Puget Sound Business Journal recently ran a wonderful series on TOD. Check out the “related stories” ($) for a focus on Pioneer Square, Mt. Baker, Othello, and Federal Way. I especially enjoyed the interview with actual real estate decisionmakers.
In the region’s first test case — the $2.4 billion light-rail line that opened in 2009, many of the TOD parcels Sound Transit offered to developers turned out not to be economically viable.
“Link Light Rail through Southeast Seattle is a great example of what not to do,” said Levine of the Seattle Housing Authority. “You’ve got 20 fenced-in sites that are too small to develop.”…
Ric Ilgenfritz, Sound Transit’s executive director for planning and project development, said officials complied with federal policies that dictate that the agency can buy only the property it needs for the projects themselves…
Last year, Sound Transit adopted a new TOD policy. As the agency maps out routes and designs stations, Ilgenfritz said, staff members try to be “more intentional about our planning up front” to encourage density along transit lines.
Much, much more after the jump.
Rauf, president and CEO of a Seattle company called Othello Partners, thought that tenants in his project would pay $1.90 per square foot a month for rent. But a year after it opened, the project was getting only about $1.80, and the building was only about half full. Othello Partners dropped rents to “the low $1.70s,” Rauf said…
Today, 93 percent of the apartments are leased, and Rauf said he’s able to push rents back into the $1.80s per square foot….
“I think that the GreenHouse [in Columbia City] ended up commanding 25 cents more a square foot,” Rauf said.
As someone literally invested in the success of the Rainier Valley, I’m not sure how exercised to get about this news. The fact that Othello Partners mispriced their rentals is not very important for public policy. Whether or not there’s a train, there are certainly closer-in and more developed urban neighborhoods, so a renter seeking to be in the middle of it will expect savings to live that far from downtown. It would arguably be a better thing if the next market-rate development was priced a bit more affordably and skimped on the luxury finishes.
On the other hand, small lots and projects with lower earning potential may have trouble getting credit. I asked Mr. Levine to elaborate on his “too small to develop” comment:
Development today does not include many small projects due to the requirements of equity investors and lenders and the operating and development efficiencies that larger projects provide. The brain damage to do a small project is typically just as great as the effort to do a larger one except that design review may not kick in. At least at the moment, there is not much “Mom and Pop” development being financed as neighborhoods like Southeast Seattle require high ratios of equity to debt…
Small projects also typically have a higher cost of construction due to the number of contractor trips and the limited amount of work… costs of development are too great and the ability to mitigate risks and unknowns are lacking on a small project compared to a larger one.
Finally, the costs of marketing and managing a 25 unit building are about the same as a 150 unit one.
It’s distressing to have this problem when small lots near transit create exactly the kind of human-scale Pioneer Square-type building that, for various aesthetic and pro-pedestrian reasons, many urbanists would prefer. Whatever it is in our system that makes those sites “too small to develop” is what’s wrong with our land use policy. Maybe it’s time to waive some rules to reduce the “brain damage” for the right kind of development.
Moreover, the choice to send Central Link down MLK is severely compromised if it doesn’t create more development in the long term. It is decades too early for a definitive judgment, but the decision to save money by avoiding Rainier Avenue only looks good if the relatively blank slate of MLK turns into something dense, including lots of market-rate development that almost certainly would not be there without the train.
I thought this Eric Scigliano piece in Crosscut was interesting:
“Otherwise, the junction looks almost as blighted as ever. And change ain’t going to happen on the private dime, Tony To, the glowering director of the nonprofit housing powerhouse HomeSight, told the New Holly audience. “The cost of new construction doesn’t pencil out here. The cost of building is the same on Othello or Capitol Hill. But you only get two-thirds of the residential rent or half the commercial rent you get on Capitol Hill. And lenders want 40 to 50 percent equity to lend down here. Developers want 12 to 15, not 7 to 8 percent return on equity for the risk of building here. How do you fill that gap?””
Congratulations to Eric for discovering David Ricardo!
EXACTLY.
Unfortunately, at least part of the problem is not regulatory, but is about being beholden to the biases of financiers, a habit-addled bunch who will continue to approve only one kind of project long after the market has shifted and that form has proven untenable (see: all of the half-finished swampfield cul-de-sac developments of Florida).
So really, one needs to force an alternate math that turns the small-lot developments predominant in every great city in the universe into the obvious investment not only for developers, but for the superlatively conservative lenders as well.
