Numbers from the Census Bureau are about as official as it gets for calculating nationwide trends. So call it official: Seattle’s rent is the 10th highest in the U.S. and its rising faster than any other major city.
According to data released by the Census Bureau this month, median rents in Seattle reached $1,172 in 2013 — an 11% increase from 2010. Seattle surpassed Long Beach, CA and Oakland, CA in its rise to the top 10.
The Seattle Times wrote about it here, but buried one important stat: the renter population actually outpaced the rent increases as the city added 13% more renters in the same time period. In 2013 some 307,000 people were renting in Seattle.
On Capitol Hill rents are rising faster.
Earlier this summer CHS reported that average rent in the neighborhood had reached $1,557, a 12% increase in just one year. According to the latest quarterly apartment survey from analysts Dupre+Scott, median rent on the Hill is at $1,462. What’s even more impressive is the rent increases are happening amid a boom of new units. From March to September the report counted 605 new units — almost double the next highest amount in the past five years over the same time period.
Barrientos developed 14th and Union’s Chloe building
Last year CHS wrote about several Capitol Hill tenants that had seen their rents jump drastically, some up to 20%. Recently we reported that average apartment rents in the neighborhood reached $1,557 a month, up $162 from last summer.
In an effort to help provide residents some relief, Mayor Ed Murray has said he will be tackling affordable housing as his next major policy issue. Following his strategy for tackling minimum wage, Murray’s first move on affordable housing was to announce the formation of a crowded advisory committee. Prolific Capitol Hill developer Maria Barrientos will take one seat on the 28-member Housing Affordability and Livability Advisory Committee, which was announced on Tuesday.
Murray also announced plans for a an emergency task force on homelessness. “Nothing will be off the table, including the issue of how best to address homeless encampments in our city,” Murray said.
Meanwhile, the City Council is working on its own affordable housing plan with council member Mike O’Brien at the helm. The council is scheduled to discuss the plan on October 14th.
A common comment here on this blog is that increasing housing supply will somehow lower, or at least stabilize, rents. These statistics show otherwise.
so is your solution to ban new development?
No, certainly not. But just don’t expect lower rents as we build, and build, and build.
The statistics show that the city as a whole is adding more renters than units (read the article, no just the headline). In Capitol Hill the difference is even higher and rents increase even faster.
If anything, the article just confirms that rents go up when demand is stronger than offer.
In case you want to read a book about it.
http://www.amazon.com/The-Rent-Too-Damn-High-ebook/dp/B0078XGJXO
That’s incorrect. There are three variables to consider: supply, demand and cost. This article discusses supply and cost, but it leaves out demand, which is crucial to understand if we are going to draw conclusions.
What’s happening (and may be hard to believe by some) is that demand is still outstripping supply, which explains why costs are still going up. We know this to be true when we look at vacancy rates, which are still <5%. THAT is the big indicator when predicting the effect of supply on rental costs. Tons and tons of people are still wanting to move to Seattle and especially areas like Cap Hill.
Secondarily, new construction always costs more than older buildings, and there's nothing wrong with that. With the influx of new units, average price spikes, because new units can charge more. As they age, they'll see their prices reduced, taking the place of older buildings today.
And my post above is referring to Calhoun’s assertion, not yours Matt.
If we didn’t have the ridiculous height limit on all the new 4 and 6 story building that went up over the last 10 years than we would not have this problem of ANY available housing going to the highest bidder. Building owners would be competing for tenants by lowering their rents rather than having an empty unit. The situation created by all these short buildings is that building owners get several people willing to pay for any space that is available and they will rather pay the higher rent than commute. And they will outbid each other for the space just like the housing market. The buildings are too short. We need more housing and that does not mean apodments, build human size housing with a view!
I think a bigger problem is that multistory apartments are only allowed in the small portion of land defined as urban villages. Whereas the vast, vast majority of residential in Seattle is restricted to 20-30 foot single family houses. You can see the zoning map here : http://www.seattle.gov/DPD/cs/groups/pan/@pan/documents/web_informational/dpds022048.pdf
Solution? Upzone everything. Change the SFH zones to LR2 or even LR1. This disperses the development across the entire city instead of bulldozing every pseudo-historic building in the old streetcar neighborhoods. The previous SFH zones won’t change that fast (certainly not as fast as capitol hill), because development is spread out across the entire city.
Once the above has run its course, maybe 30-40 years from now, THEN shoot for higher buildings. But, I don’t think its fair that all the current growth is born by the neighborhoods that are already quite dense and relatively crowded.
Yes!
Agreed, build up, not out. It’s so obvious, you build up, and you can fit more people in the building.
