the downside of affordable land…unsustainable sprawl in precarious places

If new homes can be built cheaply in Las Vegas but not in, say, California, it suggests the homes and materials are not the issue…it’s the land. As said many times on these pages, there is no affordable housing without affordable land, but as this story illustrates, there is a downside to affordable land.

Las Vegas is growing at a staggering rate. Clark county, where the city is located, is home to roughly 2.3 million people, but forecasts predict the population could go beyond 4 million by 2055.

Attracted by the lure of cheaper costs of living, lower taxes, and newly built homes, more than half a million people are expected to flock to southern Nevada in just the next 15 years. To accommodate them, the region’s arid landscape is being converted into strip malls and shopping centers as winding cul de sacs creep closer to the rocky hillsides.

Density through the judicious use of ground rents and zoning/land-use policy would force more economic and compact development, reducing the destruction of ground cover and the effects of heat islands and the dangerous rise in ozone and other pollutants.

In 2019, Clark county generated more greenhouse gas emissions than the city of Los Angeles – which is home to roughly 1.7 million more people – according to a new report issued by the county in February. Nearly half of the county’s emissions are from energy used to power buildings and industry. The next biggest share at 37% was attributed to transportation. Both of these sectors are slated to increase as more homes and businesses are built and rising numbers of residents hit the roads. The construction equipment itself is expected to add to emissions as the county continues to grow.

Las Vegas ranks 12th in a list of the most polluted cities in the US for ozone, according to the American Lung Association. Residents – especially those in the hottest corners of the county – are already feeling the effects.

This also seems like a great test bed for off-world living…I don’t see single family homes and winding streets with cul-de-sacs working on Mars. How could development be designed to create shade, turn heat and strong sun into power and light?

Mayor Teargas’s Folly, Northgate Edition

Probably not fair to label her with something she didn’t build but the vacant hole in the ground across from city hall — the old SPD HQ site — is her downtown claim to fame. She didn’t build anything there either. She also presided over leaving almost $1B on the table in the Mercer Megablock deal.

The old Northgate Mall site, still being disassembled/demo’d sits on 55 acres of prime land, right next to a freeway, a major E/W arterial, and the current north terminus of the light rail system. We could have had many things planned and built there but what did we get? A hockey training center. We could have had the Barbican with 20 acres to spare. In addition to 2,000 flats, either in towers or closer to the ground, all in the brutalist style that fits so well in Seattle, as well as local versions of…

  • Barbican Hall: capacity 1,943; home of the London Symphony Orchestra and the BBC Symphony Orchestra.[4]
  • Barbican Theatre: capacity 1,156; designed exclusively by and for the Royal Shakespeare Company[2][5]
  • The Pit: flexible 200-seat theatre venue
  • Barbican Art Gallery and the free new-commission gallery The Curve
  • Barbican Film: 3 cinema screens with seating capacity of 288, 156 and 156
  • Barbican Library: Public lending library with special collections in arts and music
  • Restaurants: 3
  • Conference halls: 7
  • Trade exhibition halls: 2
  • Informal performance spaces
  • The second-floor library is one of the five City of London libraries. It is one of the largest public libraries in London and has a separate arts library, a large music library and a children’s library which regularly conducts free events. The Barbican Library houses the ‘London Collection’ of historical books and resources, some of which date back 300 years, all being available on loan. The library presents regular literary events[6] and has an art exhibition space for hire. The music library has two free practice pianos for public use.

All of this could be under construction or even partly complete, but for the lack of imagination Seattle hides behind its preference for process over progress.

A well-designed development there, with housing for 2,000 households (or more if the whole parcel was used), could have created a north end cultural explosion, meeting people where they live rather than expecting them to go downtown. Capitol Hill is the only part of Seattle that can compete with anything like the above list, but getting there? That area was laid out around streetcars and people…Northgate wasn’t even part of Seattle for most of the city’s history. Your best option to Cap Hill from the north end is the light rail and you have to go to Northgate anyway…why not just let it be your destination? Or, better, your address? I’m sure some would argue that tower blocks by the freeway would be somehow unsightly but they would be nowhere near as tall as downtown’s office towers. And that’s all downtown is… if you have even visited or even seen the UW/Seattle compus, this should look pretty familiar.

some free (but valuable) advice for the Missionary Sisters of the Sacred Heart of Jesus

Imagine finding 22 acres of the lakefront real estate in Seattle laying around that you have owned since 1914…what would you do with it?

Currently valued at $46,339,900, developers are probably already negotiating over it: what could it be worth to the Missionary Sisters of the Sacred Heart of Jesus?

