“When you lose the biggest advocates for open space, it feels like you lost the plot”

This guy gets it…

Colin O’Keefe, who owns a town home in Crown Hill, said that when he was looking for a home in the neighborhood, there was no need to search for a place with a backyard with Golden Gardens just a few minutes away by bike.

In almost 10 years, the 35-year-old estimates he has visited Golden Gardens more than a hundred times.

Nothing beats watching the sun set late in summer, the colors changing and rays moving each minute behind the Olympic Mountains, he said.

O’Keefe, who is planning his wedding reception at Golden Gardens, said he is disappointed about the decision to limit park hours and thinks spending money for police enforcement is a waste.

“When you lose people like us, who love parks and are the biggest advocates in the world for open space, it kind of feels like you lost the plot,” he said.

Who are cities and parks for?

It seems like the drag racing issue could be managed by traffic enforcement. And the crowd size issue tells me we need more public spaces, not reduced access to the ones we have.

How can cities manage their most valuable physical resource — land — for the benefit of everyone who chooses to live on it? How is the value created, who reaps the value, and how is it remitted back to the real investors — the community?

he is so close to saying it here…the value is in the land, not what’s on it.

A 20% down payment on the standard Seattle home, which costs $800,000, will run you $160,000. Even with that down payment, you can expect to pay ~$3,400 on a 30-year mortgage. I must now remind people that I bought a home in the Central District for $70,000 in the not-too-distant year of 1998. (A 20-year adjustment to standard inflation places its value at around $120,000.) My down payment was $5,000. My mortgage, $600. I made less than $40,000 a year as a freelancer and adjunct lecturer. Those were the days for a young person in the arts. (Zillow presently places the value of that old house of mine at an unrealistic $800,000.)

We need to keep in mind that Seattle only had 563,374 people in 2000, not long after when he bought his little place, where today it’s at 753,675. That’s almost 200,000 — 34% — more people fighting over the same 84 square miles. If you don’t increase the density per square unit of area, every unit becomes more valuable. Charles Mudede knows that little house isn’t worth $800,000 but doesn’t expressly say why someone will pay that (and they will). It’s for the location, for the proximity to whatever the community has created there.

where are the sunlit uplands?

A reader made the observation that these missives don’t offer a lot of hope, don’t outline or explain the positives. Well, by chance, this came in today:

Today I took a walk in a beautiful neighborhood in Barcelona, where there is a famous palace/art museum called Palau Nacional de Montjuïc / Museu Nacional d’Art de Catalunya. As I walked toward it, coffee in hand before starting work, I remembered how while I was growing up in the suburbs in the U.S., I used to think that cities with places like this were somewhere you could only visit on vacation for a couple weeks a year. In my mind, beautiful countries were the stuff of luxury trips you could only afford if you were rich, or something you’d only see in movies or read about in books. I was shocked to realize, when I moved here for a research project several years ago, that people actually live in these places.

Sure, I theoretically understood this before, but to come face to face with this reality was moving and changed my worldview. I realized firsthand that normal people like you and me can and do live in beautiful, magical towns and cities year-round. And not because they are rich (I was a broke student for much of the time), but because in many places, it’s normal to strive to build beautiful, human-centered cities. It brings people joy and a sense of pride, it embodies values and culture in physical form, and it enhances our life experience in various ways. As I move forward with my work in the field of urbanism, my goal is not to encourage more people to move to these places (or to build castles), but rather to encourage people to make more places that are beautiful, interesting, exciting, fun to live in, unique and beloved. — emphasis added

What prevents us all from living in vibrant, interesting, people-centered places? Failure of imagination, fear of what we might lose…? For too many USAnian cities, the deeply-rooted car culture with the attendant waste of land on parking and roads, as well as the public health and environmental damage, will be hard to change. But a better future is out there and we could start working on it today.

