Don’t Believe the Lies

Developers Dan Duffus and Mark Knoll hired well-known Seattle lobbyist Roger Valdez to pressure city leaders into watering down any single-family small-lot development regulations. The name of their lobbying group: Smart Growth Seattle. (See the Publicola article announcing this lobbying effort, and the group’s website.)

Included below are the truths regarding many of the myths being circulated:

 

THEY SAY: Seattle is now one of the fastest-growing cities in the country. We need to build places for these people to live.

THE TRUTH:  Actually, if you ask the experts, they’ll tell you that Seattle is very close to being overbuilt after years of over-development.

The truth is, Seattle is in the midst of a building boom that has pushed the number of permitted housing units far above growth targets. As this Seattle Weekly article reports, Seattle is experiencing an “unprecedented building boom that has led to cranes everywhere and almost 14,000 permitted units still to be built as of this spring. That’s almost half as many units as were built in the entire seven-year period ending in 2012. They will bring the city slightly above its planned growth target – for the year 2024. Ballard, including permitted construction, has already added more than three times the number of units planned for 10 years hence; Capitol Hill almost twice as many.”

Apartment construction is also peaking. Mike Scott, of the research firm Dupree & Scott, is the local expert on the subject of rental housing. And in this video, titled “Forward to the Past,” Mike uses rental-housing data for the last 100 years to show the booms and busts of Seattle’s apartment market. See how the red line over the year 2015 is starting to tip down?  That shows Seattle’s rental housing market is now officially overbuilt.

Also see this Seattle Times article, which explains how local developers’ actions are reducing – not increasing – the availability of single-family homes in Seattle’s most desirable neighborhoods (they buy single-family homes, knock them down, then build multi-unit buildings in their place).

 

THEY SAY: We’re running out of land to build houses in Seattle. If we don’t do more infill building, it will lead to urban sprawl.

THE TRUTH: According to Tom Hauger, the comprehensive-plan manager for the Department of Planning and Development, “We have over 50 years’ growth capacity across the city.” See this Seattle Times article for his quote, plus all the facts and figures he uses to back up that statement.

 

THEY SAY: Small-lot houses create affordable housing. More housing supply equals lower housing prices.

THE TRUTH:  At the Town Hall meeting that the Department of Planning and Development sponsored in November, 2012, Michael Ravenscroft, a Windermere real estate agent and Seattle Builder’s Council representative, stated that most small-lot houses typically sell for $600,000. That’s not affordable. Even worse, this report shows that the average selling prices are actually closer to $700,000 (or 35% more than the average selling price for all the other homes in the same area).

Adding more $700,000 homes to the market is not going to make homes more affordable (but it will make the developers who build them wealthier).

At the lunch sponsored by Smart Growth Seattle in January, 2013, Roger Valdez, the developers’ lobbyist, admitted that his real-estate supply-and-demand theory (more housing equals lower prices) was primarily based on this article in the Seattle Times. However, that article includes no scientific facts and no studies (only casual predictions of what may happen in the future), and is focused not on single-family home sales prices but rather the monthly rent for apartments in Ballard.

The truth is much more nuanced, as reported in this Seattle Weekly article: “Whether development creates more affordable housing or less is a difficult question to definitively answer. Empirical data doesn’t settle the question because cities don’t typically build enough housing to create the glut needed for prices to come down, observes Rick Jacobus, a Bay Area housing consultant who made a presentation to the Seattle City Council in July. Speaking by phone, he explains that ‘In every major city, we only build high-end housing, and there’s not enough of even that.'”

And finally, this recent Wall St. Journal article reports that Washington state home builders are no longer even interested in building affordable, middle-class homes. There are so many wealthy buyers in the Seattle area now that builders are focusing almost all their efforts on higher-end housing. When they say “density housing,” they really mean “upper-class housing on a smaller scale.”

 

THEY SAY: Building small-lot houses creates lots of good jobs for skilled and unskilled workers.

THE TRUTH:  The six or eight small Seattle-area developers who specialize in building small-lot houses employ a very, very small number of people. What’s more, according to this City of Seattle report on wage theft, small residential construction companies are notoriously abusive employers: “The construction industry as a whole is routinely cited as one of the most vulnerable areas of employment for wage and hour violations. Kimberley Bobo, one of the nation’s leading experts on the problem of wage theft (if not the foremost expert), states that workers’ centers (which collect data on wage theft and other workplace abuses) routinely deal with complaints from the construction industry, and that this sector is notorious for some of the worst abuses, such as employee misclassification and total non-payment of wages.” And “… workers at companies with less than 100 employees experienced a minimum wage violation rate nearly double (29 percent) that of workers at companies with over 100 employees (15 percent).” Plus, “Wage theft is not only a detriment to workers but also to governments through revenue lost to income taxes, workers’ compensation taxes and social security deductions.”

If Seattle really wants to give construction workers good jobs (and make its citizens happy) it should do more rebuilding of the city’s roads, highways and bridges. According to this 60 Minutes report, “every billion dollars spent on transportation infrastructure would create 35,000 well-paying jobs.”

