Can Building Housing Lower Rents? 

Seattle says "yes."

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click to enlarge The Seattle Sierra Club, unlike the Bay Area chapter, is committed to infill housing. - WIKIMEDIA COMMONS
  • Wikimedia Commons
  • The Seattle Sierra Club, unlike the Bay Area chapter, is committed to infill housing.

The answer is no. Seattle will never match San Francisco housing prices. Seattle's average two-bedroom apartment rent reached $2,000 for the first time in September 2017; that was below the average rent for a San Francisco studio apartment. Seattle's two-bedrooms without the amenities included in new housing went for $1,460; that likely would not even be enough to get you an SRO with bath in San Francisco. As for home prices, Seattle's median price was $635,000 at the start of 2017 and by year's end had risen to $741,000. Even with that huge jump, Seattle was still far behind San Francisco's end-of-2017 median home price of $1,275,700.

Seattle is much cheaper primarily because it builds a lot more housing. From 2005 to 2015, Seattle built twice the number of housing units as San Francisco, 50,000 versus 24,000. Seattle averaged 5,000 new units per year during that period, while until very recently, San Francisco averaged around 1,950. Seattle's housing production was more than double San Francisco's despite Seattle having roughly 200,000 fewer people. San Francisco rents are also about double those of Seattle, and in 2015 its tenants paid 61 percent of their income in rent, compared to 38 percent in Seattle.

Other than in their historic approach to housing, Seattle and San Francisco have many similarities. Both are former maritime cities offering beautiful water views, well-paid tech jobs, and a smaller scale than sprawling urban metropolises like New York, Los Angeles, or Chicago. The Seattle area is headquarters to Amazon and Microsoft while San Francisco hosts Salesforce and Twitter, with Facebook and Google based in the nearby South Bay. Seattle has a population of roughly 600,000 to San Francisco's 800,000. John Rahaim, San Francisco's planning director since the start of the tech boom, was formerly the assistant planning director for Seattle.

In the 1980s, both Seattle and San Francisco voted to slow growth. In 1986, San Francisco's Proposition M capped annual downtown office construction. Seattle's 1989 Citizens' Alternative Plan initiative limited most new housing to 85 feet in height and office buildings to 450 feet. Whereas San Francisco's annual cap became one million square feet, Seattle limited growth to 500,000.

Seattle took one important step in the 1980s that San Francisco did not: It passed a housing levy to help fund affordable housing. Voter approval of the 1981 measure has since been renewed every seven years, most recently with 70 percent of the vote in August 2016 at a higher amount of $290 million. The levy has added 13,000 affordable units and enabled 900 low-income families to buy homes. San Francisco did not pass its first affordable housing bond until 1996. It failed to pass another bond until 2015, when a $310 million measure was approved.

In 1990, the Washington State legislature enacted the Growth Management Act to guide planning for growth and development in the state. The act required that Seattle adopt comprehensive plans for building enough housing within its borders to address population growth. Since the 1990s, Seattle has done just that.

Seattle Mayor Norman Rice set the city on the right course in 1994 when he pioneered the concept of "urban villages." These communities would get dense, commercially oriented development. They would also support 45 percent of the city's 60,000 new housing units over the next 20 years. Seven less dense "hub urban villages" and 17 "residential urban villages" would accept another one-third of the expected growth. The city backed the housing plans with funding for new parks, utilities, low-income housing subsidies, new bike and pedestrian paths, expanded bus service, and an experimental van transit program.

Mayor Rice's housing strategy encouraged growth inside the city, where it could best be absorbed: "Rather than allowing the nearby foothills of the Cascade Mountains to be colonized by new suburban developments, the city will try to lure growth inward by creating attractive urban living environments replete with parks, shops, and restaurants, and a convenient mass-transit system." Rice turned Seattle into "America's epicenter of urban planning," according to Crosscut, a Washington news organization.

A 2014 report on the 20-year anniversary of Rice's project found that 75 percent of the city's growth "was going to the urban villages, just where the original planners had wished." This was true even though the urban villages had comprised only about one-third of the city population when the plan went into effect.

Imagine if San Francisco in 1990 had been required by the state Legislature to build sufficient housing to deter suburban sprawl. The city would have much more housing and be much more affordable. Bay Area commutes would be shorter, and open green space, rather than single-family homes, would fill East Bay hills. But California imposed no enforceable housing construction plans or development quotas on San Francisco. Unlike Seattle, San Francisco was free to ignore the housing needs of a growing population. It was also free to force much of its workforce to live outside the city.

Pro-Infill Housing

To find out whether Seattle's efforts to build more housing really increased affordability, and how pro-housing forces overcame the kind of neighborhood opposition that blocked housing development in other cities, I turned to Bill Rumpf, president of Mercy Housing Northwest.


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