This week’s news is all about MHA. MHA is the Mandatory Housing Affordability program that’s part of a city-wide rezoning project to increase density while requiring developers who take advantage of the new zoning to contribute to Seattle’s supply of affordable housing either by including units in their development project, or paying an equivalent fee into a city fund to do the same. Reviews of the zoning changes have been going on neighborhood by neighborhood over the last year, with East Lake, Downtown, and the University District already getting easy approval. Things slowed down a bit when the Council began looking at the International District and Central areas.
Related, the draft Environmental Impact Study on different strategies for implementing zoning changes has been released and the public comment period is open on it. Earlier today I attended (the first?) public presentation of the findings, which focused on comparing to different MHA approaches to projections where no MHA programs take effect. One of the strategies focused on a neighborhood’s displacement risk and it’s accessibility to opportunity in making its decisions. While both programs have very similar net effects across the city, the differences at the neighborhood level are stark. If you’d like to get a look at the reports, data, and places for you to leave your official comments (which will be answered in the final report) this is the page for you to watch. I’ll probably be talking about this more as the process continues since this is going to have a huge impact on the local housing market.
I was just singing the Seattle Bubble’s praises, but I’m going to do it again. They’ve put up an analysis of housing affordability in the area, with adjustments for what the index would be with different interest rates. I highly recommend reading the article as a whole, less for its information about affordability rates in the area, and more because it winds up being a very useful discussion of interest rates, where the current rates fall in comparison to historical norms, and the potential affect they can have on the market. With affordability reaching for historical lows and interest rates creeping back toward more normal ranges, the rising interest rates could put some pressure against rising prices in many markets. I don’t foresee it having much of an impact on that front in the Seattle market since we have plenty of cash, and high-cash buyers who can avoid or mitigate those effects, but it could start to affect national trends which will, eventually play into the Seattle market.
If you’ve been paying attention to the upzoning going on around the city as part HALA, then you’ll be wanting to pay attention to the next neighborhood up for review: the International District. And not just because increased density in that neighborhood might increase floorspace for tea shops. (Though, in my opinion, that’s a very good reason to pay attention.) The two neighborhoods that have already been through review had unanimous approval, but they were also, arguably, the least controversial choices. There was small but significant opposition to the downtown plan because many activists wanted an increase in the Mandatory Housing Affordability component of the downtown plan, the opposite of the NIMBY trend expected in most neighborhoods, but overall these were straightforward approvals. The International District is a different creature altogether, and relatively unique in the city, too. Paying attention to the conversations going on during its review could be enlightening about what to expect as HALA approvals move into more controversial parts of the city.
And a final farewell to Bertha. After many years, many breakages, and a lot of disappointment, she’s finished her job and gotten dismantled. SDOT has continued their support for webcam curiosity and has a video up to let you see the giant drill head for her final resting place. (She’s mostly getting recycled.)
Last week we talked about the news that rent hikes might be getting smaller. Smaller hikes isn’t the same as smaller rents, though. Zillow just published a handy calculator that will help you figure out what level of raise you need in order to cover your anticipated rent increase.
Some of the news in this article about properties going above listing price won’t be terribly surprising, but if you thought the hot market was limited to the Seattle city limits, you’ll want to read past the fold. The percent of properties in Redmond going over list is big enough to make Seattle’s numbers look reasonable. The eastside in general is cooking up a storm, pressing buyers in the area who need “affordable” even more tightly into the North/South corridor around the city.
Bertha broke through, but we’re not quite done talking about her. SDOT made a video so you could watch the accomplishment. If you’ve ever wondered what the world’s largest boring machine looks like when it finishes a job, now you can find out.
If you’re a data nerd at all, you should probably be reading the Seattle Bubble on your own regularly, because their analysis is great. For example, they dug into the January data from the Case-Shiller index and look at more than just price growth in Seattle, but give good context for how it compares to other rapidly growing metropolitan areas including, important to the Seattle market, San Francisco. With as much interest as we get from Bay Area investors, a softening in the market there is likely to have an impact on the Seattle market (though probably not a huge one unless it was part of something bigger) so it’s something worth keeping an eye on.
There’s more evidence that trends in rent prices from the last several years might be shifting. A slow down in increases isn’t remotely the same as rents going down, but it’s still good news as far as I’m concerned. With upzoning approvals around the city already rolling in, and plenty more in the pipeline, hopefully the next few years will bring a slow down in rent hikes across the city. We’re at a place where rents are high enough to keep the market happy to build new inventory for quite a while; stabilizing things will let buyers be more thoughtful about their choices in jumping ship to buy, hopefully easing some of the inventory trouble we’re having and shoring up against the kind of frenzy that would tilt us toward a burst-ready bubble. (I started in the industry right after the last bubble burst. It was fun to be a buyer’s agent then, but I’m not eager to go back to it.) In summary: Yay, less exorbitant rent hikes!
