Pricey Housing, Long Commutes Means Employees Leaving Local Jobs
If the sheer number of cars on the road is any indicator, Seattle is growing—and growing fast. With all of the congestion and its underlying causes, like sharply rising real estate prices, Seattle businesses are paying a steep price, in employees leaving.
Seattle currently ranks fourth among the top fastest growing cities in the US. By 2040, the city’s population is expected to increase by 28 percent, or 800,000 people. To put this number in perspective, that’s the entire current population of Seattle, Bellevue, and Tacoma combined. Other major cities in the region are expected to grow rapidly as well, with Bellevue’s population increasing by 33 percent in 2040, Tacoma’s 59 percent, and Everett’s a whopping 74 percent.
Seattle’s decreasing affordability—and the challenges it presents local businesses—is a dilemma cities like New York and San Francisco have been struggling with for decades, and for whom there is still no solution on horizon.
Rising Real Estate Prices
This surge in growth means a similarly rapid rise in real estate prices, especially in Seattle proper. A strong job market combined with low housing inventory means the market is hot and getting hotter. The median home value in Seattle is currently $580,000. Home values in the city have gone up 16.7 percent over the past year and Zillow predicts they will rise another 8.1 percent next year.
Realtor and Townsquared Merchant Jon Aslin sees this demand every day, “The overall development and change that’s taking place is huge. There are swarms of people out there looking to buy.”
For renters, the picture is even more grim. Rent Jungle reports that the average apartment rent in Seattle rose by 9.2 percent in the last six months alone. For some Seattle dwellers, the housing market has become a little too hot. As the Seattle Times reported in May, the rising price of real estate—and associated rent hikes—means a fair number of would-be buyers and renters are simply getting priced out of the city. As of June, the average rent for a one-bedroom in Seattle is $2,005.
Employees Leaving Local Businesses
Local businesses are already seeing the effects of the rising real estate prices, with employees leaving the city and having to move farther away from their jobs and spend more time on the road commuting.
According to Craig Helmann of the Puget Sound Regional Council, nearly 57,000 more workers commuted into Seattle in 2014 than did in 2006.
The reality of a longer commute is especially true for low- and mid-range wage workers, such as retail and service sector employees. According to a 2014 study conducted by the University of Washington’s Evan’s School, fully four in ten people who earn less than $15 per hour working in Seattle actually live outside the city.
Townsquared Merchant Amanda Bedell, Co-Owner of NuFlours, has seen this trend firsthand. The gluten-free bakery, located on Capitol Hill, employs fifteen people in a round-the-clock operation. The majority of the bakery’s employees commute into the city via transit. “Two years ago all of our employees were walking to work. About six to eight months ago, during our last wave of hiring, everyone was out. Workers on the lower end don’t have a choice. They are having to move out.”
According to the Washington State Department of Transportation (WSDOT), overall delays on regional freeways increased by 95 percent between 2010 and 2015. As just one example of the rush hour madness, peak hour commuters traveling by bus or car between Everett and Seattle currently need to plan for a staggering eighty-five minutes in order to ensure they arrive at their destinations on time. This means drivers are spending an average of 37 percent more time in their cars to make the twenty-eight mile trek than they were ten years ago.
You can listen to a book on tape, stream the latest podcast, or rock out to your favorite 80s hair band to pass the time on the freeway, but there’s no way around it: Seattle commute times are getting worse by the day, with no sign of letting up.
What’s public transit got to do with it?
With all of this congestion, something on our roadways has to give. In June, Sound Transit made a move in this direction when it voted to put a new and improved ST3 package on the November ballot. If it passes, the changes will affect small business owners for decades to come. Most notably, the ST3 plan adds 62 miles of new Link light rail, extending service to West Seattle, as well as north to Everett, South to Tacoma and east to Issaquah and Redmond. “The public sent us a clear message: We want light rail and other high-capacity mass transit, and we want it as soon as possible,” said Sound Transit Board Chair and King County Executive Dow Constantine in a press release.
So what exactly will ST3 entail, and what does the plan mean for local business owners? Will it stem the tide of employees leaving their local jobs?
The business cost of congestion
All of this congestion comes at a price. According to WSDOT, highway delays cost Puget Sound residents and businesses $783 million in 2014 alone. As Geoff Patrick of Sound Transit put it, there is increasing concern about how congestion is affecting the bottom line for local businesses. “We’ve heard that transportation is one of the biggest concerns that comes into play when deciding where to expand or locate a business. Having a good workforce is hard with a region as congested as ours,” said Patrick.
In addition to the difficulties of employees leaving, local businesses encounter an array of other costs due to traffic congestion. For example, if a business is unable to receive its deliveries at night when traffic is light, then possible delays of incoming deliveries are an ever-present concern. Likewise, businesses that require employees to travel during the course of a regular workday face a loss in productivity during traffic delays. Retail and food service merchants may end up scheduling overlapping shifts to accommodate possible worker delays due to commute times.
ST3: What to expect
According to Patrick, Sound Transit did not directly seek out the opinions of local business owners during the planning processes. However, he notes that many local merchants likely completed online surveys and attended public meetings to voice their questions and concerns.
In addition to the 62 miles of new Link light rail, and extending service to other areas, the plan includes speeding up the establishment of bus rapid transit service on 1-405 and SR 522, expanding the capacity of Sounder rail service on lines south of Seattle, and speeding up existing bus routes by allowing them to drive on the shoulders of freeways where possible.
The limitations of mass transit
Unfortunately, improved transit options are not the answer to all of a business’ woes. Seattle-based real estate firm Estately reports that homes within a mile of existing or planned light rail stations cost as much as $78,000 more than other nearby homes. And commercial real estate is following suit.
Realtor Aslin has seen the effects of this on local small businesses. “The smaller business, or the business that was running for years upon years with minimal returns, once the rents get raised, or the building the business is operating out of gets torn down to make way for a condo, they are out.” For some businesses, the benefit of mass transit is limited by its hours of service. With a roughly four-hour gap in service beginning around midnight, customers and employees leaving businesses with late-night hours may have trouble getting where they need to go.
This past spring, the Seattle small business community rallied with a petition to Sound Transit, in an attempt to lengthen existing transit hours. Although the petition has not yet yielded any results, Sound Transit’s Patrick acknowledged that it did put this concern on transit leaders’ radar, and they will “monitor demand and consider making changes in the future.”
With all of the challenges of regional congestion, one thing is clear: transportation affects small businesses in a myriad of ways. Local businesses may start to think about getting creative with employee benefits in order to keep employees leaving jobs they’d rather keep. Certainly, as ST3 moves to the November ballot, it will pay for local business owners to stay informed and get involved.