(this was meant for yesterday and I forgot to hit publish)
King County is thinking of going forward with a $100MM project to make affordable housing. You know, housing that’s subsidized by, in this case, the county, for the people who live and work here.
But the problem is that fighting the market long term by subsidizing things like housing, especially housing that people will want to live in will simply create more demand for that.
If the argument is that this is to pay for workers that aren’t getting paid well enough to live in Seattle. Well, let me introduce you to the same argument from a different viewpoint: Walmart doesn’t pay its employees well enough that they require food stamps.
In both cases you are transitively subsidizing either the businesses that aren’t paying well enough in Seattle or Walmart, depending on which argument you’re in.
Do we need some housing subsidies? Yes, we do. There are people who through a spate of bad luck or bad relationships (or similar) need a helping hand for a period of time. But to say this will make a dent in the affordability aspect of Seattle is way too short-sighted. It helps a very small subset of the people who need it, and provides a downward pressure on wages to boot.
This is the style of magical thinking that got Seattle into the mess in the first place. You often hear the argument that just because something works, or doesn’t work somewhere, that it shouldn’t apply because in some way (that’s never specified) that Seattle is special. Basic economic principles apply to the country and to Seattle, or in the views of people, they don’t.
The fact that there are no Walmarts in Seattle is irrelevant to the argument I’m making. The fact that Walmart games the system nationally to be able to pay less-than-market wages and have the slack taken up by the federal government is the point I’m making. The same thing is in play here: by long-term subsidizing workers’ housing, you allow companies to pay less-than-market wages for those positions they have. So, in effect, you’re actually subsidizing companies around town with this effort. You also have the added bonus that a large chunk of this will also be used for administrative overhead…
What comes off as helping the workers/renters long-term winds up allowing them to be paid less. If, let’s say, that people moved away there would be a greater demand for employees, leading to higher wages.
Short-term subsidies, as I stated before, are needed to prevent people from becoming homeless and is a good thing and an efficient use of money.