It seems like a confluence of factors results in the market favoring monolithic construction over smaller projects. As has been pointed out, overhead costs and financing schemes/risk-aversion/quick ROI are part of the problem, but it seems like other factors such as labor costs and the use of machines in building construction (and construction methods in general) all put pressure on the size of structures, limit the choices of building materials and minimize the aesthetic detailing done. It is kind of tragic.
We can still build detailed, beautiful brick buildings, and they cost roughly the same as they did 100 years ago when you factor in inflation. However, modern building methods have made buildings much cheaper these days and who wants to pay double the rent just to live in a more beautiful building?
But looks aside, the real problem is that our codes wouldn’t allow us to build those buildings anymore. Forced setbacks, parking, height limits, etc. are restrictions we’re putting on ourselves that lead us to have less walkable neighborhoods, no street walls, etc. That’s a fixable problem. And if we fixed our codes we could have the same style of buildings we used to have, they’d just be made of different materials.
Would easing these restrictions convince developers to build? It would sure drop the cost per unit, because you could build more units per area of land.
So really, one needs to force an alternate math that turns the small-lot developments
I hear you, but I honestly don’t know how you get there from here. The zoning code could probably help by streamlining approval of projects that meet certain criteria. For example, we could waive design review for a certain lot size and given a certain retail width. That would at least reduce the “brain damage” problem and reduce costs in a way that makes financing somewhat more likely.
But there aren’t a lot of policy levers to change the herd mentality of bankers, or for all I know what may be absolutely correct assessments of the most profitable course of action for them.
Time for a STB TOD REIT.
This type of thing bugs me. You’re being a little hard on bankers, sure as an industry we’ve “ruined the country,” I agree with that and I’d like to do something different, but you’re not factoring in just how cr*a&py of a return on investment those lots are. Rainier Valley is actually one of the worst real estate markets in Seattle. Development doesn’t happen just because you put an at-grade, slow-ish train there. You can’t change the market report by adding rails that cut a possible future community around the station in half: MLK is a terrible street for walkable development without cars, now (Ideal TOD).
Policy possibilities (not probabilities): 1) Give Sound Transit authority and MANDATE to take more land around the station itself at the state level: have the region pay for it without federal funds (that’s doable). 2) If you want to see the type of development you’re talking about right now, instant gratification? Change the law to allow lending of public credit/funds. 3) Have a market rate Community Redevelopment Agency that allows you to build TOD utopia. All that too big a lift? I’m happy to help start with STB TOD REIT. You have to build enough projects across the city that the risks are averted over the entire portfolio, and you’re not going to make those small RV parcels return anything more than perhaps inflation at the risk of losing everything. If you need a manager of that REIT, it’d be fun to create that idealism in the real world with YOUR money.
Columbia City notwithstanding (it has a budding market), there is little doubt that at-grade trains don’t build TOD neighborhoods by themselves. It was a good learning experience, though.
Oh, and to pay for those policies? Tax parking to the extreme. Good luck.
In all seriousness, I appreciate your post, it’s interesting to see how unrivaled transit policy wonks tackle a thinking about private good (real estate). And I think climate, millenials, and the market itself will one day get us to where you want to be in RV. But if someone sold you on a train through RV to cause massive ideal TOD construction immediately, they were silly.
Thanks for taking this seriously TvC. I think many of us would happily invest in a REIT, as we’re more bullish on TOD futures than the average bank. I think short-term you’re probably right about having a low yield, but I’m much more optimistic about the desirability around these stations once it’s connected to more of our city.
You have a good point about at-grade rail cleaving a neighborhood apart. But what about Beacon Hill station? That’s amazingly close to downtown, not at-grade rail, yet the small properties are sitting vacant* leaving an elevator-to-nowhere. It has to take off someday, and I’d love to be on the ground floor as it does.
* There’s actually one large property, and it’s in the permit process to be developed as low-income housing with retail, offices, a community center, and a public plaza large enough for a farmer’s market.
Matt the Eng.,
Beacon Hill needs a lot of street level improvements to go from what it is today to what “walkability” is for the market, compare to to say Old Ballard Ave, Columbia City, SLU. The market is paying an 18% premium for that walkable feel, not for the train. The train can help get people out of cars, that makes parking less of a requirement, THAT makes walkablilty, and THAT gets your real market shift. I’ve been preaching this all over Seattle to anyone that will listen: the train has nothing to do with it, in fact, it’s the parking/cars and need for them that ruins the market and ideal (unparked) TOD.