Speaking of pipelines: Bertha made it! Yo go, you tardy, over budget girl. I must confess, I was one of those, “That’s never actually getting done,” doubters. It got done. Finally. Being a doubter doesn’t make me less proud of that giant drill that eventually could.
The news this week is a little more focused on community than markets. WSDOT released a very neat video of the SR 99 tunnel in progress and Bertha, the ginormous (that’s a technical term) drill digging the tunnel.
Pike/Pine is getting a little bit tastier, but not how you’d expect. A culinary student is setting up a center to bring chefs and gardeners together for everyone’s improved yumminess. There may have been a more serious point about understanding ingredient origins and incubating variety, but I got distracted.
The Seattle Renters Commission made it a step closer to becoming a real thing and is up for final approval on Monday. This is looking like a very good thing to me; a lot of investors want rental properties that will be attractive, and the commission is poised to improve community amenities to increase that attractiveness in a large swath of areas.
The sun is shining and I shamelessly abandoned the office for a lunch time tour. I hopped on the train, took it down to Pioneer Square, then worked my way north until I was at Westlake station. Back on the train and back to work. That netted me visits to five properties and some spectacularly great views of downtown and the sound. It was a really great Tuesday tour, and I’m not just saying that because it didn’t involve Queen Anne.
The takeaway theme for today was, “Isn’t this a great balcony? It’ll be quieter, of course, when they finish work on the viaduct.” Someday!
After completely missing tour last week (I shake my fist at thee, rhinovirus!) I jumped on the wagon in a big way the first chance I had this week. Yesterday I took a nice long lunch break and made a tour of the condos on offer from Belltown down to Pike Place. The sky was a delightful Seattle gray, the temperature was comfy, and it didn’t drizzle even a little.
This has always been my favorite way to do property tour. It’s near my office but since it’s not Capitol Hill, it’s mostly flat, and the views are always great – I’m a an admitted sucker for views of downtown, so even if water or mountains are lacking from a unit, it probably has something I like. Now, with the experiment in touring without a car, I get a bonus opportunity to be smug everytime somebody asks, “How did you find parking?” I should perhaps start tracking this stat, too. It happened at four out of six properties yesterday.
This week was a Tuesday tour week. I’ve been running from appointment to appointment ever since and this is the first chance I’ve gotten to write it up.
The weather on Tuesday was pretty nice, so I caught the train downtown and took a look at condos. I had five I wanted to see, the last on in Belltown, but I cut the Belltown condo from my plans because I was getting tight on time. The downtown condos were all clustered fairly near Pike Place Market, so walking between them was quite easy – I probably would have opted to walk even if I’d had a car with me just because parking downtown is such a hassle. My favorite part of looking at condos downtown: the views were fantastic. Mount Rainier wasn’t out – it was hazy enough in the distance to hide a shy mountain – but the sun on the water was great. Days like that, I spend a little time wishing I worked out of an office downtown instead of in Capitol Hill.
This tour was definitely a clear victory over using a car, though. The train to Westlake was easy, and not having to find parking and debate whether I should move the car from one showing to the next was a huge improvement. So far, the tours in the denser parts of the city have been strong arguments in the no-car column.
Oh my gosh, the weather today is gorgeous. The mountains are out, and it was a great day for a walk. I hopped on a bus to head over to Belltown for tour there and it was so nice that I walked up Alaskan Way to look at condo near Pike Place Market before coming back. I couldn’t have designed a nicer lunch break, and not having to park in Belltown was approximately the best thing ever.
I would complain that this was the second tour day in a row where I did not encounter a single kitty, but I’m entirely too pleased with my mountain-view intake to mind. Victories all around today.
Lots of paperwork at the desk planned for today, so I ducked out around lunch time to take a look at two condos downtown and I only got a little wet. One of the condos was in the Escala which usually leaves me snickering over certain literary associations. The unit had some different finishes from most in the building, so that was a worthwhile trip on its own. The other had a great view but suffered some noise from the viaduct, which means I’m really glad I visited – some clients will take the noise to get the view, others won’t, and now I know who to steer away.
It made a nice break for the day and I can honestly say I’d have skipped both rather than deal with parking downtown, so this is a clear win for the non-car column.