Category: land and how we use it

vigilante: a member of a volunteer committee organized to suppress and punish crime summarily (as when the processes of law are viewed as inadequate)

Seattle business attempts to clear homeless camp, backtracks after advocates step in
A Seattle business is facing heat from homeless advocacy groups after they attempted to clear out an encampment off of Lake City Way.

I have walked past this growing encampment for a couple of weeks. I expect it’s a lot of folks who were cleared out of the one in the mini-park at 30th and 125th, just a few blocks away.

“Apparently the people from Pierre decided that they didn’t want this anymore,” says Karen Whittle, an advocate for the homeless.

An attorney for Bill Pierre says his business, along with other businesses and residents in the community took matters into their own hands to clear out the encampment.

At least they admitted to it.

Their attorney sent this statement to KIRO 7, which reads in full; “The Pierre Family have been contributing members of the Lake City community for 74 years, the love for their community is generational and runs deep. They along with other community members made numerous pleas to the City and Police Department to help address issues like the vandalism, theft, property damage and threats of violence coming out of this encampment and were told that something like a shooting needs to occur before the City will respond. After hearing this several members of the business and residential community made the hard decision to come together and help clean up a non-permitted encampment filled with human excrement, rodents, criminal activity and used needles that were unsafe for everyone. The Pierre’s support was driven only by the love they have for the community in which they live and work.”

Not sure what contributions they refer to…I suppose they have paid their taxes like everyone else, and sold a lot of cars and trucks through their sprawling dealerships. I know Pierre Properties owns all of this:

And some of those lots are either vacant or abandoned, unused. The two parcels adjacent to the encampment (the two small pieces of the triangle, top right) are derelict, a few vehicles parked there but sometimes empty with no staff/employees. The largest of them, right across the street, is just under an acre in size and right on Lake City Way NE. It is assessed at $3,535,500 and taxed at just under $40,000/year. It’s empty. Not even used for commercial parking. What could a developer do with that, if the zoning permitted and the land value demanded it?

This is the solution to homelessness, not the solution that Pierre Properties felt compelled to enact by force. Land needs to be developed along busy developed roads in high commercial traffic areas. Today was the “1st annual custom car and motorcycle show” just a couple of blocks away from the scene of this incident (I wonder if the imminence of the show was part of this…) and it would be great if that land and the other disused parcels there were developed into something useful.

“If they’re allowed to get away with it other people will do it to other homeless encampments,” says Whittle. “Do something constructive rather than destructive. Give us a chance to show you that we can be neighbors.”

Opening up that land for development would be better. Do what the Seattle School District does with its disused parcels and rent it out: lower the cost to acquire the land and get some project underway.

Setting the rent might take some thinking. It’s not downtown but it is on a busy state highway in a commercial district surrounded by established neighborhoods. But surely we can expect more than $40,000 a year. The highest and best use of that land could be ten times that. The apartment building behind it pays $50,000/year for 1/4 the land. So why not set a ground rent of $200,000/year with a 1% annual increase? That would bring in $67,121,339.78 over the 99 year term, $677,993.33 annualized.

This is where Seattle’s progressive bona fides (legal weed, LGBTQ rights) aren’t enough to carry Seattle as a “progressive” city. It’s still, at heart, a propertarian city, where property rights outweigh human rights and land value is more important than land use that benefits all.

What the news reports don’t tell us is what exactly the propertarians did here. Did they physically move the belongings of the people in the encampment? Did they put their hands on people? Seems like anyone deeply concerned or committed to property rights would have a hard time squaring that kind of action with their beliefs. I never saw any reaction to the cars that have been parked along that street in the Before Times or the RVs that preceded the tents.

Again, if the issue is with tents — not necessarily people being reduced to living in those circumstances — housing is the solution. Social housing alongside market-rate housing could be built right across the street from where this mob decided to act on its worst impulses.

Amazon intends to build a distribution center on 58.5 acres it recently acquired in eastern Pleasanton [CA], the company confirmed.

An Amazon affiliate purchased the property from Houston-based investor Lionstone Investment Group for $75 million, public documents filed Sept. 16 show. Lionstone declined to comment.

That’s $1,282,051/acre. I wonder what the ground rent for those parcels, right there in Henry George’s backyard, would be. Pleasanton doesn’t really benefit from this transaction until the sorting facility gets built and the workers are hired. That’s 2-3 years out. A ground rent would get development underway (who wants to pay rent on something they aren’t using?) and get those jobs filled more quickly. And holding onto the land makes more sense than leaving it in the speculator’s market.

