Is ‘Highest and Best Use’ Always Right?

First Avenue, circa 1910, via Rob Ketcherside

This morning, Martin opined about the council’s recent decision to restrict the upzone in Pioneer Square from 150 feet to 120 feet.  Ironically, his piece was penned at the same time this editorial was being drafted– both written simultaneously with conflicting viewpoints.  While I’ve generally agreed with the call for higher transit-oriented density reflected through this blog, I’m not convinced that the “highest and best use” argument in this context is helpful to the pro-transit cause.

Mathematically, the case for high-density TOD is simple– more people, more riders.  In a less-than-perfect world, however, we often have to deal with social and economic constraints, along with various other wonky forces that affect the choices people make in regards to their mode of travel or their place of residence.  More below the jump.

Consider rents, for example.  The reason why many employers choose not to locate their offices in high-density transit-oriented nodes is plainly because it’s too expensive.  Defending the denser upzone, Matt Ylgesias makes the case that if supply for dense urban space is constrained, houses and offices “locate to some other other place that almost certainly isn’t dense transit-accessible urban space.”

But rents aren’t one and the same.  Land around transit is valuable, unlike the swaths of office and residential parks we get out in the suburbs.  Someone who can afford to rent an apartment in a rezoned Pioneer Square neighborhood might have the economical, but mysterious option of relocating to say Kent or Renton, but that luxury likely isn’t possible for someone in the same situation vice versa.  I’m not convinced by the argument that people will flee to the suburbs if they can’t find space– someone with the means and intention of living downtown isn’t likely to end up choosing a place in Redmond Ridge.

If our cause is to attract suburban dwellers to city living, then building as high and dense as possible around transit may only end up marginalizing the populations that transit supporters often seek to attract.  The danger, of course, is allowing our TOD sites to turn into “high-roller” paradises exclusively for the well-to-do.

To be clear, I believe we absolutely need density around transit to support long-term growth and ridership needs.  But I think there’s a clear line between a NIMBY who doesn’t want a 4-story apartment building blocking his sunlight and someone who is in real danger of being displaced by an unrestrained property market.  Maximizing an upzone in Pioneer Square might mean more jobs and homes, but it also likely translates into more minorities packing their bags and heading out to not so transit-friendly suburbs.

If the goal is to maximize ridership along high-demand corridors, then I don’t necessarily think that upzoning historic mixed-income districts are the best way of going about things.  Instead, we should reenergize our focus in developing dead infill areas often ignored in favor of the happenin’ urban districts and creating true transit synergy that emphasizes efficient feeder connections to core trunk routes.  In the long-term, we have better things to worry about than the limitations of a 120 foot upzone.

Comments

  1. Bruce says

    Have you guys actually tried to rent a place in Pioneer Square lately? In case you haven’t, what you’re describing is the status quo there. I haven’t been able to find a non-income-restricted studio with a washer and dryer for less than $1500/month. That’s actually why I live at 1st & Pike, I would rather live further south.

    Density allows more people to pack into desirable real estate, making dwelling units more affordable in spite of high costs per square foot. Pioneer Square already is extremely desirable — that ship has sailed. The only way you’ll keep poor people in there is with income restriction, and Pioneer Square already has heaps of that; what it NEEDS is more market rate.

    • Ben Schiendelman says

      Note that it’s not “you guys”. We don’t agree on all issues. Martin and I disagree with Sherwin here, and I’m willing to bet Andrew does too.

      • Andrew Smith says

        I very much disagree with Sherwin. Especially this:

        I’m not convinced by the argument that people will flee to the suburbs if they can’t find space– someone with the means and intention of living downtown isn’t likely to end up choosing a place in Redmond Ridge.

        The entire question is what is the meaning of “means”?

  2. Matt the Engineer says

    “likely translates into more minorities packing their bags and heading out to not so transit-friendly suburbs” No. This is basic supply and demand. If we have 250,000 homes in Seattle and we increase it to 300,000 homes, then that absolutely increases the number of people that live in Seattle. What’s more is that the average price of those 300,000 homes decreases. This is obvious if you look at the ability of those 300,000 families to pay for what they want (a home in Seattle). If family number 299,999 (ranked by income) wanted to live in Seattle back when there were 250,000 homes, they couldn’t because there were those other 49,998 families with more money. The cheapest house was set by what that 250,000’th family can pay, and now it’s been lowered to what the 300,000th family can afford.