I’d suggest land banking, I don’t have the money for you, but if you can figure out an interim use–private park-and-ride comes to mind, but that offends my idealism… A LOT–you’d have a decent longterm investment. Second, the RV market (even Beacon Hill or Columbia City) isn’t there yet, luckily for us who share the idealism for perfect, walkable, TOD, the largest rail expansion program in the region’s history is going on right now, and it’s not just in the RV. Don’t focus on the RV too hard if you want to make a point. It’s easier to make that point about what TOD should be in, well, anywhere but the RV. Then bring it back. You can’t change the real estate market with a train or a small parcel development. You can set it up to change later and that’s by building a train that gets people places as fast or faster than a car: North LINK comes to mind.
Sincerely,
TransitVsClimate
This issue with developers wanting large developments only affects a portion of the development industry. There are plenty of smaller developers, who don’t have access to the sort of finance that allows 300 unit apartment buildings. These developers built hundreds of townhome packs throughout the city, and another developer is building Apodments in the 20 – 50 room range.
It is possible that ST’s asking price is too high for these parcels, pricing out the smaller developers who would build smaller buildings on the sites.
I was running long in the post but I also asked Mr. Levine, why not townhomes?
I think the basic issue is that the achievable rent for any given level of construction investment is lower in SE Seattle than anywhere else, and Link hasn’t changed that enough. You’d think that land prices would adjust to compensate, so perhaps you’re right that the problem is that ST is sitting on land with unrealistic expectations.
I should add that small-time townhome development has occurred on private lots very close to Columbia City station after a detached home teardown. So the issue is either that ST’s asking price is too high, or being right on MLK in particular (where the ST lots are) is a huge deterrent.
I think it’s wrong to assume that Othello Station and GreenHouse are the only valid examples of TOD. If families are buying and fixing up property in Columbia City, Beacon Hill and Othello to take advantage of LINK, that’s TOD. The fact that the light rail is running through the valley makes single-family houses in the Valley more valuable to families and individuals that need to commute to downtown, Tukwila or other places in the Valley or Beacon Hill. As more of the existing housing in Rainier Valley is bought or occupied by people that are using light rail, more development will happen that serves light rail riders–that’s TOD.
GuyOnBeaconHill,
While I don’t disagree that those are VERY positive outcomes, I can’t let that description go, that is really not TOD. Ideally, TOD is development that is done that allows the most amount of people possible to live without a car as near as possible to rapid transit stations and do so comfortably.
Think of buildings and the urban environment in SLU, Cap Hill, Belltown, LQA. Because of the nature of your neighborhood villages in Beacon Hill and neighborhoods south and their lowish (in comparison) appeal for walkability, they aren’t currently seeing TOD being developed. You have a very common (especially among city councils and developers), yet rather incorrect definition of TOD. Buying single family homes and fixing them up is really great and fantastic to hear news of, but it won’t ever be TOD. If they were renovated to improve sidewalks and remove garages, that’s closer to TOD. If they were knocked down to build an unparked 4-5 story, 24 unit, apartment building, with a neighborhood service or commercial activity on the first floor (cafe, day care, etc.) and within easy access to a rapid transit station entrance (within .25 or 0.5 miles), that’s TOD.
TOD is about one thing, allowing the most amount of people possible to live without a car as near as possible to rapid transit stations and do so comfortably.
Sincerely,
TransitVsClimate
I won’t quibble about the meaning of TOD, but I do worry that this 21st century definition of TOD is the equivalent of what Jane Jacobs used to call “slumming”. I would rather see a neighborhood build and develop its character slowly, rather than have all the existing housing stock, businesses and population wiped out and replaced with concrete, steel and glass edifices occupied by young, wealthy transients that have 1,845 friends on Facebook but don’t know a single person in their apartment building.
I couldn’t agree more. The difference is important to me because the entire point of TOD is to fight sprawl and reduce VMT while increasing walking. We have to add units near transit to provide for people to live without cars completely: thats what they want more and more. You’re absolutely right, organic growth is really the most important. Small apartment buildings or condos (which naturally encourage more community involvement out of pure economic interest) that grow from single family lots mean something too. There are such things as small apartment buildings that grow naturally out of single family lots with 6 or 10 units in two stories.
Or if the lots are not “commercially viable” then commit the lots to public development. In the transportation day in Olympia a few months ago, I was struck by Frank Chopp’s observations with regard to the severe lack of “sub market rate” housing. He estimated there was demand in excess of 50,000 units of this type that was going unfulfilled. If the market is failing to address the housing needs of this significant population, there are other economic solutions.
These properties would never have to be subject to commercial banks credit equity requirements, high rent/sq ft requirements, high ROI demands of rentier class and ever continuing pressure to increase costs. It would create or augment neighborhoods close to employment centers, transportation hubs and create the kind of density we advocate around here.
