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Monday, November 26, 2012

Here's Hoping Developers Do "Overbuild" Ballard

Posted by on Mon, Nov 26, 2012 at 8:06 AM

The Seattle Times sounds the alarm:

Few neighborhoods are being transformed more than Ballard by the apartment-development boom that is exploding across Seattle. And few neighborhoods, say industry analysts, are more likely to get overbuilt. About 1,200 market-rate apartments are under construction in this old Scandinavian enclave, now probably better known for its nightlife than for its Norwegians.

Developers overbuild, they create gluts, and then prices drop. Like the developer says:

It's already 50 percent leased, says Billy Pettit, vice president of investments. And rents so far are averaging nearly $2,000 a month, more than Pillar had projected. But Pettit says he has no illusions about the future. "The data just don't lie," he says. "Eventually, we're going to see increasing vacancies, increasing concessions, decreasing rents."

Overbuilding is one way developers—evil, rotten, no-good, very-bad developers—help create more affordable housing. ("More affordable housing" isn't quite the same thing as "affordable housing." It takes a little time, and they do it by accident, but overbuilding isn't something we should worry about too much. Fight to preserve a neighborhood's character, don't let developers do anything (or tear down anything) they want, but let the motherfuckers overbuild.

 

Comments (35) RSS

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Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn 1
Former Scandinavian enclave.
Posted by Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn http://youtu.be/zu-akdyxpUc on November 26, 2012 at 8:15 AM · Report this
Joe Szilagyi 2
As usual, the Times's article is a bunch of NIMBY scared old white people type fear mongering and really not much of anything else, and as usual the Times offers little to no value for anyone. Let alone their advertisers.

The condensed version of all the presented negatives in the article boil down to just this one sentence:

"Landlords are scared they have to charge less for rent in the future and that more people may buy houses instead."


How stupid do they have to be to even frame this in such a way, when Seattle's population climbs constantly and will not slow down anytime soon? Build now; it will catch up in 1-10 years for occupancy. Meanwhile this becomes a boom in good times and revenue for every single business up and down and around Market Street. There is no downside to this and will end up leaving the area around Ballard as dense as the areas off Broadway are today.

The only losers are the Lesser Seattle people and the present locals who may be opposed to growth. But are the desires of the person who lives in Ballard today worth more or less than the person who is just moving there now, and plans to live there going forward?
Posted by Joe Szilagyi http://twitter.com/joeszi on November 26, 2012 at 8:23 AM · Report this
Looking For a Better Read 3
Starting to see this in West Seattle as well - lots of new apartment buildings recently opened, under construction, and in planning phases.
Posted by Looking For a Better Read on November 26, 2012 at 8:23 AM · Report this
ScrawnyKayaker 4
"Nobody knew they'd be the slums of the future."
Posted by ScrawnyKayaker on November 26, 2012 at 8:25 AM · Report this
5
i hope develoers buy the lots next to dan's place, spend 6-12 monhs evicting the people and biz there, leave it vacant for 6 months, have squatters move in, spend forever in construction because of the glut, have a ton of delays, maybe go bankrupt/foreclosure pnce or twice, have meth freaks start stripping the bits of metal there, and.....

its an extreme example, yes, but not all effects or scenarios of a condo glut are dreamy, and not every forecast of unlimited population growth is real or guaranteed. bubble/burst cycles arent that great for most players in the economy, and not sure why you would cheerlead them blindly.
Posted by Cassette tape fan on November 26, 2012 at 8:51 AM · Report this
Will in Seattle 6
Oh please.

