Council Member Johnson,
I am encouraged that Seattle’s 2035 Draft Comprehensive plan states an aspiration to be an “equitable” city. Job and wage growth in our city presents the mayor, council, and community with a rare opportunity to make progress toward this goal.
To this end, I hope you, members of the Planning and Land Use Committee, and the full Council will take into consideration the following input aimed at ensuring the plan sets the stage for a policy regime that makes the most of it.
- Evaluate whether the City’s “30% AMI” housing cost benchmark is fit for purpose to best foster equitable policy.
Research is clear that place of residence at the zip code, neighborhood, and census tract levels has strong correlations with well-being and life outcomes. There is a strong empirical case to be made that parental investment in a home in a higher income, opportunity, and environmental quality location may raise their children’s academic success, lifetime earnings, and, literally, lifespan.
Conversely, research is equally clear that for poor and working-class families, lack of time for high-quality parental interaction puts their children at an academic disadvantage relative to wealthier families.
In this context, (for example) housing costing a low percentage of income that entails and hour-long daily commute each way may harm equity, while more expensive housing that is a 10-minute walk from work may increase it.
The City should:
- Challenge any policy assumption that equitable housing policy can be best fostered without a measure of household well being and life outcomes
- Assess the equity implications of including or failing to include measures of the time and cost of transportation to work and school in relation to housing cost
- Assess the equity implications of treating households’ investment in place within certain parameters (such as adequate residual income) as pro-equity
- Evaluate barriers to small, local and minority-owned business expansion within a growing market.
More people, with more money, living nearby are a chance for any business to grow. (Some businesses many would consider to be a part of Seattle’s heritage are indeed doing so: Ezell’s is opening a location in Wallingford; Uwajimaya in in South Lake Union). But others that are unable to take advantage of the opportunity may be pressured by concomitantly rising rents.
While the plan currently includes language addressing business displacement and survivability, from equity perspective the more salient question is why they should be at a competitive disadvantage at all relative to those businesses that might take their place. To foster equity, the City should assess root causes behind any inability of small, local, and minority-businesses to thrive in Seattle’s attractive market.
These may themselves have equity implications, such as the legacy of discrimination, or lack of nearby affordable housing for employees (a factor cited by some Seattle restaurants recently).
The City should:
- Challenge any policy assumption that small, local, and minority-owned business would manifest any lack of ability to grow in an equitable, prosperous city
- Create a measure of business opportunity at an City-wide and small area level
- Assess the relative success of small, local, and minority-owned businesses in relation to opportunity, investigate barriers to success and prioritize policy to remediate them
- Evaluate the equity implications of holistic benchmarks for exclusion and displacement.
More jobs that pay higher wages are an opportunity for any worker to get ahead. But the cost of access to those jobs must not outweigh the potential gains. In regards to the cost of housing, “displacement” and “exclusion” are two sides of the same coin. The former addresses people already living in a high-opportunity area who may be compelled to leave; the latter, people, who would benefit from living in a high-opportunity area who are effectively barred from entry.
Addressing both together has both local and national implications for equity. There is strong evidence mixed-income neighborhoods are associated with better life outcomes. Nationally, the in-migration of lower wage and lower-skilled workers from job-poor locations to job rich locations is lower than historical norms. And the only group “left behind” in the 2014-2015 increase in median household reported by the Census Bureau is people outside of metropolitan areas.
An equitable city is a one open to people everywhere who need access to our good jobs. And in an equitable city, the odds of a people with less rather than more money living in high-opportunity areas rather than not will converge on even.
Current plans designate areas “at high risk of displacement” but do not place the same emphasis on areas “in great need of socio-economic inclusion.”
To this end, the City should:
- Challenge any policy assumption that accepts any long-run measures of income or racial segregation (such as a dissimilarity index) doing anything other than converging toward zero
- Create measures of equitable economic integration that subsume displacement and exclusion that are benchmarked against local conditions, the County, and best-in-class metropolitan areas; explore measures of Seattle as a viable in-migration destination for lower income and minority households
- Commit to collaborative, open innovation in planning and land-use in tandem with other innovations related to our strong job market. (For example, the $15 per hour minimum wage is an innovation that will foster 2-earner minimum wage households with $60,000 in annual income. This is an opportunity for the City and partners in academia and industry to explore innovation in housing forms, financing, and policies that create breakthroughs in their options for homes near jobs and transit.)
- Evaluate the equity implications of policy goals related to the “wedge” between housing prices and construction costs.
By 2013, the gap between real housing prices and real construction costs nationally rose to more than one-and-a-half times what it was in 1980. In Seattle, in 1989 the fewer than half of homes were priced at more than 140% of their construction cost—close to the same ratio as Houston. By 1999, this had risen to more than eight in 10 in Seattle, while Houston’s remained flat.
Research provides evidence that land use policy plays a strong part in driving this ratio. A larger “wedge” harms class, race, and generational equity, because windfall profits to incumbent property owners disproportionally accrue to older, whiter, and wealthier households—at the expense of renters, minorities, and younger people.
There is strong evidence that Seattle is at risk of being closer to “worst in class” rather than “best in class” at preventing or remediating inequity driven by economic land rents (see: Barriers to Shared Growth: The Case of Land Use Regulation and Economic Rents, Remarks by Jason Furman1 Chairman, Council of Economic Advisers, The Urban Institute, November 20, 2015).
Moreover, a larger wedge impairs nearly every form of housing provision for low-income people: it costs more to acquire land for publicly-financed housing, and we get “less bang for our buck” from incentive programs such as inclusionary zoning.
In regards to housing, the existence of outsized land rents is, in some respects, likely fatal to realizing any sort of robust vision for an equitable city.
The City should:
- Challenge any policy assumption that accepts a wedge between real housing costs and real construction costs that is either greater than historical norms or best-in-class (i.e., smaller) ratios in other cities
- Assess the class, race, and generational equity implications of high, low, and mid-range scenarios the city’s gap between real housing prices and real construction costs
- Create effective measures, investigate root causes of failure to meet best-in-class benchmarks, and prioritize policy to remediate them
Thank you for your consideration and all your work.