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Thursday, July 26, 2007

The Morning Headline Police

posted by on July 26 at 7:58 AM

Judging from this morning’s PI headline, “Nickels wants to widen tax break on affordable housing,” and this morning’s Seattle Times headline, “Mayor proposes more tax breaks for new housing,” you’d get the impression Mayor Nickels is taking serious steps to address the number one problem in our city right now: The lack of housing for people with low incomes.

You’d be wrong.

The mayor’s new plan encourages landlords to rent to people with higher incomes than is currently allowed under the city’s housing program. Currently, landlords get tax breaks when they set aside a certain amount of units for renters making 70 percent of the median income. Nickels wants to extend the tax break to landlords who rent to those making 90 percent of the median. Translation: Landlords would now get the tax break for renting to individual renters who make $49,000 a year rather than $38,000 a year.

There are certainly some good things about Nickels’s idea. First, he’s making the tax breaks available in more neighborhoods; expanding it from 17 neighborhoods to 39. Second, he wants to add couples into the plan. (Currently, the program only caters to individuals.) The disappointing thing about his plan for couples, though, is this: The plan targets couples making 100% of median—$62,000—rather than the current 70% standard for singles.

Nickels would also extend the break to condo developers. Again, nice impulse. But the benefit to people making average wages seems minimal. The break would be for condo units going for $350,000 a year (or affordable to people making 20 percent above median income, $75,000.)

Team Nickels boasts that the plan for renters would set rents below market rate: About $50 less on average rent for the single renter and about $200-$250 less for couples. That’s nice, but the whole plan seems to miss the original intent of the program by undercutting lower-wage renters.

Although the papers bury it near the bottom, both the PI article and the Seattle Times article do eventually give the microphone to Seattle Displacement Coalition leader John Fox. From the Seattle Times:

John Fox, coordinator for the Seattle Displacement Coalition, said the housing crisis hits people who make less than half the median income the hardest.

“If the developer isn’t willing to come in and set aside units for people who need housing, then they don’t deserve to get millions of dollars of tax breaks.

From the PI (and a little higher up than the Seattle Times):


Some low-income housing activists also say the program discourages builders from providing low-cost units for the neediest.

“To hear the mayor lament the hardships of the moderate-income category when a tsunami is breaking over the heads of our low-income residents is galling,” housing activist John Fox said in a statement.

Ultimately, Nickels is responding to the fact that developers say they aren’t participating in the current program because they stand to lose money under the existing standard (setting aside units for singles making 70 percent of median).

But Nickels is proposing an off-point solution. If the intent of the program is to provide housing to those making 70 percent of the median, the city should figure out better incentives to make that happen. Nickels’s fix is like lowering standards to raise high school test scores. He’s not addressing the problem.

Final note: What’s really frustrating to me about writing this post is that I’m stuck fighting for a program that’s about renters making 70 percent of the median. What about the people Fox is fighting for—people making 50 percent of the median—or $27,250 for one person, $31,150 for two. I guess they’re still out of luck in this town.

Ultimately, it’s not that I’ve got a problem with a program that helps renters who make closer to the median in its own right.

The problem I see is this: Nickels is responding to the failure of a program that’s designed help lower income people by shifting it to help someone else. Again, he’s not addressing the problem.

And this morning’s headlines could give readers the impression that he is.

RSS icon Comments

1

I am holding onto my MIL Apt. in Ravenna at just under $800.00 for as long as I can. And PRAY my landlord does not sell the house.......

Posted by Cato the Younger Younger | July 26, 2007 8:12 AM
2

Except that people who make the median income are getting priced out of the city too.

If it's in the interest of the city to have people of all different incomes live here, then we'll have to subsidize every class that can't afford to live in the city.

Otherwise, you end up with the very rich and the very poor, and the middle class in the suburbs. Not somewhere we want to be.

Posted by MHD | July 26, 2007 8:24 AM
3

"the plan for renters would set rents below market rate."

Highly unlikely.

What people usually fail to mention is that if you get a subsidy to build for 80 percent median affordability in a neighborhood like Rainier Beach, then the government is essentially paying you to develop above market rate housing, to accelerate the displacement of poor renters by driving rents up. The averages actually hide what's really going on. The Nickels plan would blow this loophole wide open.

MHD I challenge you to show that there has been a net increase in people below 30 or 40 percent median renting in Seattle over the past 10 years-- not 30 percent median subsidized units, but 30 percent median renters. I don't think you can. All this crap about the very rich and very poor threatening to leave Seattle without a middle class assumes that the poor have lots of rental options in Seattle right now. They don't. And building essentially market rate housing will hardly help the "middle class", who mainly live in the burbs because they don't want to rent in the first place.

