Three cities, one housing crisis

Four walls and a roof will cost you an arm and a leg in the Pacific Northwest.

The cost of housing is skyrocketing in and around the major cities of Cascadia. In Seattle, the price of a home is growing at nearly twice the average for U.S. cities, according to the Seattle Times, pushing rents to “record highs.” From June 2015 to June 2016, Seattle rents on average rose 9.7 percent, the highest rate in the country. Portland took second place, with a 9 percent average increase, and Governing Magazine rated the Rose City the most gentrifying city in America. North of the border, Vancouver leads Canada in most expensive average rents, and rental apartment vacancy rates are “at or near zero,” according to the Globe and Mail, with vacancy rates somehow even lower in surrounding suburban cities. In 2014, the think-tank Demographia rated Vancouver the second-least affordable city in the world, after Hong Kong.

Global capitalism: the downside of unlimited growth

Housing inflation, the engine of displacement and gentrification, plagues each of Cascadia’s most populous cities. In the post-industrial North American economy, global capital is concentrating in urban centers in the form of jobs and private infrastructure. Seattle has Amazon; Vancouver has telecoms, tech firms, and the film industry; Portland boasts Nike and Intel. This influx of money brings new residents in pursuit of employment and an influx of tenants bidding against one another for relatively scarce housing.

About 1,100 new people move to Seattle every week, according to a U.S. Census report from 2017. Zoning restrictions favoring single-family homes and coastal geography limiting sprawl mean that housing prices are climbing at astronomical rates. Rents are out of range for many, whether it’s cute bungalows, flats, townhouses, micro-apodments, or illegally rented couches. And if you were thinking about buying a median-priced home in Seattle, you’d need to make $93,400 a year, according to a report by Most young residents would be happy with affordable rent, but bidding for increasingly scarce housing continues to drive up prices.

“My sense is that Vancouver’s seen the most rapid impact of global capital of any big city globally,” Mayor Gregor Robertson told the Vancouver Sun earlier this year. “It’s hit us like a ton of bricks.”

Seattle urbanist (and recently vanquished mayoral candidate) Cary Moon co-authored a 2016 article with Charles Mudede that looks at how the infusion of global capital investment inflates housing prices in Vancouver, Seattle and other cities. “International ‘hot money’,” they write, “the excess capital sucked out of some other economy, is looking for a safe place to park, and our region’s houses look positively delicious…These buyers don’t care much about purchase price; they just want to turn that cash into a real physical asset—preferably in a reliable, stable housing market—as quickly as they can, before it evaporates.” Moon and Mudede compared escalating Seattle real estate prices to the national housing bubble that precipitated the 2008 financial collapse:

“The amount of excess capital flowing into urban real estate in the world’s most livable cities is enormous,” they write. “This money isn’t buying ‘housing’ for the purposes you and I understand, but buying houses as a tradable commodity, a place to park surplus cash.”

As a result, renters find themselves priced out to the street, or if they’re lucky to the boonies; or if they’re really lucky they get to stay in Seattle, paying rent out the nose and living paycheck to paycheck until the next rent increase evicts them.

Facing the same capital investment-driven inflation as everyone else, landlords struggle to meet their own rising economic pressures: property taxes, mortgages, repair costs. It’s a vicious cycle of higher and higher prices with no end in sight.

As housing costs rise, so has political pressure in each city, taking center-stage in elections and becoming a proxy for other political issues ranging from institutional racism to class war and homelessness policy. In Seattle, newly-elected mayor Jenny Durkan listed housing affordability as the first item in her Affordable Seattle Agenda platform, writing, “Housing in Seattle has become too expensive…People are getting locked out and pushed out of Seattle.”

A legacy of racist housing policies

This displacement isn’t color-blind. Due to racist exclusionary rules known as “red-lining,” Seattle’s Central District became the beating heart of the city’s black community after World War II. As recently as 1990, black people outnumbered whites by more than three-to-one in the area. Since then, however, African Americans and other people of color have been pushed out of the CD by rising rents. Many have relocated to south Seattle and beyond, seeking to balance cheaper rents away from the city center without losing access to historically black communities.