The outlook is so bleak. I am incredibly thankful I was able to buy a condo so my only worry is increasing property taxes, insurance and dues. None of which will rise as quickly as rent.
What we need is affordable housing that people can actually purchase so they can be in a similar situation. It is unfortunate that only an elite few can actually purchase a home on Capitol Hill today.
For those who are unable to buy, builders should be incentivized to build housing that’s not full of european cabinetry, granite and stainless so the common person can actually afford to rent the unit. Especially with multiple bedrooms so families can live on the hill as well.
Hear, hear!
Sigh. Can we stop with all of the pro-development rationale that says rents will continue to increase until demand is met. That is thinking from another era and is beyond naive.
“What’s even more impressive is the rent increases are happening amid a boom of new units.”
No, dear article-author, rent increases are happening BECAUSE OF new units. See, the new units are built by a small number of big companies who study demand, supply, salaries, etc very carefully before moving on a build. They do this to figure out, not whether they can be profitable but to see how high they can push rents on their often particle-board junk construction new buildings.
Then, they rent to new residents who need a place to live and will part with a huge chunk of their paycheck because they need a place to live near where they landed a job they need to be at by 8a-9a each day. The developers know the going salaries. New units can be packaged (marketed) as premium, even when the construction is anything but. This encourages other rental owners to raise rents as they see “the market increases”. Don’t believe me? Ask anyone on the hill still paying less than $1200/month for a decent non income-restricted one-bedroom, who owns it. They’ll tell you the name of the person or mom-and-pop outfit that DIDN’T jack prices up as part o this scheme.
And, don’t even start on me being anti-development (I’m not -at all- when/where it’s appropriate). The fact is, Seattle is one of the most active Real Estate markets (and Capitol Hill, one of the most active for new rental unites) because CONDITIONS ARE RIDICULOUSLY ATTRACTIVE FOR DEVELOPERS TO MAKE MONEY WITH THESE HIGH RENTS. Otherwise, we’d be wringing our hands over how to attract developers/builders to meet our recent housing demands, largely created by the tech and Amazon boom.
See the forest for the trees, please.
From the article all I can see is a 13% increase from 2010 to 2013, total of 307,000. So from 270,000 to 307,000.
Of course, not everybody rents, and not everybody lives alone. But how many houses/apartments did we build? 37,000? 10,000? 5,000?
I think there’s more competition for housing. That’s why developers are building more. And because they can only build a few units, they prefer to make the expensive ones. Remove the height restrictions and you will see all kinds of units, cheap and expensive.
If you don’t want more construction, I can only assume you are a home owner who wants the value of their property to increase.
It’s all about supply and demand currently there is more demand for rental units…However, Seattle currently can not reach that demand which in turn makes rents increase……
Bryan,
Thank you for linking to my article. I joked with jseattle that you think I “buried” something in my 350-word story. :)
But in any case, I wouldn’t say I underplayed that data point. It is simply that I would not claim that renter population outpaced median rents. The difference between an 11% rent rise and a 13% renter population increase in 1-yr. estimated data is negligible.
Buried is a relative term :) I only meant to call attention to the fact that the increase is happening for a good reason. At any rate, nice work on your end.
Thanks, and likewise!
“In an effort to help provide residents some relief, Mayor Ed Murray has said he will be tackling affordable housing” I’m wondering if this is code for more apartments the size of a closet without a kitchen or bathroom. Bit$# puhleeeeze…
Demand is the other way to affect the Supply/Demand equation .If I were being squeezed by this rent increase (I’m not, but if I were), I’d be looking “outside the box” of Capitol Hill. There is an awful lot of city out there that’s quite nice, and very little of it is as expensive as CapHill. IT doesn’t require banishing yourself to the hinterlands, and it’s not all like the The Dreaded Bellevue®. There’s amazing amounts of nice new housing being built in central Columbia City, and a lot of it’s walkable to light rail.
I agree, Jim. Another way of putting it is to say that no one has an entitlement to live on Capitol Hill. If you can’t afford it, move elsewhere in the City that you can afford. Simple as that.
Bliss: It probably does. They do tend to be myopic and out of touch at City Hall.
Jim98122x: Centrally located housing is expensive in Seattle period. Check Craigslist, Jim. While Light Rail lined areas further out are cheaper, apart from Columbia City, they tend to be very lacking in services and planning. And, a sense of safety. Besides, why should the center city only belong to the wealthy? That’s a recipe for more crime in the same expensive areas, BTW (just as we’re seeing now. This old exclusion model (that gave rise to slums, ghettos, racism, urban decay and maginalisation) is BS. We need to start thinking differently. There’s no reason folks of all different incomes can’t live near where they work, if we plan and legislate better.