Pleasanton sounds very pleasant indeed:

Pleasanton was ranked the wealthiest middle-sized city in the United States by the Census Bureau.[9][10] Pleasanton is home to the headquarters of Safeway, Workday, Ellie Mae, Roche Molecular Diagnostics, Blackhawk Network Holdings, and Veeva Systems. Other major employers include Kaiser Permanente, Oracle and Macy’s.[11] Although Oakland is the Alameda County seat, a few county offices are located in Pleasanton. The Alameda County Fairgrounds are located in Pleasanton, where the county fair is held during the last week of June and the first week of July. Pleasanton Ridge Regional Park is located on the west side of town.

Pleasanton was ranked number 4 in USA Today’s list of “America’s 50 best cities to live in” in 2014,[12] number 63 in Money’s list of “The Best Places to Live” in 2010,[13] and was named one of “Americans’ Top Hometown Spots” in the United States in 2009 by Forbes.[14] Pleasanton was named the third wealthiest city in terms of earnings in the United States by NerdWallet in 2013[15] and 2016.[16]

Seattle Mayor Jenny Durkan announced Monday the city will purchase three new apartment buildings totaling 165 units to provide housing for people who are either homeless or at risk of becoming so.

$50 million for 165 units seems a little…spendy? And that’s all you get. Just 165 units. That’s $300,000 per unit.

Durkan said the $50 million cost will be shared by the city, which will contribute $25 million, and the Washington State Department of Commerce which will provide $25 million in matching funds.

So that’s a little better, with Seattle taxpayers only on the hook for half. But even $150K per unit seems like a lot. What’s the long term plan for these properties? They are being turned over to LIHI but I’d like to see some thinking around not having a need for LIHI, for an end to low-income and low-income housing. Nothing against LIHI (I live next to an LIHI development now) but I have problems with any kind of segregation, by race or income.

But in the short term, why doesn’t the mayor or city council go after all the unimproved parcels downtown, all the surface parking lots? Why buy existing buildings when the city could get a mixed-use building — social housing, market-rate housing, retail and restaurants — on all of those parking lots? Instead of taxing them for their present purpose as the “highest and best use,” they should be taxed as productive land, as if they were already developed to house people and provide jobs and business opportunities.

If developers are willing to pay annual ground rents up to $1,000,000/acre, why are we accepting that car storage is a better use of that land? Put an appropriate tax on those parcels, assessed as productive land ve speculative investment, and if they don’t pay, seize it under eminent domain. We have a housing crisis alongside vacant/unused land in the valuable part of the city. That should be considered incompetence on the part of the mayor and council but property wealth trumps human need, property rights over human rights. Seattle is more libertarian than progressive but that could change.

Found this article today and wondered how different many cities — like Seattle — would be if they have taken this approach.

Realising the importance of mass transit, planners called for the creation of subway lines, as well as widened streets for cars – but construction would be costly and could take decades to complete.
Instead, Lerner saw an opportunity in the one form of transport that many considered a lost cause: the bus. His idea was to devise a system that gave buses as many of the functional advantages of urban train systems as possible. He proposed to integrate dedicated bus lanes along the city’s main arteries, with stations placed on medians along the routes. This would allow buses to run at speeds comparable to light rail, while dramatically reducing the cost.

We already have bus rapid transit line corridors but they are not prioritized or treated differently. They’re just limited access bus lines.

Though the system wasn’t an instant success after the opening of the first line in 1974, it gradually worked its way into the livelihoods of residents. In 1979, Lerner created the Rede Integrada de Transporte (Integrated Transport Network) to better manage the system and, as new routes were added, it began to show its full potential. By 1993, it was carrying 1.5 million passengers a day.

So right about about when Seattle rejected a $900 million federal grant…

But high ridership created a problem. Buses in the system still used conventional boarding systems, where passengers entered through the front of the bus and paid fares on board. Lerner, who was back in office for his third term as mayor, came up with an elegant solution.

He called for a revamped station design that enabled faster boarding through multiple doors, and fares would be exchanged before entering the station – similar to subway or light-rail systems. Offboard payment would also allow for the creation of transfer stations, meaning one fare would cover the entire system. To top it off, Lerner gave the stations a distinctive look by placing them in futuristic glass tubes. These new “tube stations” debuted in October 1991 as part of the first Ligeirinho express line. Today there are 357 tube stations throughout the city.

