SEATTLE - Like the rest of Seattle, Windermere Real Estate’s Chief Economist Matthew Gardner is aware of the area’s housing affordability problem. But it’s the long-term affects of the rising cost of living that has him most worried.
“When housing prices are going to be driven up to such a degree (companies) can say, ‘We are creating an online widget, we don’t have to be in Seattle, we can be anywhere,’’ Gardner told MyNorthwest. “So we need to be very careful with the longer term right now … that means we have to address housing supply.”
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At the same time, some form of deregulation should happen to make building costs cheaper — costs that get passed to the buyer or renter. Gardner stresses that Seattle needs to seriously ask if it’s still appropriate that 80 percent of the city is zoned for single-family homes with 6,500-square-foot lots.
“If we are talking about density, say a row home, town homes in the neighborhoods; the existing neighborhood homeowners don’t want that,” Gardner said.
“It’s a classic NIMBY-istic mentality,” he said. “We want to embrace housing affordability, just do it somewhere else. Just don’t do it next to me.”
The other side of housing affordability
Gardner explains that the “long term” housing issue didn’t start recently in Seattle. It didn’t even start within the past decade with the tech boom.
“Go back to the 1980s when we were trying to attract every business known to man, ‘Come to Seattle! Come to Seattle! We want you here,’” he said. “But were we addressing the infrastructure needs of those companies? We weren’t. All of a sudden we get whiplash saying, ‘Uh oh, look what we’ve created.’”
“We’ve created this monster that needs to live somewhere, in terms of the employees,” Gardner said. “Where are they going to go? Can they afford to live downtown?”
On the other side of the issue is the relationship between housing costs and the companies that are driving the economy. Sure, the rent is rising and tech workers can afford it. But what happens when they can’t?
“For example, California software engineers can move to Seattle, make roughly 4 percent less than they do in the Bay Area because we don’t have a state income tax,” Gardner said. “But, housing costs are a 50 percent reduction from the Bay Area, whether you are buying or renting.”
“Even people from LA will come and say ‘Well, OK I can’t afford to live downtown, but if it’s only an hour commute, I can do that in my sleep!’” he said.
So right now, Washington is competing with California in terms of living costs. This is important to companies, Gardner said, because it factors into where they will establish themselves — lower cost of living means they can pay people less.
“At what point are we just not going to be competitive?” Gardner said. “At what point are companies just going to say, ‘You know, I can move to Boise, I can move to Coeur d’Alene.’ (Amazon) can go anywhere they wanted. And I don’t want to say Amazon specifically … but companies in general. What they are looking for is the workforce. If the workforce meets their requirements they can say, ‘I’ll be paying my staff 30-40 percent less here because of housing costs in Seattle.”
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