Why we need publicly-owned and mandated affordable housing
Recently, Olympia proposed (and passed, without consent of the public or the required public meetings) a proposal to gentrify the majority of the city, and in the process, illegally did away with the required environmental review process. There are also mentions of giveaways for developers (usually larger, out-of-state investment firms) and dangerous changes to environmental requirements, like removal of investments in utilities, and changes to requirements for retention ponds and minimum permeable surfaces.
The name of the proposal, “Missing Middle,” implies we’re “missing” a certain “type” of housing, and that “adding the missing housing” will magically fix the material capitalistic issues caused by the lack of regulations on rental properties, or the lack of mandated affordability. This transparent corporate marketing scheme was developed by firms like Opticos Design in Southern California. The images used by the Olympia City Council were literally taken directly from the corporate marketing materials given out at conferences run by marketing firms like Opticos Design.
A better name for this proposal would be “Trickle-Down Housing.” This “YIMBY”-backed and market-based approach to housing basically implies that housing “stock” is a monolithic commodity, and we simply need “more of it,” as if housing follows the rules of supply and demand. Unfortunately, that isn’t how housing works.
Development-ready land is already a scarce resource, and demolishing affordable single-family homes to get the cheap land to build “more dense units” means developers and investors will buy up affordable houses and build profitable luxury condos in their place. Anyone who says they won’t demolish existing affordable homes is admitting this will instead cause urban sprawl. This is gentrification, plain and simple.
Any plan to create more affordable houses must mandate that new development includes affordable units, and in most cases, those units must be publicly-owned to guarantee that they remain affordable. Without such mandates, any “new” housing “enabled” by these de-regulations and giveaways will create nothing but a speculation bubble for wealthy out-of-state investors, resulting in empty units and a sharp rise in area rent, and the displacement of the working class and people of color.
Below was a proposal I shared with the Olympia City Council as an addition to their “Missing Middle” plan, which would add mandated affordability to the mix. Only two of the seven council members responded to my request for a meeting. Renata Rollins spoke to me via phone but dismissed my advice. Lisa Parshley (a multi-millionaire who lives outside of Olympia, and owns multiple investment properties) missed two scheduled meetings, then showed up nearly an hour late the 3rd time, and refused to even look at this proposal. All council members voted in favor of the so-called “Missing Middle” gentrification and corporate giveaway scheme without considering public comments.
The State Legislature is proposing a state-wide version of the “Missing Middle” via HB1923 / SB5812.
To maintain affordability in Olympia, new projects with more than 12 units should include 25% of total units that meet MHA (mandatory housing affordability), rounding up in the case of fractions (so at least 3 whole units per project). This could be based on a static 80% Area Median Income level, or a tiered system of 30/50/80% AMI at 5/7/13% MHA respectively.
Thurston HUD (the local office of HUD) keeps statistics on Area Median Income and Family Size:
Based on these numbers, and assuming 30% of gross monthly income could be spent on rent, and that unit size is +1BR for every additional family member after 2 (single person living in a studio, a couple living in a 1BR, a family of 3 living in a 2BR, etc), “affordability” limits become:
Developers who fail to include 25% MHA pay the cost of building comparable units into a fund to build affordable housing elsewhere.
Existing development after 2018 will need to maintain 25% MHA or face a per-unit yearly penalty paid into a fund for public housing. Existing developments are grandfathered/exempted from the MHA rules. This would keep the area affordable and incentivize new developments to include affordable units.
While the proposed changes to zoning in “Missing Middle” are for “buildings with fewer than 12 units,” this is intentionally misleading: projects often include multiple buildings, which can be upwards of 20–50 total units per project. The Missing Middle proposal even uses an image of such a project on the website for the proposal:
Courtyards often contain more than 10–12 units as well and would be the most likely types of dwellings for working-class residents. A typical 12-unit courtyard project would still only have 3 MHA units.
With all of this in mind, we also need to focus on not creating a speculation bubble. It has been said by proponents of Missing Middle, that “more units = lower prices,” implying the simple rules of supply and demand will solve the housing crisis and that they will just somehow end up being affordable. However, it is well known that the basic rules of supply and demand do not apply to housing markets unless strict rules are put into place to prevent over-saturation of the most profitable projects: luxury units.
Developers, when given free rein to do whatever they want, will build luxury units, which leads to speculation and outside investment (and in turn, an artificial shortage — or worse, a speculation bubble). We can witness this now in Vancouver, Seattle and San Francisco, with their blocks of vacant luxury units and a continued housing shortage during record-breaking levels of new development, paired with increasing property values and rents. However, in New York, which has strong MHA rules, this is not happening.
Missing Middle proponents have suggested amendments that would exempt nearly every project from paying any impact fees or general facilities charges, creating a huge burden on our existing utilities and natural environment, with no discernible benefit to the city and taxpayers. All development has an impact, and the following giveaways especially are not what a reasonable person would consider “small” or without the obvious impacts:
- School impact fee giveaways
- Utility development (LOTT, sewer, gas, electricity) and hookup fee giveaways
- Parking impact fee giveaways
- Other impact fee giveaways (such as transit, streets, sidewalks, and environment)
Without developers paying these fees, costs will be offset to the city, which in turn will be forced to raise property taxes (or cut other programs and services), resulting in higher rent and living costs.
Additionally, the language in the proposal regarding “no significant impacts” is misleading. For example, proponents claim developers pay for sewer installation but do not factor in the septic-only areas with no existing sewer lines. Developments in these areas would cost the city millions in required build-outs of new sewer systems (and there would now be no impact fees to help offset these costs). This is short-sighted and misleading of Missing Middle proponents. 2019 Update: The City of Olympia recently lost in court regarding this claim of “no significant impacts,” and are being forced to do an environmental review. Rather than perform this review, the City of Olympia has instead chosen to continue to appeal and drag the case on, spending millions of tax dollars in the process.
The Missing Middle proposal has many good ideas, but unfortunately, many flaws. It is nearly 300 pages of language, and with no public notice, review, debate or comment period, it would be impossible for most residents of Olympia to have time to digest and process all of the information appropriately. If given such time, I do not believe Missing Middle would be popular with most residents of Olympia. In fact, members of the Olympia City Council said exactly this as a reason for not holding public comment.
The language seems to be geared towards giveaways to developers to “incentivize” them to build in Olympia but does not clearly explain why these giveaways are needed, or why we need to “incentivize” developers at all. Olympia and Thurston County are projected to have huge growth in the coming years, and developers would be foolish to not invest in our city as-is. We’re in a position to demand positive changes.
We charge impact fees and have a review process in order to invest in our future and protect our beautiful city. These fees and rules are pretty standard in most cities in this country. Waiving the fees (for what I can only assume is increased profits for private developers) doesn’t make any sense at all unless we are going to admit that our city is being run in the interest of investors and developers who want to build Airbnb and other speculatory/investment units.
Olympia needs to address the housing crisis appropriately. If we’re going to be making blanket giveaways to developers, we must demand protections for our working-class residents, including not only mandatory housing affordability, but general rent control, deposit payment plans, protections against economic evictions, as well as other guarantees that working-class residents will continue to be able to afford to live in Olympia.