Manhattan
I just got back from an amazing 5 day trip in Manhattan (stayed in Time Square at a friends apt thats working on the new FOX Business Channel starting 10.15.07). The Real Estate development in Manhattan is truly incredible and opened my eyes to how density there is an understatement.
What Seattle needs to do to be a "World Class City" is to develop the land to its fullest extent. The market will dictate what is built. If luxury condos provide the most utility for that piece of land, ta da! However once the market is saturated (or oversaturated) the developers will start to build mid and lower class condos/houses. As for Commercial buildings, the same concept applies. There are currently 15 construction cranes in Bellevue and about the same in downtown Seattle...
Over the past few years we have seen Rents rise at a dramatic rate for a variety of reasons, thus if we build more housing the monthly cost will decline (or moderate) over time. Commercial Rental rates have almost doubled in the past 4 years (a friends companys space did). The most efficient way for housing prices to decline is through overbuilding and causing prices to decline to the point where the market absorbs the new supply (may take several years).
Are Real Estate prices overvalued in Seattle at this time, probably, but doesnt mean they will actually realize a large decline. As long as the market has more DEMAND than SUPPLY for condos/housing downtown Seattle/Bellevue we will see prices at their current levels. As construction on our roads and infrastructure are revamped the commute times will skyrocket and people will be willing to sell a kidney to live close to work, which is why I bought a condo in downtown Seattle (98101). My new commute starting later this month will be a 5 min walk to work (or 6 blocks), woo hoo!
What Seattle needs to do to be a "World Class City" is to develop the land to its fullest extent. The market will dictate what is built. If luxury condos provide the most utility for that piece of land, ta da! However once the market is saturated (or oversaturated) the developers will start to build mid and lower class condos/houses. As for Commercial buildings, the same concept applies. There are currently 15 construction cranes in Bellevue and about the same in downtown Seattle...
Over the past few years we have seen Rents rise at a dramatic rate for a variety of reasons, thus if we build more housing the monthly cost will decline (or moderate) over time. Commercial Rental rates have almost doubled in the past 4 years (a friends companys space did). The most efficient way for housing prices to decline is through overbuilding and causing prices to decline to the point where the market absorbs the new supply (may take several years).
Are Real Estate prices overvalued in Seattle at this time, probably, but doesnt mean they will actually realize a large decline. As long as the market has more DEMAND than SUPPLY for condos/housing downtown Seattle/Bellevue we will see prices at their current levels. As construction on our roads and infrastructure are revamped the commute times will skyrocket and people will be willing to sell a kidney to live close to work, which is why I bought a condo in downtown Seattle (98101). My new commute starting later this month will be a 5 min walk to work (or 6 blocks), woo hoo!
Comments
Here's my rant. The majority of our problems are caused by cars. I'm not even talking about global warming here. We buy big houses we don't need in suburbs that are all identical so we can drive a car we can't afford to a job we don't like! It's insane!
If the cost of driving were high enough, it word force more dense and smaller cities. This would make mass transportation truly economical. But here in Seattle, everybody is in love with their SUV, which they must have in case they decide to drive up to a mountain next year some time.
That's not the whole rant, but I'll leave it at that for now. The point is Finance, for once I agree with you. Density is what's appropriate. This region is just too lazy and spoiled to even try.
BOO-YAH!
I agree with Rose-colored... Seattle will never be in the same league as NYC without quality public transportation. You can go anywhere in NYC, to all 5 burroughs, in a matter of minutes.
You can't even go from Pioneer square to Belltown in under 30 min at 2 am without getting lucky and finding a cab.
My basic assertion is that suburbs are perhaps the stupidest decision this country has every made. Think of the trillions of dollars which are tied into suburban housing, the low density sprawling roads to service those houses, the clogged interstates to get those people to their jobs, and the retail jobs which pop up near each suburb for convenience. That money dwarfs the national debt!
Then think about the messed up lifestyle we get into. Yes, there are jobs in the suburbs horray! All that means is people don't know where their job will be related to where they live. So not only do we have people living in Everett so they can commute to Seattle, but we have people living in Seattle so they can commute to Everett. It is the very definition of insanity.
And guess what! It doesn't have to be this way. It's hard to change now, because we have 50 years of momentum, but eventually I'm sure we'll come around to a more European model of development.
Again, I believe a much better model is to have small dense cities (pop approx 50,000 - 100,000) with great parks (and lots of them). The land that isn't city can be zoned for residential, but minimum lot sizes need to be like 10 acres. This type of design maximizes green areas, provides reasonable land usage for those who want more property, minimizes commute times, and optimizes services like police and fire service.
Or, we could keep doing what we're doing now until we turn into LA...the crappiest city in USA not named Detroit or New Orleans.
