paulbeard Profile picture
Apr 7, 2018 20 tweets 5 min read Twitter logo Read on Twitter
Ran an errand on foot — the best way to see a city — and I noted more business closings along a major highway inside the Seattle city limits. More open spaces/brownfields/derelict buildings to show off, I guess.
So what's the cause? High taxes/costs of doing business? Given that property taxes along that stretch are about 1% of property values, is that reasonable?
The parcel I noticed is valued at $610,000 for about 12,197 ft^2. Call me Kreskin but my guess was that the taxes would be about $6,000 (1%) and they are in fact $6,895.20.
Another recently vacated parcel 2 blocks away (22,079 ft^2) is valued at $1,966,000: taxes are $21,296.97 — 1.1% of assessed value. So what's happening here?
Recall an earlier example where my favorite local tool store is complaining about paying $30,000 in taxes on real estate valued at $3,000,000 that they have held for almost 100 years.
Can they not make enough to cover those taxes? If some other cost — say, wholesale costs, due to tariffs(!) — went up, would we be expected to feel sorry for them? No. No one is owed a living, as we heard for 40 years now.
If the taxes are too high to cover the costs, maybe it does make sense to move. But perhaps the taxes are actually *too low* for the value of that land, given its location. The last thing we need is another low-rise or street level retail location with required parking.
What if commercial property tax rates along a busy corridor or in a highly-trafficked were higher, maybe 5 or 10% of the assessed value? We make land more expensive to keep and less expensive to acquire, as speculators cash out in favor of developers and commercial enterprise.
The net effect should put more land into productive use, as the costs of holding it go up. And it should make the developments more dense, as developers need to find ways to make those costs pencil out.
Instead of a retail store or low-rise apartments, a retail store, office space above, and several floors of flats. All of those properties would contribute to paying the higher land tax. We get the density we need with lower housing costs.
If that $2 million parcel was turned into a street level retail, with some other business (professional services) above and then 20 or more residential units, and the taxes were doubled, could that mixed tax base cover it?
The old retail location paid $21k: maybe a new retailer would pay half that, with the floor above paying the same with the residential units paying the balance. $42,000 in taxes, $22k paid by business, $20k by homeowners/tenants: more revenue, higher density, lower rents.
Do that for the other vacant parcels — I count 4 of them in a few blocks — and then look at rezoning/up-rating the car dealer lots and other low-rise businesses that benefit from Seattle's modern growth at rates that are out of date.
A 41,595 ft^2 parcel — almost an acre, largely undeveloped — just up the street is valued at $2,288,700. Almost twice the size of one cited above and taxed at $27,506.41. Another vacant parcel, 30,289 ft^2, valued at $1,514,400, assessed $18,576.29 in taxes.
How about a retail storage facility, aka hoarders den? How many jobs does a place like that create? How much local revenue is generated from one of those?
Here's one valued at $8,743,500 for 55,418 ft^2 — 1.27 acres — paying $88,354.11, with an out of state owner. The rents and other charges go out of state: Seattle gets the property taxes and the wages paid into the local economy.
We are not going to get the density and development we need by making it easy to hoard and speculate in land at the expense of working people. If this city is so desirable a place to live and work, the land values should reflect that.
Land should be taxed based on its productive use, not hoarded for its extractive value, and the prices lowered to get it into the hands of those who will put it to use. We need a productive economy, not an extractive one.
Location, location, location, they tell us. Time for cities to take that into account, not just realtors. Cities should lead the way with rezoning/up-rating specific areas that are underdeveloped/undervalued, then roll it out across the city and urge King County to follow suit.

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More from @paulbeard

Jul 25, 2018
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/
Read 7 tweets
Jul 19, 2018
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.
Read 17 tweets
Jun 30, 2018
"Seattle must preserve single-family neighborhoods that are essential to its livability, character and economic success."

Why? Is there any evidence you can't have a livable, economically vibrant city without single family homes?…
Is there a counterproposition here? Or is this just opposition for its own sake, "Ni shagu nazad" on behalf of property owners who simultaneously carp about their 1% property taxes while crowing about their property value?
"[I]t would create tremendous uncertainty for 300,000 mostly middle-class residents supporting the city through homeownership, removing certainty about the neighborhood and city they bought into." and what of those who are priced out of *any* home?
Read 11 tweets
Jun 12, 2018
Seattle City Council to consider repeal of head tax less than a month after approving it… | Of course. The previous mayor sent an apology to Amazon (not a person, a corporation) in case its hurt feelings were why it launched its HQ2 search.
"Seattle hates business!1!" say the pundits and online commenters but that's hard to substantiate when a city government caves so quickly. At the very least, they could have used the head tax as leverage: work with us on something better or we go with what we have.
I still think about the Seattle Times magazine cover story a few months back — "Can Seattle Handle Prosperity?" Betteridge's Law tells us that any headline framed as a question can be answered with "no." And it applies here. Seattle has had 20 years to figure this out.
Read 6 tweets
May 16, 2018… | If Amazon left — took all it's 45000 workers making a median of $110k/yr with it — would we notice?
How is Amazon's presence felt in Seattle? Would they close their stores? Hmm, they don't have any. Would they shut down charitable giving? Is there any to speak of?
I suppose we would see a slump in real estate prices and lots of office vacancies. Seems like that should be problem for the real estate/development business, the same people who have profited mightily from rising land costs but have stymied development of affordable housing.
Read 10 tweets
May 13, 2018
So in the midst of all this talk about a need for affordable housing, I learn that the Seattle Housing Authority (!) is selling (!!) 4.5 acres of land […]. Why sell it?
Why not exchange the right to use the property, as an owner would get if they bought the land, in exchange for land rent? Why should the income derived from the land's value go to some overseas or out of state real estate speculator when it could stay here in Seattle?
Why is that land as valuable as it is? Because of its location, as the realtors remind us. The ads will read "close to the heart of everything" or something like it. And who built everything? Everyone who lives here. The roads, the homes and businesses, the utilities…
Read 19 tweets

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