The C Is for Crank Interviews: Jon Grant

Now that the primary-election field of 47 has been narrowed to a comparatively manageable 18, I’m sitting down with all the council candidates to talk about what they’ve learned so far, their campaign plans going forward, and their views on the issues that will shape the election, including density, “neighborhood character,” crime, parking, police accountability, and diversity. I’ll be rolling out all 17 of my interviews (Kshama Sawant was the only candidate who declined to sit down with me) over the next few weeks. Today’s interview: Former Tenants Union director Jon Grant, who’s running against council incumbent Tim Burgess for citywide Position 8.

Jon-GrantThe C Is for Crank [ECB]: In the primary, you were running against a well-known incumbent and a prominent musician with strong name recognition [Long Winters singer John Roderick]. Were you surprised that you made it through?

Jon Grant [JG]: I felt fairly confident we would. We were obviously pleased that  things came out the way they did. I think there was a real question about money between me and my two opponents [Burgess and Roderick]. They spent, like, $275,000 to my $40,000. [Combined, Roderick and Burgess spent about $265,000 to Grant’s $37,000.] I think it speaks to whether this is going to be a campaign about money or message. The choice is between a candidate representing the Chamber of Commerce and a candidate representing the community. That was what made the difference. I think the Stranger endorsement helped,  but it wasn’t the deciding factor.

ECB: You say that Burgess is backed by the Chamber of Commerce, but it’s worth noting that their PAC, Civic Alliance for a Sound Economy, didn’t spend any money supporting him in the primary. Why, specifically, do you call him the Chamber’s candidate?

JG: Follow the money. There’s lots of examples. Look at South Lake Union and the incentive zoning proposal. The city hired a consultant to figure out what kind of fee South Lake Union could support and they figured out that it was around $85 a square foot. And the proposal that was put forward by Tim Burgess was closer to $22 a square foot. It was a real clear example of deferring to developers on what they were willing to pay they. He left tens of millions of dollars for workforce housing on the table. There is a direct line from downtown developers to his policy decisions.

Another example is the anti-panhandling ordinance. That was a clear nod to the Chamber of Commerce ‘s interest in clearing out homeless folks downtown. It was found to be in violation of human rights standards by the Seattle Human Rights Commission and it was eventually [vetoed]. That was his initiative.

He also repealed the employee hours tax, which is one of the only progressive taxes available to the city council.

ECB: Minutes after Mayor Murray announced that his 28-member Housing Affordability and Livability Agenda committee had reached a “Grand Bargain” that would not only mandate new affordable housing in exchange for upzones but avoid a lawsuit developers had promised to file if the deal included residential linkage fees, you announced an alternative plan that not only included a maximum residential linkage fee but called for rent control, which was never realistically on the table for HALA. Why did you do that, knowing that your plan would incite a lawsuit and blow up the Grand Bargain?

JG: The only time the city has ever tried to push for progressive legislation, it’s been greeted by a lawsuit. If we decided whether to move forward based on that threat, we would end up with no progressive laws. We don’t win for not trying. We’re going to have a totally new city council that’s going to make some hard decisions about how we’re going to provide more affordable housing.

If you zoom out to the bigger picture, the question is, what is the best way to provide affordable housing? The goal [of providing 20,000 new affordable units in the next ten years) is good, but the financing mechanisms in HALA wouldn’t direct enough money toward the lowest end, [people making] zero to 30 [percent of area median income.] What I would like to see considered is, what do we do to address those folks? We just ended the Ten-Year Plan to End Homelessness with more homelessness than ever. When are we going to get our act together? What can we do to be bold as a city, to bring in as much revenue as possible to help the folks who need it most?

What I would do is build 5,000 housing units for the homeless in five years. That is ambitious, but if we don’t set high goals, we’ll never achieve them. I think it’s reasonable to ask the private sector to do more for affordable housing, That’s why I’m in favor of having a linkage fee both on commercial and residential and in working with [the Seattle Housing Authority].