The sale is part of “a global realigning of the Missionary Sisters’ assets to ensure they are serving those most in need,” according to the announcement. To that end, the Sisters are beginning a process that will look at different long-term uses for the property.

Keeping that in mind, let’s explore some options. They could sell it for a multiple of that valuation: 22 acres of 6000 square foot lots is about 7 per acre, so 154 homesites. Straight up, that’s about $300,000 per site…I expect the Sisters could ask $500,000 per site for that location and get it. That’s $75+ million, 50% over the assessed value. But is that the best option, especially given their stated goal? Why not keep the land and let it be developed under a leasehold?

Right now, King County collects $12,407.30 every six months in property tax on that land. That’s it, just $563/acre each year. A ground lease of $10,000 per homesite would be $1,540,000/year for the whole parcel. For the whole 22 acres that would be $258,417,158.15 over 99 years, $2,610,274.32 annualized over the 99 year term. And who knows what a developer would pay for a ground lease with a lot less upfront vs a fee simple sale? (The Mercer Megablock, even though it was a commercial property, would have paid more than $1 billion over 99 years, vs the $150 million Seattle settled for.)

I expect a charitable order could find uses for $2.6 million/year (or more) over 99 years. And it would still own the land, with the ability to sell at a later date or simply renew/renegotiate the lease. Even the Seattle School District doesn’t sell its surplussed land: it leases those parcels, unlike the city of Seattle. Those sites get developed and pay rent, rather than sit idle.

A $10,000 ground rent/lease on those homesites, assuming they are typical 6,000 square foot site, would pencil out like this:.

The Future Value function in any spreadsheet will let you make your own models. Not sure anyone in the City of Seattle budget office has ever heard of it

But that parcel won’t be that densely populated, especially if it’s sold outright. It will all be mega-sites. The Sisters could direct its use if they kept it under a leasehold, and arrange for some of the 22 acres to be a more densely-designed development — maybe a village…cottages, terraced houses, small blocks (fourplexes), with the option to let Seattle’s monied class to splash out on a few acres. 22 acres is a large parcel of land: it’s one-third of a square mile, not much out of Seattle’s 84 square miles, but to have it as one well-sited contiguous parcel is something to consider the best use of. It may never have been used for anything since Seattle was chartered. A great opportunity, comparable to the 55 acres at Northgate that Mayor Teargas decided was more suited to a hockey training center than housing, as if the two were mutually exclusive.

I don’t expect any of this to come to pass, even though the Sisters and Villa Academy could make use of that income stream, either for charitable works or tuition for deserving but financially-challenged students. There are many opportunities here…

what will the self-driving truck bring us? shared wealth or inequality?

Speculators are already amassing land near cities for warehouses. Roads are cheaper than railroads and in many cases are already in place.

The prospect of self-driving trucks could further intensify a land grab near big cities, one that is already fueled in part by the increase in long-haul trucking during the pandemic.

“Am I supposed to stop paying for everything else I have going on in my life just so I can pay rent? That’s unsustainable.”

Yes, because propertarians like the Seattle city council president (I’m sure every city has city council members or mayors who think the same way) value extractive economies over productive ones… district 5 has large, visible swathes of unused, developable land held as investments when it could be developed. If land was subject to rents that reflected its productive value, rather than taxed as a speculative hedge, Seattle would be the wealthy city people think it is. But the reality is it’s a poor city with some wealthy people making a lot of money extracting wages from rents. Wealthy land owners would rather invest in eco blocks to ensure no one parks on their land (when an earlier posse of vigilantes were turned away), because property rights outweigh human rights.

how small is too small?

When I hear people talking up the virtues of ADUs and micro flats — more rental opportunities — this is the future I think they want.

Imagine distilling your life to fit in just 7 square metres. There would just about be space for a bed, a toilet and shower, a sink, a microwave and some storage. But no room for a kitchen to cook in, decorations, a place to store equipment for hobbies, or to have anyone round to visit.
[…]
The flat is an example of what experts say is a growing phenomenon of tiny homes, driven by soaring rent and property prices. Microflats are becoming more sought-after and even smaller, they say.
[…]
The owner has already recouped their investment by getting £800 in rent each month. The current tenant lives elsewhere for most of the time and spends just a night or two each week in the flat as it is closer to work.

I agree with this:

Julia Rugg, a research fellow at York University’s Centre for Housing Policy, said the Clapton sale reflected the “inflated nature of the housing market in London” and said it would be a “worrying development” if microflats were seen as a solution to housing affordability.

And while this might work in a city like London with nearby food options, not all cities offer that.

