Puget Sound growth: Where will they all live?

Urban villages are fine but they fall far short of filling the needs. And what happens as the millennial generation gets older and has more babies?
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Condos along Leary Avenue NW in the urban village of Ballard.

Urban villages are fine but they fall far short of filling the needs. And what happens as the millennial generation gets older and has more babies?

The strength of the Puget Sound economy and the region’s ability to attract new residents strongly suggest continuing growth in the years ahead. The question is not whether we grow, but how we grow. This is less a question of industrial and commercial growth, which tend to follow fairly predictable patterns, but of residential growth: Where will the newcomers and the young adults now growing up here find housing they can afford?

After 20 years of growth management we still don’t have a very good grip on this question. We know we do not want to sprawl forever, like the big, fast growing cities of the Sunbelt. But we have never come up with a plausible alternative.

Growth management has been very good at stopping things we don’t want — sprawl to the Cascades — but has not done much to provide new growth patterns that work for everyone. We continue to grow, but not in as orderly a way as was envisioned, and with housing prices that, after a lull, continue to rise.

To imagine the housing problem we face in the region, consider one unstoppable force and three immovable objects.

Unstoppable force: growth. As argued in two previous articles, growth is inevitable and certainly beats the alternative. The critical point is that the firms driving growth are not greatly affected by its negative impacts, especially with respect to housing. This is the “superstar city” factor: In a technology-based economy there are no self-correcting mechanisms to ease housing prices. Tech executives, who make location and growth decisions for their firms, can afford high-priced housing in convenient locations for themselves and are willing to provide private transit services for their lesser-paid employees. Everyone else in the lower-paid service economy ends up commuting from a distance. Paradoxically, population can continue to grow even though many people cannot afford housing.

Immovable object No. 1: Urban Growth Boundary (UGB). Physical growth in the region is constrained by the UGB, a hard line that runs along the eastern edge of the urbanized area from north of Everett to Joint Base Lewis McChord, plus a number of islands in outlying areas. Very little development can take place outside the line or the islands, and the one major exception, masterplanned communities, appears to be a dead idea for now. When the state required county governments to draw their segments of the main UGB in the early 1990s it was not clear whether the counties intended the line to shift outward as infill development used up the available land inside it, or whether they intended the line never to move, imposing an effective cap on single-family housing. Twenty years later it is still not clear whether the line is movable, but it is clear that the political will to do so is scarce. “More sprawl to enrich big developers” is pretty easy messaging to combat any effort to move the line.

Immovable object No. 2: Resistance to density. The quip that “no one likes sprawl and no one likes density” still holds. Despite years of experiments, demonstrations and genuinely good examples of innovative higher density housing, zoning in the region continues mostly to allow for two extremes: large, high-density multifamily projects in tightly controlled zones and conventional single-family housing everywhere else. To be sure, multifamily has gotten more dense (albeit with high prices necessitated by underground parking) and single-family lots in new subdivisions have gotten smaller. But these changes are not enough. The fact remains that preservation of existing low-density zoning is a primary expectation of local governments, and there is no constituency outside the housing industry pushing for higher densities. The political formula is simple: Most voters already own homes and have no stake in expanding the supply of them.

Immovable object no. 3: lifestyles. The way we use housing in this country, especially in the West, requires a lot of land and structures. Many of the practices that we take for granted would be unusual or unthinkable in most of the world. We promote “aging in place,” resulting in large homes with one or two elderly residents who, elsewhere in the world, would live with a child. Young adults form new households as soon as they can, rather than living with parents until they marry or have children, as young adults do in much of the world. Families do everything they can to raise their children in detached housing, rather than living in large apartments as is common elsewhere. Although many immigrant families in the region will have multi-generational households, these and other longstanding preferences will very likely persist for generations.

