1,500 apartments on 2 acres where Seattle had a 55 acre site (the old Northgate Mall) to work with…how many apartments will go in there? And when? The ice center is open, so we got that priority project completed. /eyeroll
Lynnwood’s city center may be about to undergo a metamorphosis, with light rail arriving in 2024 and with more than 1,500 new apartments opening soon or planned, plus new stores and offices.
[…]
Sound Transit hopes to select a developer by the time the light-rail station opens (with a new 1,670-stall parking garage), and the project is almost certain to include some affordable housing.
It’s not clear if Sound Transit is planning to sell the land or hold onto it and under what terms? Would ST be willing to accept a ground rent on that sure-to-increase-in-value land? What would it be able to charge? If an acre in South Lake Union is worth $1M a year, what would land in Lynwood command? And how would a ground rent, rather than a fee simple sale, lower the cost to develop the land?
It might seem counter-intuitive but raising the assessed value of land to its value when put to its highest and best use reduces the incentive to hold unused land as an asset: if a parcel assessed at $10 million a year (about $100,000 in property tax to hold it) is revalued as if it has a mixed-used multistory development on it, a ground rent at that price makes more sense. Rather than finance $10M, a $100,000 rental both pushes that land into development more quickly and remits more revenue to the city. The optimal price to acquire land for development is $0, with the value recaptured through a ground rent.
That land will become more valuable, make no mistake. For Sound Transit to sell it would be a mistake. Seattle was offered more than $1 billion (over 99 years) and chose instead to take 15% of that — a $150 million fee simple sale. Annualized, a rent of $11 million/year would have surpassed that $150M in less that 14 years with 85 years still to run — $935 million left on the table.
No doubt Sound Transit will make money on the sale but the increase in value created by the rail network ST is building should be used to maintain and extend the network. As Henry George wrote in 1868 in “What the Railroad Will Bring Us connecting cities and people adds value to those locations and that value should belong to those who created it. The transit network, on behalf of the people, should take the rents from that land, rather than sell it. We have already seen how land near the existing stations becomes more valuable but the value didn’t go to those who created it.