ECB: What are some of the ideas you think the council could consider independent of HALA, and why do you think you’ll have more luck getting consensus around those ideas given that  the HALA committee rejected them?

JG: It was easier for something to get killed in HALA than it is on the council. We’ve got a kind of moderate council right now, but it is very hard for council members to side with the minority property owners who are also landlords.

ECB: How do you respond to the argument that taxing all new development discourages developers from building here? A linkage fee won’t bring in much money for affordable housing if it deters new development.

JG: You don’t just pick [the fee] out of the air. You need to hire a consultant to do the economic analysis to see what’s the tipping point where you start to discourage development. What else would you do–take developers at their word? I think that is a meme that is put out there by developers to deter debate about government intervention, or regulation, or any type of effort to direct the market to be more affordable. “I don’t support linkage fees because they deter development.”  They don’t deter development. I think a linkage fee will work, and it will actually create affordable housing. It’s the difference between social justice urbanism vs. libertarian urbanism that just says, let the free market decide what happens. I would go the route of taking the advice of an economist to advise me when that tipping point is, rather than relying on popular opinion. I think we need to have density. I think we need height. But it’s an opportunity cost [to do nothing].

ECB: You’ve talked a lot about the need to reduce displacement of low-income tenants, preserve existing affordable housing stock, and require one for one replacement of affordable housing torn down for development. The HALA plan already includes a lot of proposals that get at those same goals. Why do you support these more aggressive interventions?

JG: I’ve seen it firsthand at the Tenants Union. Developers will choose the most affordable building, because it’s the most affordable land, and buy it, demolish it, and develop there.

There are two markets: New construction with premium rents, and older housing stock with more affordable rents. The question is, which drives the other? High-cost housing creates an incentive for developers to go after the second-tier housing stock so they can redevelop it. If you have a vacant lot and you build $3,000-a-month apartments, does that lower the cost of rent for the premium rent apartments elsewhere? If you build more, will other rents go down? Time will tell, but over ten years, it’s a drop in the bucket.

ECB: The major cities that have rent control, including New York, LA, and San Francisco, are also the most expensive cities in the US. That says to me that rent control doesn’t work, and it’s not just me—virtually all economists agree with that assessment. Why do you support rent control?

JG: The question we need to ask ourselves is, are rents affordable compared to people’s wages? In order to afford a two-bedroom apartment in Seattle, you need to earn $27 an hour. If you compare rents to inflation, rents increased at four times the rate of inflation in the last five years. That is an astronomical amount. [Average rents in King and Snohomish Counties increased by 8 percent between 2013 and 2014, which was four times the inflation rate, but rent increases were lower in previous years]. I would tie rents to inflation and if there were operating costs above or beyond that, the owner would be able to get approval to take those on.

ECB: Given the extremely critical tone you’ve taken in your race against both Roderick and Burgess, if you win, should your new colleagues expect to have a hard time working with you?

JG: I don’t think people understand to what extent I am able to work collaboratively with other people. At Solid Ground and at the Tenants Union, I worked with landlords and tenants on state legislation. I’ve pushed a lot of pieces of state legislation that have become law. I worked on the [Seattle] rental inspection ordinance. That was a fight to get that done, but I participated in a two-year stakeholder process and we got where we needed to collaboratively.

It’s been my experience that advocates don’t think of everything, and [the industry will] find legitimate flaws, and we’ll have to correct them, but there is a line where you ask, does that input detract from the original goal of the legislation? Can I work with other folks? I’ve demonstrated time and time again that I can. But other times, I put my foot in the ground.

Previously: Tim Burgess, Position 8

33 thoughts on “The C Is for Crank Interviews: Jon Grant”

  1. “Germany just doesn’t have much exclusionary, restrictive zoning the way we do.” Hmmm. From my experience and observation, all zoning is exclusionary. How do the Germans do their zoning, with no uses excluded?