    • Sherwin Lee says

      What? Boosting housing supply doesn’t mean you lower the minimum value threshold. That’s like developers in China saying that residents living in the centuries-old neighborhoods they bulldoze can move into the shiny new high-rises next door.

      • Bruce says

        If you tear down shantytowns and replace them with luxury hi-rise, yes. That is NOT the case in Pioneer Square.

      • Ben Schiendelman says

        We don’t bulldoze centuries old neighborhoods here because we don’t have central development planning and we do have historic building preservation. Using China the way you do here creates a straw man that distracts from the real discussion. Please don’t do that.

        You’re implying that we’re at the minimum value threshold, and you’re implying that the cost of a given unit remains constant. Both of those are false.

        First, we’re nowhere near the minimum rents that developers can make money on. We’ve just incentivized them with car infrastructure to take those developments outside the city center, and disincentivized them in the city center because of parking minimums.

        Second, the rent cost in a building doesn’t continue to rise with inflation over the long term. My building is a great example – I pay lower than I would pay in new construction for the same square footage, because my building has aged. Jane Jacobs has an ENTIRE CHAPTER ABOUT THIS, and you’re pretending it doesn’t exist.

      • Matt the Engineer says

        [Sherwin] It’s like telling the Chinese residents they can move into some other old buildings as the rent there just dropped.

        “Boosting housing supply doesn’t mean you lower the minimum value threshold.” That’s like saying boosting oil supply doesn’t mean you lower the minimum value threshold of gasoline. Of course it does!

      • Ben Schiendelman says

        Even if you WERE at some kind of minimum value threshold, by stopping the high income development in the city center, you’d cause it to happen slightly farther away, and you’d raise the minimum value threshold in a new place, pushing the lower income people even farther away.

        The more you build in the center, the closer the lowest income stays to the center.

      • Sherwin Lee says

        I implied neither. The issue with minimum rents is less a problem with intercity height restrictions than it is the problem with the subsidies for suburban and car infrastructure.

        Going back to Matt’s point– if you increase the number of allowable units in a city by 50,000, then in the short term there’s no reason why it would make the city any more affordable than it already was. I agree that rents will ultimately go down, but we often find that the low-renters that you initially displace are the least likely to move back.

      • Matt the Engineer says

        Why wouldn’t rents go down immediately? If you produced and sold an extra 50,000 refrigerators in Seattle the price would go down immediately for refrigerators – even if they’re nice and new. I know that everyone thinks housing is special, but it’s not. The rent of the X most expensive apartment in Seattle will always be based on the price the X+1 richest person wants to and is able to pay. An extra 50,000 units means an extra 50,000 people can afford to live here, no matter what the most expensive 50,000 units sold for.

      • Brian says

        “Why wouldn’t rents go down immediately? If you produced and sold an extra 50,000 refrigerators in Seattle the price would go down immediately for refrigerators – even if they’re nice and new. I know that everyone thinks housing is special, but it’s not.”

        Saying housing and refrigerators are the same in this respect is ludicrous. Fridges are a consumable that is easily disposed of, bought, replaced, afforded etc. Demand more quickly adjusts for any changes in the market. When you buy a fridge you can easily compare models that have a common set of characteristics and functions. Housing is tied to many more things like job location, salary, lease terms, rents, dependents, schools, mortgage costs, etc.

        As an example the rental market may change but the home ownership market may not or may adjust in the opposite direction. You can have low property values but high rents because of high rental demand. You can have the opposite of high property values and low rents due to a preference for home ownership. The dynamics are much more complex.

      • Sherwin Lee says

        Adding new space might decrease rents per unit for new buildings, but it increases the cost of the entire property. Whereas with existing old buildings, you don’t have extra units to add.

      • Zed says

        How many old apartment buildings have been torn down and replaced by new? I can only think of one in recent memory. As long as the current glut of vacant lots and low-rise commercial buildings remains I can’t see how encouraging new development within the city reduces the number of affordable units to any great degree. We need to increase housing stock within the city, period. Let the market deal with pricing.

      • Matt the Engineer says

        [Brian] The housing market is very complex. But basic economics still work there.

        [Sherwin] I’m still not sure what you’re saying. But I’m sure I disagree ;-)

  3. Matt the Engineer says

    “The reason why many employers choose not to locate their offices in high-density transit-oriented nodes is plainly because it’s too expensive.”

    This makes no sense. Are you saying that offices near tranit nodes are empty and expensive? What crazy landlord is using that business model? Doesn’t matter – they’ll be out of business soon, and someone smarter will buy up their properties.

