Slog - Comments on Steinbrueck's New Math http://slog.thestranger.com/2006/02/steinbrueks_new City Council Member Peter Steinbrueck has an alternative proposal to Mayor Nickels's downtown heights plan. Steinbrueck wants developers to put more money toward low-income housing ($20 per square foot Vs. Nickels's $10 per square foot) & he wants higher "Green building" standards than Nickels. However, a study that Steinbrueck commissioned to analyze the competing proposals—which was presented at a council briefing earlier this week—appeared to backfire on Steinbrueck when it showed that under Steinbrueck's plan, the percentage change in land value was a 23 percent decrease, while under Nickels's plan, land value increased 36 percent. Steinbrueck's colleagues—even lefty Nickels antagonists... Copyright 2007 Fri, 17 Feb 2006 13:05:25 -0800 Sun, 19 Feb 2006 09:13:03 -0800 http://www.movabletype.org/?v=3.34 http://blogs.law.harvard.edu/tech/rss Comment by High-Rise Steinbrueck's plan is total BS. Housing affordability is about supply and demand, period. Increasing the cost of housing will reduce the amount of housing that will be created, reducing supply and increasing prices. Increasing the cost of NEW housing downtown will raise the cost of ALL housing downtown (as in a rising tide floating all boats). The amount of additional affordable housing created with Steinbrueck's increased fund will be drowned by the ACROSS-THE-BOARD increases in downtown housing costs as the market equalizes. Now take that money and spend it on public amenities, schools and transportation improvements that will benefit all downtown residents (and therefore the entire region with increased economic vitality), and now that's a reason to support increased impact fees… On another note, Steinbrueck's agitating for increased fees at least has a rational underpinning (although flawed), but what the hell's up with gerrymandering the zone boundaries?

]]> High-Rise http://slog.thestranger.com/2006/02/steinbrueks_new#c019997 http://slog.thestranger.com/2006/02/steinbrueks_new#c019997 Politics Fri, 17 Feb 2006 13:44:44 -0800 Comment by Mr. X Wrong answer, high rise. You tear down $700-900 month apartments in old Belltown buildings to build new luxury towers, and that isn't going to lower the price for anyone unless subsidized units are required (as they are in Vancouver BC and, to a lesser extent, San Francisco).

Reaganomics by another name is still trickle down bullshit.

]]> Mr. X http://slog.thestranger.com/2006/02/steinbrueks_new#c020002 http://slog.thestranger.com/2006/02/steinbrueks_new#c020002 Politics Fri, 17 Feb 2006 14:04:18 -0800 Comment by Josh Feit
The IRR standard is 20%. Steinbrueck's plan hits a 26.3% rate of return. Nickels hit 27.6%. Seems comparable. In the meantime, Steinbrueck guarantees more affordable housing.

And Nickels is the one who's gerrymandering the zone boundaries.

]]> Josh Feit http://slog.thestranger.com/2006/02/steinbrueks_new#c020003 http://slog.thestranger.com/2006/02/steinbrueks_new#c020003 Politics Fri, 17 Feb 2006 14:05:12 -0800 Comment by Emerson Derth No big surprise, Josh, that once again, you miss the point entirely. Now do your job and look into the other flaws in Steinbrueck's plan.

]]> Emerson Derth http://slog.thestranger.com/2006/02/steinbrueks_new#c020010 http://slog.thestranger.com/2006/02/steinbrueks_new#c020010 Politics Fri, 17 Feb 2006 14:23:35 -0800 Comment by Zander Seems to me that both alternatives will be playing to the crickets if the arguement is expressed in wonk-speak of percentage of internal return rate.
I don't see the two proposals as being that far apart from each other.
Simplifying things Steinbrueck would trade some growth for more affordable housing and Nickels trade some affordable housing for more growth.
The dilemma being that our city needs both affordable housing and growth. The two are symbiotic.

]]> Zander http://slog.thestranger.com/2006/02/steinbrueks_new#c020023 http://slog.thestranger.com/2006/02/steinbrueks_new#c020023 Politics Fri, 17 Feb 2006 14:59:54 -0800 Comment by Hire-Rise You can't stop a free market, Mr. X... If you don't add units as demand rises, prices WILL increase. As sad as it may be, tearing down a 20-unit "$700-900 month" building to add a 200 new units (at any price) WILL result in lower overall prices as a result of the increased supply... No single individual is entitled to live in Belltown - The unfortunate reality is that those affordable units may just be located in Kent or Everett. (BTW, screw Reagan.)

]]> Hire-Rise http://slog.thestranger.com/2006/02/steinbrueks_new#c020033 http://slog.thestranger.com/2006/02/steinbrueks_new#c020033 Politics Fri, 17 Feb 2006 15:52:07 -0800 Comment by High-Rise There is no such thing as an IRR standard of 20%. Now many developers/investors may use 20% as a general rule of thumb, but many buildings can and do get built with much lower yields... With conservative enough underwriting, many institutional investors are thrilled to earn a solid mid-teens return. Where else are they going to put all that capital? You can only buy so many US treasuries at 4.85% and still meet the pension fund income requirements to all those baby-boom retirees...

