CEOs have a lot of great ideas to increase housing for the middle class. But what's missing is a plan to close the gap between the highest wage earners and everybody else.
When a consortium of top local CEOs headed by former Gov. Christine Gregoire called for increased construction of homes for the region’s financially squeezed middle class, I couldn’t help but be heartened by the likes of Microsoft, Amazon, Starbucks, Boeing and Nordstrom signing onto an effort to tackle our yawning housing-affordability gap.
How big is the chasm between the haves and have-nots here? Consider Seattle, which has more family households earning above $200,000 a year than households pulling in less than $50,000.
We’re creating a city — and a region — in which some of us can compete in the housing marketplace and some of us will simply have to make do with whatever we can find, regardless of the strain on our monthly budgets and the hassle of moving great distances between home and work.
The CEOs released a detailed report with their housing “call to action” that does a thorough job of explaining the housing issues. It also proposes policy reforms and financing solutions to make it easier and cheaper for developers to build housing for people living in that vast space been poverty and affluence. They specifically want to create housing for households earning between $54,000 and $108,000 a year. And they want to accomplish that through a combination of below-market loans to developers, increased private investment, streamlining or relaxing requirements on housing developers and easing zoning restrictions to encourage greater density, among other things.
Most Read Business Stories
- Boeing and FAA give more signs of preparations for a 737 MAX return to flight
- We asked how Amazon has affected your life. You had answers.
- Lessons from five years of Money Makeover stories
- Hot-pink 'emoji house' is eyeing a new owner in Manhattan Beach
- Ready for a 19-hour flight? Tests to start on New York-to-Sydney route
It is a decidedly business-friendly set of proposals, some newish and some currently being fought over, such as their pitch to create denser, multiunit housing in areas defined by single-family homes.
Tellingly, of the 15 local employers that signed on, only Microsoft had pledged any money — $500 million — to the effort. That’s not exactly a vote of confidence in the prospects of achieving the group’s objectives.
As I read through the report, I kept coming back to another worrying issue: In Seattle at least, the “middle class” is now top-heavy with high-wage earners due to the influx of well-paid tech workers, skewing the market for everybody else.
The yearly income at which housing is considered “affordable” in Seattle is a whopping $121,000, according to the report’s findings. (That also happens to be the average salary of a software engineer.)
The consortium argues that its proposals would make housing in metro Seattle affordable for households earning between $76,000 and $92,000 a year as well, mostly as a result of reduced monthly rents.
That’s sounds great. But there’s a catch.
We don’t just have a general income gap in the Seattle area. Longstanding racial inequities will make it harder for certain people of color to take advantage of even the reduced monthly housing costs the CEOs say their recommendations can achieve.
The median household income for African Americans in King County was $42,282 in 2015, according to the country’s figures. For Hispanic households, it was $54,926. For white households it was $86,636, and for Asian households it was $95,540. What’s more, the gap between black and Hispanic households and those at the top has been widening.
With people who have more means increasingly searching for housing outside of our major urban centers, once-affordable areas — in South Seattle and the South End, for instance — have become far less of an economic safe-haven for lower-middle-income households.
As I reported a little over a year ago, there’s yet another problem. The recent mortgage and foreclosure crisis caused a steep decline in black and Hispanic homeownership, sending many middle-class households into the ranks of those who rent, right at the time when our region started to experience its tech-worker influx. Women, particularly women of color and women over 50, were hit hardest. The post-recession boom has also made it more difficult for many young people, immigrants and single parents to compete for housing.
What I’d like to see is a concerted effort in this region not just to build affordable housing for the middle class, but to rebuild the middle class.
The income inequities are inexcusable. But some of the companies that have signed onto this call to action are in a fine position to help correct them, since they’re chiefly responsible for exacerbating them. Looking at you, Amazon and Microsoft.
I don’t need to go into the tech industry’s lapses when it comes to hiring, nurturing and elevating blacks, Latinos and women; those are well-known.
These companies need to work harder to train and hire people from local communities that are economically distressed, from old-school black neighborhoods to newer immigrant enclaves. And they can do more to tap into the brainpower and economic potential of women in our region, especially women who are sole-income earners in their households.
More than building rental housing, we need to find new ways to help people build wealth for themselves — and not just landowners and property developers. This is especially important for people who have lacked or been denied access to capital, good jobs and superior educational opportunities, or who’ve been pushed out of their traditional neighborhoods due to growth and gentrification.
The report’s authors aren’t naive. They acknowledge the daunting challenge the region faces when it comes to creating affordable housing and the need to try new approaches to achieve that end.
On paper, the consortium’s vision has a lot going for it. The consortium seems to be aware of the broader socioeconomic issues. Still, employers need to work harder to train and hire people from local communities that are economically distressed, from old-school black neighborhoods to newer immigrant enclaves.
The situation on the ground requires a grander vision.
Editor’s note: We are not allowing comments on this column because comments on Tyrone Beason’s columns often violate our Terms of Service.