Posted by Trevor | July 26, 2007 8:49 AM
4

Using the traditional 4x income calc, a $350k condo is 'affordable' to those making $87k, not $75k. Insane either way, but I'm just sayin.

Posted by investigatory journalist | July 26, 2007 8:50 AM
5

Trevor,

I don't see where it is that you think I claimed that the number of renters from low income brackets was increasing over 10 years or any other time frame. In fact, as traditionally poor neighborhoods have become more desirable to upscale people, I'm sure the opposite is true.

What I am saying is that, thanks to subsidized housing, there is a certain floor below which the population of low-income people in Seattle will not fall.

What are you trying to accomplish with subsidized housing? Is it to achieve a diversity of income levels, leading to a more vibrant city? Or do you want everyone who would like to live in the city to be able to afford to?

If the latter, we might as well repeal all zoning height restrictions now, because we've got some building to do. Otherwise, there will always be less housing than there is demand, and prices will go up. Only various government schemes will allow the poor and lower middle class to live in the city at all.

The mayor's move simply establishes a floor for those lower middle class people as well.

Posted by MHD | July 26, 2007 9:02 AM
6

Josh -
The reason that the City needs to find ways to support housing for the 60% to 120% median income is because the Feds won't do it (programs cut off at 60%) and the developers won't do it (with construction costs as high as they are - thanks unions - they don't pencil). Fox can scream all he wants for funding below 50%, but those programs already exist - there's already Billions of federal, state and city dollars flowing into them. Meanwhile, there's no safety net for the "average" guy (and remember, 100% median income is about as average as you can get). As MHD correctly points out, without prgrams like the Mayor's we're going to end up with neighborhoods full of the very rich and the very poor.

Posted by Another Average Taxpayer | July 26, 2007 9:03 AM
7

I wish my salary kept up with the pace housing prices in Seattle. Just saying

Posted by Cato the Younger Younger | July 26, 2007 9:03 AM
8

@6,

It's not that I've got a problem with a program that helps renters who make closer to the median in its own right.

The problem I see is this: Nickels is responding to the failure of a program that's designed help lower income people by shifting it to help someone else. As I said: He's not addressing the problem. He's just changing the measure.

Posted by Josh Feit | July 26, 2007 9:09 AM
9

Josh,

What's your definition of a successful low-income program?

Posted by MHD | July 26, 2007 9:24 AM
10

This is like when you're playing Sim City and trying to do things to make people with higher incomes move in and increase the value of your housing.

Except this approach isn't sound in real life and it makes you look like an aristocrat.

I think it's clear that Nickels doesn't give a shit about protecting low wage resident. He wants to maiximize tax revenue, and getting richer people to move in and shove out poorer people is the way to do it.

Posted by Gomez | July 26, 2007 9:40 AM
11

#6: Residential development is mostly non union, and in fact, employs a lot of under-the-table labor, including for white 20-something dudes. Second, the people buying/renting the 60-120% median rates are those in the 120+ crowd. The arbitrary nature of credit checks and the ability to discriminate based on income seals the deal. Finally, your own business press (outside of the pundits) is attributing the demand for housing to the credit bubble, not taxes or labor or "burdensome regulations".

Posted by t.p.n. | July 26, 2007 9:44 AM
12

Santa Barbara recently built city subsidized, "affordable" condos (only $500K? I'll take 2!) for people making up to like $175,000 because the average price of a home there is around $1 M and even doctors, lawyers, etc are priced out. Boggles the mind.

Posted by Original Andrew | July 26, 2007 9:58 AM
13

@5: "thanks to subsidized housing, there is a certain floor below which the population of low-income people in Seattle will not fall."

That floor meets less than one tenth the demand for it. It's specious to claim that that problem is solved and that we need to turn our attention to a different one. It's criminal to say it's solved and then take money from services for the poor to give money to people who aren't struggling in the name of diversity. The original affordable housing movement wasn't about diversity. It was about justice for people who otherwise wouldn't have any housing at all. We've got over 2000 people on any given night who can't even find a shelter bed. Why the FUCK are we even talking about "affordable condos"?

@6: "Fox can scream all he wants for funding below 50%, but those programs already exist - there's already Billions of federal, state and city dollars flowing into them."