    Land near transit nodes is expensive because it’s desirable. That’s a good thing. The best way to drop the price without destroying value is by building more capacity there. If you really are just concerned about price, you’ll have to make it less desirable. Maybe require city dumps to be coincident with transit nodes.

  4. Ben Schiendelman says

    Sherwin, I feel like you really don’t understand the underlying economic factors here. In a system where building heights were less restricted, rents around transit would go up *much less* than they do today, because *more supply* would be built.

    At the same time, while all new market development is targeted toward the highest rents the market will bear, if you’re actually letting developers build fast enough to keep up with high value demand, they do in fact build for lower rents as well. The level of restriction we have today, paired with the subsidy to lower density outside of the city, just moves that lower rent development outside the core.

    Increasing supply demonstrably does the opposite of what you claim.

    • Sherwin Lee says

      After reading Adam’s post, I realize we’re talking about two things. I do not disagree with you, but you missed my point about what happens in the short-term. Yes, ultimately, rents will decrease over X period of time, but what happens with the residents you’ve displaced with new construction? Can we assume they will come back?

      I’m not against the 150 foot upzone. I’m against the idealized notion that people have been pushed out to the exurbs because of limited housing stock downtown.

      • Bruce says

        Limited housing stock downtown or in Seattle generally? There are different market segments at work there. Many people who’d like a townhouse in a walkable neighborhood with a short bus or rail ride to the city have been pushed out to the ‘burbs or the far reaches of the city. Most of those are not people who’d live downtown anyway. The people who’d like to live in downtown, but can’t, are probably in places like Wallingford or the U-District, where there are cheap apartments and lots of bus service.

      • Sherwin Lee says

        Most of those are not people who’d live downtown anyway.

        That’s kind of what I’m trying to get at. People with the intention of living downtown aren’t likely to consider a place like the Issaquah Highlands.

        Another issue is the fact that zoning restrictions aren’t just about height– they’re about uses. We can’t build housing in the downtown office core because land use codes don’t permit it.

      • says

        “People with the intention of living downtown aren’t likely to consider a place like the Issaquah Highlands.”

        No, but they are likely to end up in Capitol Hill, meaning someone who wants to live in Capitol Hill winds up in the U-District, pushing someone out to Northgate, pushing someone out to Bellevue, pushing someone out to Redmond, pushing someone out to downtown Issaquah, pushing someone out to…

        This is pure, basic numbers here.

      • Bruce says

        True, but where I was going with it is that so much of Seattle is zoned for single family only, that people who would take a townhouse in RV or Greenwood are pushed out to single family homes in the ‘burbs.

        Sherwin is correct to say that we can’t just build gobs of housing downtown tofix all our problems. We need to build high- and mid-rise apartments in the city center AND upzone a notch (from houses to townhouses, say) in the “suburban” areas of the city where it makes sense, so that families with kids have a place to live too.

        Property is somewhat fungible. Somewhat. Can’t we all just meet the middle here?

      • Mike Orr says

        The spotty quality of transit is another factor. People who really value frequent transit have to live in a few specific places. Currently, the only place I’m comfortable is southwest Capitol Hill, which has lots of local (trolley) buses, is walking distance to the downtown express buses for occasional trips to Bellevue/Renton/Northgate/Lynnwood, and as a bonus has many destinations to walk to. When North Link is finished, I’d be willing to live anywhere on the line. If other neighborhoods would get frequent evening/Sunday service and all-day expresses, I’d consider living there. Ballard and Fremont have the frequency but not the expresses, Lake City has the express but not the frequency, and Aurora has neither.

        Other transit fans have different values and preferences, so other neighborhoods would be viable for them. But the general fact remains that if you’re carless and don’t want to have to wait half an hour for a bus or experience every trip being slow, you have to live in a few specific places. And as more neighborhoods get better transit, this will be less of an issue.

    • Ben Schiendelman says

      Sherwin, in the short term, if you don’t build the square footage downtown, you drive up rents outside downtown. Your argument really is still false.

      • Sherwin Lee says

        Ben, what you think my argument is is false because it isn’t my argument. You’re putting words in my mouth by saying I don’t support building extra square footage downtown because I do. Our core isn’t economically homogeneous– concentrating new development in the south downtown neighborhoods isn’t the same thing as concentrating new development in South Lake Union. Increasing the net square footage won’t change the relative affordability of the downtown property market as a whole, but it affects a neighborhood like the ID differently than it would Belltown.