    1. You’re being overly literal; obviously you know what I mean. Of course all zoning excludes something. But a set of land use rules that allow for a variety of common forms of housing–single family homes, duplexes and triplexes, subdivided older homes, stacked flats, rowhouses, small apartment buildings, etc–is considerably less exclusionary than only allowing one of those forms.

      For an overview of the differences between the German approach to residential land use and the US approach, this is a good place to start:

      1. Thank you for acknowledging that all zoning regimes impose some restrictions and exclude some uses. In our urbanist vernacular of late, the term Exclusionary has been used as an epithet against SF zoning. It’s used as a framing device, a propaganda term, and I have simply grown tired of the inaccuracy involved.

  2. A good example of the political disaster that is rent control is Stockholm. Rent control has been very successful at keeping Stockholm apartments affordable–once you can get one. The average time on the waiting list for an apartment is now eight years. (Current residents are cool with the status quo, more or less–they’ve got their cheap apartment and they’ll never be evicted!) Sweden did a much better job of providing affordable housing for all–not just winners of the time and place lottery–when they took a break from rent control and invested in building lots of homes, through the Million Programme.

  3. Nice long post. What can’t we just rent control all or most units? Like Berlin. That seems to solve most of the issues you list in your essay. I mean comment.

    1. One reason rent control has generally been more or less harmless in Germany has been that Germany doesn’t have an ownership culture, and as such there are fewer people using their home as their primary wealth accumulation vehicle.

      The real harm of rent control isn’t its economic effects so much as its political ones. Rent control increases the number of people who are either unharmed by, or benefit from, supply/demand crises. There’s already a huge block of these people–homeowners–who stand to see their primary investment benefit from supply restriction, in addition to their aesthetic preferences. Making a large chunk of renters these people’s primary ally, and you’re far more likely to get a San Francisco-like political situation, where the most acute housing shortage the city has ever seen is met with calls for a moratorium in the neighborhood adjacent the city’s best transit, and delusional buffoons like Tim “the key to affordable housing is to prevent housing from being built” Redmond are taken seriously.

      Anyone frustrated with power of the reactionary supporter of exclusionary, classist SF zoning should be leary of a policy that hands those forces a big chunk of natural allies.

      1. No, they don’t. My point is that Germany doesn’t have a large and powerful class of accumulators of housing wealth, which takes away the biggest political motivation for restricting supply. In general, there’s no political movement to restrict housing supply of any power in Germany, so the negative political consequence of rent control in the US (further empowering an already powerful and malign political force pushing for policies that create shortages of housing), isn’t a problem in Germany.

        In general, though, Germany just doesn’t have much exclusionary, restrictive zoning the way we do. That, plus local power to retain it, plus insulating lots of people from the effects of supply and demand, add up to the toxic anti-housing political movement we get here. Germany lacks all the ingredients. So the poltical consequences are completely different.

      2. The Guardian is reporting that issues are now emerging in Berlin as well. Controlled apartments attract huge demand, which means long time searching, which is what is expected under controls. Landlords will get super picky and perhaps start discriminating against minorities or foreign people, which is bad for society.

        Berlin becomes first German city to make rent cap a reality

        “Berlin is pioneering the rent cap after the national parliament approved the law, aimed at areas with housing shortages, in March. Berliners say flat-hunting is becoming increasingly competitive.

        “We were looking for the best part of a year,” said Vlasis Tritakis, a student.”

  4. Rent Control doesn’t work.

    The Guardian had a recent piece on this, also Bloomberg. Rent Control divides society into a privileged class (rent controlled properties) and an underclass that must pay even more for an uncontrolled property or sublet at inflated markups.

    If you believe that everybody is equal, you cannot possibly support this socially regressive policy. A good analogy is if you turned up at work and your boss had got the city to pass ‘wage control’ to cap your pay to CPI.

    Rents are set by demand and supply. When you don’t set them this way, massive shortages occur. When Rent Control was tried in Stockholm, Sweden, waiting queues DECADES long formed. And landlords were flooded with hundreds or thousands of applications for apartments.

