This argument will never make any sense, that vast resources of the productive wealth — cities — are somehow going to be put under austerity budgets. In today's post-industrial/knowledge economy, land/location is the means of production… 1/
…the store of value that creates wealth and attracts investment of money and energy. We were told the Internet would make it possible to work anywhere, hollowing out the expensive cities. Anyone who has looked at Seattle or SF home prices know didn't pencil out. 2/
People want to be where the action is, to make connections, to build things, and no amount of high-quality video conferencing or fat bandwidth is going to replace that, not even in the Pandemic. So why would you starve the source of your wealth at a time like this? 3/
Can't is right. I learned this from watching Netflix's The Crown when it started…the idea that a job/position has its own agenda, regardless of what the person holding it wants. Does anyone really think @BarackObama wanted to do all the things he had to do in his tenure? 1/
The USA became the world's leading oil producer during his time…did he want that *personally* or was it something the job of POTUS needed to see happen, for the economic strength of the country? A center-right country is not changing course for a temporary change of captains. 2/
The bumper sticker "if the people lead, the leaders will follow" is more accurate than many think: if we want real change it has to come from the bottom, from the voters, putting the right people in office, from city hall to the fed'l gov't. 3/
So how is a 4 million vote margin out of 147 million votes a #blowout? Ask @kingjames if a 75-71 score is a blowout in basketball? If we look at the electoral college, is 306-211 a blowout? Would a (rounded) 31-21 football score be a blowout? 1/
Or to round down further, would a 3-2 baseball score be anything remarkable? No. I get that 4 million is a lot but against 147 million? It's 3%. If you left a 3% tip you'd better run out the door. Would you be happy w a 3% raise? 2/
The bigger question is what did those 71 million voters want? Some thoughtful pieces in the weekend papers with @AOC and @tressiemcphd… I don't think many wanted more family separation or a continuation of the current COVID strategy. What we should ask is what they oppose. 3/
Anyone among my followers who knows scams, specifically money laundering through craigslist (or something like that)? Someone offered to buy something I listed and sent what appears to be a stolen check for 10X the amount…obvs not cashing it.
Bkgd: I offered a bike for sale on CL for $200 and someone replied with a full price offer + $50 to hold it. Said he would send a cashiers check (I should have stopped there but people are weird: why not PayPal/venmo?). Got email from Fedex to expect a package from Florida (!).
Package arrives with a business check — not a cashiers check — for $2,250 from a business in central Michigan. Immediately a text comes in to say the pkg has arrived, followed by an email. Thing is, I sold the bike locally for full price, as I told the scammer I would.
Rent control is one of those ideas, like "term limits," that tells you how much someone has thought about the problem. Not much, it turns out. I wrestled with rent control until I read Progress & Poverty and learned how land value, not shelter rent, is the driver. 1/
We already have term limits: they're called "elections." And anyone who can win, in a fair and equally-funded race, can stay in office as long as their constituents say. But "fair and equally-funded" are where we need to put in some work. The power of incumbency is real. 2/
So with rent control. It looks like an easy fix…limit what landlords can charge for rent. Boom: done. But this completely misses the rising value of land, rising tax assessments, and how that means properties decline or become vacant, as the capped rent doesn't pencil out.
Thought experiment for the urbanists, housing advocates, etc.
If you could buy a house in NE Seattle (98115) for $216k with a $5,000 land rent, forgoing the value of the land or you could pay $500k for both, which would you choose?
If you buy the house and rent the land, you would pay $1,226.42/month vs $1,975.60/month…$750/month that you would spend on any number of other things. Sure, you get more mortgage interest to deduct but is it worth it?
I realize this may not get any traction at all, what with my 800 followers, but maybe some more connecter person can amplify it.