The Eastside will be the "slums of the future".
Posted by Will in Seattle http://www.facebook.com/WillSeattle on November 26, 2012 at 8:51 AM · Report this
7
Between a developer and a NIMBY I'll take the developer every time. Yes, developers try too hard to impress me with words like "luxury" and "granite" (snooze), but the more they build the better my chances of finding an affordable place to live. NIMBYs on the other hand have no answer to my housing dilemma except for me and my generation never to have been born.
Posted by Prettybetsy on November 26, 2012 at 8:51 AM · Report this
8
The solution to high rents isn't fucking development, it's rent control. In what heavily gentrified city has over-development brought down prices to affordable rates? This "rapid development solves all problems" fantasy is starting to get a little silly given what happened in the last five years, don't you think? And the development happening in Ballard isn't all that smart. I see all kinds of shitty zoning decisions, unnecessary demolitions, ugly overpriced buildings, but please keep the fantasy alive. I sincerely hope that one day Capitol Hill is put to the same repricing strategy. I can't wait. Growth is not the solution to all problems, and it's time to put that neoliberal canard to rest.
Posted by Jizzlobber on November 26, 2012 at 9:01 AM · Report this
9
I don't really get the racialization of the argument for or against development. The vast majority of new residents I see buying condos in Ballard are white professionals. I have not seen a big influx of people of color or low-income households, mainly because most of them are fleeing Seattle in the face of gentrification. I'd like to see that issue addressed. Rapid re-development is diversifying Seattle? Why don't you actually prove it?
Posted by Jizzlobber on November 26, 2012 at 9:05 AM · Report this
Joe Szilagyi 10
@5 living down by Roxbury and Westwood I'd be OK with the entirety of the Roxbury/Westwood corridor getting the Ballard and Broadway treatment. Bring it on: it will mean more people, but also:

A) more business to serve those people
B) more transit in the long run
C) more city services--lights, sidewalks
D) more school spending concentrated in the neighborhood
E) A through D bring more culture and life, inevitably
F) my property value rises from demand in the area

I fail to see a downside from any logical or rational point of view. The only downside would be if I like the current sleepy nature of the neighborhood. I do. My block is the quietest block I've ever lived on in my entire life--ever. At night I can look up in the sky and see stars, being isolated and obstructed through hills and effective suburbs from both the city, Westwood, and White Center lights.

I'd trade it in a heartbeat though for A through F.
Posted by Joe Szilagyi http://twitter.com/joeszi on November 26, 2012 at 9:09 AM · Report this
11
And for the record, I work for an agency that does rapid rehousing as part of its overall services, and we don't even bother trying to place families in Seattle anymore. And part of the reason why is the high cost of living/rent, which hasn't abated after decades of re-development. In all seriousness, if you're gonna make this libertarian free-market argument about real estate and pricing (which btw echos the arguments developers have made in NYC against rent control), you need to back that shit up by demonstrating that prices have leveled out. As a person who lives in Ballard and has had his rent raised $150 after just 12 months, I'd say the new development around my place hasn't really caused any depression in local prices. If you're going to make this kind of argument, there are certain empirical hurdles you have to clear. Sure, in some theoretical future the wide availability of housing options will drive down prices, but the only event we've actually seen like this in the last decade is the bursting of the housing bubble, and we all know how well that worked out. Just the invisible hand, I guess.
Posted by Jizzlobber on November 26, 2012 at 9:14 AM · Report this
Joe Szilagyi 12
@8 @9 there is also no downside to rent control, if it's done with sanity. But it's stupid to pretend at the same time like Seattle isn't growing annually. We can't live without the major corridors at a minimum over the next 10-50 years increasing their residential capacity substantially. You'll still have your enclaves of single family homes, but over time you have to sacrifice some traditional areas unless you want to artificially cap the city's population growth through conservative zoning practices.