Curitiba’s population has now swelled to over 1.8 million people – more than four times what it was when the BRT system first opened.

Imagine if Seattle was 4 times as populous/dense as it was in 1970 — it was about the same size as Curitiba at the time. Hard to imagine Seattle making room for 1.3 million people, given how people love their big houses on big suburban yards.

The Seattle Times Editorial Board seems to think the Great Recession of ’08 and the current pandemic (in it’s 16th month) are to blame for Seattle’s hollowed out retail core:

Across the country, the pandemic wreaked havoc on traditional retail. Eighty seven million square feet of retail space went dark during the 2008 Great Recession. By comparison, an estimated 158 million square feet emptied out in 2020, mostly due to major chains closing.

More than 450 street-level businesses in downtown Seattle have permanently closed since March 2020, according to the Downtown Seattle Association. Brooks Brothers, J. Crew, Forever 21 and Sur La Table were some of the national retailers with a downtown presence that filed for bankruptcy.

I can’t decide if they should go look out the window, being as how their office is close to Amazon HQ, or if they should go talk to people in the ‘burbs who haven’t had a reason to go downtown in years. No shows, no cultural happenings, no street life, and nothing to shop for that they can’t get online. The Pandemic didn’t do that and the closures from the Great Recession were more effect than cause.

There are a lot of Seattleites who would love to go downtown, as long as they could park on the street at the front door, but now that they might have to look for parking or perhaps take a train or bus, they’re more inclined to lament how things have changed. And let’s face it, people are more likely to go to Capitol Hill or Georgetown or Ballard or the U Village. Downtown is all offices and government buildings, not street level, foot-scale retail. There’s no reason for people to stay there after work, not with the hellish commutes most people endure and no reason to go there from home, given how hard it is. If Forward Thrust had gone through in the 70s maybe downtown would be someplace to go, would be easy to get to.

As for the old Macy’s building mentioned? Let’s take a look. The property is divided into three parts, paying about $1.5M in tax, not much less than my ideal assessment of $1.8M would be. But the land is taxed far less — like 1/4 to 1/3 of the building’s value — showing that the building is considered to be worth more than 1.8 acres of land in this location. If that building were leveled, would it seriously only be worth $70M when the whole property was sold for $600M and is still assessed at $350M? Why doesn’t Seattle (or many other cities) value location like speculators do?

Long read on the effects of mountaintop removal on a family in W Virginia…the land they owned was eventually enclosed by mining operations, and they were offered a buy out. They won the battle — to keep the land — but lost the war, as they watched it become degraded by the mining operations, tailings and runoff that destroyed the natural unspoiled beauty that made the land valuable to them.

In the end, nine family members agreed to sell, but six refused, and Jerry was one of them. Arch [Coal] sued all of them, arguing that storing coalmine debris constituted, in legal terms, “the highest and best use of the property”. The case reached the West Virginia supreme court, where a justice asked, sceptically, “The highest and best use of the land is dumping?”

Phil Melick, a lawyer for the company, replied: “It has become that.” He added: “The use of land changes over time. The value of land changes over time.” — emphasis added

Surely, the justice said, the family’s value of the property was not simply economic? It was, Melick maintained. “It has to be measured economically,” he said, “or it can’t be measured at all.”

He’s not wrong. Much as I hate to find common cause with a lawyer for a coal company, land use evolves over time. I disagree that wilderness areas are used as dumping for poisonous metals but perhaps if we had a better understanding of the highest and best use of land that extended to not using it at all, we might be better off. For all the talk of urban growth boundaries, a land use tax that forced idle or disused land in cities back into productive use could be used to enforce that boundary.

The question of “highest and best use” is really at the heart of what I want to discover here. And we know that land use changes over time. Even in a suburban yard, a section of the property might be a parking space one year and a garden the next. A corner lot could become a local shop (void where prohibited by zoning). So with land in cities, where there was once farmland or one-story shops and now we see tall buildings and nothing green other than a few street trees or window boxes.