“This is accommodation that is barely suitable as a hotel room, and does not constitute sustainable liveable space. The property lacks comfort or amenity and forces reliance on disposable items. The neighbourhood may well be awash with bars and cafes but relying on these for living space makes life very expensive,” she said.

Zoning and land-use policies often prevent people from relying on the market to provide the things they can’t provide for themselves…

[Update] Seven-square-metre ‘posh cell’ in Lower Clapton fetches £90,000 at auction.

Safe bet: whatever The Seattle Times ed board/columns support, go the other way

All you really need to read is the author info…or just do a quick Ctrl-F for “radical”…

Christopher Kirk has been an architect in Seattle since the 1970s and has served on public historic preservation and design review boards.

I read that as “Christopher Kirk wants to go back to the 1970s and to that end has served on public historic preservation and design review boards which are a big reason why nothing ever changes.”

And I am not the only one to see that…Given the tone of that opening, I am sure you will be shocked to learn that Christopher Kirk is a 73-year-old white guy.

Horseshit like “a convenient but inflammatory and erroneous way to justify a radical, top-down, across-the-board redefinition of our residential land-use patterns” or “a radical, ill-conceived, statewide rezoning which will have unpredictable effects on the character of your neighborhood” could come out out of the press office of Rafael Edward Cruz (R Self-interest).

The fastest and most efficient way to develop housing is to build large, multifamily projects, and studies repeatedly show that Seattle’s multifamily zones have enough capacity to meet projected needs. These zones are on major transit lines and close to shopping and work areas. Multifamily housing can either be apartments or condominiums, so a variety of economic levels and ownership options can coexist. Seattle’s carefully developed urban-villages plan is based on this concept.

So why isn’t it being built? We know from the Times’ own coverage that construction lags demand. Maybe the “carefully developed urban-villages plan” is terrible?

More, denser housing won’t necessarily mean more affordable housing. Many large cities are denser than Seattle, yet their housing costs are often much higher. Also, even massive housing construction will not fix problems related to inadequate mental-health care, drug addiction or people choosing to live outside normal society.

He’s right on this but not for the reasons he would want to be: there is no affordable housing without affordable land. A quick perusal of rents in Paris — 6 times as dense as Seattle — doesn’t reveal rents that are 6x as high as Seattle. And yes, more valuable locations have higher rents, just as rents in Spokane and Sultan are less than Seattle. Location has value. And land is finite, unlike demand for land as population grows, which is why housing costs rise. The price to acquire land rises with population, as David Ricardo explained 200 years ago, and rents rise to meet rising wages, as Henry George explained in the late 1800s. And the casual hand-off of blame to the victims of mental health and opioids, rather than the society that creates those issues, tracks perfectly.

They completely change the nature of neighborhoods while creating housing that doesn’t work well for families with children, or most older people, and they are not particularly affordable.

This thinly-veiled “do you want those people as your neighbors?” passage is a key part of the argument: We asked for workers; we got people instead says it all. Seattlites want to be served but don’t want to see the servants. “Neighborhood character” is often used to make people think about the people they might have to see, who might listen to music they don’t like or cook food they don’t enjoy.

Further, massive, one-size-fits-all rezoning is unprecedented and a terrible shift in public policy.

This is actually beautiful in its self-delusion. What the ^%&^% does he think single family homes are but “one size fits all” zoning? What he objects to is expanding the club and this has one of my key takeaways from my time in Seattle…that clubs — swimming pools, tennis clubs, etc — are as strong here as they are anywhere. We have public pools, more than in Atlanta, but we have more private pools — “swim clubs” — as well.

Redlining and discriminatory covenants affected many single-family neighborhoods in the past, but that does not mean single-family neighborhoods are inherently discriminatory today. Neighborhoods were discriminatory because of shameful, racist, private business practices related to sales, covenants and mortgages, not because of zoning laws. To address past inequities, it makes sense to develop proactive programs to help disadvantaged groups make up for past discrimination and have more housing options, including ownership, rather than eliminating the entire category of single-family housing for everyone.

The Seattle Process, on display…create a program with consultations and committees and whatever dilatory processes are needed to ensure nothing ever happens.

Single-family housing is more expensive because it has more open space and vegetation, more living space, more peace and quiet, and more stable populations of long-term neighbors who know each other — all reasons why people pay more to live in single-family neighborhoods.

A bit of a tautology here…let’s be clear, that single family homes are essentially houses surrounded by private parks, versus more dense housing that allows more public parks and that denser housing can take many forms, including apartment buildings, duplexes, row houses, etc. Yes, land is expensive, due to scarcity, and whatever houses the most people per square foot is best. Unless people like the author want to assign a maximum population for Seattle — cap it at 500,000, say — and let the bidding commence for the 85 square miles of land therein.

