January 13, 2006
Affordable Housing, Seattle-style
Seattle City Councilman Peter Steinbrueck wants to inspire more people to live downtown by "making housing more affordable"
How will Steinbrueck accomplish this goal? By raising taxes on developers who increase the supply of housing "City seeks cut of profits of high-rises for public"
If the city raises building heights downtown, Seattle developers stand to reap whopping profits on high-rise condos and can afford to contribute more toward expanding affordable housing, a study released Wednesday found.
The study, commissioned by City Councilman Peter Steinbrueck, offers a rare glimpse into the economics of downtown development in today's hot market.
Only in the rarified world of economics as understood by the Seattle City Council, do disincentives to increase the supply of a good help lower its cost.
Posted by Stefan Sharkansky at January 13, 2006
11:32 AM | Email This
1. typical democrap wealth distribution idea...what a crock, creating "affordable housing" by making some housing more expensive. it's only fair, right?
2. Wait till Nickels and Co. decide they want to condoize the waterfront. After all, it is needed (i.e. high profit) to pay for all the other goodies he wants.
Even though it is illegal, it will happen. Imagine if you will: $3 million dollar condos for 2000 s.f.
Affordable? Depends if you are rich or not.
3. True - but increasing the supply of 3,000 sq ft condos with designer decors, granite counters, viking ranges, olympic swimming pools, wine cellars and movie theaters doesn't exactly create more affordable housing either. Perhaps the Council should look at tax breaks for developers of modest housing rather than increased taxes on luxury housing. Just a thought.
4. The only way to make housing more affordable is for the major employers to leave the state or fall on hard times. When Boeing almost went-under in 1970 (+/-), you could have bought a house by just being willing to assume the payments so the seller could avoid foreclosure and bankruptcy.
5. Libertarian,
I have family that bought that way. Nice deal.
Seattle City Council economics.
Price of Condo + current taxes + new taxes to make it more affordable.
Whiskey Tango Foxtrot
Stein-broke must of skipped ECON 101 at the U-Dub (or flunked), as a result I would like to just which planet this mental giant is living on?
6. Now let's see---we know that the libs LIKE highrises and want to squish us all into them. But we ALSO know that what you tax, you discourage. Just HOW would that work???
7. Gee, if I were a developer and wanted to maximize my profits, I'd make sure all my projects came in at under the cut-off point for additional taxes. Suddenly, all those potential residences don't get built. This creates a home shortage, driving up the prices of those units that do exist.
Economics & business - the subjects democrats flunk.
8. H Moul - if you were a developer, you'd pay the extra $20/sq ft. and pass that cost along to your well-to-do customers (let's be honest here -- anyone considering a highrise downtown is well-to-do). They're talking about an approximate 3.5% increase/sq. ft. for being able to build an extra 10 stories (if not more, considering the 160 ft. height increase) -- well worth any sort of "penalty" you're forced to pay. If, as you suggest, you decide to stop building right at the level of the increased tax, your tenants are now looking at the back of another highrise whose developer decided to pay the extra fee and can now overlook the rest of the city, thus increasing the value of their condo, and decreasing yours.
9. This sounds like typical government blackmail. It is safe to build to the higher level. We have no issues with that higher limit. BUT if you want to build to that higher level and provide more housing the governmnet needs an extra cut.
10. HERE IN TACOMA, THE HERMONIES TO BE ARE ALSO PRESSING FOR "AFFORTABLE HOUSING"...COULD SOMEONE PLEASE EXPLAIN TO ME JUST WHAT IS "AFFORDABLE".
THE AVERAGE HOUSE IN TACOMA IS $250,000...EVEN WITH A LOW DOWN A FAMILY INCOME WOULD NEED TO BE APPROX. $50,000 PER YEAR AT A MINIMUM TO GET A LOAN.
