Seattle Renters on Skyrocketing Housing Costs: "You May Love Seattle, But It May Not Love You"

Rents keep going up and up. What are stressed-out Seattleites doing about it?
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May Nguyen and Jon Lee, who rent an apartment in Othello, are finding that wage increases aren’t keeping pace with rent increases

On a recent evening in a Columbia City coffee shop situated a stone’s throw from $800,000 condos, the conversation of May Nguyen and her husband, Jon Lee, turned toward something a lot of Seattle residents are talking about now: the skyrocketing cost of rent.    

“When I first moved here in 2007, I could rent a two-bedroom, two-bath apartment in Fremont for $1,225,” says Nguyen. “Things have changed.” 

Last summer, Seattle-based Zillow—the real estate database giant—released a statistical report that stunned Seattle’s renters, who slightly outnumber Seattle homeowners. The average monthly rent in the Seattle metropolitan area inched past $2,000 per month for the first time, an increase of more than $450 per month from five years ago, and more than $170 per month from just two years ago. What’s more, the average cost of rent was up 9.7 percent between spring 2015 and spring 2016—a percentage increase four times the national average. If you are a renter, here’s some cold comfort: At least Seattle is less expensive than the Bay Area, Los Angeles, New York City, San Diego, Boston and the nation’s capital.

That rising rent buys less and less: In August, the real estate blog Curbed Seattle reported that $2,000 per month bought 529 square feet in South Lake Union; 618 square feet in Belltown; 696 square feet on First Hill; 575 square feet in Ballard; and 694 square feet on Capitol Hill.  

Rent inflation may not be a big issue for workers coming here for high-salaried jobs in the tech industry. But it’s taking a toll on many others like Nguyen and Lee, a well-educated couple with steady jobs who want to stay in Seattle. 

Many economists say housing expense should account for no more than one-third of your overall income. If the average Seattle rent is $2,000 per month, that means an income of $72,000 is needed to afford an apartment in Seattle. Who earns that much? Not social workers, administrative assistants, teachers, waiters, cooks, sales reps or maintenance workers (or many others)—who earn average salaries between $28,000 and $45,000, according to figures from King County. All of them are at serious risk of being priced out of the city.

Nguyen, 35, and Lee, 34, live in a 700-square-foot apartment at The Station at Othello Park, a six-story, 351-unit building that opened in 2011 across the street from a Sound Transit Link light rail station—one stop south of Columbia City, and like it, undergoing inexorable gentrification. Nguyen, who has a degree in marine biology, is programs manager at the Rainier Arts Center. Lee, who attended the film school at a community college, works in an administrative job at a downtown Seattle law firm. 

They’ve both received small wage increases over the past couple of years, but not enough to keep pace with increases in rent and cost of living. While they consider themselves fortunate to be well educated with full-time jobs, they spend about 40 percent of their income on rent, live paycheck to paycheck, are uncertain about starting a family and have no room in their budget for savings.

“It’s not a dire situation, but it is discouraging,” says Lee. “The thought of trying to improve or move up in any way seems a lot more difficult. There aren’t a lot of easy solutions at hand.” 

Instead of rent control (or crossing her fingers that prices plateau, or hoping she wins the lottery), Nguyen would like to see wage increases. “I think that what will help renters is a living wage that meets the cost of living in Seattle,” she says. “I think that would help everybody.” 

The reasons for seattle’s high rental prices might seem obvious. A booming economy and not enough inventory, right? Zillow chief economist Svenja Gudell, who has tracked the local market for a long time, notes that it’s a little more complicated than that. 

The 2007 national housing crash meant homeowners faced record foreclosures; those former homeowners were suddenly renters again, taking up an already limited inventory of rental housing. Similarly, renters were reluctant to buy homes in the midst of the crash. “It was a sketchy situation, things were in flux, and they said, ‘OK, I’m going to rent. I’m not going to own,’” says Gudell. “We have more renters than we usually do simply because of that.”