As the saying goes, the best time to plant a tree is 100 years ago…the next best time is now. And the corollary that the wise plant trees in whose shade they will never sit. “An advanced city is not one where even the poor use cars, but rather one where even the rich use public transport,” argues Enrique Peñalosa. If your city’s traffic is so persistent as to warrant dedicated daily news coverage, you almost certainly have demand for a dedicated busway or train. What you don’t need are more lanes or bigger highways. Just because Elon Musk doesn’t understand induced demand doesn’t mean the rest of us don’t. We give up a lot for the freedom of driving which turns out not to be worth much in cities. For getting between cities, it makes some sense but not where land is valuable and where people need land for better uses.

So the sunlit uplands are there, if we want them. And if we can’t have what we want, what are we even doing? What is the value of choice if the choices are dumb and bad? We need to imagine better choices and make them reality.

More journalism and less boosterism, please

No mention of why this property fetched such a high price…we see phrases like

the offering “garnered significant investor interest globally … due in part to the trophy quality of the asset in a submarket where the fundamentals are clearly improving.”

But no discussion of those fundamentals…that Seattle, like every city, has all the land it will ever have and the price to occupy and access it rises with demand, forcing the cost of living up. Forget all that stuff about money supply or the Wiemar republic and hyperinflation…the cost of land and its impact on the cost of living are constant and ubiquitous. The rising cost of land reflects the value of location and forces wages to rise for the businesses that value that location. Those who don’t command those wages are forced out, as shelter costs track the rising wages, like a buoy on the tide.

I guess I can’t expect the Business Journal to concern itself with these deeper issues but these articles are what we used to call “bead stringing” or “rip and read.” You just take the “news” releases from whatever industry you cover and print them, with a little light massaging or none at all.

“We’re our own worst enemy when it comes to solving the housing crisis”

A lot to unpack here — why do we continue to conflate housing with houses? — and the reluctance to accept that other people also want a place of their own, even if it means density.

“As a 30-something-year-old who is fully employed, my family and I have spent 18 of the last 24 months living in my in-laws’ basement. Not because we wanted to, but because we couldn’t find a house to buy.”

If a house is out of reach, is there no other option? People do raise families in multi-family buildings, some in very desirable locations. Not that his neighbors will accept a multi-family development:

Eskic went on to read a letter from a concerned citizen to a local Utah city council, in which the resident opposed a proposed townhome development and said they didn’t want to “live next to the kind of low-income people who typically reside in high-density housing.”

“I do not want their delinquent children attending the schools that my children attend. I do not want to deal with the increase in crime and drug use that inevitably accompanies such high-density housing units,” Eskic read from the letter. “I do not want my home values to decrease.”

We’ve already seen that density drives values up, as one would expect. But racism, xenophobia, whatever afflicts people like that isn’t amenable to reason.

The subject of the piece is a researcher but I wonder how many housing options they have seen, let alone researched. Are there no benefits to density and reduced car use, shorter distances between services? How would cities have grown without the car, in an alternate timeline? I get it, people want their private park and distance from their neighbors. They want a place to park a couple of extra cars or plant a garden or build a play structure for their kids or whatever. But doing that within a city comes with a cost. Not just to buy the land itself, but the opportunity cost of a city that allows more people to access it, to invest in it. It becomes a club, in other words.

This is all depressingly familiar, just another example of failure of imagination. “I want a house with a decent fraction of an acre and mature trees and good neighbors who look like me and drive nice cars and keep their lawns mowed and go to bed early” is not an urban planning strategy.

What if you lived in a building with people, some of whom look like you but many of whom are similarly educated, perhaps also work as researchers or knowledge workers, who have also decided they have better things to do with their time than commute to work by car or cut their grass for the approval of their neighbors? Is there nothing to gain from that set of choices? The 1950s are long gone. But they seem to linger in people’s minds, as some kind of dream world no one really wants to return to, if they had to.

where I am reminded that advanced degrees do not confer advanced understanding.

Contrary to expectations, rates of homelessness tend to be lower where poverty rates are higher.

Contrary to whose expectations?

A quick comparison of income/GDP and homelessness suggests that higher incomes push up the rate of unhoused people…why, it’s almost as if housing (ie, land) prices chase wages, and those whose wages don’t rise so fast are forced out of whatever housing they could afford.

