We’re not going to achieve a million new homes. Here’s what we can do

Washington needs to build 1.1 million housing units over the next 20 years, according to the state. More than half of them need to be affordable to our lowest-income neighbors.

You don’t have to be a city planner or economist to know that won’t happen. Even without NIMBYs, the available land with infrastructure is limited, and usually too expensive for low-income housing.

Meanwhile, short-term rentals are elbowing out people in need of long-term housing, like folks who get my cell number from a friend of a friend to ask if I have any vacancies.

The antithesis of incentives to build rentals is rent control. It discourages investment in new rentals and maintenance of existing rentals while encouraging the sale of affordable rentals.

I set rents on my three places below market because I want the best long-term tenants, but my property taxes went up 9% this year, and my insurance, 19%.

Like all housing, rentals require more than routine maintenance and repairs. A circa 1904 house I’ve owned for 10 years is due for a new roof, ballpark $20,000 (actual estimate: $16,000). It was clearing about $250 a month; that’s now $200 with the tax and insurance hikes. While I don’t want to raise the rent on my elderly tenants or recoup the entire cost immediately, it makes little sense for a retiree to absorb a long-term negative cash flow, unlike when you’re building a nest egg in your earning years.

A net income of $200 a month on a $640,000 house is a return of less than 1%. After paying capital gains and depreciation recapture plus the mortgage balance, I could net more on — ugh — Wall Street.

Rent control could hasten the loss of thousands of affordable rentals like mine. The tenants in that old house are paying $1,750 (about $600 below market). If I sell, the buyer’s mortgage payment would be about twice the current rent, plus $458 just for taxes and insurance. Ouch.

I helped build and preserve hundreds of affordable units in my city planning career. One of the few ways to create permanently affordable, low-income housing is by funding nonprofits that own and operate housing.

House Bill 2114 would have limited rent increases to 7%. It’s an appealing idea if you think landlords caused our unprecedented housing shortage. But the solution — building affordable housing — really depends on all of us, and every community, to make it happen.

It’s time to stop pretending “stabilization” isn’t rent control, and recognize that the gap between lower incomes and the cost of land and construction cannot be bridged with finger-pointing and wishful thinking.

With HB 2114 off the table for now, let’s consider:

Addressing the downside of short-term rentals: They’re helpful if you’re buying a home or trying to keep it, but when a rental house becomes an STR, it’s a loss for affordability.

Allowing residential leases to be up to five years, not one: Longer leases can offer more certainty with annual increases of a predetermined amount, or pegging increases to inflation, property taxes, etc.

Giving everyone a fair chance: Seattle’s first-come, first-served law hamstrings the most vulnerable renters. My first applicants have never been disabled, transit-dependent, a worker with an inflexible schedule or someone in a domestic violence crisis, so I never select a tenant until the end of the second day of availability.

Banning application fees: The way I see it, the only people who should pay me are those who live in my rentals. But why should anyone have to shell out hundreds of dollars searching for a place to live?

And if we really want to help the impoverished, shouldn’t we stop allowing payday lenders to charge up to 120% (annualized) interest before limiting cost increases passed on by landlords, as if this could somehow offset our collective failure to build enough housing?