Month: September 2022

Seattle’s worst city council member never ceases to disappoint. This is the same person who described the removal of homeless people from an abandoned home as “humane relocation.” That’s the kind of phrasing used to describe the rehoming of a food-habituated bear or nuisance family of raccoons. Or perhaps how indigenous peoples were sent to industrial schools or reservations…you’d think someone who puts their indigenous heritage front and center would be more aware. But then you wouldn’t be thinking of the same person. So what is she up to this week?

She seems to think this local business that is open one night a week and sits on 8800 square feet of prime developable land is worthy of our praise. A roadhouse smaller than most houses in the area, open one night a week…how much tax revenue that that generate for the city, that we should be so grateful? What acts play there that we should appreciate its status as Seattle’s last roadhouse?

The fact of the matter is it sits on 1/5 of an acre of land on Lake City Way, a busy arterial/stroad/busway, where housing or mixed-used development would be welcome. As you can see, the tavern is a teardown, valued at $1000, the lowest value you’ll see. And the land is valued at $1.1 million, up from $71,000 at the end of last century and  $528,000 10 years ago.

 

And this valuable contribution to District 5 remits $5,690.58 in property taxes every 6 months. About 1% of the assessed value over the course of a year. Seems like a great deal for someone. Not Seattle or anyone who lives there though I will give the owner full marks for using the business address for his tax mailings. Not Bellevue or Glendale, CA…

District 5 has Lake City Way, Aurora Ave, Northgate, and Holman Road/15th Ave NW, all inhospitable stroads/car sewers, as well as half a dozen strip clubs. Not that I care about how people make a living but one of them a block away from where I live, on half an acre of land, has an adjacent parcel  zoned for multi-family development. To no one’s surprise, it remains undeveloped. In the same block is a disused car wash, closed for about 2 years now and taking on a new life as a graffiti canvas.

Just up the block is an installation of a couple hundred eco-blocks, placed there after some local vigilantes attacked an RV/homeless encampment. I didn’t see that attempt at “humane relocation” mentioned in her newsletter.

Further up the street we have a disused car lot, an idled truck sales office, and entirely too much low density development for such high value land. Further south, more disused land and low-density development on a high volume roadway. But at a 1% tax — no pressure to increase density or redevelop that land — everything is fine, as far as our councilor is concerned. I asked. She thinks it’s great.

Hayekian property rights outweigh human/civil rights, it seems, in this progressive city. Certainly in District 5.

Business is booming at the Roadrunner Grab’n’Go deli outside Joshua Tree national park. Demand for sandwiches, mezze boxes and local vegan cheese has remained high through the summer, even as temperatures soar in a desert landscape that now attracts more than three million visitors each year.

But the shop’s co-owner, Merilee Kuchon, has a problem. Her employees, many of whom grew up here, are struggling to afford to stay. Over the past year, she’s lost at least a dozen staff, driven out by local rental prices that have soared during the pandemic. Now, she’s worried about hiring enough employees to keep the shop going when even more tourists return in the fall.

Gentrification is technically correct…

but this isn’t just a haphazard evolution of some bohemian district becoming cool. It’s more calculated than that…some of the land in the area was bought in the event someone else — like this sandwich shop owner or some backcountry outfitters — put in the work to make the location valuable.

I don’t buy the “inevitability of gentrification” unless we want to accept the inevitability of being hit by a bus if we cross against the lights. It’s avoidable, not inevitable. Better land use policy, managed by land use taxes and hard boundaries, would prevent both the destruction of beautiful places like this and the evisceration of working people’s lives by speculators. It’s not inevitable, unless we accept it to be so. I don’t.

Reading DeLong’s “Slouching toward Utopia,” I realize I am firmly on Team Polanyi and now understand why I have never bought into Team Hayek. Property rights don’t trump human/civil rights or the Maslovian requirements for a good life. The pendulum has some way to swing before we get there, though.

Walking the picket line today, some of my colleagues were simultaneously griping about their property taxes and rejoicing that they would be able to retire with a nice cushion when the time comes (a reasonable house in the $300-500k range 1-15 years go now commands a high 6 or even 7 figure valuation).

I wonder how many of them understand that the valuation they are seeing is not from their loving cared for home or the carefully curated plantings they have invested in but the land itself, the coordinates they own exclusive rights to. I further wonder how they would handle it if their property taxes/property value dropped. Again, the value is in the land: their house is the same house today as it was yesterday or last year. But the value today is much higher than it was a year or five years or ten years ago. And none of that has to do with any expense or effort on their part.

I doubt there are any plans to upzone or increase the density of any land near them, like the commercial land along the arterials that is often occupied by single story strip malls or single family homes. But if there were and they were promised a lower tax bill that didn’t require a lower valuation, I wonder if they would accept it? What if commercial property, either multifamily residential or pure commercial was taxed at a different rate to force more dense development and what if the resulting increase in tax revenue meant that residential property — non-remunerative property — could now be taxed at a lower rate, less than the 1% that every property owner pays now?

Right now, we have the perverse incentive of families investing in their shelter as their retirement fund, paying higher and higher taxes on it, in the hopes of a payback. A low risk bet, to be sure: they’ll get their money but what are they forgoing on both a higher purchase price/higher mortgage payments and the rising taxes that are both driven by the finite nature of land, the artificial scarcity of limiting development, enforcing parking minimums, keeping building heights down, etc.?

The perverse incentive of paying too much for artificially scarce land to pay into a retirement fund while keeping housing prices out of reach seems like something we should address. Conflating housing and land as housing is part of the problem, mostly due to the single family home as the only option for buyers, especially if they have a family. But taxing commercial land at the same rate as residential land is also part of it. Why should we tax land used purely as residential land at the same rate as the land under a store or restaurant? Are commercial and personal auto registrations taxed at the same rate? Is electricity sold to homeowners at the same rate as businesses?

If a parcel of commercial land commands $1 million per acre per year, as we have seen offered, what is that land worth? At 1% that’s $100 million. But the assessment didn’t reflect that. The developer said it was worth that much to rent, and buyers set the price in every market, as sellers eventually discover.