Seattle Will Soon Follow Vancouver BC in the Prestige State of Luxury Buildings


These will create quite a spectacle toppling when The Big One hits.
Shake, Rattle and Roll.
@2, +
@2 prove it.

Not your general idea, but the specifics of it. Gimme a budget where poverty stricken developers have to forego basic needs in order to pay fat construction workers. Numbers.

The devil is always in the details.
So, when does anyone build unless there is a profit for their work, higher profits for upscale real estate? Would you turn it down? Yes! All future housing built as of January 1st 2018 is for low income housing only and it includes all those currently under construction. This will turn the tide.
@2, @3, @5: In a post about new homes where Charles Mudede uses "prestige" eight times and "luxury" thrice -- including one of each in the title! -- your three comments list luxury and prestige exactly *zero* times as a possible cause of higher housing prices. It's reassuring to know that basic reading comprehension can still leisurely inflict upon you exactly the kind of abjectly humiliating butt-kicking it always used to bring during those long-ago decades, before the genie of social promotion freed you from the iron grip of elementary school.

@2, you get bonus points for putting the word used to justify higher minimum wages, living wage, in scare quotes and attributing it to inflating the earnings of construction workers(!). Thanks to the booming economy which has followed years of liberal policies, Seattle is chock-full of construction workers these days. How about you tell a group of them they are overpaid, because of higher minimum wages? Of the many great benefits -- your abject humiliation again being one of them -- we wouldn't have your idiotic drivel to read here anymore. (Hey, it would be merely the last of the great sacrifices you gladly made to bring your great economic knowledge to our befuddled masses, right?)
That BIG project is just bat-shit ugly.
@7 +1
@2 is right in that the costs of land, construction etc. drive the kind of construction that a developer has to do to stay in business. Not that workers should not be paid a living wage (they should, which results in more spending that creates more jobs etc.).

But when single-family lots cost upwards of $500k, and land zoned multi-family is more expensive than that, there's no way that anyone can build affordable (= substantially cheaper than market rate) and make a go of it. If we want housing that is really priced way under market, we need to construct it for that purpose and realize that we are going to have to put in money from somewhere to do it. The $100M that the city is now putting into new apartment buildings is a good start. It's very unrealistic to expect developers/landlords to forgo making a profit or even take a loss in order to provide housing at below-market rates.

Allowing upzones that increase the supply of land for multi-family housing would be a great way to address this. If such sites are less scarce, price pressure on them will ease.
What the simpletons don't understand is that 'affordable' is the same as 'market rate."

What?! (I know, shocking).

Housing is being sold/rented today for prices that the market is willing to pay. Ergo, affordable to enough people. (And yes, developers will over-estimate the market in speculation and build too much, or expect too much, and then it falls. Don't get overly excited kids. That's just a market.)

That doesn't mean rents are 'affordable' with respect to everyone's current paycheck or level of comfort, but at 2.5% unemployment, clearly there are other career alternatives that can increase wage-earnings – and with it 'affordability.' (The fact that people don't want to change jobs means its not a housing problem, it's a personal choice challenge.)

That some people don't want to pay as much for rent as other people isn't a lack of "affordability," it's just a matter of preference and choice. For example, Mudede either a) would prefer NOT to pay as much as the market demands for rent, OR; b) Would rather choose to be screed for the Stranger than do a job that makes larger rent a smaller share of Mudede's income.

There isn't public affordability crisis. This is a constellation of individuals with a personal choice crisis.

Don't expect a public subsidy for personal stupidity and/or complacency.
@6, troll. Present an argument, show your references. You don't present an argument, then demand your opponent provide references. That, and you are idiotic.

So, to the right wingers, why does that plot of land cost $500k?

Charles' point is that land as well as building costs go up because of a speculation bubble. Speculation bubbles happen because there's a lot of capital that gamblers want to gamble with, and Seattle seems like a place to get quick returns. This drives competition for room at the table, which raises prices, which makes this table seem even more lucrative, fueling a bubble.

The article is saying that the price of things, such as land, has increased the ante enough that developers need to find other differentiators, such as celebrity architects.

Are any of you assholes arguing that we're not in a bubble? No. Are any of you dickheads arguing that using celebrity architects is a way of trying to prolong the bubble through generating a kind of scarcity? No. You're just baby-screaming because you have no ideas, and the idea of your own mediocrity scares you.

Reference: every capitalist bubble since Dutch Tulips.
The only thing I find amusing about Mudede's "writing" is his constant existential terror at any visible sign of economic prosperity.
@10: $100 million. For less than 900 units. And considering how much the city of Seattle has ballooned its government spending the last few years, we're going to go broke real soon at that rate.

On the other hand, you could do what other people do when they realize he can't afford to live someplace and move.
@12 Thanks for the baby-talk lesson in economics.

Pretty amazing that you apparently know all-so-well about economics, market differentiation and finance....

(...but can you master a basic rent payment?)

