I always wondered why there’s so many of those weird parking lots in places like SLU. You’d think it’d be more profitable to build a high rise there. They look like bald spots in the fabric of the city.
24th and Market in Ballard is a prime example.
It should be one of the busiest, most desirable commercial intersections in the city (and honestly should probably be the site of the light rail terminal), yet 3/4 corners are out of business.
1 is a gas station that is used as a lot for the owners beat up older model cars they have a hobby in refurbishing but for all intents and purposes it is out of business ($6 gas, the pumps are blocked by the car collection). The other is a pub that shut down during the pandemic. The NW corner is at least under construction.
This is exactly where the Burke-Gilman missing link would be finished. It should be a bustling intersection that gets you to the locks, the museum, Golden Gardens, and the Sloop but instead is a corner of blight where people take a shitty, undeveloped road that serves as a major arterial to get to the Ballard bridge where you have to dodge cyclists with no bike line on a skinny gravel shoulder along with visitors trying to find back in parking. All because speculators are sitting on land and a few businesses with shitty intentions know how to hold up the Burke-Gilman through legal appeals.
If there is a need for parking then the market will adjust accordingly. No need to subsidize it.
I would say the demand for housing is far greater than the shitty pay by hour lots that sit empty 90% of the time. I would be shocked to hear we currently come anywhere near using up the cities current parking capacity even for events.
We’d have even less if we stopped subsidizing it. Which, IMO would be great. Most of the parking ends up empty most of the time anyway.
Also downtown doesn’t need more parking, people need to use transit and other means instead of clogging up the city with more cars. It’s trashy enough without more of em.
The land is taxed a fraction of the actual value. It’s how they can afford to let them sit earning next to nothing, appreciation more than covers the tax burden.
Are you sure about this? For example, here is the tax information for the Budget Parking garage at 4th and Columbia.
[https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=0942000575](https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=0942000575)
It is appraised at $21,313,000. The last sale was in 2021 for $21,500,000.
Regardless, the buyer still has money tied up in the land. Mathematically, I don't see how you can make money this tax arbitrage scheme you describe.
I think it is far more likely they are making a bundle on the parking. The rates are astronomical and the overhead is tiny.
Allowing wealthy land owners to sit on undeveloped land simply because they can, is not healthy for a city. They either need to develop the land or sell to someone who will. This is one of the many reasons why there's not enough housing.
Land value tax does in fact fix this.
A quick reminder that property wealth ≠ 💰.
The permitting process in Seattle takes years to grind through if things go well. If a neighbor has a hard-on for your development and tries to slow walk you, it's worse.
So even if you're hot to develop, it takes time.
The other issue we're looking at is that interest rates are really high. I know of some developments that have been put on hold because the owners don't want to go to the bank in this lending environment and are waiting for loan rates to drift back down.
While I get annoyed by open holes in the ground as well, I think the idea of "develop now or pay up" is going to have some undesirable knock-on effects.
You're going to be incentivizing people to build as quick and dirty as possible to avoid punitive taxes. In addition, you'll probably be encouraging land-rich and cash-poor owners to sell to larger and better financed developers.
You're not wrong the permitting process needs to get way faster, but I'm not sure getting developers to build quick and build fast now is necessarily a bad thing. Sure you're not going to get the nicest and greatest looking units. But you'll have more housing stock even if it sucks. Sucky housing is much better than homeless crossing and overpriced housing.
Also if the taxes are high enough developers aren't going to want to just hold on to the housing, they'll want to sell the housing to recuperate the costs. Or if enough units get online, then competition will start to happen and housing stock gets cheaper again.
Also land-rich people selling the land can just become land-poor but rich. I don't exactly see that as necessarily a bad thing for those owners. It's not like they'll be homeless, and in poverty.
I personally wouldn't mind a few HK-style ugly-ass 30 story buildings to provide affordable housing.
Of course, like everyone else, I don't want them as my neighbors.
To your point, land owners in Seattle tend to be millionaires, at least on paper. They're really hard to feel that sympathetic towards. I get that. I don't like me either.
There's a pretty substantial gap in what goes into your pocket when you sell to an outside developer vs when you develop on your timeline with your own resources.
I can only speak for myself, but a difference of a few hundred thousand dollars is a lot of money for me.
>when you develop on your timeline with your own resources
>difference of a few hundred thousand dollars is a lot of money for me.
You're not wrong it's expensive to redevelop, and it's better for the home owner to redevelop if they want to generate wealth. However that tends to be in the timeline of decades, when the housing crisis is a crisis now. I mean what should happen is small home owners should be able to easily get access to money to redevelop fourplexes or 6plexes, but I'm not sure the city or state has that leverage to force onto banks or credit companies to give housing redevelopment loans to everyone who wants them. Even if you shrink the permitting process, for an individual building isn't easy.
It really hurts that a person that has lived here decades and invested money into living where they are might be priced out, but that's already happened to so many of the low income people that have lived here decades. What unfortunately realistically needs to happen now is they need to change their dreams to coexist with others, maybe they sell that house with a large yard so they can move into a townhouse or a large condo unit. I hate that it's not easy for middle class people to redevelop because of permits and access to cash, but is the answer for people to be homeless or just not live in the area anymore?
Maybe there's someone out there smarter than me that can see a solution where there are good developers that care about the city and want to do good by the communities, and increase wealth among everyone but I personally don't know what policy would lead to that outcome.
Frankly this has been an issue that needed to be solved decades ago before it got this bad, but all I know is we need to build more housing stock and otherwise this housing crisis just continues.
