Sunday, 12 July, 2020

2015 Seattle City Council Election, District 5: Halei Watkins Interview

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halei-watkins
Halei Watkins

Article Note: The Urbanist is publishing a series of interviews with a selection of 2015 Seattle City Council candidates. In June, we will release our endorsements.

Halei Watkins is a community organizer with Planned Parenthood and previously worked on the marriage equality campaign. She is also a renter, living in the fifth district with her husband who is working two jobs while attending school. She dedicated most of her career to issues she cares about, focusing on community organizing because she believes it empowers people. She is a political newcomer in the sense that she hasn’t been elected to any prior office.

What would you do to make housing affordable to everyone in Seattle?

Watkins responded to this question with specific points about many of the policies being discussed. She mentioned there’s an array of tools but focused in on three. First, she said the city needs to examine the MFTE program. She pointed to legislation the Council passed extending the MFTE program to people making just 40% AMI living in small efficiency dwelling units (i.e., micro housing) and indicated that lowering the threshold for larger units below 60-85% would be good. Furthermore, she thinks the program could be expanded.

The second area she said needs improvement are the city policies on ADUs and DADUs. She suggested that the city could do a much better job encouraging these. Specifically she said the city could reduce parking requirements, permitting burdens and setbacks.

Lastly, she noted that she supported the linkage fee because it is important to have mixed income neighborhoods and the city desperately needs more revenue for affordable housing.

How does planning, transit policy, and development affect racial, social, and economic inequalities in our city? What policies and efforts can make to combat these inequalities?

Watkins said that we simply can’t talk about transit and planning without discussing equity and that she views policy through a social justice framework. Referring to her own district, she said that Lake City is one of the lowest income areas in the Seattle and has poor transit connections. Additionally, many of the areas that are missing sidewalks or have poor drainage are low income areas and this is the result of inequitable investment.

She said that transit serves a critical role of reducing boundaries in the city, providing access to investments and opportunities for people with lower incomes. Furthermore, planning directly affects whether or not the city sees mixed income neighborhoods and she is a big proponent of efforts to encourage these communities.

Council District No. 5
Council District No. 5

Seattle’s Vision Zero plan aims to eliminate traffic deaths and serious injury by 2030. Do you think that target is achievable? Why or why not?

Watkins said, “Yes,” Vision Zero is achievable but the city will need to make the right investments. The first step to doing this would be adopting the Move Seattle levy. She is cautiously optimistic that this money could be used on investments to achieve Vision Zero. For example, the intersection of Lake City Way and 24th is being worked on now to make it safer.

How best should the city accommodate the next 20 years of growth?

Watkins said that ‘first and foremost’ we will need to build a lot more housing. She said growth should be Transit Oriented Development and North Seattle has a ton of potential due to light rail expansion and under-utilized parcels. She is personally hoping for a station at 130th street in order to help accommodate much of the expected growth. Additionally, she thinks Lake City has a ton of potential. Keeping all this in mind, it is absolutely necessary Seattle builds affordable housing near transit. When asked about the comprehensive plan options, she said that she would like choose option three or four.

What is the most important transportation project in your district?

Watkins thinks that the Northgate Bike and Pedestrian bridge is the most important project. The bridge would help connect a community that is severed by the highway and expand access to a light rail station. She noted that the bridge would cut some walks from one and a half miles to half a mile. Essentially, this small investment expands access to one of the largest investments in her district, light rail.

Read our interviews with other District 5 candidates, Sandy Brown and Debora Juarez.

Driverless Technology: Still Not Ready For The Future City

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It wasn’t until the last two centuries that the advancement in mobility really took off globally. Before then, the mainstay of fast land-based mobility was the horse. If you were lucky, you could afford one; and if you were independently wealthy, you could afford enough of them to pull you by carriage. Most people had but their own two feet to get around on a day-to-day basis. Nevertheless, the 19th Century saw the introduction of major mobility changes: the locomotive in 1804, the bicycle (lovingly known as the velocipede) in the mid-1800s, and then the first electric streetcars in the 1860s. These were earth-shattering advancements in their own way because they expanded the speed and distance at which people could travel setting the stage for the rapid growth and industrialization of cities like New York, Cleveland, and even Spokane. It was the age of the city.

Meanwhile, the 20th Century took a completely different turn, so to speak, by transitioning to the car economy. Henry Ford’s Model T offered the first real independent alternative to shared modes like locomotives, streetcars, and horse-drawn carriages for mid- to long-distance travel. Not only was it durable and quick, it was relatively affordable to individuals. From there, the car industry grew rapidly and constantly refined its product for the masses. Cities again responded to the new changes that came with the car through the establishment of speed limits, separation of modes in right-of-ways, the institution of laws to impede the rights of pedestrians, and ultimately the decline of other modes. It was the age of the car.

Now, motorized vehicles are taking another big leap with driverless technologies.

There’s a lot to like about these advancements no matter how pro-walk, pro-bike, pro-transit, or pro-urbanist you are. A driverless future promises some really great things: elimination of human fallibility, a lower ratio of private vehicles to people, less emissions, additional street capacity, and reduced costs of vehicles. Stick with me and consider that driverless cars actually have complementary urban benefits to an existing public transportation, walking, and biking system.

Like Uber or Car2Go, a shared driverless car network could provide a means to move many people around independently or together along a shared route. It’s conceivable that as mobile app technologies improve, this capability will be in a wide usage. In fact, Uber is already trying shared rides as part of their service in some markets with relative success. As an outgrowth of the sharing economy, the driverless car network is a natural fit given people’s willingness to not only carpool with co-workers, but couch-surf abroad with people they’ve never met.

Another brilliant aspect of this is that the desire for both redundant numbers of private cars and the storage of them (parking) will dramatically decline as shared driverless cars increase. In Seattle, data from Car2Go alone has shown that thousands of members have ditched their cars entirely. We have every reason to believe that this would hold true for a shared driverless car network. Meanwhile, from a cost standpoint, the absence of direct labor to managing driverless cars (that is, physically driving them) would extend to all sectors of the market that employs driver: transit, logistics, taxis, and more.

But perhaps the most compelling reasons for why driverless cars will be complementary to cities is their safety. People are inherently flawed: they break laws intentionally and unintentionally, they make poor choices like drinking or texting, and occasionally they simply become distracted or incapacitated. In all of these instances, there are chances for tragedy to strike. If programmed correctly, technology can serve the safety of all much better than any one individual can even on their best of days. The typical human flaws are not present in the decision-making and handling of a car operated by a computer. Instead, the car operates by the rules set by the manufacturer, local regulations, and upon the surrounding conditions.

