If you doubt that land and location are at the heart of inequality and the widening gap between the haves and have nots, read on.
“This is a unique opportunity to obtain one of the last remaining large parcels in a location where demand for development is at a premium,” the Windermere sales pitch reads:
This property is surrounded by the demand for development in every direction. There are huge new construction projects next door, kitty-corner, across the street and down the block. Parking requirements are at a minimum, to maximize on the number of potential units.
It’s true. The Lake Union Partners-developed, market-rate, four-story Stencil mixed-use project rose on the block six years ago. Across the street, the Liberty Bank Building affordable housing and inclusive development from Community Roots Housing opened in 2019.
The whole article is about land and location…the scarcity of land and the high value created by nearby economic activity.
“I originally bought the land to have a long term location for Ponder,” Branch said. “But the value has dramatically increased to the point that it’s a lot of capital tied up in the land.”
Translation: it is no longer feasible as a retail location…the rising value has driven the taxes (based on the assessed value) higher than the retail sales can cover. He can sell and re-invest the windfall — value created by everyone else on the block — in another parcel, which will also cost more than it’s really worth, keeping the wheel turning.
The assessed value rose from $504,000 in 2017 to $1,224,000 in 2021, taxed at just under $12,000/year. For some reason the building, valued at $1,000 or less forever, was valued at $118,900 in 2017 and fell back to $1,000 the next year. So the assessed value is all land. A ground rent on that land might bring in a bit more. At $1 million/acre annually, that 1/10 acre parcel could be worth $100,000 in ground rent. That would lower the market price but with that rent, it would need to be developed. And that’s what we need. A 117 year old wood frame structure valued at nothing sitting on that prime location is not the highest and best use of that land, to use the phrase assessors use to describe their purpose.
Today I learned about Seattle’s Business Improvement Areas. I’ll have to look into that and see what it would take to make all of Seattle’s commercial property, maybe all of it, into a city-wide BIA. The value is in the land, as we see over and over again.