      • Sherwin Lee says

        The fungibility of housing is an even less of an question for non-white minorities when new development occurs in adjacent areas. You can’t ignore the risk that these populations are the most likely to suburbanize and the least likely to return whether or not your housing stock in the core opens up for lower rents.

        Why don’t we try petitioning the City to change the DOC restrictions for a change? That has never made sense to me.

  5. Ben Schiendelman says

    Actually, even framing the post with this title sets up a false dichotomy.

    Highest and best use is not ALWAYS right. That’s why we have protections for historic buildings, and it’s why we have parks and public space!

    But that wasn’t the question here – the question was whether we should let people building in Pioneer Square – where we clearly need higher income people to help the businesses *survive at all* – go to 150 feet instead of 120 feet.

    I think it’s really important that this blog not fall into arguments like the title frames. They make it that much harder to have the real discussions this city needs.

  6. Will in Seattle says

    You might pay attention to what happened north of us in Greater Vancouver when they built the light rail lines – the suburbs near the end of the lines expanded, but also the neighborhoods around the station locations built up.

    Rent prices downtown didn’t drop, and in fact many existing units near the stations had some slight uptick in rental prices, while new units were built.

    The main lesson from that is you can’t create park space after the fact, except at great cost.

    • Ben Schiendelman says

      Greater Vancouver has a giant real estate bubble – at the same time rent prices downtown ‘didn’t drop’ and units near the stations had a ‘slight uptick’ – the rest of the region did too.

      And if they didn’t build more, all the rents would have gone higher.

    • Mike Orr says

      There may have been a slight uptick in rents, but purchase prices have gone above the moon. $500K gets you a tiny condo with a pole through the middle of the living room. I sent the prices to my friend in New York and asked how they compared to Manhattan’s new condos, and he said New York has nothing to compare to Vancouver’s prices. It seems to be all drug money and rich Chinese buying. It sounds like you can still live near a transit line in Vancouver if you rent, but not if you buy.

  7. Charles says

    Yep, There’s a huge opportunity to develop a dense urban neighborhood along Link’s ROW in the Rainier Valley. There will be opportunities to develop density along NorthLink’s alignment especially in Bitterlake area if the alignment goes up Aurora. To me, it doesn’t make a whole lot of sense to build above a “hub” because if you’re living downtown, you’re already living most probably near where your job is and you won’t be using that hub. The hub is for people who are coming from the suburbs to get to their jobs or their recreation. It’s very transitory in nature and I believe best suited for commercial and recreational uses.

    As I pointed out in the other thread, there is no shortage of property in downtown to develop residential. Sometimes, you make the choice that for “this” neighborhood, we will not change its character.

    • Bruce says

      Rubbish. I use transit every week to go to bars/movies/farmers markets/shopping around the city. We should permit mixed-use to include residential everywhere it doesn’t conflict with other use, like industrial areas or maybe some limited special areas like the waterfront.

      • Charles says

        What is rubbish is not valuing the aesthetic that an intact historic area has for our city that Pioneer Square offers blocks and blocks of buildings of similar design, size and aesthetics that are greater than the sum of its individual buildings. It does not preclude increasing housing or other uses provided the aesthetic of the area is preserved. It means not simply leaving it to the whims of the “free market” because I’ve never met a free market that valued humans or human sentiment. They get dismissed as “quaint” something to put in a museum.

        A proper roll for our city government is deciding when, how and where structural change takes place. I think it is reasonable to say that substantive growth in density in the “downtown” area should take place north of Yesler and there is plenty of space to accomplish that.

    • Bruce says

      The only other exception I’ll make is for special historical areas like Pioneer Square (which is not, BTW, the location of the King St hub.) Reasonable people can differ over the degree of protection vs development, and I see where you’re coming in that respect, although I’m fine with the council’s current compromise, or even allowing slightly more height. But it’s simply wrong to say that we shouldn’t allow the city center to build up because the RV and Aurora are/might build up.

      • Charles says

        I am all for the city center building up but Pioneer Square is not the city center. I think growth should be north of Yesler way and there are plenty of places to put residential in downtown. Pioneer Square will grow in its own way and with these protections will maintain its character.

  8. archie says

    “In the long-term, we have better things to worry about than the limitations of a 120 foot upzone.”
    I completely disagree with this statement. We should be worrying about setting up a policy structure that makes it conducive for the market to implement the “better things” you claim we should be worrying about. The market will almost always be our best tool to implement positive change, and these sort of height limitations (based on fear and not evidence) do little more than antagonize the market and add an unhelpful hurdle to its progress.