 

THEY SAY: Small-lot houses increase the value of surrounding homes (and an old study by a UW professor proves it).

THE TRUTH: That 2012 study (“The Economic Value of Walkable Neighborhoods,” co-authored by UW professor Anne Vernez Moudon) is not a measure of the financial impact – positive or negative – small-lot houses have on neighboring homes. It is an analysis of how walkability affects home value; how homes located in urban, walkable neighborhoods are more valuable than homes located in suburban, un-walkable neighborhoods.

If you really want to know how devastating small-lot houses can be to the surrounding property values, ask a professional appraiser. When a professional appraiser appraises a home, he relies on data from the recent sales of “comparables.” Those are homes much like the house being appraised. And because small-lot houses are typically unlike anything else in the neighborhood (they’re new, they sit on half-sized lots, are usually ultra-modern in design, and sell for an average of 35% more than the neighborhood’s median), they are never, ever going to be used in a comparable analysis.

In other words, the high prices that small-lot houses sell for (an average of $727,926) don’t positively impact the value of surrounding homes, because the small-lot house would never be considered a comparable.

However, the appraiser will most likely factor in the environmental impact of the small-lot structure (and that’s never positive). Sitting 27 feet tall (that’s the equivalent of three stories), and squeezed into a backyard or side yard, small-lot houses block sunlight to the neighboring houses, block views and, because they typically tower over all the surrounding homes and yards, they rob the neighbors of the privacy those homeowners once enjoyed.

That loss of sunlight, views and privacy can easily drag down the appraised value of the surrounding homes by tens of thousands of dollars. Those were valuable attributes that the current homeowner paid handsomely for, and the associated benefits are now missing or negatively impacted.

 

THEY SAY: Change is difficult. We understand that. But there needs to be change in Seattle’s housing in order to accommodate all the people who want to live here.

THE TRUTH: The neighborhoods where small-lot houses are being built are places of radical change. Look around. The only thing that has slowed that pace of change is the fact that the bottom fell out of the real estate market a few years ago. Before that, these homeowners were adding second stories; adding additions; razing older homes and building new, much-bigger homes; turning their garages into accessory dwelling units and much more. That kind of development is usually good for a neighborhood. And now that the housing market is starting to recover, those efforts are coming to life again (see this NBC news report).

Trying to portray the issue of small-lot houses as “a little bit of change” is ludicrous. Small-lot houses are being built where a home never existed before … where all the surrounding homeowners never thought a home could/would be built … where trees, green grass, barbecues and children’s play sets were the only things there before … where homeowners used to be able to turn for a little outdoor privacy … where homes shouldn’t exist. This kind of development damages the look, feel, livability and value of these neighborhoods.

 

THEY SAY: What’s so wrong about a new house being out of scale with its surroundings?

THE TRUTH: Tall, skinny small-lot houses that are wedged into an existing neighborhood  block solar access for the other homes and rob the surrounding homeowners of the privacy they once had (all of which dramatically reduces both the livability and the resale value for homes close to these structures). Plus, because they’re allowed to be built-out to the very edges of these substandard lots, they add to water-runoff issues and reduce green space. They’re neighborhood bullies.

Neighborhoods in this city have unique characteristics based on when/how they were developed.  Dropping an out-of-scale building into them disrupts that historic character. People choose neighborhoods in part for the living environment they provide. Incongruous buildings disrupt that environment to the detriment of existing property owners

 

THEY SAY: There are very few of these small-lot houses being built. City leaders should spend their valuable time legislating other matters.

THE TRUTH: While it’s true that there aren’t many of these being built, the negative impact is very damaging for all the surrounding homes. The developer gets what he wants and walks away, while all the surrounding homeowners are stuck with the results.

Another reason why this issue should be a focus point for city leaders: the DPD is currently devoting significant city resources (people, time and money) to researching, justifying and defending these projects. Certainly they have more important issues that demand their attention.

 

THEY SAY: The city should not be penalizing the innovative thinking behind these projects. They should reward the developers who are putting these solutions forward.

THE TRUTH: There is nothing innovative about building tall, skinny houses on undersized lots. What would be truly innovative is if these developers could build housing that was actually affordable, fit into the fabric of existing neighborhoods, and did not undermine the character and spaces that made them desirable neighborhoods in the first place.

And no one is being directly penalized. This is simply a matter of recognizing that these projects don’t fit within the zoning and planned development of these neighborhoods.

 

THEY SAY: This is exactly the kind of development the city was promoting when it established new rules for detached accessory dwelling units some years ago.

THE TRUTH: Detached Accessory Dwelling Units have strict limits (minimum 4,000 square-foot lot; maximum of 800 square foot footprint; property owner has to live in the main house or the DADU for at least six months out of the year). Small-lot houses have none of those restrictions, they’re much, much larger in scale, and they subdivide lots into separate ownership. They are nothing like what the city outlined in the DADU codes.

