Hotel Surplus
Seattle is building large quantities of hotels and it’s going unnoticed. This is because hotels look, feel, and sit in our most precious high-rise lands the way dense housing does, disguising the program from the critical eye. At a time where Seattle needs more housing than ever before (for the sake of the rise in rent & real estate, the climate, and to make our transit infrastructure overhaul work), should we be complacent to the construction of so many hotels?
Housing activism has inspired the city’s planning department. Neighborhoods have proactively asked for more housing and it’s being delivered. U District, downtown, South Lake Union, Uptown (formerly known as “Lower Queen Anne”), all have added residential density at the request of the most active neighbors. In my neighborhood, the desire to rezone Aurora comes at a time where storage buildings take up precious urban village land on the city’s highest used bus line. This activism got the city to accept the zoning change. But where is that activism regarding hotel construction?
Curbing Competition
Last year Seattle heard activists testify that short term rentals (Air BnB’s) took up precious housing stock. With roughly 4,000 short term rentals, this was a whopping 1.2% of the total housing stock citywide. At the same time, several tower cranes in our skyline were building high-rise hotels. Seattle passed the regulation to Air BnB’s, under the guise of protecting housing stock, without ever noticing that short term rentals rival the hotel market, not long term housing. Those 4,000 rentals represented 19% of the hotel stock in the urban core. Now, who do you think really wanted that legislation passed?
As mentioned before, hotels disguise themselves in our city. If an office tower goes up rather than a residential building, we can visibly notice. Same goes for storage buildings. The program builds itself differently than residential. But hotels? Hotels look like residential projects, even down to the retail base and concierge lobby. Perhaps this disguise is what protects our hotel boom from the housing activism that have added more stock to our city and helped the hotel lobby curb the short term rental market.
Hotel Vacancy
It’s worth noting that the hotel market thrives with a 20% vacancy rate. And handles even more in a typical market. With prices around $200 a night, that equals rent around $6,000 per month if it translated to long term housing. The hotel boom locally is going to drive up that vacancy rate, but with prices where they are, things still work. So, essentially, by building hotels, we are accepting partially empty buildings. In housing, 20% vacancy causes rates and prices to decline, which is good! Should we be dedicating precious urban high rise land to a model that carries high vacancies and houses nobody long term? Keep in mind, with only 18% of Seattle’s land carrying over 85% of the housing growth, the urban villages are literally the only place we are allowed to grow our housing supply.
Rise in Tourism
Sure, we are expanding our state convention center (a $2 billion dollar project as-is), and with tourism up, hotel developers see an opportunity to build temporary housing where applicable. Because, after all, 80% of them are filling up. Perhaps my cynical nature on the hotel boom would be more tame if the new hotel taxes were going to something useful and not a billionaire’s building maintenance. We rob from the city and give to the rich. Judging by the crowd sizes at Mariner’s games, both tourists and locals avoid baseball games.
It’s Time to Focus
Advocates need to shine a light on the rise of hotel construction. Just like short term rentals take away housing stock, so do hotels. Downtown has a massive potential for even more housing than what’s currently in the pipeline. Every quarter block is 400+ housing units. If that’s a hotel, that’s 0 housing units.
