The Good Bubble
Note: This post originally appeared on Publicola as part of their Thanksgiving series.
Ever since the crash of Dutch tulip mania in 1637 it has been widely recognized that economic bubbles tend to end badly. But over the past year in Seattle there’s been a bubble growing that I believe is a positive exception to that rule: the apartment boom. From the perspective of urban sustainability, that’s something to be thankful for.
New apartment projects have been sprouting so fast recently it’s hard to keep up. Nearly 7000 units are projected to come on line in 2013 in Seattle and Bellevue. In Seattle’s Capitol Hill neighborhood alone construction is well under way on four large mid-rise apartments that will provide close to 600 new units, and a dozen or more projects are in various stages of the pipeline.
Factors driving the apartment boom include the lull in construction caused by the real estate bust, a relatively strong local job market, and demand from Gen Y kids and others who can’t afford to buy in today’s economy. Multifamily housing is pretty much the only real estate development market that has a pulse currently, which has led to somewhat of a feeding frenzy.
Why shouldn’t we worry about this particular bubble? True, an overproduction of apartments can be expected to dish out some economic pain to building owners, financiers, and developers who get the timing wrong. But that won’t change the fact that we’ll end up with lots of new high-density urban housing that will be on the ground for decades. And that’s some powerful good mojo for a sustainable city and region.
Dense urban infill housing reduces development pressure on farms and forests, leverages existing infrastructure investments, spurs economic development, improves public health, reduces stormwater runoff pollution, energy use, and greenhouse gas emissions, and helps create the kind of livable, walkable communities that the market increasingly demands. Furthermore, any oversupply will put downward pressure on housing prices, helping to address affordability.
So no, I’m not wringing my hands over a potential apartment bubble. When I look up and see another construction crane on the skyline it gives me hope.