 

THEY SAY: Seattle needs to think more like San Francisco and New York, two cities that are finding great success with small-lot development.

THE TRUTH: If that is the model Seattle wants to follow, the mayor should begin a transparent public discussion with citizens about changing the zoning – instead of letting the current exceptions allow haphazard development here and there. And whatever is decided needs to be clearly articulated and easily accessible so that current homeowners and future home buyers can make educated real estate decisions. As it stands,  it’s a huge surprise to the neighborhood when a developer snatches up one of these properties and begins building a new house in the backyard / side yard.

 

THEY SAY: The typical American family is much smaller now. They want and need these smaller homes (see this Trulia study attesting to that fact).

THE TRUTH: According to that Trulia study, only 9 percent of the American public say they want a home 800 to 1,400 square feet in size (about the size of a small-lot home). That’s not “typical”; that’s a sliver of a subset. Allowing more small-lot homes to be built (and neighborhoods damaged) in order to satisfy such a small contingent isn’t sound public planning.

The truth is, according to the 2012 Profile of Home Buyers and Sellers report from the National Association of Realtors, the typical home purchased in 2012 “was 1,900 square feet in size, built in 1992, and had three bedrooms, two bathrooms.” That’s what today’s typical family is buying.

 

THEY SAY: Many of today’s building codes and regulations are from the 1950s and need to be refreshed.

THE TRUTH: Absolutely true. The developers of small-lot houses are exploiting a loophole from 1957 (Land Use Code 23.44.010.B.1.D) that was designed to allow the original homeowner to construct a garage or some other out-building in their backyard or side yard. No one ever thought that developers would, 56 years later, use these tiny, long-forgotten, historic tax parcels to construct new, three-story homes that loom over everything surrounding them. This loophole needs to be closed.

 

THEY SAY: Opponents to small-lot houses are simply crying “not in my backyard!”

THE TRUTH: Usually when people cry “not in my backyard,” they’re completely at peace with the projects moving to other neighborhoods. That’s not true with the group of homeowners that has banded together to fight this practice. We come from a variety of neighborhoods throughout Seattle. And most of us already have one of these projects in our “backyards”; we know how damaging they can be for a neighborhood. That’s why we’re working collectively to address this issue citywide.

 

THEY SAY: The opponents of small-lot houses are anti-density.

THE TRUTH: No we’re not. We’re for density when density is planned, zoned and transparent. Plus, small-lot houses are an extremely ineffective way to increase density.

 

THEY SAY: Building better cities in our region, funding transit and planning for sustainable growth will mean thinking big and beyond the principled stand of lone individuals protecting their rights.

THE TRUTH: The people in this group are not making principled stands in an effort to protect our individual rights. We’re homeowners from across the city who have banded together to stop small-lot houses wherever they may pop up. Most of us already live next to a small-lot house, and we know how damaging they can be for neighborhoods.

How about the developers of these projects? Buying an older home with a bit of excess land, then profiting from the application of an obscure zoning exception is not “thinking big.” Nor is it “principled.” It is the pursuit of private profit and nothing else

 

THEY SAY: Current building codes (specifically the “75/80 Rule”) should be modified to allow development of housing on lots that are 80% of the average lot size of a block face regardless of size (i.e. if the average size of the lots on a block is 4000 square feet, then the minimum required size for development would be 3200 square feet). This new rule would be called the 80% Rule.

THE TRUTH:  This is an attempt to re-zone all the single-family neighborhoods throughout the city (without any public discussion). It’s another loophole to the minimum lot-size requirement.

The 80% Rule:

  • Is an effort to eliminate the minimum 5,000 and 7,200 square-foot zones.
  • Applies whether the lot in question is categorized as a pre-existing “building site” or not.
  • Uses “average lot size” on the block face, whereas the 75/80 Rule applies to the existing sites on the block face.

 

THEY SAY: In a long blog post, the developers’ lobbyist claims he is not a lobbyist.

THE TRUTH:  In that same blog post, he admits to the following:

  • “Well, much of what I do every day and each week is what could be called, in the best sense, lobbying. I do meet with Councilmembers and others who are making critical decisions trying to change their minds or trying to persuade them to keep doing the right thing. But I don’t charge by the hour. And I represent an organization that was formed to represent an idea, not a client for pay.”
  • “That’s what I do; try to convince people, including decision makers, that our idea is the best idea for dealing with growth. And I think I do it with great enthusiasm.”
  • “So I do everything I can every day to advance that idea and defend those people, in interviews with media, in discussions with people I meet, in communications with members and staff of our funding organizations, on social media, with friends, and everywhere and anytime I have the opportunity.”
  • “I defend builders and developers from unfair and unwarranted characterization and criticism.”
  • “I do what I do because I love to do it and because I believe in it and the people who build our housing.”
  • “But when supposed allies wave their hands at me and dismiss me because of who pays my salary that is annoying and frustrating.”