THE AVERAGE HOUSEHOLD INCOME IN TACOMA IS APPROX. $25,000 PER YEAR & 74% OF HOUSEHOLDS MAKE LESS THAN $50,000 PER YEAR. WHICH TRANSLATES INTO ONLY 26% OF TACOMANS CAN AFFORD AN AVERAGE HOUSE IN TACOMA...SO WHAT CAN YOU BUY WITH $25,000 BUCKS...THATS RIGHT NOTHING!!!
WHY IS IT THE JOB OF GOVERNMENT TO BAIL OUT PEOPLE THAT MAKE BAD CHOICES; DONT GET AN EDUCATION, HAVE KIDS OUT OF WEDLOCK,USE DRUGS ECT.
WHAT WE NEED TO CHANGE IS THIS CULTURE OF DEPENDENCY. WE HAVE PROGRAMS FOR DRUG USERS TO GET OFF DRUGS, PROGRAMS TO HELP CRIMINALS GO STRIEGHT, PROGRAMS FOR THIS AND THAT. WHAT IS NEEDED... A PROGRAM TO GET THE GOVERNMENT "MONKEY" OFF THE BACK OF THE SUCKLING SEGMENT OF OUR POULATION!!!
WHEN WILL IT EVER END!!!
11. Tacoma Phlash,
It seems almost universal that people who make poor choice in life almost never acknowledge their responsibilities for making those choice. You've hit upon one of my favorite points in discussing having kids out of wedlock. That is an almost guaranteed ay to end up in poverty.
I don't care if people have children out of wedlock, if that's their choice, but they shold be silling to accept the consequences of that choice. I am not here to pay for their poor decisions.
12. Sorry, I made a few typos in the above post, but I think everyone can understand my meaning.
13. LIBERTARIAN THANK YOU!!!
THE SIMPLE FACTS ARE; IF YOU DO NOT HAVE CHILDREN OUT OF WEDLOCK, FINISH HIGH SCHOOL AND DO NOT USE DRUGS YOU HAVE A 98% CHANCE OF NEVER LIVING IN POVERTY AT ANY TIME IN YOUR LIFE AND THAT IS THE PLAIN TURTH!!! I CAN NOT COMPREHEND WHY THE LEFT REFUSES TO GRASP THIS!!! ITS NOT ROCKET SURGERY!!!
14. From the first paragraph:
If the city raises building heights downtown, Seattle developers stand to reap whopping profits on high-rise condos and can afford to contribute more toward expanding affordable housing, a study released Wednesday found.
A few paragraphs down:
A plan by Mayor Greg Nickels to substantially raise building heights in the Denny Triangle and parts of downtown would slightly enhance developers' bottom lines in some cases, according to the analysis.
It's impossible to take these clowns seriously. Didn't they think through the implications of increased density that their GMA mandates?
15. Washington already has a very expensive afforable housing program. Its called Public Education. If you take advantage of it, you will most likely earn a lot more than $25,000/year over your working years.
16. This act should be renamed "The Full Employment Act for Construction Workers who Want to Work in Downtown Bellevue."
17. couple of evenings ago around 6 pm I passed three piles of puke along Third avenue between university and pike -- plus I was pan-handled once - plus witnessed what was surely a drug deal by three teens -- when I reached the corner of 3rd and pike there was a table with some guy giving away the daily newspapers, two winos pushing each other -- and a motorcycle policeman chasing down an automobile that had made the wrong turn during bus-only time -- only nut cases would pay to own a condo downtown....
18. SOUTH COUNTY...
IN TACOMA, JUST SOUTH OF YOU WE HAVE AN UNEMPLOYMENT RATE TWICE THE NATIONAL AVG.
COULD YOU IMAGINE HOW HI IT WOULD BE IF WE DID NOT HAVE ALL OF THE WORKS PROJECTS; SOUND TRANSIT,NEW CONVENTION CENTER,GLASS MUSEUM, HISTORY & ART MUSEUMS...ALL LOSING MILLIONS OF TAX PAYERS DOLLARS EACH YEAR!
