Failing to Raise Fees on Developers Won't Lead to "Segregation"
Smart Growth Seattle's Roger Valdez argues that Seattle's affordable housing policy won't lead to racial "segregation" as some low-income housing advocates have said.
The views expressed below are Roger Valdez's alone. In an email, CHIPP director Chris Persons responds, "nowhere in my newsletter article did I say anything even close to 'normative racial standard ratios.' I spoke specifically about economic segregation.
"I directed Roger to a recent Brookings publication by Elizabeth Kneebone about concentrated poverty. She uses a phrase something like 'economic and racial segregation' in referencing growing concentrations of poverty around the US." —Editor's note.
I was surprised to read in a recent newsletter from Capitol Hill Housing (CHIPP) Executive Director Chris Persons writing that failure to increase fees associated with incentive zoning (IZ) and mandated inclusion would lead to income and racial segregation.
Using the word segregation, a historically loaded and painful word, is a rhetorical leap that I think is unwarranted in Seattle and one that will only serve to make the discussion and politics about housing more difficult.
The current practice of allowing developers (and there aren’t many) that want to pay a fee for more height to pay the fee into a fund that would fund subsidized housing in a different building is a policy that allows, according to Persons,
The developer to meet his affordable housing requirement by shunting the affordable units to lower income neighborhoods, instead of building them in the affluent neighborhoods where they're putting up their ritzy new apartments.
And what does Persons call that policy, typically referred to as ‘pay-in-lieu?’
"It's segregation," Persons wrote in Capitol Hill Housing's newsletter, "Building Blocks," on August 7.
Persons suggests that somehow developers don’t want to include the affordable units they are paying for already as part of their projects because ‘well-heeled’ people don’t want to live next to poor people.As I've pointed out before, there is no crisis of housiing at 60 to 80 percent of Area Median Income.
He goes on to say that pay-in-lieu creates even more havoc.
The result will be neighborhoods that are increasingly divided by income levels. Congregating people of lesser means into poorer neighborhoods leads to more poverty, more crime, less access to education and healthy environments. And it certainly isn't equitable.
As I've pointed out before, there is no crisis of housing at 60 to 80 percent of area median income.
But Persons makes three errors. First, there are market rate buildings all over town that include people who earn 60 to 80 percent of Area Median Income (AMI)—it’s called the Multifamily Tax Exemption (MFTE) Program and it has produced thousands of units of housing priced affordably for those people, while the IZ program he champions has produced 600 hundred. The idea that developers don’t want to include people of various incomes in their buildings is a canard and an insult, impugning the motives of many people.
Second, the idea that people who make 60 to 80 percent of AMI are truly poor in our city is a stretch; the housing supply crisis is among the truly poor and economically challenged, people and families who earn 30, 40, and 50 percent of AMI, about $19,000 to $31,000 per year.
How does the lack of mandatory inclusion of price-controlled units affordable to people at 60 to 80 percent AMI (a income level not suffering from a lack of housing supply already included in market rate buildings through the MFTE program) warrant the claim of segregation?
Many readers may not have a problem with Persons' point of view. You might be saying, “He’s right!”
But how does mandating that 10 apartment units in 100 be price-controlled at 60 to 80 percent stem the flow of black people out of and white people into the Central District? Why is the movement of white people into the CD called gentrification, while the movement of people of color into, say, Laurelhurst, called desegregation? Do we really want to encourage or discourage people to live or not live in some places based on race?
Will the units Persons advocates for be race controlled as well as price controlled? Will there be a racial balance test for where people live? How do we accomplish the right racial balance in our neighborhoods and in new buildings? Who gets to decide?
And in this crazy mixed-up social engineering scheme, what happens to the people of various ethnicities living in the Central District today who don’t want to live in one of Persons’ rent and race controlled units priced at 60 to 80 percent of AMI in South Lake Union, or Belltown? What if people of color in the CD want affordable housing in their own neighborhood? Isn’t that the best remedy to gentrification?
Support the poorly considered and ineffective IZ scheme if you must. It won’t work. It will create higher priced housing by suppressing housing supply overall, creating more competition between renters for scarce housing.
And if you must, advocate for mandatory inclusion, even though it too will have an inflationary effect on all the other units in a building when developers have to offset the lost rents to keep rents in those units low. And if the damage to the rent rolls is significant enough, the building might not get built at all.
But, please, let's not inject the racial programming of neighborhoods into the discussion. Nobody in Seattle is advocating for segregation by class or race. Nobody. (There is one exception: Puget Sound Sage is on record saying they want the Rainer Valley to remain “majority minority,” something they stand by). And, as I have pointed out, even if it is happening unintentionally because of the housing economy, IZ and inclusion won’t stop it.
Furthermore, the very idea of pointing out racial ratios anywhere presupposes there is a right and wrong ratio. I don’t believe anyone in Seattle, the advocates of IZ and inclusion, developers, the City, and certainly not me want to be the ones to try to determine a normative racial standard ratio for communities or buildings.
We will be a great city, since all great cities benefit from lots of in migration from all over the world, which means diversity, and everything that comes with it. If we truly want a city with a healthy mix of incomes and race we will create more jobs of all kinds, and housing of all kinds all over the city. Let’s do the math, build the housing, and welcome everyone who wants to live here with open arms.