So what happens when a constrained supply of housing (urban growth boundary-restricted land base and low density zoning within the UGB) meets relentless demand? In the early days of growth management, the answer was easy: Everyone moves to urban villages. These high-density neighborhoods would be located in commercial areas with fewer concerns about local character, and would be so amenity-laden that they would overcome societal resistance to high density living. The urban village vision has come to pass in a number of high-density, high-amenity areas: South Lake Union, Ballard, the Landings in Renton, the downtowns of Bellevue, Kirkland and Redmond. But while these areas are undeniably successful, from a regional perspective, they involve less change than meets the eye.

To begin with, all of this highly visible multifamily construction has not put a dent in demand for single-family homes. The share of the regional housing stock made up of single-family homes has remained unchanged for decades at about 60 percent (with another 4 percent each in duplex/townhouse and mobile homes). For every 100 units built in South Lake Union, 200 new detached homes will be built out on the periphery. While the single-family share has dropped in King County, it has actually risen in Pierce and Snohomish counties. The urban villages have put a dent in the market for garden-style developments in the suburbs, as renters and condo buyers express a preference (and ability to pay) for downtown living over auto-dependent living. But there is no evidence that residents are moving to urban villages instead of single-family homes.

Second, urban villages do not appear to have changed preferences for family life. Urban villages across the region are filling up with millennials, with the generation's widely reported desire for dense, pedestrian-oriented lifestyles. But that celebrated generation is just getting into the baby business in a big way. And when the echo of the echo of the baby boom starts in earnest, these new parents will look for housing that is more appropriate for families. Theoretically that could include large apartments or condominiums, but the stacked-flat industry has been slow to embrace family-friendly products. So even if these millennials want to raise their children in the city, they will have a tough time finding places to do so, especially as their children get past toddlerhood.

As new residents move to the region and recession-scarred young adults emerge from their parents’ basements, housing demand will continue unabated. And money will count. Well-paid millennials will probably gentrify the remaining undiscovered parts of Seattle and push unaffordability beyond the core of the Eastside and into relatively affordable areas in South King and South Snohomish counties. The southwest part of King County will probably remain somewhat affordable, but all of South King County will be on the receiving end of the gentrification process, as lower wage workers in Seattle and the Eastside head south. Price pressures radiating from Seattle and the Eastside will ripple out to Pierce and Thurston counties to the south and Snohomish and Skagit counties to the north, and families that cannot afford long commutes will reluctantly settle for apartment living.

Almost as certain as the likelihood of growth will be the reluctance of local governments to deal with housing pressures. This is completely understandable given the nature of local governance. No one in the political structure has responsibility for increasing the housing supply and no one is politically rewarded for doing so. On the contrary, promoting either sprawl or density can result in political punishment. Twenty-four years ago, the state created the Growth Management Act and, in its desire to defer to local control — “bottom-up planning” — created an impossible situation that is again rearing its head. Housing and land prices are back to their very high pre-recession levels and families are increasingly unable to find anything they can afford or even make an offer on. Much of the region’s job growth is concentrated in areas that have little or no single-family housing capacity, and commutes get longer and longer.

The problem of providing housing for the next wave of growth is not a planning or economic question, but a political one, and it is a question that the region’s leaders need to get a grip on. Growth management, as carried out at the local level, has had two big successes: preserving the Cascade foothills and creating vibrant urban centers. There is no technical barrier to city and county leaders doing the rest of the job, primarily finding creative ways to house families that don’t involve lengthy commutes.

But before they can do that effectively, the state, which created this political mess in the first place, needs to come back to the table. The GMA needs to be tweaked to acknowledge two important truths. First, planning for population growth and unit count is too abstract; we need a finer grain of planning that considers real people and households and their needs. Second, local governments are hardwired to respond to their current residents, not their future ones, and assuming they will take tough votes on density without strong guidance and incentives is unrealistic.

When markets crashed seven years ago, questions of housing affordability and availability moved to the far back burner on the political stove. It’s time to move them up to the front again.


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About the Authors & Contributors

Michael Luis

Michael Luis

Michael Luis is a public affairs consultant with a focus on housing, growth and economic development issues and served as mayor and councilmember in Medina. He is author of Century 21 City: Seattle’s Fifty Year Journey from World’s Fair to World Stage. He can be reached at luisassociates@comcast.net