“You find yourself somewhere in [a suburb of Seattle]. The grocery store is three miles away, there’s no sidewalks… [and] half your family is living in the CD,” Inye Wokoma, a member of a longtime black Central District family, told me in 2015. “You can call it displacement, you can call it an exodus. The community I grew up with no longer exists… People basically dispersed and found places where they could afford to live.”

An analysis by the city of Seattle’s Department of Land Use and Planning found that neighborhoods where people of color are at higher risk of displacement tend to be the same neighborhoods where resources–good schools, proximity to transit and libraries, a decent job market, etc.–are most concentrated.

From 1990 to 2010, black residents of Seattle declined not only as a percentage of the population (from 10 to 8 percent), but also in absolute terms, by about 3,600, according to the Seattle 2035 Growth and Equity report.

“Housing is the core to well being and to life. It affects us in so many ways, emotionally and physically. That’s why it is a human right. We are talking life and death issues.”

Seattle isn’t the only city with a legacy of racist housing policies. Last year, The Atlantic’s Alana Semuels wrote about the legacy of Portland’s white supremacist past. “As the city becomes more popular and real-estate prices rise, it is Portland’s tiny African American population [6.3 percent] that is being displaced to the far-off fringes of the city, leading to even less diversity in the city’s center,” she writes. As in Seattle, black residents are being pushed not only out of the city overall, but especially out of its historically-black neighborhood — Albina – as wealthier, largely white newcomers move in and bid up housing prices. This friction has manifested in racially-divided conflicts over local developments ranging from wider bike lanes to the siting of Trader Joe’s stores.

Vancouver, British Columbia, has its own history of racist housing policies, beginning with the forcible expulsion of First Nations people from unceded lands without negotiated treaties. In the 1880s the city implemented bans on nonwhites owning property as a backlash against increasing immigration from China. A report by Canada’s National Post in 2014 uncovered deeds on Vancouver properties that had racial restrictions as recently as the 1990s. One South Vancouver property specified “no Asiatic, Negro or Indian shall have the right or be allowed to own, become tenant of or occupy any part of [the property].”

Vancouver has also faced recent tensions over an influx of investments in residential properties by immigrants from Hong Kong and China.

With rents skyrocketing in Vancouver, more and more people with low incomes are forced to sleep on the street.

Rising numbers in Cascadia find no home other than the sidewalk

Besides systemic racism, the affordable housing famine exacerbates the region’s worsening crisis of poor people living outside, colloquially, but inaccurately known as “homelessness.” In Portland, an estimated 1,667 people sleep outside every night. In Seattle, the number is 8,500—the third-highest population in the United States. In Vancouver, 1,032 slept on the streets. Each city’s houseless population is at or near record levels.

While the causes of so many people sleeping outside are complex, one factor is simple: they don’t have a house they can go to. Or more precisely, in the private-property economy, they cannot afford a housing unit. In 2017, the United States homeless population increased for the first time since 2010. “The increase is almost entirely due to a surge in homelessness in Los Angeles and other [west coast] cities facing severe shortages of affordable housing, say HUD officials,” NPR reported in December.

According to the Globe and Mail, low-income tenants are regularly displaced by Vancouver landlords seeking higher revenues. This shift away from housing as a resource and toward housing as a commodity drew condemnation from Leilani Farha, the special rapporteur on the right to housing for the United Nations Human Rights Council. “Housing is the core to well being and to life,” she told the Globe and Mail. “It affects us in so many ways, emotionally and physically. That’s why it is a human right. We are talking life and death issues.”

Portland bets big on an affordable housing levy

In 2016, Multnomah County voters in the greater Portland area authorized a bond (i.e. loan from private investors) of up to $258.4 million to pay for the development of 1,300 housing units. In November 2017, the City Council approved construction of a 240-unit, 12-story subsidized housing complex–the largest project approved in half a century, according to KGW. Reflecting on the project, a spokesperson for Mayor Ted Wheeler said, “During the great recession, 2008 to 2012, the city really underbuilt housing of all types, but in particular affordable housing.” This new complex will have rents affordable to people earning no more than 60 percent area median income. For example, a single person living in a studio apartment will pay $784 per month.