Average taxpayer have you heard of Reagan? He cut HUD's budget by 80 percent almost immediately. There have been federal rollbacks ever since, with HOPE VI as the coup de grace. Meanwhile, there isn't much state money going into affordable housing. King county has systematically cut its human service spending over the last ten years. City government generally provides a fraction of what's needed for any given city. Now you're asking for even that crumb from the pie to be split up to create a "safety net" for people who aren't in trouble of falling into homelessness and who are well above the poverty level?

For me, politics like this are an indication of decades of displacement's effects on our city's politics. Gentrification is making this a yuppie city in which people talk about diversity instead of justice, and think condo ownership should be an integral part of our social safety net.

Posted by Trevor | July 26, 2007 10:02 AM
14

12. Make you wonder who out there is buying these homes and where their money is coming from.

Posted by Gomez | July 26, 2007 10:15 AM
15

This whole thing is a troubling idea. People don't have a right to live in the city. If they can't afford it, there are plenty of cheap places to live elsewhere. Why should it be desirable to force an artificial diversity of income in an area?

There are people who utilize programs like these who are not particularly needy. They are fresh out of college, and want to live in the city because of the activity. I have no problem with them wanting to do that, but that is not something I want to subsidize. When we only use income as qualification, then it is prone to abuses like this.

If a plan like this were to be useful, then it should be more selective. I'd oppose it in any case, but it would be more palatable if applicants were asked to present a case for why they needed to live in the city as opposed to elsewhere.

This is a huge state. We don't all have to be living in the city of Seattle.

Posted by Ryan | July 26, 2007 10:21 AM
16

Trevor @ 13,

If you're strictly looking to put roofs over the head of people, does it make sense to put them in the most high-demand and expensive places to do it, or in more distant spots with good transit access to jobs in the center (e.g., Burien?)

For the homeless, it's not a question of affordable housing, it's a question of free housing. If you want to divert the whole housing budget into shelters, fine, but subsidies are about keeping the working poor in the city instead of having them move out to the cheaper periphery.

Ryan @15,

You're right that we don't all have a God-given right to live in the city limits. However, if no one below the median income lives in the city, you get Redmond with skyscrapers. No thanks. What makes a city vital is the economic activity and nightlife that tends to serve the young and poor (or at least, less-rich).

Posted by MHD | July 26, 2007 10:40 AM
17

@13,

Right, those 2,000 people would certainly have homes if only they had access to affordable housing.

Posted by keshmeshi | July 26, 2007 10:41 AM
18

16. Or you get San Francisco or New York City, where a la glass ceilings, you get glass walls, where if your income isn't at a certain level, you don't get to live close to the action.

Posted by Gomez | July 26, 2007 11:15 AM
19

@16,

I don't see anything wrong with the nightlife moving to cheaper areas. That could potentially lower the cost of living in Seattle, and it would naturally (rather than artificially) allow people to move back in.

You mentioned high rises in Redmond, but Redmond is more expensive than Seattle in a lot of areas. Still, I wouldn't be opposed to high rises there, but I don't think they would go for it. There are other cheap places to live though. There is plenty of cheap housing in Eastern Washington.

Posted by Ryan | July 26, 2007 11:15 AM
20

@18,
This is the crux of the issue. Why should we be paying for people to be close to the action? That sounds like a luxury, and not a need.

Posted by Ryan | July 26, 2007 11:20 AM
21

Ryan @19,

You completely misunderstood my metaphor. What I mean that is if all the low income people leave Seattle, Seattle becomes a version of Redmond, except that it has skyscrapers.

There are two main reasons people want to live in Seattle: it's close to work, or because it's not bland like Redmond. Not having income diversity destroys the latter reason; as citizens, we don't want our city to lose the characteristics that we loved in the first place, so we pay for subsidized housing.

Posted by MHD | July 26, 2007 11:20 AM
22

You are correct, Josh.

Which is why I will recommend - again - that we build 100-story inexpensive residential apartment buildings with open (non-gated) mini parkland along all major arterials, with 25 percent very low (25K or less), 25 percent low (50K), 25 percent market (75K or less), 25 percent upper (above 75K).

Like Vancouver.

Half solutions won't work.

Posted by Will in Seattle | July 26, 2007 11:47 AM
23

Most suburbs specifically do not zone for the kind of density that would allow true affordable housing. And even if they did, if you factor in the cost of owning a car, which is a necessity in the burbs, and paying for gas and insurance and maintenance and all that, the affordability of these areas is not as great as you think.

You guys make it sound like a mere quality of life issue, a personal preference, for a person who doesn't own a car to live within an hour's commute (walking, waiting, bus, transfers, etc) of their work (Seattle's service industry workers have to live somewhere). Then try to juggle it with childcare, or access to a grocery store, etc. This isn't about using proletarians to make Seattle hip, for Christ's sake. It's about Seattle being surrounded by a landscape that is even more difficult for low-income people to survive in. We can talk about changing the burbs as part of the solution, about sane city planning and public transportation. But until that change happens, Seattle needs to do its best to really preserve and expand its 50 percent median and below housing stock.