I love the mountains and grew up in the small town of Pullman and get out in the wilderness as much as possible. However, allowing the city to become very dense creates the ability to reduce urban sprall and preserve the outlining suburban environment. I actually like the Eastside and spend a lot of time over there! Currently I live in Seattle because it is close to work & school.
Same reason I live in Lake Hills, because I work in Redmond. Once that leash is broken, you can have your ultra-dense urban sardine can living. I'll move to the mountains.
I don't actually like sardine can living any more than the next guy. I guess my point is that most of the suburbs are like living in a paint can instead of a tuna can. So if you're going to be living in a can, at least let's try to get some other advantage out of it. Instead, people act like they are living in a refrigerator box when it's just a larger can. :twisted:
Is it your plan to demolish most of Seattle proper? We've got about six times your desired population level. And since when is this the "European" model? Been to London or Paris lately?
I'll give you one thing: governments have spent more than 50 years subsidizing the current model, which has certainly created lots of unnecessary car traffic.
LA is the most densely populated metro area in the US. I always find it amusing when someone beats the drums for higher density and bashes LA at the same time.
Yes, LA is densely populated in the same way that New Jersey is the most densely populated state. And no I am not advocating destruction of Seattle. We should make changes the only way we ever make significant changes in this country. The government should tax things we don't want, in favor of things we do want.
For example, the state could increase property taxes for anyone not living within X miles of a light rail line. We could increase taxes on gasoline. We could reduce property taxes for people living in city limits of cities meeting certain criteria. If the value of the taxes and the credits are determined correctly, then over time you can solve the problem. Don't get me wrong, it might take 40 years to fix, but then it's taken longer than that to cause.
On second thought, why don't we all just get indignant whenever someone suggests a new idea. Let's just wave it off because we don't really understand it and because we are uncomfortable with change.
I'm sorry, but you have a misconception of what drives people to the suburbs in the first place. Namely, the desire to own a home they can afford. If there were a glut of cheap homes closer to downtown, people would buy them before those in other areas. But as most people want to live in those areas, demand drives up the price. This will always be the case, all other things being equal. This creates a market for homes that are cheaper, but not as close. Even if you tore down six square blocks of prime location and built nothing but high-rise condos on the same property, the price for those units would be based on demand. There is no evidence that a 3/2 condo will be priced low enough that a 3/2 house in the same neighborhood won't be more desireable. The lowest price for a condo in a multi-story building in downtown Seattle starts at $558k and goes up from there. You can get a house with a hot tub and a deck in Queen Anne for less than $500k. Which do you think is going to sell first? If people can get a home for $100k less by driving for 30 minutes in any direction, there is nothing that is going to prevent them from buying one.
While it would be nice if the builders declined to allow the market to decide the price, there is no incentive large enough to overcome free market pressures. Even the government needs property values to be as high as possible to provide the resulting tax revenue. If they make more from high priced highrises versus low price highrises, where is the incentive for them to artificially restrict the market? Shall we have the government build the highrises? If you think they should, I'd invite you to go check out the "projects" in any major city and tell me how that plan worked out.
Better yet, why don't we get all just get indignant whenever someone proposes use of governement and taxes that not only has no chance of working, but is actually going to punish those on the lower end of the economic scale. Raising gas taxes? Really? Who pays more as a percentage of their income, the commuter heading for Redmond or the guy living on $25k a year? Higher taxes on those with no light rail within close (walking?) distance, lower taxes for entire cities with higher density? How do you pay the cost of building and maintaining that infrastructure when you cut your own income? How are you going to prevent people from moving across the county line to avoid being penalized for trying to save money?
You're only going to see this among lower wage earners. An additional $100K on the purchase price would add roughly $800 to the monthly payment. If you add an hour to ones commute every day that is 22 hours/month and anyone earning more than $36/hr would be losing money opting for the longer commute.
True, but there is also a psychological difference that has to included in that calculation. All things being equal, a home will always be preferred over a condo. Also, the difference in a standard 20% down payment has to be factored in to the equation. $20,000 dollars will be a larger factor for the lower income range than for those above the median income, but it will still be a factor.
Eventually the demand for houses in the central location will drive the divide in prices until the suburbs become a better deal than urban highrises.
On your analysis of why and what is built due to market forces is 100% correct. Why would a developer (yes I used the D-word) want to build a mid or lower priced building if it yielded a lower profit margin. Will there be a point where Seattle is saturated with luxury condos, NEVER...jk, of course there will.
At that time it may be easier/less hassle/more profitable to build mid priced condos. Until then the market will dictate what goes up & where. This is a good thing as a whole for the economy as it increases the tax base, then evenutally if the luxury market slumps/crashes the condos will techincally become mid priced, lol.
Actually, it's quite simple. You raise taxes on things considered undesirable, and subsidize things considered desirable. This is how our government works. They can't force anyone to do anything, so they provide economic incentive. Sin taxes are one example, and a private sector example are carbon offsets.
