When the government does it: Part 2, The city’s largest employer

January 8, 2018 | Development, Government, Housing, Inclusionary zoning, Legislation and policy, Markets, Policy, Seattle, Theory, Universities, Zoning

By: David A. Smith

 

[Continued from yesterday’s Part 1.]

 

As we saw in the previous Part 1, using as our source a short factual article University of Washington Daily (November 22, 2017) by student reporter Max Wasserman, like many American universities UW is seeking to grow its research facilities and its student enrollment, up 15% from 46,000 to 53,000.  To do that it intends to expand its footprint, already large at roughly one square mile, by going both out and up, both of which evidently require City of Seattle zoning approval.  Ordinarily such an expansion would be governed by Seattle’s Mandatory Housing Affordability requirement, but the university, which is significantly funded by the State of Washington, is exempted from the MHA because it’s legally part of state government.

 

Get that MHA outta here!

 

A terrific introduction to Seattle’s affordable housing challenge is presented by Michael Goldman (October 17, 2017) in An Affordable Housing Platform for Seattle (Husky purple Georgia font), which included this handy table:

Seattle’s Affordable Housing Lingo

(Lifted in whole cloth from An Affordable Housing Platform for Seattle)

 

*   MHA – Mandatory Housing Affordability; Seattle jargon for inclusionary zoning.

*   Inclusionary Zoning – This is the common term for MHA; it requires new development to either include subsidized housing units or pay into a fund that helps pay for subsidized housing units to be built elsewhere.

*   HALA – Housing Affordability and Livability Agenda; the 65-point plan to address housing affordability in Seattle developed by a committee formed by ex-mayor Ed Murray and released in 2015.

*   Linkage Fees – Similar to inclusionary zoning except the inclusionary part — meaning including subsidized units on the same site as new development is not emphasized.

 

Mr. Goldman then goes on first to dismiss scattershot initiatives purporting to be solutions to the affordable housing challenge:

 

They’re typically a hodgepodge of recommendations including zoning deregulation, tenant law tweaks, tax incentives, and European design imports.

 

Then he shifts to his own four-principle mega-plan.  To discuss it in depth would take us far afield, so I’ll say only that, while his first three principles make sense in the realm of housing and urbanization, his fourth – tax the rich progressively and apply the proceeds comprehensively to social uplift – is beyond scope for housing reform and politically impossible.  Exploring it would take us too far afield, so we’ll return to the subject at hand.

 

We have to go now, because we’re due back on the housing blog

 

Taking advantage of its exemption from the MHA, the university pledged to develop, not the 4,750 apartments that will be needed combined between students (dormitories) and workers, nor even the 1,500 that would logically needed to be affordable (again, excluding students from the arithmetic), but only 150 apartments of affordable housing (all for its employees).  It will build them on a university-owned site where now sits a single-family home, a site that the university would absolutely have to upzone significantly anyhow.  A person less ready than your credulous blogger to embrace the nuance of the university’s holistic view might say that UW is, in fact, offering bubkes.

 

 

In fact, the university’s development is effectively exclusionary.

 

Who says it is

 

 

C. Can government-agency-led development be exclusionary?

 

Both sides have a hard time separating the UW’s growing footprint from neighborhood change.

 

A graduate challenging the expansion of his alma mater

 

To house the many UW employees making less than $50,000, Josh Castle, an advocacy manager for the Low Income Housing Institute, said in a press release [that] called for the University to incorporate 1,200 affordable units. 

 

LIHI knows what it’s talking about: it owns or manages 2,000+ apartments around Puget Sound:

 

“This is a tiny commitment for a huge institution with thousands of low-wage employees,” said Castle, a UW graduate.

 

By no means is it tiny.  If we presume that the University District Market rent is $1,840 (home prices are over $705,000) and the appropriate affordable rent (1-BR, 60% of AMI) is $1,080, that’s $760 per month of rent bargain, times twelve, and with cap rates at 4.5% or so,  the capitalized cost of an affordability commitment would be roughly $205,000 per apartment, or a quarter of a billion dollars’ worth of ‘lost’ property value.

