April 28, 2016

Meeting Seattle’s housing and transportation needs equitably

While putting together my last post about the private sector’s emphasis on millennials and tech innovations to solve the present transportation congestion issues faced by the City of Seattle, I started thinking about recent conversations I’ve had with friends. We’re all gainfully-employed, well-educated millennials, and most of us are transplants to the City. Most of us rely on public transit for trips around the city and many are looking to renew leases; as a result, housing prices and transportation have been big topics of conversation recently. Beyond lamenting the rising cost of living for our own sake, social equity concerns and the City’s efforts to subsidize housing through policy has also come up – after weeks of speculation, I wanted to learn more about this major issue.

Rental prices are a key consideration in a city that experienced a 13% increase in total renter population between 2010 and 2013 and is currently composed of more than 50% renters. All of these renters are facing soaring rates; as shown in Figure 1, Seattle rent increased by 10.7% on average between 2010 and 2013 and ranked in the top 10 most expensive median rent in the US in 2014. This pushed the median monthly rent in Seattle to $1,172 in 2014.

In an attempt to mitigate the impacts of these trends on lower-income households, Mayor Ed Murray established the Housing Affordability and Livability Agenda (HALA) committee that, in the fall of 2014, provided information to support the adoption of affordable housing linkage fees through the Seattle City Council. The linkage fees provide developers the option to pay a per-square-foot fee based on project location, or “avoid the fee by dedicating at least 3-5% of the units in their project to households making less than 80% AMI” with money from collected fees slated to be “invested in workforce housing” (Seattle City Council).  These are known as Multifamily Tax Exemptions (MFTE). The Annual Median Income (AMI) for households in the area was $65,677 in 2012, but to determine eligibility for low-income housing, the Office of Housing establishes new AMI numbers each year based on the number of income-generating adults in a household. From this, they set rent (including utilities) limits based on 30% of that AMI. For 2016, a single-income household has an AMI of $63,300 and $72,300 for a two-income household.

Before examining those numbers more carefully, let’s consider how Seattle came to this point. In 1994, the City of Seattle enacted its Urban Village Strategy (UVS) that designated certain neighborhoods/parts of the city as Urban Centers (high commercial and housing density), Hub Urban Villages (moderate commercial and housing density), Residential Urban Villages, or Manufacturing and Industrial Districts. The goal of the UVS strategy was to direct growth in a way that would allow for the city’s transit organizations to plan services that support the transportation needs of a growing population. As of 2015, the planning has yielded mostly successful results with 75% of new housing and jobs developed per the UVS, with some UVs experiencing more growth than others. The City of Seattle stands out on a national level as well; between 2013 and 2014, out of the 50 largest cities in the US, Seattle ranks 3^rd among the 14 cities that grew faster than their surrounding suburbs as shown in Figure 2.

Added density and affordable housing initiatives may have the potential to limit population displacement, but developers want to make a profit and meet demand for expensive tastes in attractive locations, and the UVs with their ever-increasing access to transit are very attractive. For example, looking at the new, luxury apartments (that are ideally located for and actively advertise their access to transit services) in the UV where I live, MFTE housing options are provided, but they exclusively target the 80% AMI bracket. Developers argue that the 30% cut-off is arbitrary and that people should have the option to spend more for nicer facilities if they so choose; however, even as higher percentages of monthly income are considered, at 40%, 2-income households with incomes of 65% AMI ($46,995) could theoretically afford ~$1,500 in rent each month. This, however, is poor financial practice that does not address the majority of households in need, let alone the truly at-risk households with <30% AMI.

From the developers perspective, it is clearly a matter of optimization; the UVs are attractive locations where luxury apartments are in high demand by people who make 100% AMI or more, and developers want to make sure they avoid paying a fee, but also make top dollar on their investment; staying on the higher end of the AMI range also allows them to maintain a relatively homogeneous clientele. Offering affordable housing options for 0-65% AMI renters in these areas of the city simply does not make sense in the context of the market or the levies. However, it may not be reasonable to expect the affordable housing efforts via more stringent levies to address the needs of lower-income renters without driving away critical development in the carefully-planned densification initiatives in the City’s attractive UVs.

Up to this point, policy and related urban planning have dictated the affordability initiatives in Seattle; transportation engineers mainly enter the picture to try to support the envisioned urban form and (ideally) provide infrastructure that serves the population in an equitable manner. As mentioned in my previous post, more collaboration needs to occur between engineers, planners, policy makers, economists, and the private sector to encourage behavioral changes and mode shifts to keep (or more accurately to get) the population at large moving reliably through this geographically-constrained city. I would argue that the same is true when it comes to affordable housing initiatives.

While clear, casual links between gentrification and transit (specifically rail) stations have yet to be established (but are currently being studied), rail transit has been found to increase property values in lower-income neighborhoods beyond ¼-mile from a transit stop. Based on this, as the City of Seattle continues to move forward with light rail and transit upgrades, the social equity impacts of these initiatives must be recognized and considered by all involved parties.

Don’t get me wrong – I’m not advocating for less transit infrastructure investment. On the contrary – in such a congested and geographically limited city, new and different transit modes that move people safely and reliably are crucial in the efforts to decrease (or at least stabilize) congestion by getting people out of personal vehicles. However, this problem requires interdisciplinary, creative thinking in order to address not only the present issues, but also attempt to mitigate social equity costs that may arise from these transportation and urban planning solutions.

For example, a recent article from Market Urbanism highlights the importance of trailer parks as a low income housing option. While I found the concept off-putting at first blush, the author highlights a variety of valid reasons why zoning a land for a trailer park could actually meet the housing needs of low-income residents compared to the linkage fees currently used by the city. Specifically, combined used trailer and park rent costs ranging between $300 – $500 and combined new trailer homes and rent costs near $700 – $1,000; considering the City of Seattle appointed AMI values and acceptable housing costs of 30%, single-income families earning as low as 50% AMI could afford new homes, and single-income families earning as low as 20% AMI could afford used homes. Additionally, the article notes that population density of trailer parks (46,000 people per square mile on average) have the potential to support other businesses within parks. Add quality transportation access throughout a park, and you have a glimmer of an equitable solution to the Seattle housing crisis.

While this problem will not be solved overnight, the present HALA efforts are insufficient and the new transit will potentially only make the housing equity issues in the City of Seattle worse. Given the realities of our present trajectory, we know an issue exists, and therefore it is our responsibility to do our best to find a solution, and creative ideas such as trailer parks may be our best bet.