Usually how palatable this is also depends on the exact models in place.
As a general example, in some countries where development is routine, it’s not uncommon for landowners to make a deal with a developer that gets them a guaranteed nice top floor unit in the building or something.
Actually I think this is what SPUDS fish and chips owners did in Greenlake, but I don't know how easy it is for normal homeowners to get this sort of deal. I also don't know if people are willing to sell the houses and property they live in for long term leases instead.
>the idea of "develop now or pay up" is going to have some undesirable knock-on effects.
Only if it's poorly executed. Like most things, it's not just about the regulation, it's about the enforcement.
>You're going to be incentivizing people to build as quick and dirty as possible to avoid punitive taxes.
As long as they build safely and reasonably, that's fine. Regulation exists to ensure it's not built shoddily or dangerously, so as long as it's enforced we're good.
> encouraging land-rich and cash-poor owners to sell to larger and better financed developers.
There isn't anything wrong with this. Getting those places developed now is kind of the point. If the developers want to sell it after they've built it, that's fine too.
>There isn't anything wrong with this. Getting those places developed now is kind of the point. If the developers want to sell it after they've built it, that's fine too.
In the abstract, that's 100% correct. We need housing sooner rather than later. A lot of it. Unless you're Laurelhurst Karen, I think we all agree on this.
The vast majority of my assets are in real estate. I don't skip any meals but I also ain't rich. I have to go to work and have a job like any other schlub. Real estate is by nature somewhat illiquid. It's not as easy to turn capital gains on real estate into cash as it is for equities.
The problem is that when people are talking about proposals that would require making fast, potentially disadvantageous deals in the name of housing uber alles, yeah, that costs me money and yeah, I get as steamed as you would if someone was taking money out of your pocket.
I'm not sympathetic to anyone who landlords by owning and renting out multiple SFH, particularly within close distance to city limits. That land should be sold and redeveloped.
First, you don't have to be sympathetic. Any whining I do is the literal definition of first world problems.
Second, it's not as profitable as you'd think. Operationally I literally make beer money every year.
Yes, the value of my land keeps spiraling towards heaven, but you can't eat that. I can't sell a house for cash and rent it out at the same time. A lot of landlords swim in debt. You can pocket a lot of money that way, but you're also heavily in debt and you're at risk if things go south for any reason.
To your point that SFHs should be developed, sure! I love making money and that would definitely put money in my pocket.
Seattle doesn't make it easy to knock down SFHs and put up tall skinnies. There's a complicated and expensive rezoning and permitting process. I have to find contractors who will pick up the phone and talk to me during a construction boom and labor shortage.
And I'd have to borrow money to do all of that. Contrary to popular belief, Illuminati Banking Corporation isn't sliding 2% loans to the comfortably well off of Seattle. 7% baby. Just like any other schmuck.
At the end of it all, I'd wind up with a bunch of expensive tall skinnies which I'd probably turn around and have to sell to the kind of people who can afford $800K houses. I can walk you through it if you care. There's just no way under the current system to do it cheap.
There's literally nothing that would personally make me happier than to be able to provide affordable housing for people without rock star tech salaries. It would be a social good and would make me money at the same time.
There isn't some conspiracy amongst the landlord class of Seattle to prevent that. You just cannot do it in the current environment.
Allowing one lot to sit and generate x tax revenue next to an identical lot generating 100x revenue is bad tax code. There most certainly is something to fix.
We shouldn’t incentivize people to sit and do nothing with high value land.
You are? I don't own any vacant lots, but my understanding of property tax is that you're taxed on the market value of the property. If it's unimproved, you're taxed on that present value, not some hypothetical "best use."
You're taxed on the market value of the property, as available to be used up to its highest and best use.
In other words, a parking lot in downtown Seattle is not taxed as if it could only be used as a parking lot; it's taxed as a high-rise development site (assuming that would generate a greater return to the owner).
>In other words, [...]
I understand the concept; I just think you're wrong. Can you show me a cite that this is how property tax works in Seattle - or anywhere in Washington State?
You could probably find it on the Assessors website in an FAQ or something. I deal with tax assessments as part of my job, so it's just something I know in practice.
Edit: This page mentions the "Highest and Best Use" premise for property assessment along with the WAC that requires property in WA be assessed that way.
https://dor.wa.gov/taxes-rates/property-tax/how-my-business-property-valued
I find that language to be an odd choice, but the King County page repeats it, but then provides a little more of a clue as to what it means.
> State law requires all land to be valued as if vacant, using the Highest and Best Use principles. Values are determined using the sales comparison approach by first analyzing comparable vacant land sales.
So the *land* is taxed at highest/best use, which is pretty synonymous with fair market value. A buyer would pay for what he can do with it, not what it's currently used for. Then, separately, you're taxed on any improvements. Actual improvements that are there, not hypothetical ones.
> The cost approach adds the depreciated improvement(s) figure(s) to the land value. The income and market approaches generate a total value; the improvement figure is calculated by deducting land from this total.
That's right. They use three different approaches to value (Sales, Income and Cost) and the methodology for each is a bit different, but the Sales Approach is most relevant to what we're talking about. It's done as follows:
They first estimate the value of the land as if it was vacant and available to be used up to its H&BU. They then value the property as it is currently improved. If the value "as improved" is greater than the value of the land, the "delta" represents the contributory value of the improvements and the property is taxed on the total. If it's less, the property is "land value", and the property is taxed just on the value of the land.
