Thread by @TheUrbanAce

Alright to this evening's housing thread is brought to you by this question:

'I have friends who think a vacancy tax would do more to solve Seattle's housing problem than upzoning. Is this true?'

#Seattle #urbanism #housing #taxes

And before I begin, still underemployed and would love to hit $40 for this thread.

venmo: houstonace
CashApp: $Archstar

Ok let's go!

So the first thing I want to do is get a few things out of the way. 1) even though a problem may exist in a similar city (let's say SF for example) it's important to remember that although the problems are similar, given the differences in laws the reasons could be different.

and 2) more importantly, I am going to try and address this in as using a vacancy tax in non-COVID time. COVID has screwed so many things up in both making housing harder in some ways but also covering losses in others. There's no way to apply a critical lens clearly.

So, tldr: no, a vacancy tax will not work in Seattle.

And I will get into the reasons as to why, but before that I'll share some reading that will help!

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#1 - Unpacking The Growth in San Francisco's Housing Stock. Again, this is from SF so take it with a grain of salt, but it covers a lot of the challenges with implementing a vacancy tax.
(and the Terner Center has lots of great papers)

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ternercenter.berkeley.edu/uploads/CR_Fin…

#2 - The Equitable Development Initiative Community Indicators Report. This was just released two weeks ago so hot off the presses and provides the best coverage of what we know about housing and its impacts across the city along with other data points.
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seattle.gov/Documents/Depa…

Ok, so now the main challenge. Why will a vacancy tax not work in Seattle?

Well, #1 the vacancy in the city is fairly low.

This figure was hovering around 5%, which generally indicates a strong landlord market. For context, that means at the time...

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...with a bit over 308,000 units per the Zoned Capacity Report, that means there would have been 15,400 units available. By all indications the vacany rate had gone down pre-COVID, so if I take the number of housing units built since 2015...

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seattle.gov/Documents/Depa…

that would add 44,824 units to get us to roughly 353,000 units. Based on a 5% vacancy rate, that would get us 17,641 units that would be sitting empty right now.

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Based on Microsoft data (because it's really good data) the amount of units needed for those making anywhere between 0 to 120% the Median Household Income is 194,400.

So if every single unit was occupied in Seattle b/c there was some high vacancy tax we would still need...

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...over 176,000 units.

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Now I could make this much more complicated, but the other really important thing to do is that a vacancy rate to underutilized properties is like a picture to a film.

It takes a snap shot in time, but doesn't provide the whole story.

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A vacancy rate does not tell us how many rental transactions occur per month, how long a *specific* property stays vacant, how long it takes to lease a new building, what percentage of the vacancy rate is from new buildings, how many housing units are actually airBnBs...

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...you get the point. There's a lot missing!

So, what do we do?

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Well, #1 - remove the notion that we don't have enough housing. The Community Indicator Report shows that even at the level of 80% AMI in Seattle we don't have enough units because b/c they're rented by individuals with higher income. Which means...

16/21

...if you are renting an apartment (or have a mortgage) and are paying less than 25% of your income before taxes, you are a gentrifier.

In addition...

17/21

...the fact that we built 10,000 units last year and have only made a minor dent in our housing needs means that not only do we need to build even more units, but we also need to be subsidizing more of the cost to hit that 0-30%AMI gap. We have A WAYS to go.

18/21

and big one #2) we need a housing AND lodging registry. Until we can account for every single unit in the city, both owned and not, we can't accurate propose taxes on whether or not they are occupied. Plus, if it turns out a huge portion is due to AirBnb, it might be...

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...better to simply raise the hotel taxes on those so it is better financially for owners to rent out the units.

And lastly, as I say all the time...

20/21

...we need to raise the minimum wage. If the AMI keeps increasing from high wage earners 60% AMI is still going to be out of reach for many people.

And with that, I am done for the evening.

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