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Is it a perfect correlation? No, there are other factors but the assertion that homelessness is tied to poverty rates, rather than inequality or a widening gulf between rich and poor, makes me wonder how much the authors want to understand the problem. But then I am reminded of Upton Sinclair’s dictum that “[I]t is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Housing as a market good rewards speculation. Recapturing the value of land to fund and build social housing, through outright public ownership of land or a tax that recoups the dividends of public productivity, can curb it.

Homelessnessness isn’t a housing problem: it’s a land problem. There is no affordable housing without affordable land. Seems like it wouldn’t take a PhD to get that. Maybe having one makes it harder to see the obvious.

Upton Sinclair was right.

Yet another well-argued and sourced explanation of why land rents are not just the “least bad tax” but good actually. The fact this never seems to be part of the debate, as tax rates in high earners (and investors) fall and working people find themselves under more stress makes a person wonder, why not?

A real Populist would make hay with this, if such a person existed. What’s the old saying? “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Nor can you make someone understand something if their power depends on not understanding it…not that congressional salaries are unimportant (if the national minimum wage were $15, they would make about 12 times that, not counting staff and other expenses) but power is the real draw. Corporate boards and other sinecures await the obedient.

to believe in social housing, you have to believe in society

The Seattle Process is alive and well…just as a consortium to build social housing gets some traction, another then opposes it and who knows if anything will ever get built?

The land is there, the funding could be found, but as noted in this piece, the bust part of the cycle, where the fortunate few watch the rest of us struggle or leave, has cheerleaders. Seattle doesn’t want to be a fair and equitable city, One Seattle, or anything of the kind. I think the promise of that, as unveiled at the 1962 Century 21 Exposition, scared people. (What this writer seems to forget is that all the changes he and his mossback friend decry were all wrought by local people cashing out their local businesses or failing to keep up with the times.) The local voters were offered a future with transit and managed growth but opted out, cherry-picking pools and parks for themselves (and to keep other people in their own neighborhoods) and rejecting anything that connected people.

According to the City of Seattle, currently most surplus public land is sold to the highest bidder; however, a state level bill passed in 2018 (SB 2382) “grants authority to cities to sell surplus property for below fair-market value – all the way to $0 – as long as the land is used for permanently affordable housing.”

And as we already know, that just turns what could be productive land into a speculative investment.

No matter what the bloviators on right wing media claim, Seattle is far from “woke,” whatever they think that means. It’s still a propertarian city of private parks surrounding single family homes that are no longer housing but tradable commodities…Wall Street, not your street.

This encapsulates the current mood pretty well, reminding me that Seattle is a city that is willing to share, as long as it doesn’t have to give anything up.
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he knows what we need but maybe not how to get it

Rebecca Parson, a Democratic Socialist running in Washington’s 6th Congressional District, tweeted that “$15 minimum wage is an antiquated demand. It should be $30 per hour.” According to her reading of the present economy, which is mostly correct, “1 adult supporting 1 kid needs $30 an hour across the country. Rural, urban, suburban: $30 is the floor.” But increasing wages will only return us to regular Keynesian economics when what we really need to do is move toward an economy that makes life much cheaper. Raising wages without considerable structural changes can will only add more fire to the belly of the beast we call capitalism.

The increases in the cost of living and resulting inflation are caused by the increasing cost to access land for development. Inflation is caused by too many dollars chasing a scarce good…what is more scarce/finite than land? We have all the land we will ever have, and as much as all the kingdoms and empires ever had. What we have that they didn’t is a lot more people trying to make living, build a life, on that land. Putting a rent on land the returns that rising value to the people who created it is what we need to do.

what if…inflation, like the cost of housing, is rooted in scarcity (and high cost) of land?

Could housing crack before inflation does?

Singling out housing makes sense. As we’ve discussed, house prices and rents are very high. Roaring demand, driven partly by demographics, is paired with meagre supply. The inventory of existing homes for sale hit an all-time low in January and has hardly recovered. Homebuilders are rushing to get fresh inventory on the market, but are constrained by shortages of labour and building materials.

Does it make sense though? Labor and building materials are just as available in suburbs as in cities but land is not.