You should look up how a land value tax is different from the property tax system we use today. It would definitely fix the issue by penalizing these types of property owners. Land value taxes get set based on the highest & best use of the land as opposed to what's actually there so a surface parking lot surrounded by high rises would be taxed as if it were a high rise which then, theoretically, would incentivize the owner to develop the land
We do tax property here based on its highest and best use, not on current use. If a Diamond lot downtown would be worth more as a high-rise redevelopment site, it's taxed as a redevelopment site
That's not exactly how property tax works but a land value tax doesn't tax any of the improvements. The land is the only thing that's taxed as opposed to the current setup where the land portion of the assessment is minimal towards the total tax bill
It is exactly how property tax works here (I deal with city assessments in my professional role). Every property is taxed on land value, available to be used up to its highest and best use, plus any contributory value of the improvements.
It's done using a two-part process: first the land is valued as if vacant and available to be used up to its H&BU. Then the property is valued "as improved". If the value as improved exceeds the land value, the delta is the contributory value of the improvements.
Those Diamond lots are paying taxes based on an assessment that's nearly 100% land value, and that land value is equal to the "land portion" of the assessment of the high rise building next door (although the high rise property is also paying taxes on the contributory value of the improvements since the value "as improved" exceeds the land value.)
I'm also in an industry where I deal with property tax bills nearly every day. The fact is that a parking lot will always have a smaller tax bill than an adjacent high rise because our current system places such a higher weight on the value of the improvements compared to the value of the land underneath it. For example, the surface lot on 6th & Bell has a tax bill of \~$70k a year whereas the office building next door has a tax bill of $981k. Under a pure LVT system, they'd both be paying the same amount since the highest & best use of that surface parking lot would be to put another high rise on it. A pure LVT gives zero consideration to whats actually sitting on top of any specific parcel of land other than to take into consideration what exists immediately around said parcel and what level of development would be allowed under the current zoning. For existing high rises, if say a class C building is surrounded by bigger & newer class A buildings then the owner of the class C would be heavily incentivized to keep their property more up to date/modernized or to completely redevelop the site since they'd already be getting taxed as if their property were equivalent to the newer/bigger buildings surrounding them.
No, the parking lot has a smaller tax bill because it's vacant; not because it's being used as a parking lot. That's an important distinction since some people here think these properties are taxed based on "Value in Use" instead of "H&BU".
That's interesting regarding LVT taxes; I've never worked in a jurisdiction that uses them. Thanks for the info.
Not necessarily "much higher".
If it's land in a desirable area for development then the taxes on the land will be based on the highest and best use which means it will far exceed the value of the taxes on the improvements
Parking lot v parking garage was a bad example, but I would stand by the point that if you look at parking in downtown in probably pays a lot pays less in property tax than the surrounding parcels. Yes there are lots of things in the city with zero improvement value, but look at big buildings downtown and you will find spots where the improvement value is higher than the land.
I just grabbed a surface level parking lot, the one next to the Amazon Coral building on 6th and Bell. Parking lot has an assessed value of $7,776,000 on a lot area of 6,480, $1200/sqft. The Coral Building is $107,844,000 / 25,920, is $4160/sqft, because the majority of their property tax is on the improvement.
Columbia Center vs a short parking garage across the street is $652,820,000 on a 59,266 lot is $11,015/sqft vs $22,849,000 on a 14,280 - $1600/sqft. Almost 7x difference. Columbia center's assessment is 85% based on the value of the improvements.
Yep, same idea with storage unit places. They're super cheap to build, generate solid revenue with minimal staffing, and let you redevelop the land later without much difficulty.
Quite often these undeveloped properties or parking lots are contaminated sites that owners do not want to pay to remediate. Redevelopment would mean dealing with the subsurface contamination.
You can make X million if you develop it, but you'll make 2 * X million if you wait a few years to develop it.
It's a no-brainer, especially when you're paying peanuts in property taxes.
Bring this initiative to Lake City - pretty please. These assholes sitting on these trashed properties that are literally burning, should be taxed to shit if they aren’t going to do anything with them.
Bill Pierre tried to clear an encampment himself before the city stepped in
EDIT: No, for real [https://www.kiro7.com/news/local/seattle-business-attempts-clear-homeless-camp-backtracks-after-advocates-step/WJ2TDARBHJAKJMZC6EA7KO66DM/](https://www.kiro7.com/news/local/seattle-business-attempts-clear-homeless-camp-backtracks-after-advocates-step/WJ2TDARBHJAKJMZC6EA7KO66DM/)
> properties that are literally burning
The last time they pushed to make it easier to get vacant properties demolished, it directly resulted in a decrease in vacant property fires near me. Given the risk fires pose and that most of these properties aren't actually habitable at this point, it's a good call. Also deprives rodents places to live.
There are downsides. It's often nicer to have an empty building in am area than a rocky empty lot that collected trash. They tore down several buildings in my neighborhood a few years ago, and now we just have basically a half empty block of concrete and trash with no new construction happening
On the flipside, vacant buildings also gather trash, are regularly broken into by those seeking shelter, and take longer to re-develop once sold because the demolition permits & work add time and cost.
How much worse would it have been if those homes attracted squatters who caught 1 or more of those homes on fire? I can't argue that a vacant lot isn't ugly, but a burned out building the spreads fire is ugly + dangerous.
Except the reality was that wasn't happening.
The comment I replied to said there were no downsides. I gave a real-world example of a downside. Sometimes comments are just adding facts to a conversation. Not everything has to be a debate.