Charles,
What about subsidized housing guarantees low rent? All I’ve ever seen is a limit on how much one can earn to be eligible to rent these units. But I’ve never heard of any of these units having a rent ceiling.
I think public developers have a lot of the same issues that private ones do regarding building form. Furthermore, I’d argue that the MLK corridor is somewhat near some sort of public housing tipping point and I wouldn’t endorsed unrestrained placement of more subsidized homes.
Which isn’t to say that isn’t a good solution for some of these spaces.
Perhaps you would care to elaborate?
“Whatever it is in our system that makes those sites “too small to develop” is what’s wrong with our land use policy. Maybe it’s time to waive some rules to reduce the “brain damage” for the right kind of development.”
I don’t know what OP was referring to specifically, but I can give you one for instance: per fire code, you now need two separate walls between town homes (even brick). This is a safety issue, but also doubles the cost of that wall and reduces rentable squarefootage. Not the case when Pioneer Square was built.
The sort of soft redlining described above might not be such a problem if our “Democratic” State Treasurer wasn’t flat-out opposed to the creation of a state bank, such as Sen. Bob Hasegawa is championing.
Maybe those of us in credit unions should also ask why our credit unions aren’t providing loans for this sort of tight urban development. It annoys the heck out of me to get all the slick mailers from my credit unions advertising the opportunities to get cheap car loans and mortgage loans, when I am interested in neither.
BECU doesn’t have a single ATM or office of any kind in the 98118
Mostly because BECU doesn’t spend money on commercial mortgage and construction lending directly at least not to my understanding. Credit unions are fairly small and pool their funds to create a large “CUNA Mutual”-like (www.cunamutual.com/) commercial investment platform.
“Finally, the costs of marketing and managing a 25 unit building are about the same as a 150 unit one.”
If only there were a way to build more units on the same amount of land… Oh well, I guess it’s impossible.
Ok, I’m done with the sarcasm. Zone tall, make setbacks smarter, raise SF minimums for EIS review, and make design review optional.
(by SF minimums I mean square foot, not single family)
What are the height limits in the corridor? I’m concerned that going taller doesn’t necessarily help if you get beyond the ability to build framed buildings (as opposed to concrete and steel towers). Then the small developers have difficulty with the absolute costs of building, regulation aside. But I think 7 stories is still doable. Correct me if I’m wrong on this point.
4 stories of wood frame is max. At 5 you need an expensive concrete podium.
Here’s one unmet need for small-scale pocket development: mosques. I don’t know if this is up-to-date, but according to this list kept by SPD (to refer people to the resources of these mosques, not to track them), there are only 18 mosques in the Seattle area.
MLK, with its huge and rapidly-growing Somalian population, is the perfect place for more mosques.
Mosques?
Tax free entities. No property tax, got it?
I guess I don’t understand why a small lot cannot be used for multi-family housing. I mean, that’s what was built in the past. And when you drive through residential neighborhoods, you’re bound to see some sort of multi-family housing on a lot that used to have one or two single-family houses on it. So, when the developers scream ‘regulation’, to me it is just white noise. They could build it, but choose not to. They can yell all they want about reduced profits, but profits are profits…if they ain’t building, they ain’t making profits. My condo in upper Fremont was 525 square feet, in a building with only 24 units, built in 1987. I had one of the smaller ones and it was a perfect size for me for 7 years(beginning in 2003) before I got married and moved to a bigger home. I didn’t want a luxurious condo with a rec room/swimming pool/exercise room and I’ll bet there are thousands of people that also don’t want those things.
So, bottom line. Multi-family housing could be built on small lots, but developers don’t want to unless they get special tax breaks from the government.
According to the very post you’re replying to, the issue isn’t tax breaks. It’s that banks don’t want to lend for these sorts of projects. The regulation isn’t really the issue; Levine even states that smaller projects might not have to go through design review.
Yep, I’m glad someone bought this up. There are many other aspects to markets than simply land use. Economic signaling that induces developers and property owners to want to develop often get way laid by the things that financial markets pay attention to.
But the larger reality is while the “free market” is bound up in its confusion about signals and an imbalance between demand and supply, average rents versus average incomes, etc. continues, the need for affordable housing remains undiminished.
This is a clear case where the market fails to provide for a need even in the face of incentives because the rentier classes demands for continuing and escalating increases in their asset values are incompatible with the economic conditions at hand.