  9. Cascadian says

    Pioneer Square’s problems are that the people who spend time there are transient in some way–they’re tourists seeing the city’s first neighborhood, or frat boys going to clubs, or sports fans walking through on the way to and from stadiums, or maybe suburbanites checking out art galleries. There are people living in the neighborhood but not enough of them to drive out the perception of the obvious transient population: the alcoholics, addicts, and beggars who are far overrepresented in Pioneer Square.

    For that to change, the neighborhood needs a lot more people. Most of all it needs a lot more residents, paying market rates to live in a close-in neighborhood with character, who will then drive demand for more diverse retail and commercial establishments. That diversity will then pull in people from the rest of the city who currently have little incentive to go to Pioneer Square.

    There are caveats to this general call for more people. Yes, preserve the historic character of the neighborhood. You can do that with existing preservation tools and with a limited restriction on zoning on certain streets or lots. You don’t want to develop the whole neighborhood at once–as Jane Jacobs points out, this just creates capital stock that all ages at the same time and contributes to an eventual neighborhood decline. So you want to add the people selectively, by encouraging development on underused lots, with developments that are not a block long, and that respect the historic character without having to ape it. But where you add people, go big. Put in as much people as you can where you can. Don’t do so much in any place that entire blocks have nothing but Quizno’s (or maybe Subway) and the few other niche retail outlets that can survive in new buildings. But don’t be afraid to add some of that–it brings in new people, and will age into more interesting uses with time. Encourage that by getting rid of zoning restrictions that create narrowly designed spaces.

    In a sense, the 120 vs. 150 foot debate misses the entire point. Both limits are simultaneously too low and too high when taken as a whole. But it’s better to side with less restrictive zoning and then to encourage building diversity within those more open limits. Some developers will be able to make 100′ or 120′ buildings work, putting up less capital for a more intimately-scaled building that won’t pay off as quickly. Others will want to go even higher in order to make more profit more quickly. Both are fine approaches, so long as there’s an overall mix and the change in the neighborhood is staged as much as possible. But I’d rather risk too much new development than to kill a declining but historic neighborhood because we were too afraid of changing things for the better.

  10. says

    “Instead, we should reenergize our focus in developing dead infill areas often ignored in favor of the happenin’ urban districts…”

    Looking out in concentric circles from downtown, I’m wondering what you’re talking about here. Almost everything I’m coming up with is either already being served by Link or otherwise hardly ignored, or is not only not “dead”, but full of people who are likely to actively resist any redevelopment (unless you think places like Queen Anne are “dead”). Are you talking about the CD? Parts of West Seattle? Parts of Wallingford? Loyal Heights? Ravenna? Georgetown? Or just the RV and everything else on Link that isn’t Belltown or Pioneer Square? Or are you even talking about areas even further away along East Link (you HAVE been our Bellevue City Council Follies correspondent)?

    • Mike Orr says

      Yes, which infill areas are being neglected? By far the largest opportunities are 99 north and 99 south, and they are already getting RapidRide/Swift/maybe Link. Lynnwood is already zoning for TOD at Swift stations. Seattle/Shoreline/SeaTac/Des Moines/Federal Way don’t seem to have realized it yet, but there are a lot of underperforming big-box buildings in the corridors which would make a great place for inexpensive housing and mixed-use developments.

  11. says

    I guess I go back to my argument that “transit” is not social engineering per se, but yes it can be part of such.

    However, if social engineering, actually moving or forcing people to change their living patterns is your goal, then you should change the name of your efforts (and this blog) to say so. This blog should be called the “Seattle Social Engineering Blog” because for you, there is only one lifestyle, one density, one modality of movement.

    You are not presenting a flexible transportation system that can accommodate the millions of Puget Sound residents, you are advocating only for the very few downtown landowners who would realize the greatest profit by removing people from their homes and forcing them into tiny spaces all in the name of “transit”.

    That said, “transit” is the catchall phrase for a pernicious type of social engineering, one that everyone should be made aware of … before being taxed into their own demise.

    • says

      How’s life on Planet Bailo?

      Pretty much the entire argument that now seems to have been moved into the newest thread has in part centered on the fact that some people DON’T necessarily want to live in urban condos and apartments. To say that we think “there is only one lifestyle” is ludicrous.

    • Mike Orr says

      What about the people who want to live without a car, yet the current situation forces them to live or take jobs in low-density areas where it’s hard to provide frequent transit.



You may want to read our comment policy.