Despite this though, it’s possible that driverless cars will be a victim of their own success. For one, declining vehicle ownership will directly impact the bottomline of car manufacturers and retails. For another, there are still limitations to what driverless cars can do. Like any mode in a system, there is a maximum carrying capacity for it–no matter how efficient it may be. But there are other reasons to give us pause for concern.

Eric Jaffe of CityLab penned an article last week that discussed a fairly dystopic vision for city streets being researched by a group at MIT. Researchers of the project known as “DriveWAVE” want to create fast, signal-free intersections. But, they went about it completely the wrong way by neglecting to consider that people also, you know, don’t always drive. Here’s what Jaffe had to say:

The first thing to notice is how truly terrifying it would be—at least initially—to ride in a driverless car going that fast through an intersection. Seriously: pause the video at 44 seconds and see how narrowly the car turning left avoids being slammed by another going straight. When you ride in a self-driving car, you quickly learn to trust it; in fact, Google has said its early test riders trusted the car too much on highways. But having faith in a computerized intersection overlord to orchestrate so much city traffic at such great speeds will require a steep period of public adjustment.

The second thing to note is far more important: Where are all the pedestrians and bike riders? (Hat tip to Columbia University planning professor David Kingfor bringing this to our attention.) Keep in mind this wasn’t some remote crossing being modeled; it was the intersection of Massachusetts and Columbus avenues in Boston. Here’s the Google Street View, complete with cyclists and walkers:

There’s an obvious reason why an “intelligent intersection” would want to eliminate people crossing on foot or by bike: they’d slow things down. But it would be a huge mistake for cities to undo all the progress being made on human-scale street design just to accommodate a perfect algorithm of car movement. If the result is that driverless cars need to move through cities at sub-optimal speeds, then so be it. We won’t be losing as much productivity to traffic as we do today, anyway.

Perhaps most bizarrely is that the MIT researchers hail from Cambridge, Massachusetts, one of the most urban and vibrant places for walking and biking in the Boston area. But maybe the goals the researchers aren’t as charitable as Jaffe conjectures. At best, their model is an algorithm for fast, seamless driverless car travel which could sound attractive to the average driver mired in daily congestion. At worst, there are greater goals of returning us to the same pattern of suburbanization, which has had dire consequences on an incredible range of environmental, social, and economic realms.

It’s doubtful that most cities would succumb to the dystopic future offered by DriveWAVE. In recent decades, there has been a huge resurgence in demand for dense, walkable cities and districts. Fundamentally, people want streets for all purposes: bike lanes, woonerfs, more safe crosswalks, smaller lanes, and even parklets. They aren’t asking for more segregation and less safety brought by the car. But let’s not be naive, there are some places that share the DriveWAVE dream. And for that reason, it’s worth challenging cynical ideas like DriveWAVE before they ever have a chance of hitting our streets.

Still, another thought-provoking point was raised by Tanay Jaipuria who discussed the ethics of driverless cars through the lens of “The Trolley Problem”. Despite all the advancements in mobility technologies, is this the fundamental issue that we face in the future city of driverless cars?

Say a trolley is heading down the railway tracks. Ahead, on the tracks are five people tied down who cannot move. The trolley is headed straight for them, and will kill them. You are standing some distance ahead, next to a lever. If you pull this lever, the trolley switches to a different set of tracks, on which there is one person. You have two options:

1. Do nothing, in which case the trolley kills the 5 people on the main track.
2. Pull the lever, in which case the trolley changes tracks and kills the one person on the side track.

What should you do?

2015 Seattle City Council Election, District 5: Sandy Brown Interview

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Article Note: The Urbanist is publishing a series of interviews with a selection of 2015 Seattle City Council candidates. In June, we will release our endorsements.

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Sandy Brown

Sandy Brown is running for Seattle City Council in District 5. Brown has been a leader in the faith community for 30 years, and a social justice advocate for 15 years. He was a founding member of the Committee to End Homelessness in King County, and helped lead the campaigns in favor of R-74 (marriage equality) and I-594 (expanded background checks for gun purchases).

What would you do to make housing affordable for everyone in Seattle?

Brown believes that the city’s top priority should be providing housing for people earning between 0-30% of the area median income (AMI). He called for strongly subsidizing this type of housing, through measures such as an expanded housing levy, reuse of surplus city/county housing, linkage fees, real estate excise taxes, and using the city and county’s surplus bonding capacity.

For people earning between 30-80% of AMI, Brown believes that we need both subsidies and supply increases. He supports the multi-family tax exemption. He thinks that the solution will require both public and private efforts, and he wants to find ways to encourage the development of market-rate workforce housing.

Brown also mentioned that he is a proponent of “well-done apodments”, saying, “Maybe we don’t all need to live in 3,500 square foot houses with 3-car garages”.

How does planning, transit policy, and development affect racial, social, and economic inequalities in our city? What policies and efforts can we make to combat these inequalities?

Brown observed that while many people think of North Seattle as predominately white, Lake City has the third-highest population of people of color in Seattle. He noted that the relative lack of effective east-west transit makes it hard to effectively connect communities like Bitter Lake and Broadview with Lake City. In his words, “diversity everywhere is good for us”. He believes that better transit is key to promoting blending and interaction, and that high-quality transit will enable people to find affordable housing while still being able to access jobs in the center city.

In addition to better east-west transit, Brown specifically called for expanding the trolleybus network into North Seattle.

Council District No. 5
Council District No. 5

Seattle’s Vision Zero plan aims to eliminate traffic deaths and serious injuries by 2030. Do you think that this target is achievable? Why or why not?

Brown does think that the target is achievable. He was a bit nervous from his experience with the Coalition to End Homelessness, which failed to meet its goal of ending homelessness in 10 years. Even so, he believes that Vision Zero is a worthy goal that should be pursued. He noted its similarity to gun legislation, stating that “if [Vision Zero] saves one life, then it’s worthy”. He praised the decision to launch Vision Zero in Lake City, stating that North Seattle needs pedestrian infrastructure more than anywhere else in Seattle.

Brown supports the city’s street rechannelization program (also known as “road diets”), as well as Move Seattle, particularly its full funding of the Safe Routes To School Program.

Brown believes that Vision Zero-style street improvements have benefits beyond safety. He noted that many Seattle residents told him how they dislike fast traffic along the residential streets by their homes. He believes that calmer traffic “opens up areas” and makes neighborhoods more pleasant, as well as reducing pedestrian fatalities.

How best should the city accommodate the next 20 years of growth?