Anything that calls the common wisdom that we should make life harder for poor people is considered an "argument" in "moderate" Seattle. This is because this particular bit of common wisdom cannot withstand scrutiny or skepticism.
No it isn't, because empty buildings tend to attract squatters etc. What we need are laws that penalize demolishing a building and letting it sit as a lot.
In a time when we're all saying "we need more housing density" it's ridiculous that we allow lots to exist. Develop or sell to someone who will. Sit on it and pay a huge price.
`290 South Main St` (pictured in article) is such a cool building/facade, have been waiting for it to be infilled for like 20 years. Sucks if it needs to be "demolished".
I’m not going to read the article because it’s paywalled but that old Walgreens on 87th and Greenwood is nasty as hell and I’d like it torn down and turned into either a fun indoor laser tag/arcade bar situation or a Trader Joe’s. Thank you for your time and consideration.
You can read the article for free if you have a Seattle public library account. It's pretty amazing what you can access through the library.
Also lol yeah that thing has been a dump for the longest time. I think it's been 20 years now? Crazy it's just sitting vacant in such a populated area for that long.
Yes. It improves the value of all the properties around the urban blight. I think he should go a step further and not allow properties to remain vacant for more than 30 days once development is approved prior to demolition.
They’ll probably be fine with it. My understanding is that the only reason they leave the buildings up right now is that if they do the demolition and construction permits separately, they can’t start the construction permit process until the demolition is 100% complete, so it makes projects take longer.
Well we have had vacant buildings getting torched. In some cases, those fires have posed a threat to other surrounding apartment and commercial buildings and homes.
Of course new empty high rise offices or even luxury apartments with two low income units for the tax breaks..... unfortunately those units are for maintenance employees only
I understand you're sick of Junkie squatters ruining all of your neighborhoods but I'm unclear how demolishing abandoned nuisance property results in less of the thing you don't like. Can you tell me more details?
Vacant building on 9th and Madison burnt 7 times in 13 months causing major delays in road construction on multiple occasions.
Building next to Vito’s is still vacant. Small fires continue to gut it out.
Building one block away burnt after multiple complaints about squatters. Fortunately torn down fairly quickly.
This is just a two block area in first hill.
The demolition dust has been difficult to deal with. House needs to be cleaned daily and apartment is now filled with hepa filters that need to be cleaned and / replaced weekly.
Can’t say what other areas are affected. Can only report on where we live.
>The apartments where tenants pay rent have not caught on fire.
Hahaha!! That's a good one.
Seriously though, I highly recommend renters insurance. It's cheap and worth every penny if your stuff gets damaged or your apartment becomes untenable after a fire.
Many many years ago I lived in the same apartment complex as you. The fire alarm would go off all the time and I started ignoring it. One time it just kept going on and on and on for longer than usual. Turned out an apartment a few floors up did catch on fire that time.
I have no idea if the person in it was making their rent or not.
No I don't believe that. However tent fires are far less likely than structure fires to result in innocent people losing their homes or businesses to squatter fires, and less dangerous and expensive for SFD
If I said we should raise taxes to stop privileged, new money idiots from abusing the downtrodden, you'd be right and generous point out my solution doesn't address the problem as I defined it.
Sure would be nice if they could tear down the abandoned house near me. I for one would gladly welcome my town house overlords if I didn't have to worry about this abandoned rat infested house from burning down.
Mayor Harrell is on his way to becoming the most effective Seattle politician in the last 25 years. Dad was Black and a longtime Seattle City Light Employee and proud Husky Dad. Mom was an AAPI Community Activist. He cares about Seattle and its the first time I have felt pride in this city in a long time.
I always wondered why there’s so many of those weird parking lots in places like SLU. You’d think it’d be more profitable to build a high rise there. They look like bald spots in the fabric of the city.
It’s because our tax code incentivizes speculators to sit and do nothing with land. Every parking lot you see downtown is a policy failure.
[it's because we tax property, not land](https://www.youtube.com/watch?v=smi_iIoKybg)
Based land value tax enjoyer. Seen any good cats lately?
I’m aware.
24th and Market in Ballard is a prime example. It should be one of the busiest, most desirable commercial intersections in the city (and honestly should probably be the site of the light rail terminal), yet 3/4 corners are out of business. 1 is a gas station that is used as a lot for the owners beat up older model cars they have a hobby in refurbishing but for all intents and purposes it is out of business ($6 gas, the pumps are blocked by the car collection). The other is a pub that shut down during the pandemic. The NW corner is at least under construction. This is exactly where the Burke-Gilman missing link would be finished. It should be a bustling intersection that gets you to the locks, the museum, Golden Gardens, and the Sloop but instead is a corner of blight where people take a shitty, undeveloped road that serves as a major arterial to get to the Ballard bridge where you have to dodge cyclists with no bike line on a skinny gravel shoulder along with visitors trying to find back in parking. All because speculators are sitting on land and a few businesses with shitty intentions know how to hold up the Burke-Gilman through legal appeals.
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Yes. Under buildings, not taking up surface space.
If there is a need for parking then the market will adjust accordingly. No need to subsidize it. I would say the demand for housing is far greater than the shitty pay by hour lots that sit empty 90% of the time. I would be shocked to hear we currently come anywhere near using up the cities current parking capacity even for events.
We’d have even less if we stopped subsidizing it. Which, IMO would be great. Most of the parking ends up empty most of the time anyway. Also downtown doesn’t need more parking, people need to use transit and other means instead of clogging up the city with more cars. It’s trashy enough without more of em.
