Why is Rent so High?

May 17, 2023

   It’s no secret…living in Seattle is expensive. Rent is high. House prices are high. The overall cost of living is just too high. Across the Seattle Metropolitan area, there is a very real fear among young adults about the feasibility of living in this region.

   As the senior class of 2023 marches ever closer to graduation and the possibility of living on their own, it’s important that the students of Hazen know some of the reasons why this is. 

   Even if you plan on moving out of the state, this is still an issue that you, the reader, will likely have to face. This problem is not exclusive to Seattle. Across the United States, rent prices, housing prices, and the cost of living, in general, are going up, particularly in major cities. According to the World Economic Forum, a non-profit organization that discusses economic issues with political and business leaders, New York City alone is the second most expensive city to live in on the entire planet as of December 2022. Los Angeles and San Francisco are also in the top 10 list of most expensive cities. 

   Even if you do not plan to live right in the heart of a big city, the cost of living will still likely be very high for you. It’s important to note that when we say “Seattle is expensive,” or “This city is expensive,” we aren’t just talking about living within the city limits. As mentioned earlier, this is a problem facing the entire Seattle Metropolitan area.

   A metropolitan area refers to both a major city and all the smaller cities that surround it. Typically, these towns, suburbs, and smaller cities have some influence exerted over them, either economically or socially, from the larger major city. 

   For example, when people talk about how expensive LA is, they are really talking about how expensive Greater Los Angeles is, which includes many smaller cities closely linked to and surrounding the main city of L.A.

   Although the students of Hazen may live in Renton or Newcastle, we all still live in the Seattle Metropolitan area. The point is, even if you don’t plan on living in the heart of downtown Seattle, it is very likely that you, yes, youwill need to deal with the rising cost of living in this area, or for that matter any city or suburb you move to other than the rural countryside.

   So why is it so expensive to live here? There are a couple of reasons.

   To start, gentrification has been having a significant effect on housing prices in this region. Gentrification is when the landscape, demographics, and “character” of a less wealthy urban area is changed by wealthier individuals moving into the neighborhood. Although housing is improved, and new businesses are attracted, property values increase to prices that the original residents of the neighborhood are simply unable to afford, forcing the original residents to leave their own neighborhoods.

   According to an article published by the University of Washington, “50% of eligible census tracts have gentrified since 2000,” with the median home value for each tract increasing by an average of 47% from 2000 to 2013. In addition, according to an article from the Seattle Times, “Among 100 large U.S. cities, Seattle has the third highest percentage of gentrifying census tracts.”

   However, gentrification is not the sole reason for the rising cost of living. Another reason lies in the more fundamental ways our cities are designed. 

   In economics, the concept of supply and demand reigns supreme. If you have a large amount of people that want to live somewhere, but a very limited supply of houses or apartments for those people to live in, prices increase. 

   This is a problem that has been plaguing New York City since the revolutionary days. Especially Manhattan, which is an islandmeaning that there is a very limited amount of land you can use to house people. At this point, every square foot of land that isn’t being used for a park has been developed. New York City is a hub for trade, culture, and economic growth; many people want to live in the city. However, there just isn’t enough room on Manhattan Island for more housing, unless you build upward. Too much demand, not enough supply. 

   The issue of supply and demand is particularly bad for cities and regions with large, growing tech industries, like the San Francisco Bay Area and Seattle. Tech industries, by their very nature, grow incredibly fast, which translates into a fast growth in the industry, which leads to incredibly fast growth in population as people flock to cities to work in this growing new industry. Ever since Amazon set up its headquarters in Seattle back in 2010, more than 5,000 people moved to the metro area as of 2021, an increase of 15%. In addition, a lot of tech workers are able to gain high-paying jobs, moving into regions that previously housed low-income individuals, causing gentrification, which increases property values, which increases house prices, rent, etc.

   There is another thing to consider as well. Fifteen years ago the U.S. faced a massive housing crisis. The details of the crisis itself are not important, although The Kilt encourages you, the reader, to do research on your own. The main thing to note is that the crisis has had long-lasting effects on the U.S. housing market and economy to this day. One of these effects is a significant decline in new homes being built. For a large period of time, we simply haven’t been building enough houses to keep up with our ever-growing population. According to the Economic and Housing Research Group, the U.S. is more than 3 million homes short of the needed supply for those interested in buying. Because of a financial crisis that occurred a decade and a half ago, housing prices are increasing not just in the big cities, but across the entire country. 

   If you look around Renton, you may notice a lot more apartments being built. The reason for this increase in construction is to try to add more housing to meet the demands of a growing population. Rather than building more single-family homes, the city is rezoning land for apartments, using less land to house more people, and creating more affordable options for those who wish to live in the Highlands. 

   Even if the crisis never occurred, the fact is there comes a point where you simply can not build any more houses in a region. There just isn’t enough room. When you get to that point, instead of building outwards, the only thing to do is build upwards. Instead of building single-family suburban homes, build more apartments, or condos. 

   This ties into another concept. Affordable housing. Even if there is plenty of housing in an area, there is no guarantee that developers will build housing that your average young adult could afford. Unfortunately, there is a lot of land in American cities that is specifically zoned for single-family homes and nothing else. This means that developers aren’t allowed to build apartments, or any other form of affordable housing that would increase supply, or at the very least add more affordable options to the market.

   You could simply rezone the land, but then you’d have to deal with NIMBY’s. N.I.M.B.Y (Not In My Backyard) is a slang term for someone very opposed to something they deem as undesirable being located in their neighborhood. In the case of apartments and affordable housing, there is a fear among some living in certain neighborhoods that affordable housing will lower property values, or generally destroy the “atmosphere” of the area.

   This is one of the big reasons why housing is so expensive in the San Francisco Bay Area, a region that has faced a similar explosion in population due to the tech industry as the Seattle metro area has. Too much land is zoned for single-family suburban homes, and any attempt to rezone land or build more efficient housing is met with fierce backlash. At the moment, 70% of Seattle is zoned for single-family homes, although Seattle is in a much better position than San Francisco as far as zoning laws. 

   In the end, there are a variety of factors that contribute to the rising cost of living. The housing market and overall economy are extremely complex, and it is difficult to point to any one reason for the lack of affordable housing. Still, it is important to understand the various factors that are causing this epidemic. It is reasonable to assume that most people in Generation Z do not want to live in a world where it is hard to simply have a roof over their heads. If our generation is to fix this problem, the only way we can begin to tackle it is by understanding why it is happening. 

   Using our knowledge, when we go to the polls, or otherwise demand action from our government, we will know what to demand, and make it more likely that any solution will truly fix the problem. This is a problem that will affect all of us, Class of 2023. And soon, it will be a problem that affects everyone in the Class of 2024, 2025, and 2026. No matter where you move after high school, or what your future plans are, everyone at Hazen will need to face this issue. So go. Build a better future for all of us.

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