You either increase the supply of apartments to keep pace with growth or you'll have today's $1000 apartments costing $1800 adjusted for inflation in 20 years.
Posted by Joe Szilagyi http://twitter.com/joeszi on November 26, 2012 at 9:15 AM · Report this
DOUG. 13
Fuck Ballard. A bunch of bike trail obstructionists.
Posted by DOUG. http://www.dougsvotersguide.com on November 26, 2012 at 9:18 AM · Report this
stinkbug 14
This might be a typical NIMBY complaint, but.. there's a new apartment building near me with high (for the area) rents and from what I can tell they haven't rent that many of the units. As a result on the the weekends there are now 30+ A-frame boards on most of the neighborhood corners trying to drum up interest. It's a good example of A-frame boards getting out of control.
Posted by stinkbug on November 26, 2012 at 9:22 AM · Report this
15
#12: I totally agree with everything you're saying. My main gripe with what Dan is saying is that not all this re-development is smart development, and this argument that all development is good all the time obviously doesn't hold up to scrutiny. Sometimes redevelopment actually leads to the loss of services--not all businesses and housing options lost equal more people or more affordability--I've seen buildings housing multiple low-income families demolished for new condo units, with the same number of units, but now unaffordable to the people who had lived there--these were people working service jobs in the city, and they can no longer afford to live near where they work, and that's a problem that development is not solving. I'm glad Ballard has so much development because it means the neighborhood is alive and dynamic (I'd rather have development than a dying neighborhood), but it's not all candy and rainbows. There is a social cost. I also have a beef with Dan's argument because of all the virtues of redevelopment, diversification doesn't actually seem to be one of them. The idea that Seattle is becoming more diverse simply isn't true, and the new developing isn't targeting mixed-income communities. This is not a problem the free market alone can address. To me, the basic thrust of Dan's argument is okay, but the sort of unqualified exaggerated rhetoric he uses (bring it on!) is bad journalism, similar to the overheated claims in the Seattle Times story.
Posted by Jizzlobber on November 26, 2012 at 9:29 AM · Report this
Joe Szilagyi 16
@15 you are a smart cookie. You should really register so your comments aren't buried under the anon Idiot Filter.
Posted by Joe Szilagyi http://twitter.com/joeszi on November 26, 2012 at 9:39 AM · Report this
ScrawnyKayaker 17
@6 That was meant to amuse, not to be a factual statement.

But you may be right, for a change.
Posted by ScrawnyKayaker on November 26, 2012 at 9:43 AM · Report this
Hernandez 18
In the absence of any real plan by the city to bring in actual affordable housing (not the "affordable housing" 80% of the median thing that still prices too many people out of the city), this is what we're left with.
Posted by Hernandez http://hernandezlist.blogspot.com on November 26, 2012 at 9:54 AM · Report this
19
@10 you would not trade it in a heart beat, or you obviously would have already, and moved to an area that matches your a-f.

my complaint is that developers and the building industry have too much power in this city and state, too much influence in poitics. and when things go bad, which they cyclically do, society picks up their tab. we pay for their externalities as well even in the good times.

so there's a lot of smart things we can do to encourage or mandate smart development, and we should invest in mass transit and make smart long term decisions, but it seemed this article was kinda mindless in its cheerleading
Posted by Cassette tape fan on November 26, 2012 at 9:57 AM · Report this
20
@15 Sure, in a better world developers would build the modest, affordable housing units people actually need, and remodel older buildings without displacing low-income tenants. When I said I'd take developers over NIMBYs I was talking about the lesser of two evils. Rent control is nice as far as it goes, but the fundamental problem is that there aren't enough small housing units. To the extent that condos are being built instead of McMansions, that's a positive step.

@18 is right. I don't live in Seattle, but I don't see effective provision of affordable housing anywhere I've been. Rampant condo development, if it displaces single-family housing near transit, is the next best thing, but it's far from ideal.
Posted by Prettybetsy on November 26, 2012 at 10:12 AM · Report this
Joe Szilagyi 21
@19 "you would not trade it in a heart beat, or you obviously would have already, and moved to an area that matches your a-f."

If I could have afforded a $500,000 to $750,000 house at the time I would have moved to (in order)

The neighborhoods east of Broadway, north of Pike/Pine, west of 23rd
Ballard/Market
Green Lake
Central Wallingford
West Seattle Junction
Admiral
Alki

But you take what you can get based on your income and spending ability.
Posted by Joe Szilagyi http://twitter.com/joeszi on November 26, 2012 at 10:18 AM · Report this
22
@19 Yep, developers have too much power. But the only group that has enough juice to fight them in any city where I've lived are NIMBYs, who don't care what happens as long as they never have to look at anything that's not either a detached SFH with driveway and 2-car garage or else a strip mall. That's even worse.
Posted by Prettybetsy on November 26, 2012 at 10:20 AM · Report this
23
There seems to be this sort of blind hope that the market will fix everything. The turning of the screws on urban housing in the last 15 years in Seattle and really any thriving city in the US hasn't exactly let up to a significant degree; of course rental property owners will charge the absolute ceiling of what their customers can afford.

