Understanding Market Drivers: The Seattle Housing Market

Understanding Market Drivers: The Seattle Housing Market

The Yimbys should be rejoicing right about now. If you’re unfamiliar with the term, Yimby, that stands for “Yes In My Back Yard”, and it includes a growing contingent of (many millenial) Seattlites. On October 4, the City of Seattle published their Final Environmental Impact Statement (EIS) regarding accessory dwelling units (ADU’s)—the kind of structures used for mother-in-law apartments or other secondary living space on a single family home’s lot. The loosened regulations now allow for 2 ADU’s on one lot, require less total square footage lot sizes to be built, and remove some parking requirements. They also remove owner-occupancy requirements and a stipulation requiring one year of continuous ownership to establish a secondary ADU. What does this mean for Yimbys and all Seattlites? Hopefully more housing options and affordability. Councilmember Mike O’Brien spoke to the Seattle Times ahead of the release, “This isn’t going to transform our housing market,” O’Brien said Wednesday. “But it will be another tool in our toolbox to add new options for people, and we think we can do it in a way that helps preserve our housing stock.” Additionally, by restricting the size of new homes being built – a lower Floor Area Ratio – the City hopes to encourage residents to add accessory units instead of building ‘McMansions’, or large, mass-produced single family homes. The result would allow an increase in density and reduce tear-downs of older single family homes, hopefully combating gentrification and ultimately the housing affordability crisis. 

Seattle’s encouraging of ADU’s is just one way the city is attempting to combat skyrocketing housing prices and increase affordable living. A growing national and global tactic, is the rise of co-living. There are emerging companies that provide apartments and shared common spaces for tenants, such as Sun and Co. in Spain, or Starcity and Common in the US (New York, San Francisco, Chicago, and now Seattle), more refined versions of what were originally known as “Hacker Houses” that provide private or dorm-like rooms and larger common spaces and generally catering to tech-minded individuals. What these living situations universally offer is the ultimate goal of establishing community. Brad Hargreaves, founder and CEO of Common, told Multi-Housing News in a recent interview, “Our goal is to continue to grow our robust network of homes to meet the evolving needs of cities, and create community-driven homes that remove the stress and hassle that can come with urban living. We want to grow with the members who have chosen us, adapt to their changing needs, and serve the growing number of city dwellers nationally.” Their website includes testimonials from residents touting the benefit of a plug-and-play community upon arrival: “If you look at all the stresses involved in uprooting your life and moving to a new country, moving into Common was completely stress-free. Not only that, the chance to instantly meet new, friendly, like-minded people that make you feel part of a community, made a huge difference,” says a Brooklyn resident.

“If you look at all the stresses involved in uprooting your life and moving to a new country, moving into Common was completely stress-free. Not only that, the chance to instantly meet new, friendly, like-minded people that make you feel part of a community, made a huge difference,” says a Brooklyn resident.

There are signs the Seattle market is cooling finally, which may mean a lower market for such co-living situations. With inventory near 2012 levels, reported by the Seattle Times in early October, and sales dropping 27% in King County according to the Northwest Multiple Listing Service, there’s an obvious shift in the market. In a NWMLS press release, Windermere Real Estate President OB Jacobi posited that, “Balance is finally returning to the market, and with it, slowing home price growth.” The annual rate of home sales dropped 15.3% since May, reported by the Daily Journal of Commerce, and September was the 4th straight month of slump.

The housing market slow-down doesn’t mean that there still isn’t in a crisis in Seattle, however. Applied Survey Research produced a report this year on homelessness in Seattle and King County, what they described as a “snapshot” of the homeless population on a given night. The studies’ findings show a 46% increase in persons living in vehicles over 2017, and an overall increase in unsheltered population of 15%. Those experiencing chronic homelessness, defined as “as sleeping in places not meant for human habitation or staying in emergency shelters for a year or longer—or experiencing at least four such episodes of homelessness in the last three years—and also living with a disabling condition such as a chronic health problem, psychiatric or emotional condition, or physical disability”, increased by 28% over 2017. When asked about support in obtaining housing, 80% of respondents indicated that rental assistance and affordable housing would benefit them in attaining a permanent residence, and 98% indicated they would move into safe and affordable housing if offered. 82% also indicated having used local, community-based services in the past.

With the repeal of Seattle’s controversial head tax— a proposal that would have charged businesses a tax per employee and raised nearly $48 million dollars, slotted for investment in affordable housing—Councilmember Kshama Sawant is speaking up to get those dollars added to Mayor Jenny Durkin’s budget proposal. More specifically, Sawant is calling to cut funding from other services, to the tune of $48 million, to dedicate back towards affordable housing. The proposed cuts would need backing from at least 4 other council members, and a sign off from Mayor Durkin, to pass the overall budget package. Tim Harris, founding director of Real Change, commented at Sawant’s press conference, “There’s this thing I keep hearing, which is that in a city this wealthy, nobody should have to live in a tent.”

“There’s this thing I keep hearing, which is that in a city this wealthy, nobody should have to live in a tent.”

Harris also referred to the repeal of the headtax as a “betrayal” and support’s Sawant’s budget re-allocation. Final votes to adopt the city’s proposed budget are scheduled for mid-November. The City’s Budget Committee, process, and timeline may all be viewed on it’s website: http://www.seattle.gov/council/committees/select-budget-committee.

Whether it’s as a city, improvements to individual housing situations, or co-living lifestyle dynamics, it’s clear that the homelessness epidemic so frequently touted by Seattle headlines is solvable through a one meaningful methodology, and that’s community. 

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