As in Seattle, Portland is wrestling with trade-offs between quality and quantity, and between short-term and long-term strategies. According to the Willamette Week’s Nigel Jaquiss, the 240-unit project became a flashpoint for controversy after private contractors claimed they could produce the same number of affordable units for a fraction of the price. City Councilor Nick Fish responded to Jaquiss that it is “penny-wise and pound-foolish” for the city to focus exclusively on the most cost-efficient (that is, cheapest) forms of subsidized housing. “You could reduce the expense of our projects—but at what cost?” Fish said. “We do high-quality work in neighborhoods where people want to live. I’m not going to compromise on those values—we should celebrate them.”

The city has also tied increased development to increased sub-market housing via an inclusionary zoning ordinance: developers can develop more, but they have to include low-income units. As one might expect, there’s been NIMBY (Not In My Back Yard) resistance. For instance, homeowners in the Laurelhurst Neighborhood Association organized earlier last year to seek official designation as a historic site, which would prohibit new development there despite recent upzones across much of the city to accommodate new housing. “We have an ace card to play that almost no other neighborhoods have,” said Mike Parrott, a Laurelhurst resident, in the historic district’s promotional materials, reports Willamette Week’s Rachel Monahan. “It will add one more barrier against my street becoming filled with duplexes and my corner lots becoming triplexes.”

In response, Oregon legislators have begun considering a bill that would make it harder for local governments to restrict new development, market-rate or otherwise. H.B. 2007 would take the question out of the hands of local government, where lawmakers are often shackled by the wishes of NIMBY homeowners who don’t want to see more housing (and more people) in their communities,” wrote Citylab’s Kriston Capps in June. “Essentially, by stripping cities of authority, the state is protecting its cities from their own neighborhoods.”

Portland passed an ambitious affordable housing levy in 2016, which will fund projects like Block 45, a 240-unit, 12-story complex in the city’s Lloyd district.

Stripping that authority would constitute a sea-change in Portland housing rules. As Portland Monthly’s Amanda Waldroupe reported in 2012, the Rose City’s “microfederalism” in city and neighborhood politics “makes for epic battles—from nascent neighborhood groups’ seminal fight against the 1970s Mount Hood Freeway to the Northwest District Association’s role in stopping Steve Jobs from building a modernist Apple store in the quaint mishmash of NW 23rd Avenue in 2006.

Yet city centers are not the only place where housing for poor and working class people is in desperately short supply. Portland’s houseless-advocacy newspaper Street Roots noted in November that the affordable housing crisis is not limited to urban centers. “The lack of affordable housing throughout Oregon is affecting Oregonians everywhere,” wrote executive editor Israel Bayer in November. “Bend is a disaster. The coast, too. Southern Oregon is off the grid, literally and figuratively speaking…Local communities around the metro region and the state (with the exception of Eugene) invest almost no money or ongoing revenue into the production of affordable-housing units or homeless services. It’s a nightmare scenario for Oregonians, and unfortunately, Multnomah County.”

Yet NIMBYs have been losing ground in recent years, especially in local elections. In response, they’ve begun pinning the anti-development cause to Occupy Wall Street-style class war, because developers are easily portrayed as greedy capitalists, a convenient foe for both NIMBYs and leftists.

Pamela Phan, policy and organizing director for the Oregon Community Alliance of Tenants (CAT), agrees, saying, “We are absolutely in a housing crisis statewide…If you bump into someone at the bar or the library, this is what they’re talking about.” Part of CAT’s work is trying to increase renters rights against eviction, a goal for which “I always look to Seattle” for inspiration, says Phan. She acknowledges the “double-edged sword” of new development, which can either destroy existing affordable housing or directly or indirectly create new affordable housing, or both. Of course, loosening zoning restrictions to allow for more “infill” development – such as backyard cottages — is one way to increase supply that single-family homeowners are more likely to accept. Phan points out that Portland’s private housing market has not served all citizens equally. There’s a glut of expensive housing on the market right now, so much so that “a lot of those properties are empty right now,” she says, while the unmet “demand is in moderate and low-income housing right now.”