 

(I say ‘lost’ in quotation marks because the value is created by the upzoning, so it’s value foregone rather than value lost.)

 

 

Asking for 1,200 affordable apartments is quite plausible – that would be only one-quarter of my back-of-the-envelope estimate of 4,750 needed, and most likely a substantial fraction of the newly created jobs will be middle-income or lower.  Add to that the continuing surge in housing prices (up 15% last year), and it’s clear that the university’s expansion will fuel further home-price appreciation, especially in the vicinity, and while that will be great for those who already own homes, it’s a more than legitimate grounds to pursue 1,200 affordable apartments.

 

But that’s not what they’re getting, in fact the city is getting only one-eighth of that:

 

The City of Seattle has accepted the university’s proposal of 150 units, an amount it promised in an employee apartment building that will replace a single-family house on 42nd and Roosevelt.

 

So the University is generously offering to house its own employees on a property that will be developed (vertically) to replace one house. 

 

Clearly this doesn’t meet Seattle’s recently adopted Mandatory Housing Affordability requirement that translates into either mandatory inclusionary zoning development or substantial linkage payments (forest green font): 

 

Based on the original MHA framework of providing increased development capacity in combination with new mandatory affordability requirements, the City is introducing a tiered approach of higher performance and payment requirements for areas – such as the U District – that are receiving a higher development capacity increases than the standard one story proposed as part of MHA.

 

That invites the question, why is the university exempt?

 

It’s certainly not because they pay their adjunct faculty so well

 

 

D.  What is the policy case for exempting the government from its own rules?

 

For the time being, let’s stipulate that the university is part of government (I’ll return to this question in a later part of this post): Hath not government workers?  (Seattle Post-Intelligencer, April 2, 2015; husky purple):

 

The University of Washington is the city’s largest employer

 

Hath it not massive inherent advantages already?

 

– one of the nation’s largest recipients of research money. 

 

Fed from the same Federal grants, using the same municipal transportation infrastructure?  If you tax it, doth it not shriek? 

 

The UW’s contributions to the community are not well publicized –

 

Hath it not a property development budget?  Hath it not therefore a responsibility equal to that of any other developer? 

 

– and its relations with elected bodies are frequently strained.

 

The political skullduggery the city teaches it, it will execute, and it shall go hard but better the instruction. 

 

My meaning in saying it is a good university is to have you understand me that he has sufficient credit

 

With all that, the University of Washington isn’t a classic American land-grant university (that’s Washington State), so why is it considered part of government?  The answer is purely historical: the University of Washington has always been a state university, indeed it was a territorial university three decades before Washington became a state:

 

The Territorial Legislature stipulated that the fledgling university have four departments: literature, science and the arts; law; medicine; and a military department. 

 

In 1861, a founding college president at 22

 

The University’s first president, Asa Shinn Mercer helped to build the foundations of the University of Washington in ways that his successors never had to. Having followed his brother Thomas Mercer to Seattle after he graduated from Franklin College in Ohio, Asa worked as a common laborer to construct the building that housed the Territorial University.  When classes began November 4, 1861, he was the sole faculty member. The earliest students were mostly of primary school age, with only one college-age student (Clarence Bagley) to take advantage of Asa’s knowledge of Greek and Latin.

 

Asa was a bachelor, as were most of the pioneer men attracted to the area.  Addressing a combination of practical needs and a vision for the future, he recruited two groups of young women from Lowell, Massachusetts, to Seattle to be teachers.  The first group of 11 Mercer Girls arrived on May 16, 1864; a larger second group arrived on May 28, 1866.

 

Most of the young women soon married.

 

Elizabeth Ordway, the only Mercer Girl who didn’t marry

 

(The story even inspired a television series, “Here Come the Brides” in 1968, which ran for two seasons.)

 

That’s because we’re just good grooms

 

In fact, one married Asa Mercer and moved with him to Texas, and then Wyoming, where they settled permanently.

 

Charming though this is, to say that a university is part of government because it has always been a part of government begs the question: should it be such?

 

Please, sir, may I know the answer in the next part of this post?

 

[Continued Wednesday (it’s already written!) in Part 3.]

 

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