#RentStabilization

One fact that everyone can admit: the cost of renting in Seattle is increasing at a pace that is unsustainable for moderate-income families. With the developer contribution to affordable housing brought by commercial linkage fees, incentive zoning, Mandatory Housing Affordability (MHA), and the Multi-Family Tax Exemption (MFTE), we're on the right track to produce more housing that will, ostensibly, be affordable to preschool teachers, social workers, and nursing assistants. And while we can have the debate (and should continue to move forward with solutions) around income inequality, that does nothing to address the current housing crisis. 

Small apartments and detached single-family homes - living together in harmony; illegal in mots of Seattle

Small apartments and detached single-family homes - living together in harmony; illegal in mots of Seattle

What's missing from all of our discussions: what about the current "naturally affordable" housing that is quickly disappearing - not from redevelopment, but from lack of competition. Regular readers are very aware that I believe we must build more housing, and in particular more housing types, throughout the city. More missing-middle, legalize and encourage backyard cottages and mother-in-law units, allow duplexes and triplexes in single-family areas. These are all things that will help produce the future of naturally affordable housing. Forcing all development changes into already dense neighborhoods is not going to produce sustainability in the market for non-subsidized homes.

Further, focusing significant changes in neighborhoods that created community in the face of redlining exacerbates institutional racism in housing and access to necessary neighborhood amenities. This is one of the topics that Nikkita Oliver speaks to that is so incredibly important to hear, and work to understand. If we don't equitably develop our city, we'll simply whiten it, and create, as Ms. Oliver has stated, a "museum of us that isn't really safe for us to visit..." We see this in the LGBTQ community, as well, with the significant gentrification of Capitol Hill. More and more families are being pushed from where we were once safe, and when we come back to visit, find bigotry alive and well in Seattle. 

While new construction creates housing that is unaffordable, what has been driving the exodus from neighborhoods throughout Seattle is rising rents in existing buildings. As I've bemoaned many times before, my annual rent increase was about 8% for years - and then 10% this year. While the letter with the rent increase cites property tax increases, the actual reason: the building can get more for its units because new construction prices are so much higher, and while the building is already profitable, it can be even more profitable, without the need for investment in units or community spaces, just because. 

That's not to say that I blame new construction for the increase in my rent. The other part has everything to do with available housing throughout Seattle. There just isn't enough that will accommodate the folks moving to Seattle for high-paying jobs, and the folks who live in Seattle who don't have access to those same high-paying jobs. This isn't developers fault - this is due to strict rules that limit the ability to produce housing, and spread the love around. We have parts of the city with declining populations that still have great access to grocery stores, parks, and bus lines, but allowing for two more families to live on a block is 100% illegal. That's a problem. 

But there remains this festering issue: what do we do now. Lord knows if anyone dares to suggest rent control in Seattle, they will be tarred and feathered by white dudes who know better. By pointing to cities where rent control exists, or charts and graphs that they believe prove that the market alone can solve the housing crisis, if you say it, they will come. (I admit, I've been known to just @ people on the Twitter with the words "rent control," and just watch what happens for the next ten minutes. Bees to honey, y'all). 

So let's contemplate rent control in other cities, and how it impacts affordability. The big one, of course, is New York City. Their RC scheme is complex, but one basic tenet: it applies to old buildings. Only 1.8% of housing units in NYC are actually rent controlled. 34.2% of units fall under the rent stabilization laws because they were built before 1947. 11.2% fall under a different set of rent stabilization rules because they were built after 1946, but before before 1974. 47.2% of rental units in NYC are 43+ years old. Of the remaining units, about 13.7% opt-in to stabilization measures in exchange for tax benefits. Ignoring rent-controlled units - 1.8% is not having a meaningful impact on rents overall - the stabilized units can have rent increases, but they are set annually by a separate board based on inflation. There is also a requirement for lease renewal. There is also a limitation on increases in vacant units between tenants. 

In San Francisco, rent control applies to rental units built prior to June 13, 1979 (except for single-family homes). Rent increases are allowed, and limited to inflation as determined by a board. Landlords can petition for an increase of up to 10% based on capital improvements, or up to 7% if they can show an increase in maintenance and operations costs, however a tenant can petition for a hardship exception from these passthroughs. There is also a just-cause eviction system. However, the system in San Francisco hasn't necessarily meant that rents have stabilized. Instead, combined with extremely restrictive zoning laws, folks moving into the city that make more than folks living their currently are routinely able to outbid existing residents. 

So what can this mean for Seattle? It's no secret that I am a fan of identifying a rent stabilization policy that would work. While folks like to point to San Francisco and New York as proof that it can't work, these are two cities with wildly different systems, neither of which we would have to adopt. The fine art of public policy is re-inventing the wheel. While economists postulate that rent control measures don't work, the options they are given to study are poor options. Even then, economists agree that rent stabilization doesn't have a huge adverse impact on rents or development

I believe there is an opportunity for the city to work with tenants and landlords to better understand the economics of rent. Any proposals to provide stability in housing costs to renters, after all, must be done thoughtfully, and in a way that does not make being a landlord impossible. If tenants can better understand the costs associated with owning a rental unit - and the public at large - we can have better policy. But we have to start somewhere. 

For one, any rent stabilization measures should be accompanied by greater flexibility to build more missing-middle housing. From there - what is the actual year-over-year cost? What comes to mind for me: tax increases (levies, yay!), increases in cost of maintenance and staff (as expected with needed minimum wage and benefit improvements), utility rate increases for common areas (or actual units if your landlord's paying that), and insurance premium increases (particularly if a building does not require renters to carry their own policies). 

Combined, these can all lead to a reasonable expectation of rent increases year-over-year. And, frankly, landlords should be passing these on. I've heard stories of people having the same rent for 3-5 years, and then being shocked when it goes up by $400 per month. Had the landlord just kept pace with increasing taxes and costs each year, it likely would have ended up to be $400, but more manageable being eased in. 

What I think we should look to do in Seattle: limit increases to one per 12 month cycle, require 60 days' notice, and allow increases to be no more than 5% or inflation plus tax increases, whichever is higher, with an exception for capital improvements. Require landlords offer a lease renewal (unless there is just cause), and maybe even require landlords to increase rent by at least tax increases year over year. Tie the stabilization to the lease, allow more building that is appropriate throughout the city, and once someone moves out, the property owner can assess what the move-in rent for the next tenant should be. 

Of course, some have said that this system would discourage people from moving. Once they find an apartment or townhouse they can afford, they'll sit on it for as long as possible. And? Having stability in housing shouldn't be considered a bad thing. It's good for families, good for neighborhoods, and good for our city as a whole when people know they will have a safe place to sleep tonight. 

Additionally, there is no reasonable conclusion that such a plan would discourage development or preservation of existing housing units. You either believe that people are going to build here, or they're not. Sure, ideally this would be a statewide program, but it's worth starting somewhere. What is pushing more and more people out of their homes isn't new construction - it's lack of available housing, leading to increase in cost for existing housing, and then a lack of housing to be found when rents are increased so much as to economically evict middle-income families. 

So while the MFTE and MHA program are dope af, we have to continue to identify what we are going to do for the folks who don't qualify for those new units, and are also being pushed out of the old units that were once "naturally affordable." And I believe we can do that as a city, if we're willing to do the work.