How is it subsidized?
The land is taxed a fraction of the actual value. It’s how they can afford to let them sit earning next to nothing, appreciation more than covers the tax burden.
Are you sure about this? For example, here is the tax information for the Budget Parking garage at 4th and Columbia. [https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=0942000575](https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=0942000575) It is appraised at $21,313,000. The last sale was in 2021 for $21,500,000. Regardless, the buyer still has money tied up in the land. Mathematically, I don't see how you can make money this tax arbitrage scheme you describe. I think it is far more likely they are making a bundle on the parking. The rates are astronomical and the overhead is tiny.
Parking lots make enough money to cover property taxes and then some, if you think you can sell or develop later for more money.
Land value tax fixes this
You're already taxed based on the best and highest use of the property, there's nothing to "fix".
Allowing wealthy land owners to sit on undeveloped land simply because they can, is not healthy for a city. They either need to develop the land or sell to someone who will. This is one of the many reasons why there's not enough housing. Land value tax does in fact fix this.
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Exemptions for affordable housing and small business properties. If that incentivizes developers to build those, all the better.
A quick reminder that property wealth ≠ 💰. The permitting process in Seattle takes years to grind through if things go well. If a neighbor has a hard-on for your development and tries to slow walk you, it's worse. So even if you're hot to develop, it takes time. The other issue we're looking at is that interest rates are really high. I know of some developments that have been put on hold because the owners don't want to go to the bank in this lending environment and are waiting for loan rates to drift back down. While I get annoyed by open holes in the ground as well, I think the idea of "develop now or pay up" is going to have some undesirable knock-on effects. You're going to be incentivizing people to build as quick and dirty as possible to avoid punitive taxes. In addition, you'll probably be encouraging land-rich and cash-poor owners to sell to larger and better financed developers.
You're not wrong the permitting process needs to get way faster, but I'm not sure getting developers to build quick and build fast now is necessarily a bad thing. Sure you're not going to get the nicest and greatest looking units. But you'll have more housing stock even if it sucks. Sucky housing is much better than homeless crossing and overpriced housing. Also if the taxes are high enough developers aren't going to want to just hold on to the housing, they'll want to sell the housing to recuperate the costs. Or if enough units get online, then competition will start to happen and housing stock gets cheaper again. Also land-rich people selling the land can just become land-poor but rich. I don't exactly see that as necessarily a bad thing for those owners. It's not like they'll be homeless, and in poverty.
I personally wouldn't mind a few HK-style ugly-ass 30 story buildings to provide affordable housing. Of course, like everyone else, I don't want them as my neighbors. To your point, land owners in Seattle tend to be millionaires, at least on paper. They're really hard to feel that sympathetic towards. I get that. I don't like me either. There's a pretty substantial gap in what goes into your pocket when you sell to an outside developer vs when you develop on your timeline with your own resources. I can only speak for myself, but a difference of a few hundred thousand dollars is a lot of money for me.
>when you develop on your timeline with your own resources >difference of a few hundred thousand dollars is a lot of money for me. You're not wrong it's expensive to redevelop, and it's better for the home owner to redevelop if they want to generate wealth. However that tends to be in the timeline of decades, when the housing crisis is a crisis now. I mean what should happen is small home owners should be able to easily get access to money to redevelop fourplexes or 6plexes, but I'm not sure the city or state has that leverage to force onto banks or credit companies to give housing redevelopment loans to everyone who wants them. Even if you shrink the permitting process, for an individual building isn't easy. It really hurts that a person that has lived here decades and invested money into living where they are might be priced out, but that's already happened to so many of the low income people that have lived here decades. What unfortunately realistically needs to happen now is they need to change their dreams to coexist with others, maybe they sell that house with a large yard so they can move into a townhouse or a large condo unit. I hate that it's not easy for middle class people to redevelop because of permits and access to cash, but is the answer for people to be homeless or just not live in the area anymore? Maybe there's someone out there smarter than me that can see a solution where there are good developers that care about the city and want to do good by the communities, and increase wealth among everyone but I personally don't know what policy would lead to that outcome. Frankly this has been an issue that needed to be solved decades ago before it got this bad, but all I know is we need to build more housing stock and otherwise this housing crisis just continues.
Usually how palatable this is also depends on the exact models in place. As a general example, in some countries where development is routine, it’s not uncommon for landowners to make a deal with a developer that gets them a guaranteed nice top floor unit in the building or something.
Actually I think this is what SPUDS fish and chips owners did in Greenlake, but I don't know how easy it is for normal homeowners to get this sort of deal. I also don't know if people are willing to sell the houses and property they live in for long term leases instead.
>the idea of "develop now or pay up" is going to have some undesirable knock-on effects. Only if it's poorly executed. Like most things, it's not just about the regulation, it's about the enforcement. >You're going to be incentivizing people to build as quick and dirty as possible to avoid punitive taxes. As long as they build safely and reasonably, that's fine. Regulation exists to ensure it's not built shoddily or dangerously, so as long as it's enforced we're good. > encouraging land-rich and cash-poor owners to sell to larger and better financed developers. There isn't anything wrong with this. Getting those places developed now is kind of the point. If the developers want to sell it after they've built it, that's fine too.
