110
    mukoh says:

    I think pfft is on the party line with Sawant like fly on doo doo. SO to summarize is this for them:

    “Lets give things that are worth $XXX to people who don’t have the skills, intelligence, and put in the effort for less at determined $X.”

    THAT WILL GET THEM WORKING HARDER! ISN’T IT?

    Oh wait.

  111. 111
    NoahFect says:

    RE: The Tim @ 2 – I know one “political organizer” who makes a LOT more than $100,000/year. Lives in a big white house in DC.

  112. 112
    NoahFect says:

    RE: pfft @ 63 – Athletic Department on line 2. Coach says to put those goalposts right back where you found them, or there’ll be trouble.

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