Brown thinks that the city needs to go further than “mapping where density will be”, and needs to focus on the quality of the places where growth is being directed. He noted that “walkability is a quality that happy cities share”. He supports the creation of European-style pedestrian zones throughout Seattle, including one in Lake City around NE 125th St / 30th Ave NE, as well as others in downtown Seattle.

Brown worries that “passive” zoning isn’t sufficient to create high-quality places. He wants to see more “active” solutions, where the city calls out to stakeholders and asks them to build something that the community needs, like a grocery store in Northgate.

Brown supports transit-oriented development (TOD). He pointed to 130th St (near the proposed future Link station) as an example of a good location for TOD, and called for an east-west bus route along the street.

Finally, Brown noted that he is concerned about displacement, especially of renters who don’t have the ability to benefit from rising land values by selling their home. He believes that some sort of mitigation will be needed.

What is the most important transportation project in your district?

Brown pointed to the Northgate light rail station, stating that it will “change the face of the north end” when it opens in five years.

Brown also stated that Aurora Ave N is “crying out for something to happen”, and wishes that it had been included in Move Seattle. He cited Shoreline’s redevelopment of the corridor as a great example of what Seattle could do. He noted that there is a great opportunity for the state legislature to get involved, since Aurora is a state highway (SR-99). He observed that Lake City Way is in a similar situation.

Read our interviews with other District 5 candidates, Halei Watkins and Debora Juarez.

Redevelopable Capacity: Disguising Correlation As Causation

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In a previous article, I responded to Dan Bertolet’s rebuttal of my essay outlining why urbanists must support linkage fees. My primary argument, that land is inelastic, means that land supply doesn’t increase when prices go up or decrease when prices lower.

Land was sometimes defined in classical and neoclassical economics as the “original and indestructible powers of the soil.”[1] Georgists hold that this implies a perfectly inelastic supply curve (i.e., zero elasticity), suggesting that a land value tax that recovers the rent of land for public purposes would not affect the opportunity cost of using land, but would instead only decrease the value of owning it. This view is supported by evidence that although land can come on and off the market, market inventories of land show if anything an inverse relationship to price (i.e., negative elasticity).

Inelastic land supply is incompatible with the theory that landowners will hold land off the market at lower prices. While the debate about the elasticity of land is important, it’s actually unnecessary. Even in a world with elastic land supply, the linkage fee wouldn’t reduce housing supply.

Connecting The Supply Of Land To Housing Supply

Overall, the rebuttal of the linkage fee did four things. It asserted that land is elastic. It then told a story about why landowners would hold their land off the market. It went on to explain why evidence showing the success of inclusionary zoning is insufficient. Finally it suggested there are better alternatives to linkage fees.

To engage further, I’ll entertain the assertion that land is elastic. With that assumption, I will examine if landowners will wait to sell until they get the price they want.  I will look at an example property going through multiple sales. Then I will examine if holding some land off the market could affect housing supply. Finally, I’ll run through the stories being told about the market and implore urbanists to refocus on housing limits, rather than regulatory costs.

The Role Of Development Capacity

The rebuttal article begins by drawing a line between land values and development capacity. To be clear, development capacity doesn’t cause development. Everyone should repeat this to Lesser Seattleites claiming, “Seattle has plenty of development capacity.” This is also the most logical response to Bertolet’s initial points regarding development capacity.

Land value is determined by calculating the potential revenue a property could earn and subtracting the cost to reach that potential. Improvement value on the other hand is the assessed value of current improvements.

How fees affect land value.
How fees affect land value.

Bertolet’s rebuttal begins by describing the common model for determining redevelopable land:

the ratio of the value of the improvements on the land, to the value of the land itself. The larger the ratio, the less likely a property will redevelop.

He shows that less land is measured as ‘redevelopable’ when property values drop without improvement value changing. This analysis is useful for understanding development capacity but he then says:

we can see that because a linkage fee reduces land value but not improvement value, it skews that ratio towards predicting no redevelopment.

 

To put a finer point on it:  Pickford’s position contradicts the standard methodology used by the City of Seattle, King County and countless other municipalities to estimate “buildable land,” that is, land that can be redeveloped. This alone should be enough to cast serious doubt.

Suggesting linkage fees won’t affect housing supply can’t contradict the standard methodology because the methodology doesn’t make predictions about housing supply. Development capacity models are primarily used to guide development to particular areas and predict if development is possible. Comparing land value to improvement value is a proxy for understanding if parcels are at their maximum use. But a drop in land value due to a fee doesn’t necessarily reduce the potential usage of a property.

It even turns out that there are different methods for determining redevelopable land. As an example, the Snohomish County Buildable Lands Report prepared by EconoNorthwest says:

Note that redevelopable land, as it is typically defined, deals primarily with parcels with developed structures that are judged as likely to be demolished and new buildings constructed in their place. The standard approach to identifying redevelopable land is to compare improvement value to land value. Many analyses assume that tax lots where improvement value falls below land value (a 1:1 improvement to land value ratio) are redevelopable. Not all, or even a majority of parcels that meet this criterion for redevelopment potential will be actually redeveloped during the planning period. The issue of how much of the potentially redevelopable land will be assumed to redevelop over the planning period needs to be considered.

 

An alternative approach to estimating redevelopment potential is to analyze the relationship of parcels to other surrounding parcels. For example, some jurisdictions define redevelopment potential as parcels that have improvement values significantly lower than surrounding parcels in similar designations. This approach, however, requires a property-by-property analysis using advanced GIS tools.

 

Another approach to estimating redevelopment potential is to analyze land value as a function of parcel size. In general, one would expect larger parcels with lower improvement values to have higher redevelopment potential. The distribution allows analysis of the relationship between improvement value and parcel size, and shows clear breakpoints in that distribution.”

The second method doesn’t even consider land values. Instead it just uses relative improvement value. But just like land value, improvement value isn’t a cause of development. Overall, the important point is that the models aren’t predicting development and neither improvement or land value cause development.

At What Price Are Profit-Maximizing Landowners Willing To Sell

It’s often stated that the city can’t simply reduce the value of someone’s land by fifty percent and expect them to sell. But what does this mean? The claim seems to rest on the assertion there is a tipping point for landowners to sell. A price too low and the landowner won’t sell. When the price is high enough, development will happen. Bertolet points to the development capacity model as a way to understand this but I don’t think that’s the best way. To represent this tipping point, I think the profit-maximizing landowner who received a bid from a developer would ask, “over the long run, is it more profitable to keep my property at the existing use or to sell it right now.” There are a lot of reasons selling might be better:

  1. Rents should be higher in a newer building because it’s new and often has more units;
  2. Operational costs may be increasing and income decreasing due to building age;
  3. Landowners may want to cash out and enjoy retirement; and
  4. A dollar now is worth more than a dollar in the future due to interest, investments and risk.