Yeah, markets bubble. This one is bubbling along. People speculate. Fine. Let it collapse. Let thje winners win and the loser's lose. And then watch it build. Only a screaming baby throws a tantrum when they don't get what they want right now.
@12 "Are any of you assholes arguing that we're not in a bubble?"

I'm going to go out on a limb here and suggest that Seattle's home prices might have some correlation to the fact that this is a desirable region that has experienced remarkable growth in median wages for quite some time now. I know it sounds crazy, but if people with a lot of money want to live here, it is perhaps possible that they might be willing to spend a bit extra to get what they want.

@16 So simple and so correct. Home prices have outpaced wages in all corners of the US— throw in some nice surroundings, easy access to world travel options, and more than it's share of high-paying jobs, it's no mystery why Seattle is what it is today.

Compounded by the fact that raw construction costs alone (among other factors like banks and all the Charlesly stuff) keep increasing supply from becoming the panacea we'd like it to be. It's all a bit... depressing.

This 2014 report puts constructing a 640sq ft apartment at $470k per unit (or about $370k if developer, realtor, permits, and city fees didn't exist, which they do).…
[When completed, Terrace House] will only hold 20 homes, and many of them will take up an entire floor.

Interesting to note that you could build that in Seattle, anywhere they allow apartments. You would need only to provide one parking spot per floor.

On the other hand, Apodments are illegal. Making matters worse, you need to add parking for every unit. Parking is expensive (roughly 20 grand a space) which pushes up the cost of every unit, as well as all rent in general (and the cost to buy).

Also worth noting is that there is nothing stopping the construction of huge homes on any lot in the city. But you can't convert a house to an apartment. At least, not in most of the city (roughly 2/3 to 3/4, depending on how you want to count it). Most of the land is, essentially, locked up, and you can't add density. Oh, you can add a basement apartment, but only if you adhere to expensive and arcane rules, and only if live in one of the units. In other words, I can't buy a big house, convert the basement to an apartment, and rent out both units. Same with backyard cottages.

All of this means that developments that favor the extremely wealthy are legal, while those that could serve the working class (and could be built very cheaply) are not.

It is amazing that people spend so much time talking about economics without mentioning this very simple fact. The zoning rules operate like a cartel, and the results are as you would expect. As long as there is a lot of demand and the cartel keeps supply artificially low, you are going to see very high prices. Since demand for housing is very high in the area (due to extremely high employment) we are going to see very high housing prices until the cartel is broken.
@15, You're welcome! It seemed appropriate!
@12- "are any of you assholes arguing that we're not in a bubble?" Actually I have spent a good amount of time wondering if we are in a bubble. Maybe I am actually wondering whether I am an asshole. Or maybe I am actually a dickhead. Or maybe we are not in a bubble, and thinking we are not does not make one an asshole OR a dickhead.

Your tulip bulb comparison is wrong for the simple reason that a tulip bulb has very little inherent value, while a place to live in a very desirable city is worth quite a lot (that is, it has a lot of utility). Tulip bulbs are more like Beanie Babies or the sticks my dogs chew on - they are only valuable because someone else wants them (or at least people think that someone else wants one).

I'd argue that we are just catching up to what prices are in other desirable cities on the West Coast. For this really to be a bubble you would have to claim that the Bay Area and LA have been in bubbles for much much longer, as their housing prices are still higher than ours and have not crashed. As long as most homes are bought by people who are living in them and not just trying to flip them speculatively, we're not in bubble territory. As far as I know this is exactly what is going on here. Every house in my neighborhood that sold went to people who live in it. No flipping.

@14-$100M for 900 units is a bit over $100,000 per unit. I'm quite surprised it can be done that cheaply.

@18 is exactly right. Fix the zoning laws and solve the problem. What we do now is only tightening supply and making it impossible to house people.

That is all.
@18 (and @20, who agrees with him):
"On the other hand, Apodments are illegal. Making matters worse, you need to add parking for every unit."

You obviously have no idea of what you're talking about. Apodments are definitely not illegal. Furthermore, in any neighborhood that's defined as an "Urban Village" (these are areas slated to be significantly upzoned by HALA), Developers aren't required to provide ANY on-site parking in UV's. There just has to be decent bus service in that neighborhood.

For example, 2 blocks from me they are building a 40 unit aPodment with exactly ZERO parking spaces. And guess what? Depending on who you talk to, anywhere from one third to two thirds of the residents will still choose to own cars. Incredibly, not everyone wants to ride the bus across town to work everyday, or bike in the rain uphill. Shocking, I know. So, the developers are allowed to externalize their renters/buyers parking needs onto the surrounding neighborhood, while they pocket the profits.

Oh and btw, the first buildings to get demolished for your Borg cubes will be the older, more affordable rental homes and apartments.
@14-$100M for 900 units is a bit over $100,000 per unit. I'm quite surprised it can be done that cheaply.

I'm surprised by this as well. Raw materials and labor alone... that margin would be challenging.