MILLIONS IN 10 YEAR PROPERTY TAX DOLLAR EXCEPTION GIVEN TO DEVOPLERS TO "ENTICE" THEM TO BUILD IN TACOMA.
I THINK EVEN FDR IS ROLLING IN HIS "COLLECTIVE GRAVE:!!!
19. Looks like Mayor Numbskull listened to his crack economic advisors. He must make it a policy to only hire graduates of the Seattle Schools. This is just another grand idea that sounds good on the surface but has the usual tremendous hidden costs. Not to mention the Council of Clueless Ones have yet again way over estimated potential revenues and don't even have an inkling as to the true costs. The new Holly Park was going to be the national model on how hard working citizens would be willing to pay market rates for housing to subsidize their next door welfare neighbor who has no intention of ever getting a real job. Yeah, right.
If the Downtown Dimwits really wanted to make housing affordable, then they should stop jacking up the appraisals that allow them to collect more tax revenue via the property tax without having to ask the voters to approve the increase. Looks like the Mayor and his cronies are sharing the adult beverages with their skid row buddies in Pioneer Square.
20. If you build condos and they fill up, isn't that proof they're affordable?
Take Two: By moving people from other locales and into those aforementioned condos, you take pricing pressure off the former areas with net emigration. That, in itself, makes housing more affordable.
What's amazing is that the Lefties--now clearly understanding that they've spit in the wind for the last 40 years--are resigned to being forced to make decisions like this one (i.e., allowing developers to develop), but they simply can't do it without shaking down the businessperson. Legal graft, I guess. Petty and stupid, too.
21. Affordable housing is a problem with a simple solution: if you can't afford to live in an area, move to a less expensive one.
If an area suffers due to a lack of low income workers, wages will rise. MacDonald's is paying $18/hr in New Orleans.
22. I just keep waiting for the other shoe to drop. Too many people being crowded into too little space. When, oh when are the environmental lobbyist and the affordable housing cooporatives going to insist on limiting population? You know, no new net population growth. Someone dies or moves out, let a new person move in. Price controls on housing, limits on auto ownership, no new impervious surfaces and maybe a BLUE County test to insure that only "right thinking" individuals are accepted into the new collective formerly known as Seattle.
23. I notice Headless Lucy or Uncle Winkz haven't dropped in here.
I guess even they can't find a way to spin this one.
24. Oh, Org Man....that is way too simplistic and logical. Are you implying that McDonald's will not be able to afford staying in NOLA? Let's pass the McDonald's Preservation Act! Where's Gov. Katie Blanca? (Oh, is she still hiding in a closet someplace?)
25. And where does Mr. Peter Stienbrueck live? I bet it's not downtown.
26. This is all part of the master plan to keep the Democrats in power. Since there is zero population growth among Seattle city liberals, they need a way to attract more liberal minded people into the city and this is it. The talking points about "attracting families" to downtown is just putting a spin on it, unless the family was conceived in a test tube ;)
Personally, I could care less what they charge developers or what they build in downtown. If it gets a few more people off the road, fine by me.
27. The funny thing about all this is that Vancouver (BC) did much the same thing in that they encouraged lots of condos. Over time the bigger businesses left (everybody was converting to condos) for the suburbs which made the smaller service businesses leave (restaurants, copy services, etc.) and now their problem is that the tax base is drying up. Condos don't bring in the taxes that businesses do and Vancouver is needing the $$. What now? Raise taxes on all those "well to do" condo owners? There'd be outta there faster than Nickels to a cream puff. Also, if the city wants affordable housing, why not drop fees? I buddy of mine is a builder and he says that taxes and fees (state, county, city) on an average house approach 25K.
28. I don't think Seattle has that same problem. There's more office space there than in Vancouver. But if the city decides that these new condos can be build so high on the new waterfront (when the viaduct comes down) that it blocks out the views from the offices, then it could be [b]trouble[/b].