    The Guardian: Pitfalls of rent restraints: why Stockholm’s model has failed many

    “Half a million are on the waiting list for rent-controlled flats in Stockholm, meaning a two-tier system, bribes and a thriving parallel market.”

    Bloomberg: Rent Control Makes Sense Only for Politicians

    “Rent control creates two classes of tenants: people who have the right to rent at below-market rates, and renters who would like to get a long-term lease on an apartment, but cannot, or must pay through the nose for a limited number of uncontrolled properties.”

    Only building more housing will provide true relief. Recently, the San Francisco Bay Area Renters Federation released a simulation model which shows that adding new housing – even expensive housing – benefits everyone. It reduces competition for the existing housing stock, which relieves pressure to increase rent prices.

    How does adding expensive housing help the little guy?

    If there is going to be a tax, it should be a land tax on everybody. That will mean that people in single family areas will have an incentive to develop their property or build duplexes, triplexes, villas and the like. At the moment single family zoned areas are just watching their own land values inflate, which is good for them, but bad for the rest of society.

    Rent Control DOESN’T work. And in my opinion the Pacific Standard Mag did not do enough research to find real examples where it has failed with clear effects, such as in Sweden where it totally destroyed the rental market.

    1. So of the hundreds of cities in the US that have tried rent control, the only study of one you could find was by a self-taught k-12 teacher who calls herself “sfbarf”?

      Meanwhile, if “Rents are set by demand and supply. When you don’t set them this way, massive shortages occur”, then logically there would be no supply crisis in housing markets without rent control (most cities in the US), or without regulation at all (most cities in the US in the 19th c.). Which is patently false. Perhaps markets aren’t perfect, and big bad government isn’t the only cause of homelessness and price gouging in rental markets.

      1. Firstly, you chose to object to her personally rather than deal with the substance of the arguments presented in her simulation model. What exactly is it within her simulation model that you are disputing?

        Nowhere within my comment do I mention Government or perfect markets. In fact, I even suggest Government intervention by way of a tax on land.

        Secondly, you ignore the possibility of multi-causality. Just like there are multiple ways to get sick, there are multiple ways to have a housing shortage. In addition to price controls, there are also quotas which can also cause a shortage. A quota is an upper limit on the total number or amount of some item. Do cities have quotas? – absolutely – it’s called zoning ordinances.

        If you ban people from building certain housing in an area, you can also have a shortage if the quota is binding. For example, if you pass a law saying supermarkets can only sell 1 loaf of bread per day, then of course there is going to be a shortage. And the price for the loaf will be extreme.

        The worst case is where you have BOTH quotas AND price controls. This is like having 1 loaf of bread and slapping a price control on it so that baking more is also discouraged. Which is exactly what people are advocating for – price controls and restrictions on new development near them.

        These are exactly the sort of muddle-headed policies you would adopt if you wanted to poison the city and make the problems 10x as worse.

      2. The best place to look for empirical data on rent control’s effects in the US in New Jersey–over 100 cities have it, of all types and sizes, so we can compare them head to head with similar cities that don’t, this creating a kind of ‘natural experiment’.

        As you can see, there’s really not much here for rent control’s critics or supporters to get excited about; the effects are fairly minor. Median rent in cities with rent control is slightly lower, but median rent per room is slightly higher.

        In expensive cities undergoing quick economic growth, rent control stands to do the most good (for current residents) but at the greatest risk of harm for everyone else. But in the long run, in a non-hypercharged evironment it doesn’t seem to do much good or harm.

        At any rate, it’s painfully obvious Olympia’s not going to legalize it, so any politician pushing it is just engaging in cheap talk/populism, and there’s no good reason to take them seriously. We have other–and better–tools at our disposal, if we can overcome the anti-growth politics to execute them.

  5. “but it is very hard for council members to side with the minority property owners who are also landlords” ??? What does this mean?

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