By the way affordable housing includes transitional housing, for those who think that the issue is somehow unrelated to homelessness. You might not solve homelessness by investing a few million dollars on it, but at least you're not giving it away to someone who doesn't need it, or subsidizing someone's investment in the housing market without even getting a return on your money.

Posted by Trevor | July 26, 2007 11:49 AM
24

@21,

I did miss the metaphor, and I now understand what you mean.

You make a very good point, and I assume that you would be in favor of the changes Nickels is proposing. His plan does increase income diversity, and does address a real problem for some people. I would think it would be difficult for anyone making $49,000 a year to live in Seattle with the rising costs of housing.

I do think you overestimate the influence of wealth on nightlife however. Part of the reason Redmond is dull in comparison to Seattle is the ratio of families to singles. If you go to a country town with low incomes, there is not a thriving nightlife. Poor people don't necessarily party harder. Single people do (or even couples without children).

Posted by Ryan | July 26, 2007 11:51 AM
25

Ryan @24,

You're right; strictly from a perspective of nightlife, marital status > income. But I'm using that as a shorthand for a lot of things, such as having an immigrant population that's part of the city's life.

To be honest, I haven't completely thought through all the benefits of income diversity of the city, but I believe it's a valuable thing to have.

Posted by MHD | July 26, 2007 12:06 PM
26

Right, Ryan. Living in Seattle is a luxury. My poor uneducated foreign ass belongs in Federal Way and the daughters of educated whites belong in Fremont. Thanks for clearing that up.

Posted by Gomez | July 26, 2007 12:36 PM
27

Trevor,

But it is a quality of life issue! Living in the suburbs is possible without a car, it's just incredibly inconvenient.

If you want to define the need for subsidized housing narrowly enough to only capture those who can't afford cars, there's plenty of it to go around. Many of the families that live across the street from me in Section 8 housing have a car.

Given that there are a finite number of places in the city, I'm not sure I see the moral content in spending government dollars to allocate one of those places to a very poor person over a lower-middle-class one, which is the ultimate effect of many of these programs.

Posted by MHD | July 26, 2007 12:56 PM
28

@26,

That is a pretty racist thing to say. To suggest that only whites can make the money to live in Seattle is a slap in the face to every non-white person. While being uneducated might be a reason living in an expensive place is out of reach, being non-white or foreign born certainly isn't.

There are plenty of educated people who can't afford to live in Seattle either. What's wrong with that? Living in Seattle isn't a right. If someone wants to be there, they should have to earn it. Just like anything else.

Besides, its not like living in Federal Way (your example) means one can't commute to Seattle. It is just less convenient. Should convenience really be subsidized?

Posted by Ryan | July 26, 2007 1:00 PM
29

MHD @ 27

If you think a person earning $49k is a lower middle income individual worthy of government subsidy - there are still tens of thousands of unsubsidized renters who are hanging on in Seattle paying $800 or less per month in rent who would surely beg to differ with you.

This new subsidy will pretty much guarantee that it's more profitable to tear down their homes and build new $1100+ per month apartments (and only 70% of the units even have to go for that). We should not subsidize the displacement of what is left of the truly affordable rental housing stock in this City, and that's EXACTLY what this developer giveaway does.

This proposal is fucking obscene - pure and simple.

Posted by Mr. X | July 26, 2007 1:04 PM
30

Whatever, Ryan. Take a look at Belltown condos and Wallingford neighborhoods and tell me what you see.

Predictably, Ryan, you desperately are trying to deflect discussion away from your stuck-up philosophically classist commentary.

Why live in Seattle if you can't live IN Seattle? If I wanted to take a 45 minute bus ride to go hang out somewhere, I'd have lived somewhere else.

This isn't about rights, it's about the Mayor actively trying to price out the working and middle classes. Everyone has the right to live in Seattle. It's a matter of affordability. No greater power has the authority to decide whether or not I deserve to live in Seattle, and you sure as hell don't.

Quit trying to derail the discussion with philosophical irrelevance.

Posted by Gomez | July 26, 2007 1:14 PM
31

Mr.X @ 29

I don't think anyone is "worthy" of a government subsidy unless there is no place in the region that they can truly afford to live. I don't ascribe some magical notion of livability to the city limit.