In the last 10 years, much of commercial Seattle has been bulldozed and redeveloped, and/or allowed to lapse into disrepair, chaos and crime.

Oh, good, more oooga booga nonsense. He claims to know a lot of about Seattle but is he aware that a 1.3 acre parcel of land sits idle downtown, right across from City Hall, and that land has been a hole in the ground since 2005? There are many under-used or disused parcels around Seattle but to have the old SPD HQ building demo’d in 2005 and still sitting idle should be an embarrassment to everyone who works in City Hall from the mayor to the city council. Not that Mayor Teargas was capable of embarrassment and the council seem little better.

Only Seattle’s traditional single-family neighborhoods have remained healthy and maintained their unique character. Polls show that most people prefer to live in single-family homes, so if these neighborhoods disappear it seems likely that people will start moving to the suburbs as they did in the 1960s.

Scary nonsense like this, with vague threats about neighborhood character (people who don’t look like me and won’t cut their grass like I want it cut), is just part of the plan to keep Seattle a collection of car-dependent suburbs rather than a city with all kinds of serendipitous connections and experiences. Every week I see lists of “10 things to do in Seattle this weekend” and I wonder “why just 10?” and at the same time I wonder why I have to plan? Why can’t I just go out and find things that are happening? One reason is I live in a car-dependent suburb out in D5. I can get to other places by bus/rail but mostly downtown…not across down. Seattle has not yet recreated the Interurban railway and streetcar lines it was bequeathed and decided to destroy in favor of cars.

If you do not support a radical, ill-conceived, statewide rezoning which will have unpredictable effects on the character of your neighborhood and the value of your home, please ask your state lawmakers to vote against House Bill 1782 and Senate Bill 5670, and follow up with your city council.

But on the other hand, if you want to tell aging cretins like the author that they are past their sell-by date, ask your state lawmakers to make Seattle and Washington for everyone.

If Seattle or other cities want to emulate Paris, they need to start with land rents

The lease runs for 80 years and URW has agreed to pay city hall €2m a year for its duration.

That’s €160,000,000 over the course of the lease: running a FV calculation on that means that even a 1% annual bump would boost that to €243,343,043.44…about 50% over the term. Does anyone think that Paris will decline in value over the next 80 years? A lot of money to leave on the table…

propertarianism, all the way down

This piece explores two ideas…that density will allow people to stay in their neighborhoods, if not their homes, but will upset the neighborhood character and that density will destroy neighborhoods, as single family assetshomes are replaced by multifamily developments…that are meant to be contradictory. From both viewpoints, people are being priced out, whether due to an inability to remake their home to accommodate new needs or as rising land values turn homes into teardown.

“If you can’t allow incremental change in neighborhoods, they’re going to be torn down and be completely rebuilt over time, as homeowners need to seek other solutions that work for their families.”

I guess it depends on what you think makes neighborhood character…the buildings or the neighbors themselves. Looks a lot to me like the buildings matter more than the people, just as cars are more important than anyone who needs to get around. It’s propertarianism, all the way down.

“Warehouse Space Is the Latest Thing Being Hoarded”

It’s not “warehouse space” so much as land. The scarcity has always been there: now would be a good time for cities to take advantage of it…

Logistics firms are taking several steps to deal with the scarcity of storage space, like signing deals for new space long before ground is broken and expanding searches for sites farther from coastal ports, to such areas as Knoxville, Tenn.; the Lehigh Valley in Pennsylvania; and Reno, Nev.

They are also reimagining the commercial warehouse space they already occupy. And in densely populated areas where land is scarce and zoning restrictive, they are vying to build taller warehouses or spread their goods to smaller spaces such as vacant storefronts that were shuttered during the pandemic.

And this should not be possible: ground rents/land value taxes would prevent stockpiling or hoarding undeveloped or unused land.

Adding to the space crunch, companies aren’t just amassing goods for future sales, they are also stockpiling warehouse space when they can, even if they aren’t yet able to fill it, said Greg Sanguinetti, president of Pro Group Logistics in Sparks, Nev.

“But if it costs too much, people won’t build there…” Of course, they won’t, if it costs too much: the problem we have here is that it costs too little and speculators are taking the profits. Either the location is worth building on or not.

But city officials and the budget/finance people who advise them see land values as some kind of natural force, like weather, to be endured and dressed for, rather than managed. Similar to traffic. On the one hand, you might feel like a city has arrived when it has a traffic reporter but on the other, you have someone whose job it is to monitor the daily waste of people’s time and the resulting environmental damage from a man-made problem, entirely preventable.