The ongoing battle to re-zone Seattle

In Seattle, urbanists have been trying for years to upzone single family neighborhoods so that new housing can be developed there. They are indefatigably opposed by NIMBY groups, whose generations-long struggle to protect what old timers call “lesser Seattle” (an acerbic inversion of the “Greater Seattle” envisioned by business boosters) has managed to keep 57 percent of the city’s buildable land zoned exclusively for single family homes. In 2015, a mayoral task force issued 65 recommendations in what was called the Housing Affordability and Livability Agenda (HALA). The big takeaway? Let developers build more, in exchange for either capping rents in a fraction of the new units for several years or paying into a pot of money to fund subsidized housing elsewhere.

“At the heart of [HALA] is a grand bargain between developers and affordable housing advocates,” then-mayor Ed Murray said, as I reported in Seattle Weekly at the time. Murray described the plan as a way to mitigate the city’s growing “economic apartheid” and a way to end “an almost two-decade war about how we move forward on affordable housing.”

With over 1,000 new residents arriving each week, Seattle has struggled with rising housing costs. Officials struck a “grand bargain” with developers to loosen building restrictions in return for required low income units.

That latter statement turned out to be overly optimistic. After a local columnist leaked an early draft of the plan under the headline “Get Rid of Single Family Zoning?,” the City Council backed down from the part of the plan calling for increased density in single family neighborhoods, which covered the majority of Seattle’s land area. “I feared, and still do,” council member Tim Burgess said at the time, “that the blowback on that is so intense that it puts at risk all the other stuff that the so-called Grand Bargain includes.”

Yet NIMBYs have been losing ground in recent years, especially in local elections. In response, they’ve begun pinning the anti-development cause to Occupy Wall Street-style class war, because developers are easily portrayed as greedy capitalists, a convenient foe for both NIMBYs and leftists. The most striking recent example was the relatively conservative Seattle Times editorial board’s endorsement of Jon Grant, a democratic socialist, for City Council, apparently because they believed that his commitment to heavily taxing developers would serve the editorial board’s own goal of slowing development.

In short, while polls show plurality support for upzoning in Seattle, the noisy minority that opposes upzoning has been able to obstruct changes by playing up disagreements over the details. However, that’s beginning to change. In the past year, Mandatory Housing Affordability (MHA) has gone into effect in Uptown, Chinatown/International District, parts of the Central District, Downtown, South Lake Union, and the University District. MHA is one vehicle of Murray’s “grand bargain”: developers are now allowed to developer bigger/denser, but they must include sub-market rate units or put money into an affordable housing development fund.

At the same time, activists (including yours truly) have worked to pressure city leaders to build more subsidized housing–and to hopefully pay for it by taxing large businesses, since state restrictions severely limit the city’s ability to tax progressively. During the City Council’s budget process in October and November 2017, activists [full disclosure: I was an active participant in the Transit Rider Union’s efforts] packed and sometimes interrupted public meetings, and filled elected officials’ voicemails and inboxes with pleas to support an employee-hours tax on the largest Seattle businesses –raising $24 million per year to pay for subsidized housing. The City Council responded tentatively with a resolution to create a task force to examine a business employee hours tax and possibly other revenue sources. Whether and how that resolution will be fulfilled remains to be seen.

There are also a number of smaller tweaks to regulations that city leaders hope will ameliorate the shortage of affordable housing. For instance, in December the Seattle City Council passed legislation limiting the number of housing units that owners can rent short-term (i.e. through Airbnb), in order to prevent the city’s housing stock from being converted into de facto hotels for tourists.

Explaining her vote in favor of the restrictions, newly elected council member Teresa Mosqueda said on her blog, “We need housing…It was through this lens that I took a vote yesterday on the short-term rental provision, to make sure that we get more affordable housing options into our market to make sure that more people can afford to rent and stay in the city where they work, study or want to retire.

Vancouver’s housing moon shot

In November 2017, the Vancouver city council passed an ambitious 10-year plan to produce 72,000 new units of housing, including rentals, supported living units, and condos, according to Global News. Much like Seattle’s HALA blueprint, the plan proposes denser development in traditionally affluent areas. It also contemplates restricting purchases of property by non-permanent residents, as is currently the law in Australia and New Zealand. It comes on the heels of a national strategy unveiled by Justin Trudeau’s Liberal Party in November to spend over $11 billion to create at least 300,000 affordable units of new housing across Canada.

“Counter NIMBYism with empathy and education. In building housing and services, the city must put the safety and survival of marginalized people above the comfort of residents who are housed and safe.”