However, I think any community benefits from having all income levels present - 10% 30%, 50%, or 90% of the median. If the prevailing market rate prices any of these groups completely out of the city's neighborhoods, I'd like my government to do something about it.

I'd certainly agree, also, that the long term solution is boosting density to increase the housing stock and bring prices down, as Will In Seattle said.

Posted by MHD | July 26, 2007 1:16 PM
32

@30,

I don't particularly buy into social classes based on income levels. Let's say you have someone who makes $100K a year. Now, let's say they lose their job and for whatever reason can only find employment that offers $30K a year. Are they suddenly a different person? Of course not.

As for deserving to live in Seattle... No one deserves to live in Seattle. It is a place to live, and it costs a certain amount to live here. Why should a certain set of people get a free pass just because they don't earn as much?

I've heard the magic number of $800/month for rent thrown around here. It is possible to live in Seattle right now for less than that without subsidies. If you are willing to live with roommates any determined person who wants to live here can make it work.

Posted by Ryan | July 26, 2007 1:48 PM
33

And I think it's lunacy to create production/density incentives that DESTROY what is left of the housing that is actually affordable - without any government subsidies - for working people in this City.

I'm all for subsidizing housing at below 30% of median (as those are the people who are most at risk of being priced out of Seattle, and exist at an income level that most good government types have traditionally agreed actually IS worthy of public subsidies), but to force longtime residents to subsidize housing that would be built anyway (have you noticed a shortage of cranes around town?) through tax breaks is just wrong, and to force them to subsidize policies that encourage their own displacement is doubly idiotic.

Put it this way - should someone who lives in a one bedroom apt in an older building and pays $650 per month be forced to subsidize the construction of new units that will rent at almost $1200 per month? Because that's EXACTLY what this proposal does.

When the Mayor's flacks talk about this subsidy being aimed at units that will rent for $50 a month less than what market rates would be - people need to understand that is they are talking about the market rate for BRAND NEW housing - not the rental levels at which tens of thousands of older units are priced.

Will in Seattle is sadly mistaken if he thinks that we can produce our way out of that problem - once you tear down those $600-800/month units, it will take literally decades for the rental price of new units to fall to comparable (inflation adjusted, of course) levels.

Like I said, fucking obscene.

Posted by Mr. X | July 26, 2007 1:56 PM
34

'Deserve to live' is a better choice of words for you point than 'have a right to live', Ryan, so I have to give you credit there. I can agree with that assessment: no one deserves to live anywhere.

And I will admit that I have met the magic number, but not by much: I pay less than $800 a month for my place here in Seattle, and that's after having my rent recently raised.

I don't consider controls so much a subsidation as a reeling in of out of control prices set by external forces (namely, brokers and owners trying to abuse a rising demand and force out the incumbent population in the name of pulling a few extra bucks). No one's suggesting we hand out anything, only that we keep pricing within a reasonable scope for most of the population instead of letting it get to where you have to be in the top 10% of earners just to afford a place.

Posted by Gomez | July 26, 2007 2:11 PM
35

@28

Last time I checked, and this was about 5 years ago, there was a wait list of over 10,000 people for section 8 vouchers, and sha wasn't taking new people on the list. Checking in again today, I guess the've triaged the wait list down to about 4000, and they don't plan on adding to it for at least another year. Hardly the "plenty" you describe, or anywhere close to meeting demand.

Posted by Trevor | July 26, 2007 2:35 PM
36

i meant 27...

Posted by Trevor | July 26, 2007 2:36 PM
37

Mr. X @ 33,

Upon further reflection, you're right. The scenario you describe is flat out obscene. As is often the case, market-distorting subsidies lead to all kinds of unintended consequences.

A sensible amendment to the Mayor's policy would disallow the tax break when it involves destroying even lower-income housing, unless there's a dramatic increase in the number of units.

I still think living in the city is a privilege, but subsidising your own eviction is criminal.

Posted by MHD | July 26, 2007 2:58 PM
38

Trevor @35,

That's not what I said. Obviously, many Section 8 renters own cars, and therefore could live in the suburbs without extraordinary inconvenience.

I suspect that if you turfed out those that owned cars, those 4000 people would get their vouchers.

Posted by MHD | July 26, 2007 3:01 PM
39

MHD -

Thanks for taking a minute to try and understand the point I'm making. So many young Stranger readers (and, more unfortunately, their writers) have bought into a trickle-down view of housing supply and demand - and it pains me to see otherwise progressive people buying into supply-side arguments that would do David Stockman (the man behind "Reaganomics") proud.

Posted by Mr. X | July 26, 2007 3:13 PM

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