Multifamily rental housing construction also slowed between 2009 and 2011. That’s changing as new construction is underway. Gudell disagrees with those who think too much is being built. “I think what we are seeing is supply-and-demand driven.”

Newcomers to the city—and our healthy economy is attracting a lot of them, an estimated 120,000 by 2035—are choosing to rent rather than buy as they get to know the area. And overall, Seattle residents are relatively young and untethered. “The need to actually be a homeowner comes later on in life, and that contributes to a bunch of people in the rental pool,” says Gudell.

Those renters who do want to buy a home are finding the market expensive and competitive. “It’s a situation where you have five available homes and 20 people wanting to buy those homes,” says Gudell. “It turns out that, literally, people take years to find a house.” The result? The normal rotation from renter to homebuyer slows down, the number of renters increases, and the demand for rental housing soars.

The increase in rental prices is also making it more difficult for middle-income renters who want to enter the housing market to put money aside for a down payment. 

“That piggy bank that you have in the corner of your living room that’s supposed to collect money for your down payment is slowly but surely being emptied every month because you have to pay more in rent,” says Gudell.

For those who just want to continue renting and stay in the city, Gudell offers a few strategies: Look in older apartment buildings with fewer amenities, at apartments that are farther out from the city center, and consider signing a longer lease to keep your rental price fixed. “I do think we are getting more rental inventory online, so rental increases will ease. I don’t think Seattle is anywhere near seeing declines, but we are seeing some easing in some areas—especially in downtown Seattle, where we are seeing growth slow a whole bunch, somewhere around 1 percent.”

Some Seattle renters may also be coming to terms with paying more money for smaller apartments just to keep a foot in the city. It’s a strategy adopted by renters in other high-demand cities. San Francisco’s median studio rent is $2,908—two bedrooms will cost you $6,033; artist Peter Berkowitz became famous last spring when he rented a plywood box in a friend’s apartment for $400 a month. In Manhattan (median rent, $3,339), a few lucky renters snapped up 265-square-foot micro apartments for $2,570 a month. Seattle renters have also turned to microhousing: 100- to 200-square-foot single rooms with kitchenettes that rent from $500 to $1,000 per month. 

Alison Driver, 31, is one of the Seattleites who may soon consider one of Gudell’s strategies for more affordable rent: moving farther from the city center. Much farther.

Since the summer of 2015, she and her boyfriend, James, have lived with their two dogs in a 650-square-foot apartment within walking distance to the heart of Fremont. She works at a nonprofit in downtown Seattle. James is a scientist. Both work full-time. They paid just under $2,000 per month in rent. That changed in August when they e-mailed their landlord to see about renewing their lease.

“We debated whether we should ask if the rent is going up,” says Driver, during an interview at a coffee shop in downtown Seattle. Across the street, building contractors in bright safety vests were busy working on a construction site while cranes slowly pivoted overhead; construction was underway on a 40-story, 398-unit luxury apartment building. “Our landlord wrote back and said, ‘Yeah, you can sign a new lease. Here’s your new rent.” The increase? Nearly 10 percent. 

“We would have been ecstatic to see that it was 5 percent. I don’t think we had any thoughts that it would stay the same. That would have been a miracle. I mean, it makes sense. There’s a lot of people looking for housing.”

Driver considers herself a true Seattleite. She grew up in the View Ridge neighborhood, attended Seattle public schools and returned to the city in 2011 after college and a stint in the Peace Corps. She recently earned a master’s degree in public administration at the University of Washington. She enjoys biking, rock-climbing, swimming and being close to her family. She’s also built a strong professional network in the city.

But she’s considered moving to Tacoma, where housing is more affordable and the city less congested. A lot has changed in the five years since she returned to Seattle. Then, she and a roommate split a two-bedroom Phinney Ridge apartment for $1,175. “At one point, they raised the rent $100 after we had been there two years. We were incensed!” she recalls, laughing.

She adds, “I don’t know why anyone moves here who doesn’t have a very high income. I think if you’re making a lot of money, Seattle is a great place to be these days. If you’re not, I think it’s probably not a great place to be.”