The existence of cheaper housing in suburbs or small towns, either as new construction or existing stock, shows us that land and location drive housing costs. Scarce commodities rise in price, as any economist or business person will tell you, but for some reason, land is always left out of the conversation.

So why compare inflation and housing costs without discussing land and the scarcity of it as the factor driving both upwards? Rising prices and inflation are always linked to scarcity of something…after the Black Death, as scarce labor supply raised wages.

But all we hear about is inflation without any attention paid to what causes it. The underlying inflation we hear about constantly as well as the pressure to raise wages, higher rents or home prices, all of this ties back to scarcity and the rising cost of living. And land is the one commodity we all need, whether for farming, manufacturing or just to live on. We should perhaps act like it’s valuable, maybe even essential.

There is no affordable housing without affordable land

Developers say they can’t build affordable apartments the Boise area needs. This is why

Blame high land and construction costs, along with property taxes, developers say.

Don’t listen to me, listen to developers who want to build the housing we need but can’t…because speculators are holding land for gain.

And by property taxes, they mean low taxes on vacant unproductive land vs the taxes on improvements that discourage development, along with zoning and other outdated laws. Raise the tax on undeveloped land and lower it on improvements and stand back…the increased in economic activity will more than make up for any shortfall in passive property tax revenue.

how much public land are we willing to give up to preserve private wealth?

When I read this, I see the people of Seattle giving up public land in a park to make up for the enclosure of so much land in private parks (yards).

If you magically doubled the density of Seattle and freed up that much land currently under and around single family homes Wall Street’s new favorite commodity, imagine the amount of park land and public space we would have…and still only one-third the density of Paris. The City of Light houses 2.2 million people — three times as many — in one half the area…and there are public spaces, parks, railways, trams and bus lines, as well as ample and safe space to cycle.

I wonder if people are really as opposed to publicly visible encampments as they claim to be. Maybe people get a frisson of satisfaction as they glide past a tent encampment under a freeway bridge. After all, you can’t have winners if there are no losers.

I note this story on the declaration of a “homelessness emergency” with a pledge to end it in 10 years — in 2015. 6.5 years later, I’m not sure there is an emergent solution. But then I didn’t expect one. As was pointed out in the local paper two years later, Seattle had no idea how to manage its good fortune.

When the vacant land we already have is developed into much needing housing and commercial space (there are parts of Seattle that are close to being labeled “food deserts”), rather than carving up public parks, maybe we can take some of this seriously. Any parcel of land that has been idle for years — not even turned into pay parking — should just be reclaimed under eminent domain, taxed or fined as an eyesore, whatever it takes to get it developed, rather than sacrifice public spaces. But under the current city leadership, our glad-handing mayor and complacent council president, I don’t expect much to happen.

more free but valuable advice for religious orgs that hold valuable land

I would argue that these churches would be better off renting/leasing access to their holdings than selling them, as with the local branch of the Missionary Sisters of the Sacred Heart of Jesus.

If a developer is willing to pay $55M…

Pastor Audrey Warren provides a window into the future of First Miami Presbyterian church. In 2018, three years into her tenure as pastor of the nearby First United Methodist, she helped arrange the sale of her church’s original 1.15-acre property, just one mile north of First Miami, for $55m.

…how much could a church get from a 99 year lease? If 3 acres in Seattle’s hottest location sold for $150M — after an offer of $1.1B over 99 years was rejected — could that location command a similar rental income of $330M/acre over that same term? Back of the envelope calculations of $330M over that term means $800,000 a year in rental paid but $3.4M annualized rental income (take the total and divide by the years of the lease term…I assumed the same 2.5% annual increase though in So Fla that might not hold water [ouch]). Lowering that to a more conservative 1% means $1,355,986 annually. So 40 years in, the fee simple sale price is met and the remaining 49 years are gravy.

And this may not be the last time we read stories like this…

Other than the federal government, religious organizations are the largest owners of real estate in the country

cities need to understand the real value of location

Now that some places are emerging from the pandemic and business wants to get back to normal — whatever that is — we are going to see more stories about how workers have changed the way they think about work. After two years of not being able to — or needing to — go into an office but still managing to get things done, why would they want to change that?