I had heard of this Real Rent idea but never looked into it til now. The idea is that the people who live and work in Seattle (and other places founded on indigenous land) should pay something on top of the pittance granted by treaties, if any. 1/
At first glance it sounds like a fine idea but I think it's like so many of the solutions around inequality and social justice…it misses the point, asks the wrong people to make good on the wrongs of the past. 2/
There is no doubt that everyone who benefits from what Seattle has to offer owes something to those who were here first and were forced to bargain for what was theirs. And we know that the indigenous peoples didn't own land as colonizers and settlers do. 3/
Convo over a Seattle/WA state income tax (vs a local or broader ground rent), it struck me that NYC residents pay multiple income taxes — city, county, state — in the midst of broad inequality and some of the most valuable land in the world. 1/ thebalance.com/new-york-city-…
A deadweight income tax will be gamed or massaged to exclude passive income or larded up with exemptions that ensure never quite achieves the desired outcome. It will raise revenue but the inequality it was meant to address will endure. Look to the postwar history of the US. 2/
Tax high earners and they will leave: wealth confers that kind of flexibility and as they leave, so goes the tax base. The pandemic as well as high local rents is forcing businesses with high earners to allow WFH or to add headcount elsewhere. 3/
A few years ago, Tyrone Beason at the SEATImes wrote a Sunday magazine piece asking if Seattle could hold onto its newfound wealth: the answer was obvious even then… 1/
Betteridge's Law was in full effect, of course. Seattle's wealth is its location, the indoor/outdoor lifestyle — the old climate and access to culture and activities, for those who can afford them. But it is selling that off, by allowing the land to be bid out of reach. 2/
Housing is already affordable: it's land that's expensive. Don't believe it? Look up a home here: blue.kingcounty.com/Assessor/eReal… and look at the assessed value of land vs improvements. Those $600k ramblers? A bargain at $300k, if you didn't have to buy — and finance — the land. 3/
Came to the slow resolution that buying a house (w land) would be like an abolitionist buying slaves back in the day…
Land ownership as a means of keeping housing expensive/out of reach at the intersection of capitalism and white supremacy… 1/
Why own land? The majority of a home purchase (in Seattle, anyway) goes to buy the land which you don't need/can't really use *except* as a wealth store/scarcity token. Privately-held land divides/dilutes civic power and blocks progressive land use policy. 2/
Picture no SFHs on major arterials (25th/35th/15th in the NE) with that land zoned/taxed into dense mixed-used (commercial at the ground, residential above, superblocks/courtyards where possible). But you can't do with every parcel in private hands… 3/
I hear a lot about "affordable housing" in Seattle and other cities that are showing both strong economic growth and a tight housing market. My interrogation of this tells me that without affordable land, affordable housing is a dead letter… 1/ #LVT
Here is the property tax assessment for a modest 4 BR house in NE Seattle…note the price of the land relative to the house. Note how the land gets more expensive, eventually passing the value of the house. But isn't the house all that you want? 2/ #LVT
I mean, what can you do with the land? You can't farm it or mine it. It's zoned residential so you need special permission to run a business out of it. So why buy it? Why take on a much larger mortgage just to own something you can't use except as a place to keep a house? 3/ #LVT
What if operating rents were managed, not at the retail (customer) level but at the wholesale (rentier) level? What if we could make downtown about experiences vs purchases? It would be interesting to see how many people go d/t just to be where something might happen. 2/
Outside of Capitol Hill and a few blocks around Benaroya/SAM what is there downtown after hours? Driving to a function a few months back and all 5 of us, all of us longtime Seattle residents, couldn't remember the last time we had been to the downtown core. 3/
The story isn't that Value Village is closing, it's that the rentiers want more $. What makes that land valuable? The roads leading to it, the neighborhood around it, the increased buying power of local residents, which the rentiers did nothing to bring about. #LVT 1/
Whoever does take on that lease will be sending their checks to Bellevue and from there, who knows? More locally-earned money going right out of the local economy. Seattle's new city council needs to take a hard look at the wealth created by the people who voted for them… 2/
…the value of the land that is paradoxically too expensive to develop but isn't for sale, until that unearned increment reaches the owner's target price. The state's 1% tax rate is too low to cover our needs but just fine for speculators. 3/
This is interesting. A couple of things that came to mind… 1. Costco stores are (almost?) always located in outlying areas/suburbs/exurbs, making car travel a necessity. To make that easier, they sell cheap gas.