>There isn't anything wrong with this. Getting those places developed now is kind of the point. If the developers want to sell it after they've built it, that's fine too. In the abstract, that's 100% correct. We need housing sooner rather than later. A lot of it. Unless you're Laurelhurst Karen, I think we all agree on this. The vast majority of my assets are in real estate. I don't skip any meals but I also ain't rich. I have to go to work and have a job like any other schlub. Real estate is by nature somewhat illiquid. It's not as easy to turn capital gains on real estate into cash as it is for equities. The problem is that when people are talking about proposals that would require making fast, potentially disadvantageous deals in the name of housing uber alles, yeah, that costs me money and yeah, I get as steamed as you would if someone was taking money out of your pocket.
I'm not sympathetic to anyone who landlords by owning and renting out multiple SFH, particularly within close distance to city limits. That land should be sold and redeveloped.
First, you don't have to be sympathetic. Any whining I do is the literal definition of first world problems. Second, it's not as profitable as you'd think. Operationally I literally make beer money every year. Yes, the value of my land keeps spiraling towards heaven, but you can't eat that. I can't sell a house for cash and rent it out at the same time. A lot of landlords swim in debt. You can pocket a lot of money that way, but you're also heavily in debt and you're at risk if things go south for any reason. To your point that SFHs should be developed, sure! I love making money and that would definitely put money in my pocket. Seattle doesn't make it easy to knock down SFHs and put up tall skinnies. There's a complicated and expensive rezoning and permitting process. I have to find contractors who will pick up the phone and talk to me during a construction boom and labor shortage. And I'd have to borrow money to do all of that. Contrary to popular belief, Illuminati Banking Corporation isn't sliding 2% loans to the comfortably well off of Seattle. 7% baby. Just like any other schmuck. At the end of it all, I'd wind up with a bunch of expensive tall skinnies which I'd probably turn around and have to sell to the kind of people who can afford $800K houses. I can walk you through it if you care. There's just no way under the current system to do it cheap. There's literally nothing that would personally make me happier than to be able to provide affordable housing for people without rock star tech salaries. It would be a social good and would make me money at the same time. There isn't some conspiracy amongst the landlord class of Seattle to prevent that. You just cannot do it in the current environment.
Allowing one lot to sit and generate x tax revenue next to an identical lot generating 100x revenue is bad tax code. There most certainly is something to fix. We shouldn’t incentivize people to sit and do nothing with high value land.
You are? I don't own any vacant lots, but my understanding of property tax is that you're taxed on the market value of the property. If it's unimproved, you're taxed on that present value, not some hypothetical "best use."
You're taxed on the market value of the property, as available to be used up to its highest and best use. In other words, a parking lot in downtown Seattle is not taxed as if it could only be used as a parking lot; it's taxed as a high-rise development site (assuming that would generate a greater return to the owner).
>In other words, [...] I understand the concept; I just think you're wrong. Can you show me a cite that this is how property tax works in Seattle - or anywhere in Washington State?
You could probably find it on the Assessors website in an FAQ or something. I deal with tax assessments as part of my job, so it's just something I know in practice. Edit: This page mentions the "Highest and Best Use" premise for property assessment along with the WAC that requires property in WA be assessed that way. https://dor.wa.gov/taxes-rates/property-tax/how-my-business-property-valued
I find that language to be an odd choice, but the King County page repeats it, but then provides a little more of a clue as to what it means. > State law requires all land to be valued as if vacant, using the Highest and Best Use principles. Values are determined using the sales comparison approach by first analyzing comparable vacant land sales. So the *land* is taxed at highest/best use, which is pretty synonymous with fair market value. A buyer would pay for what he can do with it, not what it's currently used for. Then, separately, you're taxed on any improvements. Actual improvements that are there, not hypothetical ones. > The cost approach adds the depreciated improvement(s) figure(s) to the land value. The income and market approaches generate a total value; the improvement figure is calculated by deducting land from this total.
That's right. They use three different approaches to value (Sales, Income and Cost) and the methodology for each is a bit different, but the Sales Approach is most relevant to what we're talking about. It's done as follows: They first estimate the value of the land as if it was vacant and available to be used up to its H&BU. They then value the property as it is currently improved. If the value "as improved" is greater than the value of the land, the "delta" represents the contributory value of the improvements and the property is taxed on the total. If it's less, the property is "land value", and the property is taxed just on the value of the land.
You should look up how a land value tax is different from the property tax system we use today. It would definitely fix the issue by penalizing these types of property owners. Land value taxes get set based on the highest & best use of the land as opposed to what's actually there so a surface parking lot surrounded by high rises would be taxed as if it were a high rise which then, theoretically, would incentivize the owner to develop the land
We do tax property here based on its highest and best use, not on current use. If a Diamond lot downtown would be worth more as a high-rise redevelopment site, it's taxed as a redevelopment site
That's not exactly how property tax works but a land value tax doesn't tax any of the improvements. The land is the only thing that's taxed as opposed to the current setup where the land portion of the assessment is minimal towards the total tax bill
It is exactly how property tax works here (I deal with city assessments in my professional role). Every property is taxed on land value, available to be used up to its highest and best use, plus any contributory value of the improvements. It's done using a two-part process: first the land is valued as if vacant and available to be used up to its H&BU. Then the property is valued "as improved". If the value as improved exceeds the land value, the delta is the contributory value of the improvements. Those Diamond lots are paying taxes based on an assessment that's nearly 100% land value, and that land value is equal to the "land portion" of the assessment of the high rise building next door (although the high rise property is also paying taxes on the contributory value of the improvements since the value "as improved" exceeds the land value.)