The question business owners — and city leaders — should be asking themselves is why downtown locations are more expensive than suburbs or spare rooms turned into workspaces and why they pay higher wages in large cities than smaller ones? In other words, who is making the real money here and without doing any of the work? Landlords grow rich in their sleep, as someone once said. The high rents and higher wages are the landlords game…business owners may be nettled about having to pay the same wages and rents, as their still-productive workers stay home. And that’s what they should be thinking about: why am I enriching someone who creates no value while I and my workers put in the work?

The reduction in corporate property rents last year as high as 10%, with huge changes in the use of office space and co-working space. And the city has a new competitor: the suburb. The flight to suburbia during the pandemic has accounted for a rise in the property market for residences outside city centers. For downtown districts to attract and retain people as places to live and work, city centers will need to be redesigned completely.

The fact that business owners pay high rents and higher wages for downtown office space that now might be vacant, with all of that value raked off by speculators, should be concerning. The landlord’s game is all about charging what their tenants can afford to pay, not the value they offer. Sure, they might claim to offer a great location but they didn’t build that. Seattle didn’t become a tech goldmine because of real estate investors…it became one through the investment of various business owners and the educated workforce that jumpstarted it. A lot of workers may move to Seattle but the UW and other local schools are well-represented. That investment should be reclaimed from the speculators through a tax or ground rent structure that rewards development over speculation. As noted in the excerpt above, land values — and prices — increase with economic activity.

Land prices mainly reflect location: farmers may till the soil, or drain it, but most increases in land’s value comes from the activity of other people. Nobody builds skyscrapers or shopping malls in the wilderness. Landowners, in other words, enjoy unearned income from the benefits bestowed by good transport links, and proximity to customers, suppliers and other businesses. Once they have bought their land, they keep this money.

But why not tax it? That simple but revolutionary idea has deep roots. David Ricardo termed unearned income from land as a pernicious anomaly: “that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil”.

And this would be an ideal time to re-assess the best use of land in cities to make them work as something other than a 9-5 destination and a desert the other 16 hours of the day. Monocultures don’t survive. And what else is a city of office blocks but a monoculture?

Not every city has the energy to be a 24 hour city but it’s only failure of imagination that holds them back. Cities like Seattle have lots of opportunities to reclaim and redevelop the urban environment (hint: if people are no longer commuting by car, you probably don’t need all those surface parking lots).

Every one of those markers could be a multistory development, mixed-use or residential, all adding to the local community rather than sitting idle for 2/3 of the day for 5 of the 7 days.

The value of the land downtown, whether it’s under an existing development or a disused car storage area, is all created by the investment made by others…your vacant lot becomes more valuable when I put up a shop on mine. And both become more valuable when the city runs a bus or train to connect them with other parts of the city or connects them to the utility grid. And that value should be recaptured by something more closely related to that value than simple property tax. A high tax on the productive value of land — not held as a vacant lot, but based on the uses nearby — and a reduced tax on improvements would get land back into productive use, driving more commercial activity and lowering rents as landlords are forced to compete, rather than hold land idle.

“Sin is when you treat people like things”*

Sweeping up people like they are trash, “humanely relocating” people as if they were a nuisance animal…treating people like things.

But what counts as sin in the church of money and power where our leaders worship?

Some voters, like tiny house resident Harold Odom, who hasn’t had permanent housing in about 13 years, says Harrell’s approach to homelessness so far has been “aggressive” in the wrong ways.

For example, Odom says the swift clearing of an encampment across the street from City Hall in March indicates the mayor’s disregard for unhoused people.

“That block was cleared so he didn’t have to see it,” Odom said. “But people are hurt and crying out for help and dying on the street and Mayor Harrell doesn’t give a hoot.”

If you put people out of sight, they’re out of mind.”

* The full quotation: “There’s no greys, only white that’s got grubby. I’m surprised you don’t know that. And sin, young man, is when you treat people as things. Including yourself. That’s what sin is.’
‘It’s a lot more complicated than that -’
‘No. It ain’t. When people say things are a lot more complicated than that, they means they’re getting worried that they won’t like the truth. People as things, that’s where it starts.

