The Right Way to “Tax” Seattle’s Rich

Seattle is not affordable and it’s causing homelessness. Our Socialist City Councilmember, Kshama Sawant wants to ”tax the rich” and big business (Amazon) to solve the problem.  She’s wrong about taxing business here but right about “taxing” the rich, though not in the way she wishes to do so. Taking more cash from rich people will not make Seattle affordable. We have a housing shortage, not a cash shortage.

No, homelessness is not Jeff Bezos’s fault. While I loath corporate welfare, blaming Amazon for our housing crisis lets our local politicians off the hook for decades of mismanagement.

First, let's isolate the cause of Seattle’s key affordability problem. Housing, there isn’t enough of it.

More jobs than homes created every day -> Rent increases.   Source: The Urbanist

More jobs than homes created every day -> Rent increases. Source: The Urbanist

But you might say “I see cranes everywhere.” Sure, we build a ton but it’s not enough. As you can see in that graph above, we create more jobs than houses every single day. The city itself has recently released a study confirming the true cause of our affordability crisis: Zoning that requires Single Family Housing for most of Seattle’s residential neighborhoods.

75% of housing area in Seattle is zoned single family and more people are moving here each week. The new people only have 25% of city to move into. Given that, it doesn’t take more than the first Economics 101 lecture to understand why median home prices rose 85% since 2012 and rents 65% since 2010. ( Though we’re starting to see a slight slow down or even decrease because of the building we’ve allowed in upzoned areas - Hint: We need more upzoned areas)

So while our socialist Councilmember, Kshama Sawant is trying to wage war against Amazon, has she tried to upzone our city? She’s strangely silent on the issue - and if I’m wrong about that, please correct me, and I’ll be thrilled to apologize. But it’s curious, while her 3rd council district actually has quite a bit of non-single family zones it also has some of the wealthiest single-family neighborhoods in Seattle: Madison Park, Madronna, Washington Park. Etc.

Screenshot%2B2018-12-17%2B16.24.37.jpg

Is it possible that her constituents are so rich that they are happier to part with cash, then with the zoning that protects their single family homes? It’s a theory, I’ll have to investigate. Perhaps there is a poll to be done, if I can find the resources.

Regardless of the preferences of single family home owners, the right way lower rents is to “tax” them, in her district and the rest of the city; not with a cash tax, but by upzoning their neighborhoods especially near public transit as the city’s own study concluded. We should tax the pleasantness of their lives. Make no mistake, if you like your idyllic single family street, this will change the vibe. But it’s that ‘vibe’ that makes Seattle unaffordable for far too many. It’s a root cause of our homelessness crisis.

So we can blame Amazon in a spiteful and fruitless furry, or solve the problem - too many people, not enough homes - by upzoning a lot more of the city. The choice is ours. It’s gonna be an uphill fight though, especially if we don’t have Councilmember Sawant as an ally for upzoning.

The good news that there is hope. We’ve seen some upzoning and we might get more. But you NIMBYs out there, I’m personally asking you to make a sacrifice for the greater good.

Nathan Chaffetz