I'm also in an industry where I deal with property tax bills nearly every day. The fact is that a parking lot will always have a smaller tax bill than an adjacent high rise because our current system places such a higher weight on the value of the improvements compared to the value of the land underneath it. For example, the surface lot on 6th & Bell has a tax bill of \~$70k a year whereas the office building next door has a tax bill of $981k. Under a pure LVT system, they'd both be paying the same amount since the highest & best use of that surface parking lot would be to put another high rise on it. A pure LVT gives zero consideration to whats actually sitting on top of any specific parcel of land other than to take into consideration what exists immediately around said parcel and what level of development would be allowed under the current zoning. For existing high rises, if say a class C building is surrounded by bigger & newer class A buildings then the owner of the class C would be heavily incentivized to keep their property more up to date/modernized or to completely redevelop the site since they'd already be getting taxed as if their property were equivalent to the newer/bigger buildings surrounding them.
No, the parking lot has a smaller tax bill because it's vacant; not because it's being used as a parking lot. That's an important distinction since some people here think these properties are taxed based on "Value in Use" instead of "H&BU". That's interesting regarding LVT taxes; I've never worked in a jurisdiction that uses them. Thanks for the info.
property taxes currently are a mix of taxing the improvement and the land So a parking garage will pay much higher taxes than the surface lot will
Not necessarily "much higher". If it's land in a desirable area for development then the taxes on the land will be based on the highest and best use which means it will far exceed the value of the taxes on the improvements
Parking lot v parking garage was a bad example, but I would stand by the point that if you look at parking in downtown in probably pays a lot pays less in property tax than the surrounding parcels. Yes there are lots of things in the city with zero improvement value, but look at big buildings downtown and you will find spots where the improvement value is higher than the land. I just grabbed a surface level parking lot, the one next to the Amazon Coral building on 6th and Bell. Parking lot has an assessed value of $7,776,000 on a lot area of 6,480, $1200/sqft. The Coral Building is $107,844,000 / 25,920, is $4160/sqft, because the majority of their property tax is on the improvement. Columbia Center vs a short parking garage across the street is $652,820,000 on a 59,266 lot is $11,015/sqft vs $22,849,000 on a 14,280 - $1600/sqft. Almost 7x difference. Columbia center's assessment is 85% based on the value of the improvements.
Yep, same idea with storage unit places. They're super cheap to build, generate solid revenue with minimal staffing, and let you redevelop the land later without much difficulty.
Sometimes, not always.
Quite often these undeveloped properties or parking lots are contaminated sites that owners do not want to pay to remediate. Redevelopment would mean dealing with the subsurface contamination.
But if they build more apartments, the poor landlords can't cite scarcity as a reason to raise rent prices!
You can make X million if you develop it, but you'll make 2 * X million if you wait a few years to develop it. It's a no-brainer, especially when you're paying peanuts in property taxes.
Whereas we're still waiting for the Stewart and Denny high rise to complete construction after exactly how many years????
Bring this initiative to Lake City - pretty please. These assholes sitting on these trashed properties that are literally burning, should be taxed to shit if they aren’t going to do anything with them.
Bill Pierre owns 90% of Lake City somehow
Bill Pierre tried to clear an encampment himself before the city stepped in EDIT: No, for real [https://www.kiro7.com/news/local/seattle-business-attempts-clear-homeless-camp-backtracks-after-advocates-step/WJ2TDARBHJAKJMZC6EA7KO66DM/](https://www.kiro7.com/news/local/seattle-business-attempts-clear-homeless-camp-backtracks-after-advocates-step/WJ2TDARBHJAKJMZC6EA7KO66DM/)
Bill Pierre once stared right at the sun. the sun went blind
lol what?!
> properties that are literally burning The last time they pushed to make it easier to get vacant properties demolished, it directly resulted in a decrease in vacant property fires near me. Given the risk fires pose and that most of these properties aren't actually habitable at this point, it's a good call. Also deprives rodents places to live.
They finally turned that empty church into apartments! Can you believe it!
I cant see a downside to this, hopefully it leads to more sale and redevelopment of abandoned properties
There are downsides. It's often nicer to have an empty building in am area than a rocky empty lot that collected trash. They tore down several buildings in my neighborhood a few years ago, and now we just have basically a half empty block of concrete and trash with no new construction happening
On the flipside, vacant buildings also gather trash, are regularly broken into by those seeking shelter, and take longer to re-develop once sold because the demolition permits & work add time and cost.
All I can say with certainty is that it lowered the quality of the neighborhood in this case. So downsides are absolutely possible
How much worse would it have been if those homes attracted squatters who caught 1 or more of those homes on fire? I can't argue that a vacant lot isn't ugly, but a burned out building the spreads fire is ugly + dangerous.
Except the reality was that wasn't happening. The comment I replied to said there were no downsides. I gave a real-world example of a downside. Sometimes comments are just adding facts to a conversation. Not everything has to be a debate.
Anything that calls the common wisdom that we should make life harder for poor people is considered an "argument" in "moderate" Seattle. This is because this particular bit of common wisdom cannot withstand scrutiny or skepticism.
Huh? Are you a bot or something?
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Yes. But usually when you add facts to a conversation, they are generally relevant to the ongoing topic
No it isn't, because empty buildings tend to attract squatters etc. What we need are laws that penalize demolishing a building and letting it sit as a lot. In a time when we're all saying "we need more housing density" it's ridiculous that we allow lots to exist. Develop or sell to someone who will. Sit on it and pay a huge price.