2. Part of the big box store model is land — owning that scarce resource and extracting rents from it. Some of these chains hold the land in a separate business unit and rent it back to the retail business (which would seem to prove the value of land rents).
3. Costco stores — as well as other similar chains — are measured in acres, not sq ft. That's a lot of land that could be making money for the people who made it valuable by putting in utilities and building the roads that connect it to its customers.
You get gentrification when whoever owns the land decides to cash out on the increased value (if it's a rental) or when the land value pushes the taxes so high, the owner has no choice but to sell. The cost to hold land is low for speculators but high for working folks. 2/
The solution is to control who reaps the benefits of those increased land values. Either through ownership — where all land is publicly-owned and rented to homeowners and business alike — or through a land use tax that recoups that value for the investors…the taxpayers. 3/
There is something to this but *local* concentrated wealth — land values and the reaping of wealth by property owners — is a factor. Housing inequality starts with low costs to hold/high costs to acquire land for development. 1/
20% of Seattle's precious single family homes are rentals: that keeps prices higher through scarcity and rewards owners. 1% property tax makes land cheap to hold and the red-hot economy's demand makes land more valuable each year. 2/
We can talk all day long about new programs to develop affordable housing but without affordable *land* we're just wasting time. A parcel that sells for $1M zoned for 10 units means each unit has a $100k basis before the first shovel of dirt is turned over. 3/
A thought experiment, using a piece of disused land and a land value tax model. This graffiti exhibit is in front of a disused business, currently being demolished at a glacial pace. Last I looked it up, it was assessed at $2M for the land and the building was a write-off. 1/
So $2M for the land, before you can do anything with it. Note that it is zoned for 18 units and 26 parking spaces. At 18 units, the developer is already at $111K per unit before she turns over a shovel of dirt or drives the first nail. 2/
And 26 parking spaces eats into the developable footprint, making it smaller and perhaps making the units smaller, since their sale price needs to cover that initial $111k cost. So what can be done about that? 3/
As long as people's wealth is tied up in their home values (and longterm Seattle homeowners have seen it pile up over the past 10-10 years) I don't see anything changing. They will vote in a corporatist city council if it preserves/expands the value of their property… 1/
…by importing more high-wage workers and allowing them to set higher rents or sell for bigger sums. I think a land value tax/location fee with zoning changes (some of which are in place, I think) that drives density and puts disused land back to work should be considered. 2/
I wonder how many of these so-called progressives have traveled to Paris or London and marveled at the street life and convenience but never considered adding that to their hometowns? The city of Paris — 2M people and all that culture and life — fits in the N half of Seattle…3/
Coming back to this as a compelling argument for a land rent/land value tax on *all* commercial real estate in Seattle. Rentiers have been siphoning off wages for too long. Collectively, their holdings might dwarf everyone's fave villain, Jeff Bezos. @cmkshama? @CMTMosqueda? 1/
The rentier makes money while he sleeps, as Adam Smith said 240 years ago…the value of the land in Seattle in a function of the people who live/invest in it. It's not even good for business: you can't sell overpriced land and your business might not cover your 1% taxes. 2/
A parcel of land might have doubled or tripled in value, along with the property taxes. Good news if you can find a buyer, not good if you want to keep your business or if you waited too long to get out…vacant parcels don't make any money beyond taxes — no jobs, no sales tax. 3/
Seattle's business and politics communities (is that 2 things? Or just 1?) are at loggerheads over wages and inequality, and we still hear arguments that raising the minimum wage kills business, despite evidence that proves the opposite — that good wages are good for business.
But what if instead raising wages, these two (?) camps looked at why higher wages are needed — the cost of living, ie shelter costs? Rents will simply rise with wages, as we already see. Why not look into that? Where is that money going? Into the local economy? Or nah?
I don't hear anyone in city council or city hall talking about this. Even as we see Seattle's housing authority selling off valuable tracts of land — to the private sector rather developing them for public benefit — we hear nothing but lip service to the monied interests.