Increasing rents and (the lack of) rental affordability have been in the news a lot lately (as have attempts to explain what’s going on). And yet, with all the coverage I’m still perplexed!
The market will take care of itself. This is a classic phrase that gets mentioned often by proponents of a free market economy. This concept suggests that an unhindered supply and demand of apartments - with no government regulation or control - will lead to a balance: add apartments throughout the city (increasing the supply) and the rental price goes down (because there’s less demand). But, here’s the thing: it doesn’t seem to be working in Seattle.
If Seattle has more apartments than ever, then what explains the high rents? According to this report from KUOW's Weekday, Seattle has added close to 2,000 apartments this year. But that doesn’t explain the high rents. This article makes it clear: Seattle’s employment growth is partly to blame. As more people move to Seattle for work (no doubt good for our city), the demand for housing goes up. And those who can afford the steep rents are snatching up the apartments. This has transformed the rental market. Capitol Hill has experienced the biggest increase in average rents, now $1,395 per month. And the Downtown neighborhood is now the most expensive – more than $1,700 per month on average.
2,000 new apartments sounds like a lot, but it isn’t, really. Seattle's Comprehensive Plan anticipates 47,000 new households and 84,000 new jobs by 2025. But of course we know that many of these new jobs will not pay enough to afford in-city rents! We also know that the city is currently not keeping up with the need for affordable housing. This report has a goal to add roughly 17,000 new affordable units by 2025. It just isn’t enough – especially given that more people are finding work in lower-paying jobs like the service industry.
So, what’s the solution? Finding an affordable apartment has become half the battle for residents in Seattle. Current residents struggle with the soaring rent prices once lease renewals roll around. At times these increases can be so high that residents are priced out of their apartments. Affordable housing counters this trend, and allows a more stable rental history for residents. Organizations that offer affordable housing through tax credit and bond programs follow strict guidelines in setting rental prices and maximum rent limits. So one’s rent might go up - but nominally, in comparison to market-rate apartments. And even more importantly, there is a maximum rent cap, allowing residents to have peace of mind, and stable homes they can afford, now and in the long term.
I think the answer is pretty obvious, if not simple. The city must ensure that all new developments include affordable places to live. As an organization focused on rental affordability, we see the challenges that low-income people face every day just trying to afford rent. And qualification is no guarantee of housing: we have long waitlists on many of our buildings for those residents who should be able to move into an affordable home.
More affordability. It will keep our city vibrant, and diverse.