On the other side, there are costs to development. Obvious costs include things like; loans, labor, materials, demolition and regulation. But the known costs are shared by nearly all developers and are largely handled during bidding for land. The big cost is the risk of lower than expected demand, like a recession. This is why many developers went bankrupt during the last recession. They sunk costs into building and then their income evaporated. Everyone should keep this in mind when skewering developers as evil or taking insane profits.

Looking At An Example

To understand whether or not a landowner will sell, I’ll discuss a real example. Outsider guesses at the impact of linkage fees on land values vary widely from 5% to 40%. In previous comments, Bertolet indicated 25% and he’s pretty close. If we look at the history of the parcel containing the Sunset Electric, we can see a linkage fee would’ve reduced land value by 20%.  The 2012 buyer of this property would’ve had to consider, at worst, a $22 per square foot linkage fee because of their plans to redevelop. The building that now occupies that lot would’ve garnered about $1.35 million for affordable housing, or 20% of the $6.7 million price tag they paid for the property.

So if the bid for land in 2012 was 20% lower, would this have been enough to sell the property? The previous owners, 11th and Pine Associates, bought the property in 2006 for $3.275 million in 2012 dollars. They left the property empty the entire time they owned it, indicating nearly any price would’ve been greater than the income from the existing use.

Why did I choose this property, which didn’t already have income? It actually tells a decent story about how development happens. Developers typically target under-utilized properties. The property also appears to be an example of land speculation. It’s possible the 2006 buyers intended to develop the property and the recession got in the way but even considering that, the property was unused for at least a decade. During that time the property value increased more than 300%. It’s hard to believe a 20% lower land value, garnering over a million dollars for affordable housing, would’ve prevented or slowed a sale according to the logic of comparing existing uses to potential income.

Instead this evidence indicates landowners trying to cash out at the market peak, an entirely rational way to treat an asset like land. Unlike the developers that built the new Sunset Electric building, the money speculators received wasn’t from value they created. Furthermore, this development didn’t become possible because the land value hit the right level. The development became possible because Capitol Hill became a more desirable neighborhood, in a wealthy, growing city; the same reason the land value increased. The linkage fee would simply capture some of this value so that those with less money can continue to afford housing.

Anecdotal evidence can be misleading and no one should put too much weight on this example. But it’s more useful than theoretical stories. Linkage fee opponents will likely show an example of a project that wouldn’t ‘pencil out’ if linkage fees existed. This strategy is similar to the businesses suggesting a higher minimum wage would require laying off workers. It doesn’t acknowledge the fundamental economic shifts that will apply to everyone. Like the business that can raise their prices, because everyone else in the city also raises their prices, developers can lower their land bids because all other developers have to as well. Since we can’t trust anecdotes though, the reason I feel relatively confident is because this has been done in other cities. It turns out the reliable research show basically no affect on housing supply. This is more important than stories or anecdotal evidence.

But What If Fewer Landowners Are Willing To Sell

Under the worst scenario, some landowners are unwilling to sell for some period of time. This doesn’t even consider that upzones could increase the value of land. It also ignores all the arguments about inelastic land supply. Remarkably, even if this happens the fees should still work.

In order for housing supply to be affected through land, there has to be too few redevelopable parcels. If the development capacity model is related to the amount of redevelopable parcels, or the number of property owners willing to sell (something Bertolet is at least implying) this conclusion is unrealistic. The development capacity model estimates capacity for 223,713 housing units. While this isn’t a perfect model, Seattle isn’t lacking capacity. I’m not familiar with a clear explanation of how development capacity affects housing supply but opponents to linkage fees haven’t presented this either.

With that said, the assertion that fewer willing landowners mean less housing supply relies on some reduction in redevelopable capacity. In fact the reduction would have to be enough to prevent the amount of development that would happen. Last year developers only built about 8,000 units, or 3.5% of the redevelopable capacity. Would there have been less development if capacity had been 150,000, 100,000 or 10,000 units? Is it reasonable to think that a 20% decrease in land values would result in a 10, 20, 50 or 96.5% reduction in capacity? If capacity actually decreased drastically, would the Department of Planning and Development do nothing to increase this capacity? These are important questions for linkage fee opponents but they remain unanswered. Instead opponents focused on hypothetical stories about how market actors behave.

Stories We Tell About ‘The Market’

First, I found the retiree narrative confusing. The story goes that a potential retiree will hold their land off the market due to lower bids:

Slap on a million dollar linkage fee, and maybe they’ll wait it out through the next development cycle—perhaps 7 years or more—until market rents rise enough to offset that million dollar hit to their nest egg caused by the linkage fee.

Where did the million dollar fee come from? This would likely require a sale price in the millions of dollars. Apparently, adding millions to their retirement nest egg isn’t enough to retire, nevermind the fact that waiting 7 years might actually result in less money due to a recession. Or the fact that a retiree will likely want money sooner so they can spend it before they die.

Development Capacity Report from the City of Seattle.
Development Capacity Report from the City of Seattle.

Another confusing argument is that the fee makes development less likely in areas needing development, such as Northgate and Rainier Valley. It’s arguable these places ‘need development,’ just ask those worried about displacement. Overlooking this concern, my interpretation of this argument is that some people think these areas aren’t economically feasible:

A linkage fee’s level of impact on these hold/sell decisions will depend on the value of the existing uses relative to the land. And where it will have the greatest tendency to hinder sales for redevelopment is in areas with lower land values where feasibility is currently marginal, such as the Rainier Valley, Northgate, and the International Districtin other words, the very locations where the City most needs new housing to meet its goals for sustainable development.

But the model cited by Bertolet – not the model used by developers – shows these areas have lots of development capacity. This again gets at the tenuous relationship between land value, improvement value and actual development.

I think a more compelling explanation for why these areas aren’t seeing development is that they are relatively less profitable. Contrary to the claim he makes, his logic suggests the fee would likely increase the appeal of Rainier Valley and Northgate. The proposed fee is tiered from $5 to $22 dollars and these areas have the lowest fees. If a high fee discourages development a relatively lower fee should relatively increase development.

Moving on, readers find another archetype, the incompetent government bureaucrat. He says:

Given that every development project is unique, and given how the market varies over both geography and time, it’s delusional to believe that the City could set a linkage fee rate in some kind of “sweet spot” that wouldn’t end up sabotaging land transactions for redevelopment.

Immediately following this he goes on to say the evidence showing no affect on supply is weak because some municipalities enacted density bonuses with their inclusionary zoning programs.