Driver knows that many others in the city are in a more challenging income situation. But it doesn’t make it any easier to contemplate leaving the city she loves. “There are other options,” says Driver. “I think that if you are being realistic and living in Seattle, you might have to embrace the fact that you may love Seattle, but it may not love you.” 

Bellevue's University Bookstore to Close, but the East Side Keeps Its Edge

Bellevue's University Bookstore to Close, but the East Side Keeps Its Edge

Bellevue is in many ways more “urban” than Seattle now—certainly, it’s racially more diverse, which is complete flip from the white-bread suburbs of the ‘60s and ‘70s
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Berger supervising a photo shoot of Bill Gates and Brian "The Boz" Bosworth in 1988

The news that the University Bookstore is closing its downtown Bellevue location next month is hardly big news. Bookstores have had to close, move and adjust to changes in the book biz. Elliott Bay relocated from Pioneer Square and now thrives on Capitol Hill. Amazon—blamed for driving many small independents out of business—has opened a dead-tree bookshop in University Village and another in Portland. Change happens.

Still, the news spurred memories of the not-so-distant past when the U-Bookstore’s move to Bellevue in the early ‘80s was part of a wave of urbanization—you could call it the “Seattleization”—of the Eastside suburbs. Back in the ‘70s and ‘80s, Bellevue became of the focus of what became known as “Edge City” city building. Skyscrapers popped up, much to the surprise of Seattleites who looked east and saw high rises. Between them and the Cascades.

There were other signals. Microsoft moved to Bellevue in 1979, before settling in Redmond, and became the vanguard of the Silicon Forest. In 1976, Starbucks opened its first outlet in Bellevue, and today the oldest Starbucks in Bellevue sits in a strip mall across from Bellevue Square on NE 8th and just around the corner from the U-Bookstore. Crossroads shopping center revamped as a kind of suburban mall-meets-Pike Place Market with a newsstand, bookstore, public chessboard, and a catalyst for social services. The demand for “third places” in the suburbs—often criticized as a desert of “no place” cul de sacs—was growing.

That growth was nurtured by other developments. In 1976, Bellevue got its own daily newspaper, the Journal-American, so Starbucks goers had first-rate local news and columns to read over their lattes each morning. In the late ‘80s, the statewide magazine I worked for, Washington, which had launched in Bellevue in the mid-80s, did a cover story on the fact that two major national celebrities were based on the Eastside: Bill Gates and Brian “The Boz” Bosworth. One seemed to reflect a new braininess in the ‘burbs, the other a kind of brazen, bleached Seahawks celebrity whose attitude suggested an in-your-face approach far different from quiet good guys suburban dads like Steve Largent. It seemed like the Eastside was an Edge City gaining some edginess.

In 1990, Seattle Weekly launched a sister paper on the Eastside. I was the editor and publisher and we arrived because we saw the changes of the ‘70s and ‘80s—the spread of cafes, the yearning for arts, the demand for urban amenities and services—increasing. An essential part of that was reflected in moves by chains like University Bookstore were a sign that a new kind “psychographics” was emerging, a population that wanted something more than split-level, bedroom community isolation. A population of readers, for one thing, that didn’t want to have to cross a bridge for culture, or good coffee.

The trend has been a steady, prosperous for Bellevue and the Eastside. Bellevue is in many ways more “urban” than Seattle now—certainly, it’s racially more diverse, which is complete flip from the white-bread suburbs of the ‘60s and ‘70s. It is now a majority minority city—the largest in the state!

Bellevue used to be Ronald Reagan country, but has been shifting “blue” politically since the early ‘90s. Light rail is coming, the cranes are still building, and the Edge City is now a big city in its own right. The seeds for that vision were planted long before the University Bookstore came to downtown Bellevue to serve hungry minds.

But the U-Bookstore’s move to Bellevue in the ‘80s was like an indicator species signaling to Seattleites and Eastsiders that the Puget Sound ecosystem was shifting. And boy, have they.