Example: The building that will replace the Post Office at Broadway and Denny across from the new Capitol Hill subway station? A mere 5 stories! That’s absurd and inexcusable. This high volume corner across from a major transit mode should be 15-30 stories and have plenty of affordable unites ($800-$1400/mo. depending on unit size). The city could have bought that lot and overseen development so it was just as I described. But, noooooooooo
Why is it so hard for folks to think out of the Capitalism/big business-meets-bureaucracy box?
“There’s no reason folks of all different incomes can’t live near where they work, if we plan and legislate better.”
There is a reason. The reason is because the middle class and lower class are being forced out of the neighborhoods by skyrocketing rents. Older buildings that are perfectly functional and fine and being flipped in order to double the rent just because the demand is out there by those invading the city with six figure incomes which in turn means less affordable housing for all the people who aren’t making ridiculous money in the Seattle tech industry boom. With every apartment that is being flipped and or having the rent jacked up, it is one less apartment that a displaced middle class citizen cannot afford. They in turn have to leave the city for more affordable housing. This will continue until the last of us not making $100k staring at a computer monitor are pushed out of the city. There is no other way around it. There is a massive displacement of Seattle citizens going on right now not just in Capitol Hill, but across the city which is not being dealt with. If and when this tech bubble hopefully bursts, there are going to be some serious foreclosures, overpriced apartments sitting vacant and a slew of displaced workers not from the area fleeing the city to go back to mom and dad’s basement.
Bob, I agree (as, you are correct) except for your assertion that we can do nothing. Elect better leaders. Toss out the Richard Conlin’s (who think being “eco” is for those who can afford it; fortunately, he’s out) and the insensitive to reality (Sally Clark, Tom Rasmussen, etc). as well as the dullards who lack even one original idea on the issue, which is all but 2 or 3 legislators at City Hall and only a handful in Olympia.
Then there’s this…
Government can
1) commission the building of housing itself, to ease demand (as done in the past in Québec and Scandinavia). Québec has some of the fairest housing prices of any safe, progressive, modern place on the continent. And, it has major, profitable developers, too.
2) implement tax policies that channel and manage development better. There are ways. Look at Pittsburgh. Look at NY state’s Empire Development Zones for ideas. To encourage low cost housing, Seattle Housing Authority could NOT sell off great land holdings and develop them themselves. They don’t. They contribute to the problem by selling to developers who turn around and build garbage at ‘market rate’ (read: they jack up prices, big time).
3) Government can create the MOST BASIC rent management policies as hundreds of municipalities have done throughout the country. From Portland (rent increase restrictions), to Montréal and all of Québec province (rent restrictions and set-aside units) to L.A. (somewhere in-between), there are examples of ways to slow rising rents.
Cheers!
Regarding your first suggestion, does Seattle government (or SHA) really have the money to build more low-income housing? This would be very expensive, and the City budget is strapped as it is.
Also, the complete re-do of Yesler Terrace is underway. This will replace a lot of low-income housing. My understanding is that some of the financing is coming from the sale of prime land to private developers, but there must be some city/federal money going into it too.
Calhoun, the city can float bonds and hire low-cost housing builders from around the globe to build attractive, sturdy housing that gets rented at prices that include NO PROFIT MARGIN. If anyone on city council EVER read Dwell, they’d see there are amazing innovations in high quality affordable housing construction. Where there is a will, there really is a way. Developers don’t just build to build; they build to MAKE MONEY. Seattle Housing Authority should build just to create shelter, no profit involved, no investor return. It’s very, very common sense stuff ;-)
And, Yesler Terrace was a mighty land grab by private developers, with ZERO net gain of affordable housing, in spite of a huge increase in actual units in the area. Instead, you’ll see most of its units contribute to the higher rent problems plaguing so many working Seattleites. The SHA board may contain compassionate people but none of them appears to have any remarkable experience with planning, development, building or any activism associated with the same (read: there is no expert or ‘captain’ stearing the proverbial SHA ship).
“While Light Rail lined areas further out are cheaper, apart from Columbia City, they tend to be very lacking in services and planning.”
At first. Yes. But the services do follow. The question is, will you wait for them? If your answer is no, you pay a relative premium. That’s the way it is. Has always been that way, everywhere, and always will. Some people have the luxury to pick and choose their answer, and some don’t. When I was younger, I had to make the decision to forgo immediate gratification and live for awhile in a slightly fringe area, where I was an ‘urban pioneer, ‘ as my neighborhood improved. Guess what? That neighborhood is stupid-expensive now, but it wasn’t always. This phenomenon isn’t new, it isn’t different, it’s not even unique to this high-tech boom. Not sure why everyone thinks there must be a brilliant solution to this. If there were, it would’ve been thought of generations ago in cities across the world.
