Stories about tenants being priced out of their apartments are beginning to feel too familiar: An older apartment building trades hands, then the new owner imposes huge rental increases on tenants, some of whom are on fixed incomes or have been paying below-market rents for years or decades.
Such a story graced the front page of The Seattle Times this week and metro columnist Danny Westneat vehemently reacted to the news.
While the story of an owner of a nine-unit apartment building more than doubling rents is shocking, it doesn’t represent the larger picture of Seattle’s housing market.
Rents rose about 18 percent in Seattle during the past two years and about 16 percent in the Seattle-Bellevue-Tacoma Census area, according to apartment research firm RealFacts.
Despite the dramatic rent increases, Seattle remains relatively affordable. In addressing the issue of housing affordability, it’s more important to think about how to protect vulnerable tenants versus cursing landlords who want to maximize their revenues, which is in their right as business owners.
Some context to keep in mind: Seattle is experiencing significant growth that has attracted thousands of new residents to the area and promises to attract about 100,000 more people and 115,000 more jobs by 2035.
And while some people argue that all the high-paying jobs are going to techie transplants, it’s still notable that Seattle’s income levels grew 2.8 percent — the third fastest in the nation — during the fourth quarter of 2014, according to a report in the Puget Sound Business Journal.
Seattle added about 35,600 units of housing from 2005 to 2013, which is about double the housing production of San Francisco, a city of 800,000 people compared to Seattle’s 650,000. People in San Francisco envy Seattle for “getting it right” on housing production, as I reported for the San Francisco Business Times last summer.
Instead of asking why landlords are hiking up rent, we should ask what we can do to help people in the bottom rungs of the income ladder. That is what Arthur Sullivan, program manager for A Regional Coalition for Housing (ARCH), an East King County partnership of cities, has been trying to address in his 30-year career. He recalls similar displacement narratives during other economic cycles such as when he started working in Bellevue in the early 1990s.
No city or region has ever been able to provide enough affordable housing for the bottom third of the income spectrum, he said, but they should at least try.
A major concern with current housing development is that it caters to the high-end. Typically, new housing is priced more than older inventory because it’s new. But usually that means that older, outdated units are less expensive and become what people call “naturally affordable.”
In Seattle, many of those “naturally affordable” units are seeing big rent increases because of high demand or because a new owner comes in and renovates.
Stan Humphries, chief economist at Zillow, told me one unsolved mystery right now is why the private housing market isn’t delivering more housing aimed at middle-income people.
Zillow also found that rental affordability has steadily declined in Seattle for the last two decades, which is also happening nationally.
In Seattle, renters were paying an average of 31 percent of their income in rent in September 2014, up from 26 percent in September 2004. Across the country, the average is about 30 percent up from a long-term average of 25 percent.
“We’re not providing enough rental properties that the typical renter can afford,” Humphries said. “We have documented well the affordable rental crisis in this country. Now we need to look at why.”