The city or county needs to manage the highest and best use on behalf of everyone but exercising that power is difficult. The land and its value would need to be separated, where the title and right to use it remains with the owner but the value — something the owner doesn’t create and has no right to claim — reverts to the commons through a ground rent or land value tax. If the city needs housing more than it needs car storage in otherwise densely-used areas, it should be able to assess tax on that value. If a developer offers $1 million/acre a year in ground rent and the owner of a surface parking lot is only paying $73,000 in property tax for a .3 acre parcel by the waterfront, the highest and best use would be whatever pays $300,000 a year. If the owner wants to pay that for its current use, that’s fine. It will likely go up year on year as other parcels are developed to their highest and best use. And that assessed tax is just on the land, not any improvement that could be built there. A split rate tax that also taxes development (at a lower rate) would be best but for now, I would be happy to see a ground rent that gets land turned to productive use, rather than as part of some speculator’s portfolio.

Any city that has a housing shortage or homelessness emergency with surface parking lots on its most valuable land is failing the people who live there, housed or otherwise.

The headline Seattle developer lands financing to turn historic Labor Temple into offices caught my eye. I know that building from my time working down by the waterfront.

Columbia Pacific Advisors Bridge Lending is providing $14.3 million in financing to stabilize the redevelopment of the historic Labor Temple in Seattle’s Belltown district.
[…]
That works out to just $430 a square foot for the land. The cost and challenge of preserving the landmarked asset likely suppressed the value.

62% of an acre, valued at $7,326,000 (the 1944 building, for all its historic significance, is valued at $500)…what if the developer didn’t have to borrow $14 million but could simply rent the land from the city? $74,000 in property taxes plus the debt service on $14 million looks like $70,000 a month in mortgage and interest. What if there was a way to get that project underway with less upfront cost?

If we use the $1,000,000/acre annual rent benchmark, that would put the annual rent at $620,000 — comparably, $70,000 * 12 months is $840,000 so a ground rent could be quite a bit less to come up with.

A ground rent — 99 years with a 2.5% annual increase — seems like a simpler way forward and represents $261,034,307.81 over a 99 year term, $2,636,710.18 annualized. This is $2.6 million of contractually guaranteed revenue Seattle could use to borrow against. The 500 acres set aside as “downtown” could yield quite a lot in revenue but also would represent a revenue stream the city could borrow against to fund some of the many needed improvements, from social housing to transportation.

She was so close, off by just one letter.

The rentier class, the landlords who make money in their sleep, own the suburbs and the intown neighborhoods. Private land ownership with its inevitable consolidation means fewer and fewer people own more and more land.

With the growth of population, land grows in value, and the men who work it must pay more for the privilege.
There it was: whenever a population converges around a certain location, the land, of which there is only a limited supply for each location, becomes more expensive to live on; people have to increasingly pay to live on land, and this in turn affects the entire economy.

This hit home with me, the idea that gentrification and displacement are somehow inevitable, as relentless and predictable as the tides when we know they are manmade, completely artificial and preventable.

Shearer is increasingly involved with efforts to protect neighbors from displacement. He bought his first home in the North Oak Cliff neighborhood of Winnetka Heights for $145,000 in 2003. Today, homes sell for three times that. Originally, Shearer was attracted to the neighborhood’s sense of community, which he claims was driven by the neighbors, not by retail and restaurants in and around the Bishop Arts district. As someone who has witnessed how gentrification has changed the neighborhood that’s been his home for two decades, he feels a duty to protect it.

“I see my role now as one of speaking out against the perceived inevitability of gentrification and displacement. So many that are either actively participating in gentrification, or passively benefiting from it, believe it will happen regardless of our actions,” Shearer says. — emphasis added

The value in the land is created by those who live and work on it, not those who own the deed to a set of map coordinates. The map is not the territory and the documents are not the land. But the deed to the land is how you access that wealth. By owning the land you claim the productive output of whatever was created on it, whether it was a restaurant with a thriving community or a factory. Land is the means of production in a post-industrial economy, even more so than it was in the industrial era. A steel mill made more money than the same land did as a farm and who claimed that value? Those who punched a time card at the mill or whoever owned the deed to the land?

We hear a lot about “neighborhood character” and how it matters but it’s often the argument of racists who want to keep their neighborhood white. A neighborhood as a collection of properties is different from a community, where people might come from outside the physical neighborhood to participate. These are in tension…as the physical neighborhood is bought and sold based on the value created by the community, the community has to relocate and rebuild that value elsewhere. Sadly, that value will be expropriated in much the same way, by the same speculators who know the price of land but never see the value of community.

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.