So do I support punishing poor people? NO! If we raise the gas tax, we use the extra money that throws off to subsidize preferable things like the busing system. We increase the frequency of buses or lower the ticket price. If we penalize inhabitants of cities with bad infrastructure, that money can go into a general fund used to fix the very problem being penalized.
You're jumping to conclusions about what I think causes people to take certain actions. Price certainly may play a role in why people choose Renton over Kirkland, because property sizes in each city are comparable, but desirability (hence price) are very different. I, however, do not think the decision is that simple. I think most people know they can afford $X, within that budget, they want short commute, good schools, safe neighborhood, some kind of yard space, convenient retail outlets, etc.
So how do people decide among all those choices? How much is a good school worth? How about an extra hour commute a day? How about Bellevue safety as opposed to Ballard safety? Everybody has their prices for each of these qualities, and if you don't think taxes and subsidies can offset some decisions, then you're naive.
I think I have a better idea.
For electricity and water, I am charged more per unit if I use a lot. Gasoline should be the same way.
Put a tax on gasoline. Collect all of the tax and distribute it equally among the citizens.
People who drive 10 mpg SUVs all of the time may spend $500/month on gas and get back $50/month.
People who drive a Honda Civic may spend $120/month on gas and get back $50/month.
People who drive a hybrid may spend $60/month on gas and get back $50/month.
People who ride their bike everywhere may spend $0/month on gas and get back $50/month (which they can spend on their bike).
How would this impact businesses that drive significantly due to shipping/receiving that require large consumption...they wouldnt pass those additional costs along to consumers, ah ya.
The only way this would possibly work is if you had to pay less/more DMV taxes on your car...oh wait they alreay do that in WA state!
I like that idea too. I think any solution which starts with charging consumption, and ends with taking all the tax and distributing it in some 'fair' way is feasible. The reason taxes like this are always voted down is they are billed as another way for the government to skim off the top. What's good about your idea is that $$$ coming back to people might make them more likely to actually support such a tax, which makes it more politically feasible.
Maybe. I think that point is debatable. It is a common argument from the right against all government programs.
My broad brush stroke idea is to charge it at the pump. But I want businesses to pay this too. I don't want FedEx to ship in their own fuel from Canada or buy directly from the refinery to save money. FedEx should have to pay that tax too.
You got it. FedEx passes the increased costs directly to the consumer. The money collected from FedEx is distributed evenly across the people (not sure how that works either -- again broad brush stroke here -- but GWB did distribute a $300 refund to everyone who paid income tax so that idea is feasable). People who use FedEx a lot end up paying indirectly for the gasoline used by FedEx. Then they get their rebate just like everyone else. You don't have to use gasoline directly to use it. The more you use directly or indirectly the more you pay.
This does put American business on an uneven footing when exporting products. Exports should get some sort of rebate on the fuel used to produce and ship that export. That is the stickiest part of the idea. Any ideas I have on how to do that seem open to abuse.
I'm not sure I follow your train of thought there.
Yes, taxes and subsidies can make a difference. But the amounts you would need to spend to achieve your desired result cannot be obtained without a huge increase in tax revenues. The way you propose to finance it is by tax hikes. With your proposed tax credits/incentives, you have to raise taxes even higher to offset the loss. The effects on the local economy would be so negative that the very people you think need this "help" would be the ones most hurt by it.
Raising gas taxes, for example, to force people to use the bus ignores the fact that people choose to drive *despite* the availablity of mass transit. There are currently enough routes and buses to handle the current mass transit need, based on demand. Conversly, if there was a huge demand for mass transit, there would be more routes, and more buses. So why are people not taking these buses? It's certainly cheaper than driving today. And yet, people still drive. Until you can explain why that is occuring, you have no chance of finding a "solution" that doesn't involve draconian measures on the part of the governement.
I'm not trying to pick a fight. You have a faith in government to achieve things that you see as desireable. I don't share that faith or that view. You started your "rant" with the assumption that urban density is a good thing and that we are just too "lazy and spoiled" to live any other way. I, and others, have pointed out that your assumption just doesn't fit the facts. You seem to think this is based in intolerance and indignation. I don't see that. I see people examining your assertions and refuting them. And I see you getting offended by that. I'm not trying to offend you. I just don't agree with you. That doesn't make me naive.
Questions: Does FedEx also get a share of this rebate? I know you wrote that they get to pass on the increased tax directly to consumers, but what about the cost passed onto them by their suppliers? Are governmental agencies exempt from the tax? What about producers and transporters of the gasoline?
The idea is intriguing, if it replaces current gas taxes. But the devil is in the details.
I don't know. I haven't considered that. What do you see as the ramifications of that decision?
Again, I don't know. Where do you collect the tax? The refineries? The pump? I'm probably not qualified to write the real bill on this thing.
I agree.