One way Seattle’s leaders could make it a city for everyone

King County’s tax assessor keeps a list of properties that could be put back into productive use…does Seattle’s political leadership have the courage to take over derelict properties and put them back to work? This story mentions several parcels that the owner refuses to secure or develop, allowing an encampment to fester into multiple crime scenes. The city may as well just take it, either through liens or eminent domain.

“After we spend $20,000 to demolish 1808 E. Annonia Ave., what do we do next?” he says, referring to a derelict house on the list. “What we do is file a lien for the $20,000 it costs taxpayers to demolish it, and then we just move on to the next one. No.”

Weidner argues that cities owe it to taxpayers to collect on their liens and put abandoned properties back on the tax rolls.

The whole article is worth a read…there is no affordable housing without affordable land and St Petersburg FL understands that better than Seattle does, it seems. St Pete has figured out how to turn land from speculative eyesore to productive asset.

There is a lot of talk about Seattle’s family-friendly neighborhoods and its devotion to single family homes. The later are an anachronism in this day and age but the former is still possible, if the various disused or undeveloped parcels of land with the city could be put to work. Is this a city for speculators, as Vancouver was in the early part of the 21st century? Does it want to be a city or just a base for outdoor activities and world travel? Seems to me, if I had those interests I’d want as low-maintenance of a home as possible, rather than spend my weekends and free time on landscaping when I could be hiking or skiing. There’s room for all of that. But not if a lot of that land is tied up in speculative holdings and crime scenes.

never go full WSJ

You’ve got unearned wealth, what should you do with it?

What is referred to as “equity” is the value above what the owner has invested…so where did that come from? More correctly, it’s whatever has been paid down against the mortgage — what you own free and clear — but in too many markets today, it becomes the combination of that and the scarcity-driven appreciation. It’s the value of location, of scarcity, not the result of anything the owner did. The existence of home equity/HELOCs is predicated on the inevitable increase in value of finite/scarce real estate. If your property isn’t guaranteed to increase in value, you wouldn’t borrow against it…but since it is, many people do.

If you don’t understand or believe that, look around and see how many abandoned properties are still increasing in value? It might not happen overnight, but over a few years, even a vacant lot is worth more than the owner paid for it.

This just in…Housing costs are rising as investors purchase more real estate

The headline on Google news was more direct: Housing costs are rising as investors purchase more real estate. And that’s really the game.

Last June, investors purchased 24% of the single-family homes sold in the US, according to CoreLogic researchers. By the end of September, that share reached nearly 27%.

Land is finite, land-use policies favor passive investors or owners, and [w]ith the growth of population, land grows in value, and the men who work it must pay more for the privilege.

“With out-of-towners driving up home prices in Phoenix, a lot of local first-time buyers have bowed out of the market,” Heather Mahmood-Corley, a Phoenix Redfin agent, said in a housing report. “They just don’t have the cash to compete, especially when there’s such limited inventory.”

Locals often face rising housing costs in areas where these businesses have relocated— especially in markets like Dallas and Phoenix where rents have risen by 21% and 28% year over year, respectively. This is because investors hoping to make a profit, typically increase prices to meet the income levels of new residents moving from higher cost-of-living locales.

Until we decide to move from a propertarian land model to a communitarian model — one that accepts that land belongs to everyone and taxing its use will drive growth and fund the infrastructure needed to support it — this will not change.

who are cities for?

It’s tempting to draw lines on a map, but we can’t forget that cities should be designed for the people who live there

Cities are designed for the people who own them, who own the land and property in the city. All the changes that need to be made, to zoning and land use, will affect land and property owners. And given how much people depend on the value of their land, not just as speculators but to ensure a comfortable retirement, any proposed change to that will sound like an orchestra of scalded cats.

A well-designed land value tax/leasehold system would actually lower the barrier to home ownership while recouping the unearned value of commercial property but that means not getting that unearned value in residential property…people love to say their home value has increased by $X but a look at the property tax rolls will show that the value is in the land, all unearned.

It would be better if cities were more like a co-op where everyone had a stake in the land and how it was used, with idle land forced into productive use and speculative windfalls recaptured by the real investors — the taxpayers.