Unfortunately there's a steady supply of "absolute ceiling" people and a metric shitload of people that will have to eat a lot of bread sandwiches to afford those "absolute ceiling" rents who will doubtless move out to Shoreline or Kent instead. Never mind their commutes will be absurd, etc etc. I guess if you want to live in an enclave that's solely comprised of wealthy people (or people up to their eyeballs in debt) that's fine. If you think just building more units will really address this problem I'd recommend a reality check.
Posted by Soldier of Misfortune http://www.youtube.com/watch?v=GQO1qZD5lek on November 26, 2012 at 10:37 AM · Report this
24
close peren, please
Posted by Lack Thereof on November 26, 2012 at 10:40 AM · Report this
25
@21 - Somewhere in the back of my mind I register a faint echo of horror at the idea that 500k-750k is considered "affordable" by anyone but that might be taking this whole discussion off the rails.
Posted by Soldier of Misfortune http://www.youtube.com/watch?v=GQO1qZD5lek on November 26, 2012 at 10:51 AM · Report this
Joe Szilagyi 26
@25, oh, it absolutely is not affordable. My earning power would need to increase at least 3x to 4x to afford those neighborhoods and I'm not exactly poor, while I'm not well off at all--pure lower to central middle class. I'm baffled at who can afford to buy and raise a small family in some of those areas. My only guess is that a good chunk are ones where the parents had the house, and it's paid off, and they passed it on to their kids. Sort of like I'd already in my head thought about. Around the time our house is paid off is probably around when our kid would be having kids himself. It would just make sense to hand it off to him to get a clean start as we piss off to live lazy in a condo or apartment again.
Posted by Joe Szilagyi http://twitter.com/joeszi on November 26, 2012 at 11:13 AM · Report this
27
@11 It takes time for the overbuild-glut-bust cycle to run. We're in the overbuild phase right now, with signs of glut. All those fancy overpriced places are not selling or renting. What that means is that prices will fall, although it may take some developer bankruptcies and foreclosures to make it happen.

Failure to build denser housing than we have now will make affordable housing scarcer in the future, regardless of rent control or other government policy. High prices for housing are the direct and predictable result of insufficient housing relative to the demand for housing. The reason is simple -- those with resources to do so bid up the price. You can throw mud and call me names for pointing that out, but it does not change the underlying patterns of economic behavior related to scarce goods (like housing in Seattle).

Rent control doesn't actually change this -- all it does is render the process opaque and shift the balance to favor resources other than money. In particular, it strongly favors those with the stability to remain in one place for a long time at the (typically ruinous) expense of younger people and new families. The temptation for corruption in such arrangements also becomes intense.
Posted by rocketgeek on November 26, 2012 at 11:27 AM · Report this
28
Back in 1987 right out of college I lived in sleepy little Ballard in a nice five bedroom brick house a few blocks from the beach for less than $500 a month. 87 was a recession not too different from now... excepting this city was LIVABLE then. It's not anymore.

Incomes have not improved all that much from 1990 so I have no idea how young people are surviving. $2000 dollar a month one bedroom apartments are Manhattan rates. Ballard is not god damn Manhattan.

Of course I've benefited immensely from the insane explosion in the housing market as well as it's later contraction because we got lucky (and smart) and timed everything just right.

IOW: I am one of those people who got to buy a home on Capitol Hill cheaply that is now supposedly "worth" 600K. Supposedly.

