Seattle is Doing the Unthinkable: Building Itself Out of a Rental Crunch

John Michael McGrath is a Digital Media Producer for TVO.

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Seattle seems to have built its way out of a rental crunch. This fact will offend some people.

Seattle joins just a handful of North American cities that have managed to build enough to keep rents in check, the rest of which being mostly Sunbelt sprawl towns. To be sure, rents will continue to increase in nominal terms throughout the Seattle Metro area, and some neighbourhoods will see much faster increases than the average (while others, because math, will see slower increases or even decreases). And in fact, the news isn’t an unalloyed good: Seattle’s rents are stabilizing after some of the fastest rental increases in recent history.

Even a quick Google search reveals an amusing succession of people worrying that Seattle’s building boom was going to run out of steam in April 2012, then April 2013, then October 2013. So either a bunch of analysts are foolish (and the market is smarter at making money than we think), or a bunch of developers are going to lose money when the bottom falls out of the market. Neither outcome should upset the average reader.

But we really, really don’t like the idea that something as precious as our cities can be made more affordable by something as simple as building more of them. We like to think our cities are snowflakes that couldn’t possibly be formed by something as crass as the market. And, hey, fair enough: what makes your city feel like home is a near-infinite number of market and non-market factors that can’t be commodified, packaged, and sold. But by the same token, they also can’t be planned.

Prices, however, are something that economics understands pretty well. And the usual prescription for high prices is to let people make more of whatever’s dear. Cities are, and have always been, a machine for converting land into floor space. So if floor space has become expensive, it’s not a mystery what we’re being prodded to do.

There are reasons why this is more difficult in some areas than others. Vancouver has difficult geography (though not obviously more difficult than Seattle’s); in other cities, it‘s simply not legal to add as much as the market is calling for. And then in Toronto, we have the odd situation where the market can add a huge amount of supply—just not enough, and not without having to endure a two or three-year planning process, the kind of thing that makes it difficult to add anything at the low end of the market.

(In Toronto, there’s also the concern that the last of the easily developed space—the former rail yards and warehouses of the city’s post-industrial core—is almost all used up, meaning future building will have to be laboriously and politically negotiated with locals.)

It can also be difficult because there don’t seem to be any rules of thumb to offer much guidance to urban policymakers beyond “keep building until the rents stop going up.”

Turning our gaze back to Seattle, one of the more unique trends there has been the growth of microhousing, a way of adding cheap, small apartments to otherwise settled residential neighbourhoods. It’s been a knock-down, drag-out fight against full-spectrum NIMBYism in some areas, but it’s part of the city’s building success. It amounts to a form of regulatory hack: developers are sneaking microhousing into neighbourhoods that wouldn’t allow a similar number of full-on apartments.

There’s no reason to think our problems are physical or technological, either. If you don’t like concrete and steel, the forestry industry is begging for permission to build new tallish buildings out of wood, with all sorts of creative solutions. But if you’re opposed to anything over your neighbourhood’s current roof-line, then there’s a problem—it’s just not the one you think.

We can, of course, keep doing what we’re doing now: building enough new housing to irritate every home-owning burgher without seriously addressing affordability. But the longer this goes on, the less affordable our cities are—and increasingly, that’s where we’re keeping all the money. Or we can relax our grip on the real estate market even just a little and see what happens. It needn’t turn into a free-for-all, and it doesn’t obviate the need for more spending on social housing, but all of the signs point in one direction: It would be better than the status quo. That’s usually a good place to start.

Image via Phil Price / Flickr