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Density And Affordability Go Hand In Hand

2012 March 29
by dan bertolet

Density and affordability: To become a truly sustainable city Seattle needs more of both, but is that best of both worlds possible?

One camp argues that if you want to make housing more affordable, the best thing you can do is build as much housing as possible so that prices will fall due to supply and demand. All other things being equal, this is no doubt true. However in practice, new high-density housing tends to be relatively expensive, and in some cases may cause the displacement of existing low-income housing. And thus the opposing camp argues that dense redevelopment is an affordability killer. But they ought not to blame density itself.

Inexpensive density has existed in cities throughout history, and is arguably the most prevalent form of housing on the planet today. Of course some of that is unacceptably subpar—a.k.a. slums—but the point is nothing about density precludes affordability. And in fact, dense housing is inherently cheaper because it requires less construction, less infrastructure, less operational energy, and less land per occupant.

Nevertheless, in growing, economically vibrant cities like Seattle, new market-rate housing—dense or not!—is typically not affordable to a large portion of average households. This has two root causes:  high demand, and high cost of production. Again, density is not the culprit.

Demand is why the most successful cities have always been the most expensive cities. People recognize a city’s value, and they are willing to pay a premium to be there. There’s nothing to be done about it, aside from intentionally destroying a city’s economy and livability. Densification is the result of demand and rising real estate prices, not the cause.

Regarding housing production costs, over the past several decades the cost of labor and materials to produce housing has risen faster than the average incomes of most of the U.S. population. That combined with the high price of land in desirable cities adds up to a cost that can put new housing out of reach for perhaps the lower third or more of households.

< Subsidized affordable density soon to come online amidst not so affordable higher density: The Dekko Place at Gethsemane Lutheran, located in the Denny Triangle in downtown Seattle >

What to do?
Clearly, affordable housing is a vexing problem, but halting redevelopment—i.e. limiting density—is not the solution. While that approach could potentially save a relatively small amount of existing low-income housing in isolated cases, it would also lead to unmet consumer demand that would drive up prices and exacerbate the affordability problem across the spectrum.

Furthermore, density is the key to the efficient operation of frequent transit service, which can enable lower-income households to significantly reduce their living expenses by not owning a car. And it is also important to recognize that today’s new multifamily housing will age—much of it not well—and is destined to become the affordable housing of future generations.

Nor should we expect private developers or landowners to take full responsibility for a burden that should be borne by society as a whole. For relatively high-value projects (which are almost always high density, by the way), it is reasonable to encumber development with requirements to provide affordable housing in exchange for allowing increased development capacity. But for more modest projects, that approach can have the unintended consequence of reducing the potential amount of housing produced, which is a self-defeating outcome. Regulations should be ground-truthed in the reality that dense redevelopment is good thing in itself—the building is the benefit.

In the end, the only viable solution is market intervention, that is, government subsidy. Most industrialized nations provide valuable subsidies on the consumer side through a range of major programs (health care, education, etc.) that redistribute wealth, and this would be the single most effective strategy for addressing the affordable-housing  crisis in the U.S. Alas, ours is a culture in which socialism is a dirty word.

So for now that leaves the supply side of subsidy, which is currently delivered through a variety of programs at the local, state, and national levels. These programs are vital to non-profit affordable-housing developers, and in particular for projects that address the very low-income range, which is by far the biggest challenge. Private developer incentives can also be an important part of the mix for the “workforce housing” sector.

As the reality on the ground makes clear, however, these programs are not enough. We need to beef up Seattle’s housing levy and the State’s Housing Trust Fund, for example. We also need to pursue innovative new strategies like the land acquisition fund currently being developed by the City of Seattle to secure land for affordable housing in strategic locations with good transit access.  Or how about a federal program that picks up where HOPE VI left off but focuses on equitable redevelopment in high-capacity transit station areas?

And one more thing: If we want more affordable housing in Seattle, we need to learn to love us some density.


“Rain come down, forgive this dirty town”


Dan Bertolet is an urban planner with VIA Architecture and creator of Citytank.