Our initially luck in buying into real estate was only remotely possible because the rental market was accessible and we could save our money. What is happening here now is not sustainable. Most you kids out there are screwed. Unless this thing crashes again.
Posted by tkc on November 26, 2012 at 11:36 AM · Report this
keshmeshi 29
I'll believe it when I see it. One thing I've learned to count on is landlords keeping units empty rather than suffer the horror of lowering rent by 5-10 percent. Just look at the Horizon Books space as evidence. How long ago was that business kicked out? And it's only now that a new tenant is moving in. There are tons of examples of that just in Ballard; a successful long-lived business loses its lease and it's either supplanted by a failing teriyaki/pho joint or the space sits empty for years.
Posted by keshmeshi on November 26, 2012 at 11:41 AM · Report this
keshmeshi 30
@28,

In fairness, that's not Manhattan rates either, unless maybe you're living in Washington Heights. These days, you can get a microstudio in Manhattan for $2k a month.
Posted by keshmeshi on November 26, 2012 at 11:44 AM · Report this
balderdash 31
Yeah, but in the process, they're turning Ballard into Belltown, and Belltown sucks ass.

:(
Posted by balderdash http://introverse.blogspot.com on November 26, 2012 at 12:05 PM · Report this
32
Rent control and zoning (density) control is a total fucking joke. Take it from a New Yorker.

The result is once you get a rent controlled apartment, you never move, no matter how much better sense it makes for work/love/life. The apartment is NEVER renovated by the landlord because it can not and never will make economic sense. I've seen rent controlled apartments that have not had a new cabinet or bathroom sink in 30+ years. Absolutely filthy. The longer you are there, the more the landlord's incentive to make you leave. If you're crafty, you live in the apartment for a few years, then sublet it out and make a killing each month... until the landlord catches you. In that case it's basically welfare for people who are willing to break the law-- which is to say, welfare for criminals. Etc etc etc. Zoning control? Yeah, that worked out for the West Village... Hm, does Jane Jacob's butcher still live on the same block as his butcher shop? No! All those affordable multifamily townhouses got turned into $8 million single family homes... instead of being torn down and turned into modest 300-unit apartment homes for a new generation of Manhattan workers. Not to mention that zoning/density control has made SROs or cohousing or microapartments illegal... these spaces used to be full of scalawag day-laborers but I can guarantee today they would be full of young, single workers who are in search of just enough affordable housing space instead of a mandated minimum amount well above their needs.

All this noise about "well obviously rampant building hasn't worked" is total horseshit-- because you haven't seen even half of the *volume* OR the *variety* of new building that's needed.

Posted by New_Yorkerrr on November 26, 2012 at 7:23 PM · Report this
33
The non-closed parenthesis in the last paragraph is hurting my eyes, and I can't think of anything else.
Posted by juli81 on November 27, 2012 at 1:55 AM · Report this
34
Maybe by the time I graduate I can afford to live somewhere, then. Although I really hope Ballard doesn't lose its charm.
Posted by mngmay on November 27, 2012 at 9:49 AM · Report this
Tingleyfeeln 35
What's happening in Ballard is an example of the need for density to be seen as a regional issue, not a Seattle issue.
To make this work, we need (like between 20 and 40 years ago) a grade-separate regional transit system. We need this so the suburbs can share more equitably in the burden of density. Being a city, we had a higher density before it became fasionable.

Re @29's post, we need to place a legal limit on how long rental spaces can remain vacant. There is a retail space in Ballard which went vacant nearly 3 years ago, when the landlords, in the middle of a fucking recession, wanted to raise the rents on their long time tenant exorbinately. Guess what, nobody else has taken it, and it's been empty since.
I propose (anyone want to start an initiative?) that there be a limit on how long rental spaces can remain vacant, especially in areas where density makes sense. For retail spaces, after the limit is up, it becomes subject for auction among independant startups. For residential spaces, it becomes elligible for rent controlled spaces, to save on costs of building and maintaining new low-income structures. I have been thinking of this ever since I watched 2 apartments in my building sit vacant for over a year each. I knew what he was doing or hoping to do, but I also have observed enough in the current developments to know that my property is worth less without a neighboring property, which has been passed down through the family to the current owner/resident.
Posted by Tingleyfeeln on November 27, 2012 at 1:23 PM · Report this

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