If an IZ program is “revenue neutral” it means that it would not cause any reduction of land value, and therefore no impacts on housing production would be expected! In contrast, Seattle’s proposed linkage fee offers zero in the way of cost-offsets. Thus the results of all of the California IZ studies should be presumed to have minimal relevance to linkage fees.

In other words, inclusionary zoning was successfully implemented in nearly every municipality studied. Even though bureaucrats are incompetent they somehow managed to find both an appropriate fee level and an appropriate density bonus. Perhaps most importantly, if density bonuses work, there’s no reason the upzones we’ve already done wouldn’t work with some level of fee over the long run.

Linkage Fee feasibility.
Linkage Fee feasibility.

Again, the most charitable way to interpret these objections requires accepting there could be a level at which the fee would work. If that’s the case, it makes sense to trust the analysis provided by the city that actually worked through the math indicating development could handle the proposed fee. This analysis estimates that the proposed linkage fee would be equivalent to a 3-5% set aside of affordable units. This is both modest and cautious compared to the 10-20% set aside seen in most areas studied with successful programs.

Let’s Increase Development (Not Just Capacity)

Getting to the end result of more development is complicated. Increasing development capacity would be a good start. This fits perfectly with my call for urbanists to focus on housing limits, rather than regulatory costs.

No urbanist wants to reduce development capacity and most, including myself, want to increase it. But most urbanists know less development capacity doesn’t equal less development or vice versa. Pursuing efforts to improve the quality of the city, such as ensuring mixed income neighborhoods and equitable access to urban benefits, shouldn’t be avoided because of affects on development capacity. We shouldn’t get rid of Seattle City Light’s efforts to make buildings more energy efficient just because it increases improvement value.

What this tells me is that we need to focus on housing limits. Good urbanists have spent a lot of time and energy on reducing housing limits. I made this argument by providing evidence that regulatory costs probably don’t affect development. There is compelling evidence this approach is accurate. But even if it’s not, it doesn’t mean urbanists should focus on land values, improvement values or regulatory costs. There is not a straight line between regulatory costs and housing supply. There is a much clearer line between housing limits and supply.

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Smart Growth Seattle telling a Cascade representative we don’t need bicycle parking.

To drive the point home, many regulatory costs improve the quality of life in Seattle. This is why affordable housing and social justice advocates support linkage fees, the fees will help achieve integrated neighborhoods in a way other affordable housing programs can’t. But the battle against regulation goes beyond linkage fees. In fact, opposing regulations aimed at making the city nicer draws a line between urbanists and many other advocacy groups since quality of life is so closely related to development. Affordable housing advocates read Bertolet’s article and perceive a battle with urbanists. Is a battle with the neighborhood greenways and transit advocates next? Or should we just move on to fighting education activists? If regulatory costs don’t affect supply or even have a marginal impact, this is extremely counter-productive.

It’s also counter productive if efforts to remove housing limits will overwhelm other factors. Political outcomes are unpredictable and can have unintended consequences. As an example, I believe Bertolet’s argument inadvertently provides evidence linkage fees will cause upzones. The city is required by law to plan for growth by expanding development capacity when it drops below 20 years of growth. If we see declining capacity due to lower land values, the city will likely pursue upzones to meet GMA requirements. By definition lower land values would create the impetus for further upzones.

There are great urbanists that disagree with my view; reasonable people can disagree. I don’t expect them to change their minds; people rarely do. But my take is that the best we can do when trying to understand economic outcomes is to look at empirical research. I’d be happy to continue looking at research regarding land elasticity or the effects of linkage fees but I don’t think Bertolet’s rebuttal presented any new empirical evidence. Instead it focused on a narrative story. Furthermore, after dismissing the evidence provided he claimed the burden of proof is on The Urbanist. I disagree and believe the burden of proof should be on those that have not presented supporting evidence. Most importantly though, I believe a successful urbanist political effort will require focusing on things that most clearly harm housing supply, housing limits. It will also require building coalitions with natural allies that want regulations making the city more livable. If no one changes their mind about linkage fees, urbanists could still refocus on housing limits. In the end, if urbanism is going to be a viable political force, I believe urbanists must distinguish between the efforts to eliminate regulations and the fight to eliminate housing limits.

2015 Seattle City Council Election, District 1: Brianna Thomas Interview

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Article Note: The Urbanist is publishing a series of interviews with a selection of 2015 Seattle City Council candidates. In June, we will release our endorsements.

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Brianna Thomas

Brianna Thomas is running for Seattle City Council in District 1. She is the Field Director for the Washington Housing Alliance Action Fund and she lives near the junction in West Seattle. Thomas has been a community activist and organizer in Seattle for the past ten years and housing affordability is a key focus in her campaign.

Thomas was campaign manager for the “Yes for SeaTac” initiative to raise the minimum wage to $15 per hour. She also worked at Church Council of Greater Seattle, in the offices of Democratic Washington State Senators Steve Hobbs and Bob Hasegawa, and was campaign manager for “No On 1185.” Thomas graduated from University of Washington with a degree in Political Science.

What would you do to make housing affordable for everyone in Seattle?

Thomas shared a number of ideas in this area. She supports an affordable housing linkage fee and she also supports inclusionary zoning. She gave South Lake Union as an example of a recently developed community that could have been done better had developers been required to perform and build affordable units in that community. She would also like to see more family-sized housing units available as most units on the market are studios and one-bedroom units. And, she would like to look more closely at zoning rules and creative design.

How does planning, transit policy, and development affect racial, social, and economic inequalities in our city? What policies and efforts can we make to combat these inequalities?

Thomas explained that regardless of where people live in Seattle, when they are transit reliant, it can be difficult to get around: to get to work, to get food. There are parts of the city where it is especially difficult to get food because those neighborhoods lack grocery stores and bus service is infrequent or runs limited hours. South Park is a neighborhood she gave as an example where many people rely on public transportation but do not have easy access to a grocery store. Thomas sees focusing on more frequent bus service and longer operating hours as one possible solution.

Council District No. 1
Council District No. 1

Seattle’s Vision Zero plan aims to eliminate traffic deaths and serious injuries by 2030. Do you think that this target is achievable? Why or why not?

Thomas does not see the goal as realizeable because of human nature. “It is an ambitious plan until we have computer-driven cars.” She does support strategies making it safer for people to get around by walking and biking. Some specific ideas she mentioned include: lowering speed limits, better traffic light timing, sidewalks and protected bike lanes.

How best should the city accommodate the next 20 years of growth?

