a crank's progress

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.

Finally, the old SPD site will be something more than an eyesore…how many mayors and city councilors will have come and gone by the time it’s complete?

Bosa Development said Wednesday it expects to begin construction in April on a 57-story tower with 422 condos, retail on the ground level and a public plaza. The tower should be finished by 2026, the developer says.

Cool…400+ luxe investments for those who can afford them…it could have been home to many local people and families years ago. But now it will just be a stack of market-rate (unaffordable) assets.

A cartoonist could have some fun here…

Citing sidewalk obstruction, the city of Seattle cleared a longstanding tent encampment that sat right across from city hall, on 4th avenue. It’s the latest move by Mayor Bruce Harrell’s administration in response to the city’s ongoing homelessness crisis.

Picture a 1 acre hole in the ground across from City Hall, surrounded by a wooden hoarding, and a figure of a little man looking like the mayor clearing tent campers off the sidewalk who could be living in clean safe social housing on the other side of that barrier. “Clear out, there is no room for you here…,” as the 1.3 acre lot, vacant since 2005, continues to accrue value for a Canadian speculator.

The economist’s take could be a huge pile of gold behind that barrier but the mayor is more concerned about a penny on the sidewalk. Protecting that pile of wealth by securing the sidewalk is more important than the people who were living on it. People like to say Seattle is a wealthy city but it’s really not: it’s a poor to average city with a lot of poor and a few very rich people, all getting richer as the others get poorer. It’s propertarian, not progressive. “Progressive” is about more than LGBTQ rights and legal weed.

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?

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.

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…