Author: paul

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

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.

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.

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.

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.

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.

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.

A prominent San Francisco LGBTQ+ rights activist is being uprooted from his home in the Castro neighborhood after the new owner of the property nearly doubled his rent to $5,200.

Cleve Jones, 67, who moved to San Francisco in 1973 and first conceived of the Aids Memorial Quit, is reportedly moving out of his rent-controlled, one-bedroom apartment this week. The move comes after he was notified of a significant price increase from the property’s new owner, who claims that the apartment is not Jones’ primary residence.

The new owner, Lily Pao Kue, is a 30-year-old self-described stock market investor who, according to Zillow records reviewed by the San Francisco Chronicle, purchased the property in February for $1,585,000.

Who else can afford property in the city where Henry George had his great insight — With the growth of population, land grows in value, and the men who work it must pay more for the privilege?

And that tells us all we need to know about the high cost to live in desirable cities…as companies based in cities like Seattle raise wages to attract workers ($150,000/year for college graduates), the price of land will rise to meet those wages, and force those who can’t command those wages out of those cities.

This is what we called “bead stringing” back in the day…a news release picked apart like the carcass of some large animal…

Lots of talk about the square footage and the number of “residences” and amenities in this paean to the new (and long overdue) development on the old SPD HQ site but not much examination of how many units could be built there or the trade-off of amenities like a rooftop pool and some streetscape vs housing that actual working people can afford.

These will be investments for the plutocrats/kleptocrats, the equivalent of the moldering mansions of Londongrad.

Did anyone read this and think about some kind of wildlife — beavers or bears — as what was referred to?

Working in tandem with our city departments, we will humanely relocate the individuals living at the location and clean up the area to protect the health of the Thornton Creek Watershed.

What would happen if they didn’t want to be relocated or if they returned? Would they be euthanized, like that bear in Ovando MT last summer?

And this…

Even Mayor Teargas kept her distance from the inappropriately named chief of police. Failing upward is how it works for some. I would be too embarrassed to show my face after my role in the summer of 2020, were I the chief of police at that time, but I think that precludes me from seeking public office.

At some point you have to wonder what one would have to do to be shunned…the old saw about being caught with a dead girl or a live boy no longer holds up, I suppose. Even that could be excused…as long as you maintain your connections to power, your own and that of others, everything can be excused.

* on the word cipher: The mathematical symbol (0) denoting absence of quantity; zero.