Thomas sees zoning changes and building up rather than out as necessary. She noted that ⅔ of the city is currently zoned single family and questioned the environmental sustainability of a 6,000 sq. ft. lot housing two people when it could be zoned to house more people. She would like to see density created in a way that acknowledges the disparities that currently exist. She also expressed concern with the Neighborhood Conservation Districts proposal.

What is the most important transportation project in your district?

The West Seattle Bridge increasing commute times for all users was Thomas’ choice for most important project. She also mentioned the need for an east-west bus connection between West Seattle and Beacon Hill, increasing Rapid Ride C access to under-served communities, and expanding evening service hours for the Route 22.

Read our interview with other District 1 candidates Shannon Braddock and Lisa Herbold.

She Did It on a Monday

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I pause at inbound Henderson, waiting for an indecisive runner. Why am I irritated? What is this rushing stress which bubbles inside of me on rare occasions, rearing its head like a stranger within? Something to work on.

“How’s it goin’,” I ask him as he pauses outside the front doors, staring into the middle distance. He decides to step aboard, a white fellow in middle age, thin and very cold, underdressed on this February night. His bowl-cut hairdo, parted in the middle, has the precision of a machine.

“Hey,” he asks. “Are you going towards Garfield?”
“Yeah, I am, yeah. Come on in. How you doin’ tonight?” Sometimes when I’m feeling less than stellar I’ll force myself to reach out further, asking about people’s days or complimenting their hats. You can use the people to bring you back up, get yourself out of your head.

“Oh, not so good,” he responds with a companionable sigh.
“I’m sorry to hear it. I appreciate the truthful answer, but I’m sorry to hear.”
“Well, it is what it is. We’re here.”
“And that’s a good thing. We’re alive, we’ve got our arms and legs,”
“Hey, there you go,”
“Lot to be thankful for.” Reminding myself as much as anything else.
“You got that right. Hey, you go up towards South Edmunds?”

We sort out the geography. I can tell he knows the terrain, but perhaps he hasn’t been out here for a while. He asks how my night is going, and I mention how much I love driving the 7. “It’s a favorite of mine.”
“How come?”
“It stays interesting out here. High energy, a lot going on, a lot of color,”
“Man, you’re positive.”
I laugh. He notes that he most recently saw me on the 49, and I mention how the two routes are interconnected at nighttime.
“Yeah,” he says, “my girlfriend and I, we were together about ten years,”
“Oh wow,”
“Yeah, she lived at the end of the 49 line, and I lived halfway down the 7 line.”
“Oh, excellent. That sounds like a pretty perfect setup.”
“Yeah, it was a perfect setup. She was great.”

He pauses.

“You know, she actually ended up killing herself.”
“Whoaaaa. Oh, no. Oh, no.” Suicide guts me on a level other violence doesn’t come close to.
“Yeah. Yeah.”
“Oh.” A heavy exhalation of air, the fitful attempt to release a burden.
“And it was totally unexpected, she was a positive person. She just …”
“Oh, my goodness.”
“She was just, sometimes she would get real down.”
“Was it like a clinical depression thing?”
“No, it was more of a bipolar type thing. She would have these moods, I don’t know. She had a head injury way back, and ever since that,”
“Okay,”
“Yeah, it affected her mood, affected everything,”
“Like a chemical imbalance,”
“Yeah. She did it on a Monday, man.” Silence. “She knew I was always busy running around on Mondays, and she chose a Monday when I was just payin’ some bills.”

“Oh, my goodness. That’s heavy. That’s, wow. Oh, man. Suicide gets to me pretty hard.” I mention a couple of incidents which took place when I was a child, and he tells me similar events happened amongst his acquaintances as well.
“So yeah, it just gets to me. And the thing is, it’s not really her, but that chemical imbalance, the injury,”
“Yeah, can’t blame her.”
“Can’t blame her. It feels strange to say it, that she’s gone.”
“When’d this happen?”
“Three months ago.”
“Oh, wow. Oh, man.” We drive in silence for a short bit. Here’s Othello Street. Here’s Frontenac, here’s Graham.

Me again: “but you know, I’m really glad you guys got to have those ten years together.”
“Oh yeah.”
“I mean, that’s huge. She’s always gonna be part of your character,”
“Ooh yeah,”
“And that’s good. Ten years, man. Longest relationship I ever had is three, so ten, my goodness, that’s just beautiful. I admire that. You know, somebody said once, ‘we’re gonna lose everything we love in this life,'”
“Yeah, yeah.” Nodding.
“‘And all we can do is just figure out how to enjoy it while we have it.’ That’s the great magic trick to getting through all this, this life.”
“Yeah. Yeah. Well, so, uh, hey, how’ve you been?”

We both laugh together, the pent-up sorrow belching out into something more familiar. We bring back the conversation, discussing such banalities as the number of round trips I have and how there’s hardly anyone out tonight. We cling to the ladder rungs of the ordinary, speaking and sharing our way out of the depths, rising slowly, such that we might feel all of life’s colors, and not just the thudding, aching blows.

2015 Seattle City Council Election, District 6: Mike O’Brien Interview

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Article Note: The Urbanist is publishing a series of interviews with a selection of 2015 Seattle City Council candidates. In June, we will release our endorsements.

Mike O'Brien
Mike O’Brien

Mike O’Brien is an incumbent member of the Seattle City Council running in the new District 6, which encompasses the  neighborhoods of Ballard, Fremont, and Green Lake. He has been on the Council for five years. Previously, O’Brien served as a law firm CFO and chaired the Sierra Club’s Washington state chapter, a position in which he campaigned to pass the Sound Transit 2 funding measure in 2008. His platform consists of three priorities: public campaign financing; getting $15 billion for Sound Transit 3 and light rail to both Ballard and West Seattle; and implementing the linkage fee to increase affordable housing.

What would you do to make housing affordable to everyone in Seattle?

O’Brien answered with a long list of solutions, starting with increasing the housing supply and adding more subsidized units; he declared that the City has the capacity to build 1,000 affordable units per year. He would also like to see some form of mandatory inclusionary zoning, such as the linkage fee. O’Brien said that Seattle’s single-family neighborhoods need to lend support to growth, especially near the borders of urban villages. He expects the mayor’s committee on housing to recommend strategies like permitting or encouraging basement units and accessory dwelling units (ADUs) that can increase density without altering neighborhood character. O’Brien supports microhousing units and noted regret for new minimum size requirements on them.

Beyond land use tools, O’Brien suggested that some form of rent control may be needed to stabilize costs, though he acknowledged Olympia is not likely to repeal the state law that forbids it. He suggested one tool could be a voluntary program that partners with landowners to help them avoid selling to the highest bidder and maintain their buildings with lower rents.