“Even a sharp correction in the housing market won’t enable opportunities for people to rent or buy without an increase in supply of housing geared to low and middle incomes,” wrote Vancouver mayor Gregor Robertson in 2015. A city report backs him up. Between 2011 and 2014 the greatest unmet demand for housing in Vancouver was for units affordable to people earning $30,000 CDN or less annually. Those earning $30,000 to $50,000 had a slightly smaller, but still substantial, shortage. By contrast, there was a glut of housing affordable to people earning $50,000 or more per year–nearly twice as much supply as demand, according to the report.

In short, the invisible hand of the housing market is working just fine in Vancouver, as long as you’re wealthy enough to be allowed into it.

Yet new, subsidized housing remains controversial among the city’s wealthy elites and long-established homeowners. The Vancouver Sun reports that NIMBYs in Vancouver’s Marpole neighborhood recently objected to the development of 78 units of subsidized housing for homeless people–because, as resident Mike Burdick put it, the site was too close to a school. An online petition against the project drew more than 2,000 signatures. “Why would you subject a kindergarten, Grade 1, 2 and on up children to possible dangers with [mentally ill] people walking around the community?” Burdick said to Sun reporter Matt Robinson. “There doesn’t appear to be any kind of standards for security or safety…It’s really disturbing.” A court ruling in December, however, ordered that project go forward.

Jessica Hannon, executive director of Vancouver’s street newspaper Megaphone Magazine, responds: “Counter NIMBYism with empathy and education. In building housing and services, the city must put the safety and survival of marginalized people above the comfort of residents who are housed and safe. We ought not be able to decide if poor people have a right to live near us under the guise of community consultation.” Similarly, says Hannon, Vancouver and other cities should “stop criminalizing people who are homeless. Bylaw enforcement, injunctions against tent encampments, and the like just make it harder for people trying to get by in awful circumstances.

“[U]nderpinning this housing crisis is [the fact] that real estate is primarily a financial asset, rather than a home,” she says. While Hannon lauds the local and provincial government’s recent investment in modular housing, “we need to build long-term toward permanent housing.” And that requires money, which means taxes, which means politics, which means continued ugly fights.

Holding back the flood

The tidal wave of capital investment washing into Portland, Seattle, Vancouver and other west coast cities has lifted some boats while sinking others. More and more residents find themselves frantically bailing water to pay rent, moving away to less-expensive cities or treading water by living outside, growing ever angrier as they watch well-paid tech workers and the One Percent zip around in their yachts and Teslas.

In response, city leaders in Cascadia have employed two strategies to increase affordability–with mixed results. They’ve reduced limits on density and new development in order to increase the overall stock of housing, and they’ve raised revenue to subsidize low-income housing. Those efforts may have held back some of the flood waters, but housing costs continue to rise past these virtual systems of levees and dikes. It remains to be seen if newly elected city governments can pass additional measures–and if they can, whether those measures will be too little, too late.

One thing is certain: the crisis of affordable housing in cities in Cascadia will not dissipate anytime soon. It’s a social crisis, a symptom of global capital’s escalating polarization of wealth. It’s a difficult prospect, solving a very localized problem that’s driven by much larger forces. Nevertheless, local leadership will need to address it.

“We need all three levels of government to step into the housing sphere in a big way: municipal, federal, and provincial,” says Hannon, suggesting we need to pass “progressive taxation that funds housing and social services.”

Clearly, that kind of assistance from the current American federal government won’t be appearing soon in Seattle or Portland (and in fact the newly passed federal tax bill will likely cause huge cuts to affordable housing assistance). This shifts even more responsibility on to the shoulders of local leaders, governmental or otherwise–and on the activists who lobby those leaders.

Or, to look at it another way, it dumps more gasoline onto an already fiery crisis in which there are lots of easy answers, but few good solutions.

Casey Jaywork is a freelance journalist based in Seattle. Follow him on Twitter at @CaseyJaywork.

Photo credits: Vancouver apartments by Joe Mabel, CC BY-SA 3.0, homeless people on the streets of Vancouver by Adam Jones, CC BY-SA 2.0, Portland’s Block 45 affordable housing project, courtesy Lever Architecture, Seattle apartment construction by Andrew Engelson.

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