I also am not trying to pick a fight. I did not see any valid proof that my assertions were wrong. The only concrete 'proof' was that LA is densely populated, but LA is also one of the most paved cities in the world. Everything else was just speculation against speculation. I'm just trying to expand the discussion to include ideas that I believe most people have not even considered. Finally, I have about as little faith in government as the next guy, but some decisions MUST be made collectively and cannot be made optimally by a free market! The reason is collusion.
Here's the proof. Following is a road diagram, which I hope looks OK in everyone's browser:
A \ 1 -------- / \ B ------------- C 2Here's the explanation. Four people live at A, two people live at B, and they all work at C. The people at A must take the upper path, but the people at B may choose either path. The time to travel a path (1 or 2) is its number times the number of commuters taking that road that day. The game theory is, which path do those living at B take?So if both B residents take the lower path, it takes them 4 (minutes) to commute, and it takes A 4 (minutes). The average commute time for a B person is 4 (minutes), and the summed commute time of everyone is 24 (minutes). If one of the Bs decides to take the upper path, then it takes him and the A people 5 (minutes), but it only takes the other B person 2 minutes to commute. The average B commute now takes 7/2 (minutes), but the summed commute time has risen to 27 (minutes).
This is not a real-world example, but it proves that collusion (between people at
Well, consider the currently governmental uses of refined crude oil in transportation. Fire engines, police cars, "public" buses, helicopters, planes, boats, emergency generators, maintenance vehicles of all kinds and functions. If their "costs" are passed on to the consumer in the form of additional taxes, then it comes out of your own pocket. If you give government a free pass on that tax, you remove a sizable chunk from the pool of the overall available rebate. Either way, the public ends up subsidizing the governments use of fuel. But given a choice, I'd rather they got a pass; it's less likely to distort the rebate bicyclists would receive. If the pedal-pushers have to pay higher taxes for not using fuel, it invalidates the "fairness" of the overall tax. Granted, it's probably a difference of pennies, but it's the principle of the matter that gets debated and spun.
Speaking of spin...*puts on the Devil's Advocate hat*... what's the point? Why place a consumption tax on gasoline? Is this going to replace (my guess is "no", since you stated "zero sum" earlier) all the other transportation taxes?Since I already pay multiple fees/taxes/charges to Federal, State, and Local governments, why should I agree to vote for another tax that is just going to be an environmentalist Robin Hood scheme? Why are you penalizing me for earning a living and supporting my family? Why should I subsidize some poor schmuck who only drives back and forth to the welfare office (with a few short runs to the crack dealer)? Why are you giving my money to someone dead beat that lost their car to foreclosure? Sure he bought gas for six weeks, but why is he getting a full share rebate since he'd be walking anyway?
And we haven't even scratched the surface of possible objections. You mentioned the cost of a new govenment program being a fave point of the right, but based on recent history, there is good reason for that. How many taxes have been enacted under the premise of eventually being lifted, but are still in place long after their projected "sunset"? 2% Hotel tax anyone? What happens when a "budget" crunch forces the use of that tax revenue? What if some tries to revive the monorail project with all of that cash flow?
This thread has drifted off topic, so I'm just going to get right to the heart of this "cars are bad" train of thought that started this: Mass transit, even housing density issues, won't truly happen until it becomes profitable for the companies who provide those services. If the government has to subsidize a company to keep it operating, then it's clearly not a viable business model. Mass transit in the large eastern cities grew as the city grew, and was almost entirely financed by private industry. It also pre-dates a pretty signifigant advance in the United States: the car. The first mass transit rail lines in New York were built in the 1880s. The model T started production in 1908. The population in New York City in 1880 was 1.9 Million, the same year the total population in King County was.... 6910. In Los Angeles, it was 11,000. By the time these areas had any population pressure at all, the car was the cheapest form of transportation for many people. Paved roads were cheaper per mile than railroads, and they remain so, which is why they were preferred over mass transit in growing cities with no existing infrastructure.
I'll leave it at this: In 1923 alone, the Brooklyn-Manhattan Transit Corporation spent $300 million on construction, operation, and maintenance of 502 miles of mass transit tracks and some feeder bus lines. Converted to todays currency...~$3.5 Billion. Sound Transit's proposed price for construction of light rail? $10.2 Billion over 28 years, according to their recent base case forecast, for 69 total miles. Oddly missing from the forecast is the projected number of riders.
*Disclosure: I ride my bike everywhere I go, and my wife takes the bus to work most days. We use ~20 gallons of gas a month between 2 cars.
Well, I never made that claim, so quit trying to reframe the argument. I said I had no faith in government. And your theory of collusion can just as easily be applied to government, turning road "1" into an HOV-lane and increasing the commute to 30 minutes for everyone
See my previous post for the refutation that we are "lazy and spoiled". Your original assumption as to cause and effect is completely backwards.