Council District No. 6
Council District No. 6

<How does planning, transit policy, and development affect racial, social and economic inequalities in our city? What policies and efforts can we make to combat these inequalities?

O’Brien dived into a proposal for an infill light rail station at Graham Street, located in southeast Seattle, as an example of equity issues. According to O’Brien, the community wants a new station at Graham Street largely due to access issues. Residents report long walks to stations down the line and some reduced transit mobility in the area, which was spurred on by the light rail. Deployment of the rail line led to a bus route being deleted in the corridor.

However, O’Brien also said that a new station could lead to gentrification and the displacement of not only residents, but local businesses, too; owners of new retail space often wait many months or even years for the ideal high-end tenant to come along. O’Brien wants redevelopment to be considerate of cultural anchors like religious facilities and community centers; these need to be preserved. More broadly, he thinks each neighborhood differs in what they need for community benefits and drivers like schools, jobs, and transit. In turn looking at his own district, he described it as a fairly well-off part of the city.

O’Brien went further on the inequality issues and thinks that new planning policies could deepen those. O’Brien fundamentally believes that it’s the people in neighborhood that make them great, not the buildings. In making that point, he criticized Councilmember Tom Rasmussen’s proposal for neighborhood conservation districts. O’Brien thinks that they would give homeowners more direct control over new development, which could lead to even higher housing costs as new units are opposed or prevented.

Seattle’s Vision Zero plan aims to eliminate traffic deaths and serious injuries by 2030. Do you think that this target is achievable? Why or why not?

O’Brien thinks that the target is entirely achievable, and the city should make strides to ensure it becomes reality. He said that no one should risk their life on Seattle’s streets: In the speed versus safety argument, safety always wins. He cited road safety redesign projects as a proven strategy to improve traffic safety for all.

How best should the city accommodate the next 20 years of growth?

O’Brien started by saying we should accommodate growth because cities are the answer to environmental issues. His belief is that city residents inherently have lower carbon footprints than their suburban and rural counterparts. He remarked that “it’s not because people in New York give a shit about the environment more.” He thinks Seattle will become a climate refuge as it becomes one of the few places in America that doesn’t need air conditioning. However, he also said that Seattle has to be very intentional about how it takes in growth. For instance, small revisions to development codes and policies, like allowing townhouses on single-family lots, are achievable changes to sustain growth that most resident could support.

What is the most important transportation project in your district?

O’Brien believes that the Sound Transit 3 funding measure will be critical. At this point, he doesn’t have a preference on the debate for specific Seattle alignments like a Ballard-to-Downtown line or Ballard-to-University District line. Meanwhile, O’Brien said that fixing the Ballard Bridge is a huge safety priority for his district that can be done for a low cost.

Read our interview with another District 6 candidate, Catherine Weatbrook.

Repeating The Case For Inelastic Land Supply

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image2 - Impact of Linkage Fees
What supply and demand looks like for an inelastic good.

A month ago, I made the case for why urbanists must support linkage fees. In response, Dan Bertolet at Smart Growth Seattle argued that linkage fees will impede housing production. Bertolet starts by summarizing how planners estimate redevelopable capacity, a critical concept in planning. He then firmly declares that a decrease in land values without a change in improvement values will decrease the supply of land, and consequently the supply of housing.

Bertolet, an urban planner at VIA Architecture, brings a valuable perspective to the debate. He has a lot of planning experience, and a long history advocating for a more sustainable city.

RogerOnLandValues
Discussion with Roger Valdez from Smart Growth Seattle.

Both Bertolet and Roger Valdez (the director of Smart Growth Seattle) seem to agree with me that the cost of linkage fees would be passed to landowners. But we clearly disagree about whether reduced land values affect the supply of land. Cutting to the heart of the matter, Bertolet is making a claim about the economic nature of land. Do high prices mean there’s more land for sale? Do low prices mean there’s less?

Land Is Uniquely Inelastic

As I previously argued, the supply of land is, for all practical purposes, inelastic; that is, land prices have no impact on supply. Here’s how Wikipedia describes land economics:

Land was sometimes defined in classical and neoclassical economics as the “original and indestructible powers of the soil.” Georgists hold that this implies a perfectly inelastic supply curve (i.e., zero elasticity), suggesting that a land value tax that recovers the rent of land for public purposes would not affect the opportunity cost of using land, but would instead only decrease the value of owning it. This view is supported by evidence that although land can come on and off the market, market inventories of land show if anything an inverse relationship to price (i.e., negative elasticity).

While it’s appealing to say ‘if you want less of something, tax it,’ this rule doesn’t apply to inelastic goods. By definition, the supply of an inelastic good can’t be reduced with taxation. (In fact, if a good has negative elasticity, taxation would actually increase supply.)

My assertion about inelastic land supply fits with common experience. Cities with high land values usually see less development. Cities with lower land values may experience a lot of development (e.g. Austin), or none at all (e.g. Detroit). There are only two possible explanations for this: either the supply of land is inelastic, or the price of land has little overall impact on the supply of housing.

To distinguish or not to distinguish: stories about ‘the market’

Bertolet’s overall argument rests on a theory suggesting that the supply of land is elastic. Yet he admits that much of the land in Seattle is actually inelastic:

“The first piece of evidence Pickford presents to make the case that the factors I describe above would not impede housing development is historical data showing that the number of homes and condos for sale in Seattle is not influenced by average sales price—that is, people aren’t more inclined to sell their homes when prices are high, and vice-versa. However, most people who are selling homes live in them, and therefore most will be purchasing (or renting) another home in the same housing market with the same price trends. Therefore it makes all the sense in the world that sales price wouldn’t effect [sic] sales volume—for homes.” [emphasis mine]

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Proposed Linkage Fee Map. Courtesy of the City of Seattle.

Most urbanists would like to see more urban spaces, which means urbanizing (or redeveloping) single-family zones. If Bertolet’s description above is correct, then his argument against linkage fees does not apply to these zones.

Bertolet goes on to suggest that land with existing uses besides homeownership is elastic; in these areas, lower land values decrease the supply of land. (Conveniently, this definition seems to include everywhere that linkage fees are proposed, even though many of these areas are full of owner-occupied homes.)

By definition land is inelastic. Clearly, the total amount of land in Seattle is not changing. Instead, Bertolet muddles the discussion by suggesting the supply of land varies as land comes on and off the market. Since the value of land in cities is derived from development, it’s not clear what land coming off the market means. A commodity like salt can be put to multiple uses. If restaurants have less need for salt, then more salt might be used to de-ice roads, or producers might make less. But landowners can’t shift land to a different market or reduce production. If land is not on the market for development, it has no value. In other words, in order for a good to be elastic, the production or use must change.

