Kirk Watson is right

In his most recent Watson Wire email, the mayor described the housing reforms he and others on Council have championed as a matter of fairness, specifically generational fairness.

In 2024, the housing affordability challenge contributed to an estimated 1.6 million fewer households being formed among Gen Z and Millennials than would’ve been expected. Younger folks are residing longer with their parents or roommates until they can afford to form their own household, which in turn affects other life decisions such as marriage and children.

“Young households have been hit the hardest by the housing shortage as purchasing a home on a typical early-mid career salary has become increasingly infeasible,” according to the Realtor.com report.

During SXSW, I spoke on a housing panel with the chief economist from Realtor.com and others. I talked about the notion of generational unfairness and the unfortunately pervasive attitude among some older homeowners of “I got mine, now you get yours.”

In the past Watson has referred to "generational equity," but "fairness" is a much better way to put it, even before the state and federal government were overtaken by anti-DEI hysteria. Contrary to what many progressives seem to believe, it's actually better to use words that a kindergartner would understand than those concocted in a graduate sociology seminar.

One of the ironies of the past decade of debate over housing policy is that opponents of reform tend to decry new housing as serving nobody besides young singles. Too many of the new homes are studio apartments or one-bedrooms, they say.

To a certain extent, they are right. But it's the opponents of reform who have shaped this reality, where the only "family-friendly" housing in the city requires the ability to pay for a large lot detached single-family home. The refrain from opponents of reform has been that "density should go on the corridors" –– as long as it's not one of those corridors near a single-family neighborhood. In other words, if you can't afford a house with a back yard and a front yard, there's an apartment on the side of a freeway for you.

Reforms like HOME that aim to produce more "missing middle" housing –– duplexes, triplexes, townhomes –– are unlikely to produce as many units as those aimed at enabling large multifamily housing projects. But they serve an important purpose of creating options for people who don't want to live in a large apartment building overlooking a car sewer but don't have the money for 5,750 sq ft of land.

Do we have the builders for it?

The first step to build different types of housing is to legalize different types of housing. But culture can be a barrier as well, and not just among consumers. The businesses that build housing in this town –– homebuilders, developers, lenders, engineers, architects –– are accustomed to a certain way of doing things. If they've made good money building one thing, they may be reluctant to start building something else.

An ambitious builder who wants to try something new still depends on financing from a bank that is likely less interested in doing something new.

I recall conversations with the late Chris Riley about his efforts to get downtown developers to put commercial space at the bottom of their condo towers instead of parking garages. At the time (90's, 2000's), they didn't see the point.

These days, everybody understands the value of ground-floor commercial space downtown, but many developers remain skeptical of it elsewhere. I recall one multifamily builder explaining that many developers scorn ground-floor retail because the price per-square foot they get from a retail tenant is lower than what they'd get from another floor of residential. His view, however, was that putting something interesting on the ground floor (restaurant, store, etc) made the development more attractive and perhaps more profitable long-term.

Resistance to change among builders is compounded by the fact that there are fewer homebuilders than before. In a recent article in Washington Monthly critiquing the "abundance liberals" who focus on reducing regulatory barriers to housing, Paul Glastris and Nate Weisberg concede that exclusionary zoning is a big problem, but also highlight the effects of corporate consolidation in the homebuilding industry:

Since the 2007 financial crisis, the number of homebuilders has plummeted by 65 percent, according to a Johns Hopkins University study. Two companies, D.R. Horton and Lennar, account for nearly as much new construction as the next eight largest builders combined. The Hopkins study authors estimate that when a local market loses competition in the homebuilding market, housing production drops by 15 percent in value, 16 percent in total square footage, and 11 percent in number of units. Prices go up, too. 

Anyway, all of this is to remind you that simply removing government barriers to good things will not always produce those good things. But it's still a necessary first step.

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