Why is it so hard for some people to think outside the CAPITOL HILL box? Yes, Capitol Hill is great–but it’s not the ONLY great, and beating your head against the wall trying to outsmart market forces that are working against your economic situation strikes me as time not well spent.
It appears that many of the commenters here haven’t been to Columbia City in the last 10 years. It is really nice, with a lot of amenities. I felt completely safe when I have been there at night. I was also recently told that the Seward Park PCC is closing and moving to Columbia City on Rainier Ave. Sadly, I think Columbia City is already pretty expensive.
Not true, Anne. Builders can build faster. They choose to not. They manage supply as tightly as possible for maximum PROFIT. And, so long as they do, rents will climb. Demand is only one piece. A place can have demand that is met if properly managed. Why don’t people see that there needs to be some intervening management and governmental programming to address shortages that are created by market manipulation by builders. Do we really want Seattle to be by and for the rich? Do you not see what is happening? Really? Please, STOP DRINKING THE DEVELOPER KOOL AID! So frustrating.
Housing is a right, not a privilege. We need to build enough housing to stay ahead of demand. It’s not rocket science. It’s capitalism’s exploitation of a situation for maximum profit.
What do you propose to do? Force developers to build whether they’ll make a profit or not? If you were a developer you’d do the same thing. You’d wait till you’re sure they’ll rent out. It’s not “market manipulation”, it’s common sense. Should they keep building when there’s already plenty of housing around?
Good grief. Do you really think government intervention will make development magically faster? Government is anything but efficient, lol.
Jim and Franklin, I’m glad you already ‘got yours’
Government can
1) commission the building of housing itself, to ease demand (as done in the past in Québec and Scandinavia). Québec has some of the fairest housing prices of any safe, progressive, modern place on the continent. And, it has major, profitable developers, too.
2) implement tax policies that channel and manage development better. There are ways. Look at Pittsburgh. Look at NY states Empire Development Zones. To encourage low cost housing Seattle Housing could NOT sell off great land holdings and develop them themselves. They don’t. They contribute to the problem.
3) Government can create the MOST BASIC rent management policies as hundreds have done throughout the country. From Portland (rent increase restrictions), to Montréal and all of Québec province (rent restrictions and set-aside units) to L.A. (somewhere in-between), there are examples of ways to slow rising rents.
“Magically faster” Kidding, right? Seattle’s population has risen steadily for 25 years. At some point along the way, a long time ago, policies could have been implemented. If you follow development, you know that developers very often don’t move from plans to shovels quickly -when they do at all. This is far from Seattle’s first Real Estate run-up. When will we learn? THIS WAY DOESN’T WORK -unless you’re rich. Never mind that creatives/artists create the desirable neighborhoods, only to be pushed out.Read The Stranger’s cover story THIS WEEK.
PS- I hope the above alleviates some of your ignorance on the matter ;-) If not, please use our ‘friend’ Google (or Bing!) to dig deeper. I have not the time right now. Just because folks hold indoctrinated notions, doesn’t mean they are true. Be part of the solution, not the chorus of lemmings stuck in inertia. :-)
Jim and Franklin, I’m glad you already ‘got yours’
Government can
1) commission the building of housing itself, to ease demand (as done in the past in Québec and Scandinavia). Québec has some of the fairest housing prices of any safe, progressive, modern place on the continent. And, it has major, profitable developers, too.
2) implement tax policies that channel and manage development better. There are ways. Look at Pittsburgh. Look at NY states Empire Development Zones. To encourage low cost housing Seattle Housing could NOT sell off great land holdings and develop them themselves. They don’t. They contribute to the problem.
3) Government can create the MOST BASIC rent management policies as hundreds have done throughout the country. From Portland (rent increase restrictions), to Montréal and all of Québec province (rent restrictions and set-aside units) to L.A. (somewhere in-between), there are examples of ways to slow rising rents.
“Magically faster” Kidding, right? Seattle’s population has risen steadily for 25 years. At some point along the way, a long time ago, policies could have been implemented. If you follow development, you know that developers very often don’t move from plans to shovels quickly -when they do at all. This is far from Seattle’s first Real Estate run-up. When will we learn? THIS WAY DOESN’T WORK -unless you’re rich. Never mind that creatives/artists create the desirable neighborhoods, only to be pushed out.Read The Stranger’s cover story THIS WEEK.
PS- I hope the above alleviates some of your ignorance on the matter ;-) If not, please use our ‘friend’ Google (or Bing!) to dig deeper. I have not the time right now. Just because folks hold indoctrinated notions, doesn’t mean they are true. Be part of the solution, not the chorus of lemmings stuck in inertia. :-)
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