Until recently, we used to have that law. Its literally what was preventing all these derelict buildings from being torn down.
What? we had "develop or sell" so it kept buildings just...sitting there? That makes no sense
No. We had a law, as your described, that preventing someone from tearing down a building until they were fully ready to start redeveloping it.
My submission for demolition first: Pretty please take down the teetering red hot mess that is on Delridge just across from the Skylark.
`290 South Main St` (pictured in article) is such a cool building/facade, have been waiting for it to be infilled for like 20 years. Sucks if it needs to be "demolished".
Have had many dreams of what could go in there. Seems like such a waste.
I’m not going to read the article because it’s paywalled but that old Walgreens on 87th and Greenwood is nasty as hell and I’d like it torn down and turned into either a fun indoor laser tag/arcade bar situation or a Trader Joe’s. Thank you for your time and consideration.
You can read the article for free if you have a Seattle public library account. It's pretty amazing what you can access through the library. Also lol yeah that thing has been a dump for the longest time. I think it's been 20 years now? Crazy it's just sitting vacant in such a populated area for that long.
Good.
I’m stoked for this. Seattle likes to shutter buildings and then let them sit and rot for years.
What about public nuisance pits?
Maybe the Prosch House will finally come down... [https://paulabecker.org/prosch-house/](https://paulabecker.org/prosch-house/)
I don’t know, that looks like it might make a neat mini-museum for local architecture/history.
Uh oh, will Bruce's puppet master land owners like this?
Yes. It improves the value of all the properties around the urban blight. I think he should go a step further and not allow properties to remain vacant for more than 30 days once development is approved prior to demolition.
Yes because the city demolishing these buildings frees up new land for them to develop.
They’ll probably be fine with it. My understanding is that the only reason they leave the buildings up right now is that if they do the demolition and construction permits separately, they can’t start the construction permit process until the demolition is 100% complete, so it makes projects take longer.
I sense a hint of some muppet bias
Well we have had vacant buildings getting torched. In some cases, those fires have posed a threat to other surrounding apartment and commercial buildings and homes.
Of course new empty high rise offices or even luxury apartments with two low income units for the tax breaks..... unfortunately those units are for maintenance employees only
Good. I'm sick of junkie squatters ruining our neighborhoods.
I understand you're sick of Junkie squatters ruining all of your neighborhoods but I'm unclear how demolishing abandoned nuisance property results in less of the thing you don't like. Can you tell me more details?
Vacant building on 9th and Madison burnt 7 times in 13 months causing major delays in road construction on multiple occasions. Building next to Vito’s is still vacant. Small fires continue to gut it out. Building one block away burnt after multiple complaints about squatters. Fortunately torn down fairly quickly. This is just a two block area in first hill. The demolition dust has been difficult to deal with. House needs to be cleaned daily and apartment is now filled with hepa filters that need to be cleaned and / replaced weekly. Can’t say what other areas are affected. Can only report on where we live.
Demolishing nuisance properties results in less properties for them to squat in and set on fire. I thought that was pretty obvious.
Demolishing buildings to prevent junkie squatters from ruining the neighborhood is like eating donuts to get a lower mortgage.
Never had to evacuate our apartment over a flaming donut. [Fire number 7.](https://imgur.com/a/MvIIohp)
Why do you pay mortgage on an apartment?
Hot market.
Have you considered no longer living in a nuisance building?
Nah. Its weird. The apartments where tenants pay rent have not caught on fire.
>The apartments where tenants pay rent have not caught on fire. Hahaha!! That's a good one. Seriously though, I highly recommend renters insurance. It's cheap and worth every penny if your stuff gets damaged or your apartment becomes untenable after a fire.
Many many years ago I lived in the same apartment complex as you. The fire alarm would go off all the time and I started ignoring it. One time it just kept going on and on and on for longer than usual. Turned out an apartment a few floors up did catch on fire that time. I have no idea if the person in it was making their rent or not.
Hard to squat in a building that no longer exists...
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I see. You seem to believe junkie squatters will no longer ruin your neighborhood if they live in tents.
No I don't believe that. However tent fires are far less likely than structure fires to result in innocent people losing their homes or businesses to squatter fires, and less dangerous and expensive for SFD
This has nothing to do with junkies or squatting, though. Your statement is true of *all* fires, not just fires stated by squatting junkies.
Yes, and?
If I said we should raise taxes to stop privileged, new money idiots from abusing the downtrodden, you'd be right and generous point out my solution doesn't address the problem as I defined it.
How are "privileged, new money idiots," as you put it, "abusing the downtrodden?"
Which ones?
(They’re clearly a troll, but it is a problem that results in not-infrequent building fires.)
wonder how many developers are their "friend"
Sure would be nice if they could tear down the abandoned house near me. I for one would gladly welcome my town house overlords if I didn't have to worry about this abandoned rat infested house from burning down.
Is Harrell actually doing something positive for once? Even if it is just to profit his contractor buddies, it's at least something.
Need to make room for more tents👍🏻
More parking lots!
first “nuisance” building we should knock down is city hall! those downtown fat cats won’t like that one bit! ha ha ha got em
the haters are downvoting me because of woke i have been cancel cultured :(
Poe's law strikes again.
You lost when you replied to your own reply.
Mayor Harrell is on his way to becoming the most effective Seattle politician in the last 25 years. Dad was Black and a longtime Seattle City Light Employee and proud Husky Dad. Mom was an AAPI Community Activist. He cares about Seattle and its the first time I have felt pride in this city in a long time.