I would argue that Bertolet’s analysis confuses whether or not land is on the market with whether or not a seller is willing to sell. Fortunately, landowners can’t capture the value of this asset without selling it. (Earning an income on a property is an alternative, but this is a distraction.)

Why land doesn’t keep its current use

Suppose that you owned a rental property that earned $1,000 a month in rent. How much would someone have to pay you to sell your property? You would probably need more than $1,000, since you could wait a month to collect that amount. Yet, while you might accept a higher offer, you probably wouldn’t require more than $1,200,000 (100 years’ worth of rent). It’s unlikely you will live that long, and your only alternative beyond collecting rents is to sell the property. In fact, the number is likely much lower than this; the property will depreciate, and money now is worth more than money in the future. Going even further, if a seller can reinvest the money from a sale on something that has a better return and/or earns more income, nearly any sale price would be tolerable.

But what is a buyer’s willingness? In the case of developers, the amount they are willing to pay is likely well above any amount required by a seller. Unlike a landowner, developers seek out the lowest risk, highest return properties. These properties are generally ones that can be better utilized. For example, developers might target a property with a one-story building in a zone that allows six stories. They don’t reach their number based on a property’s current income. Instead, they are willing to pay up to the potential income minus the costs and returns they need. In the end this means there is potentially a big gap between sellers and buyers. The seller can’t make more money at the current use, so they are generally willing to sell. Unfortunately, buyers can only make that money with the specific parcel, since land is unique. Other parcels will have different risks and returns. Developers will bid down as much as possible, but any other developer can swoop in and bid higher. The only things limiting these bidding wars are costs and expected returns. In the long run, landowners benefit. But this gap is also where costs that apply to everyone can be leveraged. So long as the seller is willing to sell after all these costs, the property is still developable.

A linkage fee is an added cost, but one that’s unlikely to affect sales. As an example, the highest possible linkage fee on the sale of the Sunset Electric parcel would have been $1.3 million. That’s a lot of money for affordable housing. But would the landowner still have sold the property? Records indicate the landowner would have made $2.5 million after the fee. This is about 100% profit on a six-year investment.

There are even further factors working against existing uses. Property depreciation ensures that income reduces over time. Market risks like the 2008 recession prevent people from simply holding on to land and being guaranteed a higher return. Information asymmetry helps developers who can take their capital to other places but hurts landowners with no other options for cashing out their asset. GMA laws require periodic upzones that increase potential uses beyond the current income. And, of course, the inevitability of death means that people’s need to sell will increase over time. I don’t want to pretend that I know the reason why land is inelastic, but all of these reasons are plausible explanations.

Market Stories And Market Evidence

Overall the distinction between different types of landowners relies on a story rather than evidence. Some have argued this is a stronger argument. I remain unconvinced, preferring to side with the central findings of the empirical evidence. (We suggested some empirical evidence that might buttress Bertolet’s argument, but he didn’t provide it.)

Instead of providing evidence the rebuttal dismisses an article by Michael Goldman using Seattle data, demonstrating land inelasticity. In an effort to produce more evidence, I wondered about the distinction made in Bertolet’s rebuttal. Are income earning property owners different than homeowners? Does income from an asset change the way people treat that asset? It seems a stockholder earning a dividend would be a good comparison to an income earning property owner. Yet the evidence doesn’t seem to show a correlation between price and trade volumes for stocks that earn dividends.

Again the rebuttal article only draws a distinction between homeowners and income-earning property owners. I think this distinction is a red herring. The difference isn’t as stark as one might think. Homeowners earn imputed rents, making them similar to income-earning property owners. Weighing the sale of a property against the income isn’t an unreasonable thought experiment, but shouldn’t homeowners make this judgement too? To be clear, homeowners buying and selling in the same market is evidence of land inelasticity. They remain in the same area because land is unique based on its location. Even Bertolet indicates twice in his rebuttal that parcels are unique, a characteristic of an inelastic good.

dan-repsonses
Conversation with Dan Bertolet

The rational market actor described in the rebuttal, often called an econ, is an archetype and should be viewed skeptically. Even if we accept that framework, there are huge segments of property owners in Goldman’s evidence that are income-earning, namely people who rent their homes. Beyond those people there are others that should maximize the return on their property. Retirees should wait to get a bigger nest egg. Couples downsizing – perhaps from two homes to one home or when their kids go to college – have flexibility on when they sell. People moving out of the regional market will need to buy in a new market. In fact, I have a hard time imagining many homeowners not trying to maximize their largest asset. I would expect a group this big to affect the data. Yet, despite all this, the data still indicates land is inelastic. And most importantly, Bertolet doesn’t present any data supporting his assertion.

Wikipedia goes so far as to say evidence shows negative elasticity. There are even logical explanations to explain why land has negative elasticity. Most likely urban land is a safe, high-return asset and landowners are monopolists. A high price indicates a low-risk asset, worth keeping for its rental income. A low price signals high risk and the possibility to earn better returns elsewhere. It makes sense to hold on to urban land if the return versus risk calculation is very good. If that calculation persists, factors other than price will likely cause sales. In other words, land supply is inelastic.

Debate about the elasticity of land is important but actually unnecessary. It’s pretty easy to determine that linkage fees won’t affect the supply of housing even with an assumption that land is elastic. In the next article, I’ll try to engage charitably with Bertolet’s arguments by accepting his premise but still show linkage fees wouldn’t reduce housing supply.

Better Regulations And Fewer Housing Limits

In summary, I want to repeat my initial call for urbanists to focus on housing limits, rather than regulatory costs.

It’s critical that urbanists’ goals to build more housing don’t prevent the city from being successful. Bertolet’s article completely ignores the progressive desire to create mixed-income neighborhoods and equitable access to urban benefits. We shouldn’t avoid these and other desirable outcomes in service to a theory about regulatory costs. Instead, if we are convinced that there is some cost from an otherwise beneficial regulatory change, urbanists should focus on mitigating those costs. The most obvious way to mitigate the perceived cost of linkage fees isn’t to fight with affordable housing advocates. It’s to argue for upzones.

I don’t mind opposition to linkage fees. I was actually surprised by the widespread positive reception to the argument in favor of linkage fees. I hope the discussion continues and there is some new empirical evidence presented. Most importantly, though, I encourage urbanists to seek out empirical evidence and to distinguish the efforts to eliminate regulations from the fight to eliminate housing limits. Seattle doesn’t need less regulation, it needs better regulation, and ultimately fewer housing limits.