So in the midst of all this talk about a need for affordable housing, I learn that the Seattle Housing Authority (!) is selling (!!) 4.5 acres of land [http://www.djc.com/news/re/12109903.html]. Why sell it?
Why not exchange the right to use the property, as an owner would get if they bought the land, in exchange for land rent? Why should the income derived from the land’s value go to some overseas or out of state real estate speculator when it could stay here in Seattle?
Why is that land as valuable as it is? Because of its location, as the realtors remind us. The ads will read “close to the heart of everything” or something like it. And who built everything? Everyone who lives here. The roads, the homes and businesses, the utilities…
All of that was built by and for the people of Seattle. So why don’t we get the income from the use of that land? Why isn’t all commercial real estate subject to a land value tax/land rent to recoup the costs of running the city that makes those businesses worth starting here?
And then we have this — https://www.seattletimes.com/seattle-news/politics/seattle-politicians-have-run-themselves-into-a-corner-on-homelessness-but-theres-a-surprising-way-out/ — argument for building higher/denser and using debt-financing to get housing built on a commercial timetable, not the usual government speed.
Sure, why not? Why not talk to the Richest Man in the World and offer to name something after his mother if he carves off a chunk of his wealth to kickstart it? Mothers Day would have made for nice timing but it can’t be helped.
Those McCaw boys built a concert for their mother and named it for her twice (Marion Oliver McCaw = MOM). And Mary Gates has a road and campus building named for her…Jeff Bezos’ folks gave him some startup capital so why not?
I wonder how many similarly useful parcels of land Seattle has sitting vacant due to inflated prices that could be brought in line with land rents instead of property taxes?
Here’s half an acre of vacant former retail property, zoned for mixed used, now used as a graffiti exhibit — http://blue.kingcounty.com/Assessor/eRealProperty/Dashboard.aspx?ParcelNbr=2826049034
Valued at $2MM, taxed at just over $20k. The land alone is valued at $1,103,900 but the building will be demo’ed. Why assess tax on it? Tax the land at a rate that reflects it’s commercial value and the value as as a speculative investment will fall to where someone will put it to use.
Right next door? http://info.kingcounty.gov/finance/treasury/propertytax/RealProperty.aspx?Parcel=LpqfwMpAvqXsy%2fZ6CsNAnQ%3d%3d .36 of an acre, long vacant. Valued at $799k, taxes of 7,647.74. And at that price it may sit there, a chain-link fenced eyesore, for years to come.
Next to that? Another tax delinquent holding, same owners: http://info.kingcounty.gov/finance/treasury/propertytax/RealProperty.aspx?Parcel=oyIv0E%2b%2fnYOveoD3WnsLzg%3d%3d
.449 acres on the same busy intown commercial hwy, long vacant. Valued at $508,500, taxed at $6,546.21.
Next to it, another vacant parcel, same owner — http://info.kingcounty.gov/finance/treasury/propertytax/RealProperty.aspx?Parcel=oyIv0E%2b%2fnYPFd%2fEagX613Q%3d%3d .19 of an acre, valued at $218,400, assessed $2,818 in taxes.
So that’s more than an acre of hwy frontage in a high traffic area, held hostage to inflated values which if paid will result in out of state speculators making a fortune, rather than Seattle getting a payback for its investment.
Ideally, these parcels would change hands for a price approaching zero, since there are no improvements being sold. In a well-tuned land rent model, the cost to acquire land would be the conveyancing fees: the value, as land rents, flows to the city, not speculators.
What would it take for Seattle to experiment with land rents on long-vacant properties like some of these? There was a vacant parcel, one city block, across from City Hall for ten years. Would a lower price with land rent have gotten that into productive use sooner?
Why are we content to let developers and banks derive all the value from this city’s productive energy? We should replace property taxes with land rents on commercial land and let that revenue go back to the original investors — the people who live and work here.