]]> High-Rise http://slog.thestranger.com/2006/02/steinbrueks_new#c020038 http://slog.thestranger.com/2006/02/steinbrueks_new#c020038 Politics Fri, 17 Feb 2006 16:01:36 -0800 Comment by High-Rise Josh, I agree that Nichols has engaged is some gerrymandering of his own. As to my comment here, I'm just mystified as to why we have multiple versions of proposed zone boundaries in play (for example, see the blocks between 6th & 8th and Blanchard & Bell). It just all seems so ARBITRARY to me...

]]> High-Rise http://slog.thestranger.com/2006/02/steinbrueks_new#c020054 http://slog.thestranger.com/2006/02/steinbrueks_new#c020054 Politics Fri, 17 Feb 2006 16:36:14 -0800 Comment by Zander It may seem arbitrary but it is not. There have been countless meetings and drafts to hammer this stuff out.
The area you mention is in what is called DOC2 (Downtown Office Core 2). Most of central downtown is occupied already with big buildings. Building big office towers south is proibited by the Pioneer Square historic district status and the geology of the area. If you go east you hit I-5. To the north Belltown was designated residential decades ago and is fairly well developed. To the Northeast in the Denny Triangle you find both solid ground and the most development potential.
City Hall needs to do a lot more outreach and education for people to get this.

]]> Zander http://slog.thestranger.com/2006/02/steinbrueks_new#c020074 http://slog.thestranger.com/2006/02/steinbrueks_new#c020074 Politics Fri, 17 Feb 2006 17:22:48 -0800 Comment by Mr. X Highrise,

You know what - I'd rather not move to Kent or Everett, and notwithstanding your assertion, has the cost of housing dropped as a result of thousands of new units built in the city in the last 5 years? Maybe if you wanted to live in a new Belltown unit at $1500/month instead of $1800, but it hasn't any difference at all in the availability of $600-900/month units Citywide, except that City policy now actively encourages the demolition of just those sort of units (the multifamily tax exemption, for example, defined affordability as close to $1k/month for a one bedroom - should existing renters and owners of older buildings have to subsidize new units that rent for more than theirs when the tax burden shifts?).

Tear em down, and they're gone forever, and that's just what the sort of thinking you espouse has resulted in for thousands of REAL people who lived and invested in this city long before it was a gleam in some developer assholes eye.

There's nothing sadder than watching purported progressives carrying water for developers.

]]> Mr. X http://slog.thestranger.com/2006/02/steinbrueks_new#c020077 http://slog.thestranger.com/2006/02/steinbrueks_new#c020077 Politics Fri, 17 Feb 2006 18:54:25 -0800 Comment by High-Rise The blocks I've mentioned were DMC 340/400 in Nichols' version (and the EIS) and are DMC 240/400 in Steinbrueck's version... Why? Seems kind of arbitrary to me (unless they're trying to screw Clise, the owner of the majority of this area).

I'm not advocating tearing down affordable apartments - Look out across Denny Triangle and you mostly see a vast area of parking lots and single-story commercial. The more units that can be created here, the better. Not to mention that the new bulk restrictions should have the effect of limiting the total number of new towers, hopefully creating a blend of new, taller buildings divided by lower, existing buildings.

It's not that the cost of housing has fallen with the addition of new units (actually, not as many as some may think were actually delivered 2002-2005 and 2005 in fact saw a net loss of rental units as cheap, affordable rental properties were purchased and converted to condos), it's that prices have RISEN AT A SLOWER RATE than they would have had the new units not been added to the total inventory. Economics 101.

]]> High-Rise http://slog.thestranger.com/2006/02/steinbrueks_new#c020429 http://slog.thestranger.com/2006/02/steinbrueks_new#c020429 Politics Sat, 18 Feb 2006 11:45:25 -0800 Comment by High-Rise In my opinion, developers are unfairly demonized. Who do you think actually creates the housing in which we live? In fact, many of the most beautiful and revered neighborhoods in Seattle are the result of self-serving, speculative development in days gone by.

I'll carry water all day long...

]]> High-Rise http://slog.thestranger.com/2006/02/steinbrueks_new#c020430 http://slog.thestranger.com/2006/02/steinbrueks_new#c020430 Politics Sat, 18 Feb 2006 11:50:39 -0800 Comment by Mr. X If you upzone an existing property, you raise its value - whether or not the owner actually wants to build to the new zoning-and this results in higher property taxes (including on properties that aren't developed) and higher rents. This is the result of a conscious policy choice - not gravity or some other force of nature.

Take NYC - should all of the Lower East Side and the Village be upzoned for maximum density to encourage a bunch of large scale new construction - or is there a value in older buildings that transcends your simplistic supply and demand model?

And, frankly, at the profit margin they are demanding from a publicly approved upzone, developers can go hang as far as I'm concerned.

I don't know if you've noticed, but a whole lot of large (240') buildings are being built downtown under the existing zoning - presumably at a healthy enough profit that the "need" to upzone downtown to encourage development is pure horsepucky.

Building 12,000 units that rent at $2000/month or sell for 500,000 and up rather than building 10,000 of them will have NO effect on the affordability of housing in the city for people like me.

None, nada, zip.

]]> Mr. X http://slog.thestranger.com/2006/02/steinbrueks_new#c020644 http://slog.thestranger.com/2006/02/steinbrueks_new#c020644 Politics Sun, 19 Feb 2006 09:13:03 -0800