There are places in the world, that are considered even more capitalist (and probably less democratic) than this society that guarantee a minimum housing standard for (almost) all its citizens. Singapore for example. Even though its private real estate market is as lively and as inflationary as ours, when push comes to shove, almost every citizen can have a reasonable place to lay their head at night. While hardly a utopia, theirs and their neighbor Malaysia’s housing policies bear taking a look.
I don’t know about you guys, but I see that this area is just getting harder and harder to sell anything, regardless of what is going on behind the scenes with developers.
MLK is headed downhill (again), and the Link has helped that to some degree, I and use it to get downtown when I stay in Rainier Beach.
The prospects for affordable TOD are poor because there’s a land monopoly in the way. This is great news if you’re a property owner within a few hundred meters of a transit station, but terrible news if you’re hoping to actually utilize these public investments for their intended purpose.
Washington State is investing more than 15 billion dollars in light rail altogether and ~150% of this will be absorbed in local land values. The Othello Station caused area land values to rise 400% in a 5 year period — this on top of the 180% increase that was generally prevailing.
http://www.psrc.org/assets/9065/ValueCaptureFinancingReport113-printing.pdf
Why is this a problem for TOD? It’s a problem because property owners make money by hoarding land. The greater the demand for a location, and the more it is expected to increase in the future, the stronger the incentive to reduce supply, thereby increasing profits. In the industry this is sometimes called “land banking.” You can see the effect on urban development by observing neighborhoods like Pioneer Square, First Hill and the Denny Triangle.
In Washington State it is not only illegal to tax these unearned windfall gains that serve literally no economic purpose, it is unconstitutional, because the tax system has been designed by land speculators. Trying to explain this to the proles is like trying to teach math to a golden retriever, but that’s democracy for you.
Land hoarding gets you nothing unless you can sell the land. The book value of your property might go up, but you don’t suddenly have more cash. Both of these are important.
The net worth of a typical billionaire is not measured in cash dollars. Yet, their net worth is very bankable. It can be used as collateral and leveraged up the hilt. Yet most of this economic activity remains free of tax.
It’s taxed in property taxes. Beyond that, is there any jurisdiction where the nominal rise in an asset value is taxed before it’s sold? The rising value is just a prediction of what the item would sell for, so it itself is a speculation. The prediction can be wrong or it can reverse at any time. You can’t base a tax policy on that. If you tax for rising nominal value, fairness would require giving tax credits for declining nominal value.
+1.
The OP’s complaint is absurd and unfounded.
I think PSRC was attempting to talk to legislators Tax Increment Financing? Not sure, just a quick read of the exec summary on that one. My only point would be to not forget to look at zoning changes to actually explain that property value change.
How about the fact nobody wants to pay top dollar to live in the ghetto? Geez, it is quite obvious. Maybe we should let SHARE/WHEEL put in a multi-story open air tent platform…
Nobody wants their kids playing crack vial hopscotch, folks
This is just a whole lot of whining in my opinion. Unless a developer controls a ton of land and the developer and the city work hand in glove, you just don’t get a rapid buildout of any area. Even in South Lake Union, there were a ton of “underutilized” parcels until Vulcan landed Amazon.
tl;dr: Neighborhood transformations take time.
I agree. Belltown changed drastically in the 3 years (2000-3) I lived there and now LQA/Uptown is finally getting rid of all the parking lots. We have plenty of small buildings going up along side the big ones. It took a long time for both these areas to change.
Already finished, the 45 unit – h2oseattle.com
A six-story, 53-unit mixed-use – http://www.komonews.com/communities/queenanne/197571881.html
A 76 unit, 5 story (little bigger footprint, but less than a 1/4 block) – http://www.komonews.com/communities/queenanne/197513991.html
8 story hotel/apartments on a triangle lot – http://www.komonews.com/communities/queenanne/197557241.html
Also a 4 story 43 unit replaces old house – http://www.komonews.com/communities/queenanne/development-approval-means-so-long-to-last-house-on-block-790863-196979351.html
Developers will build on small and odd shaped lots, when the numbers work for them.
I think you’re going to have to get used to the idea that the mini-Pioneer Square model of development just isn’t viable except for very high priced residential areas. If you need more $6000 apartments, then South Seattle LINK is your ride.
[ot]
New construction happening primarily in larger buildings is sort of a trend all over town, ‘eh? For some time before the crash people were building a lot of those “ugly Seattle townhouses” (their code-mandated ugliness aside, they were clearly built at a decent clip for a while, but I haven’t seen many under construction lately). And during the recovery, which has broadly been one where big companies, rich people, and businesses that cater to rich people have done well while many others have struggled, development has been concentrated in big buildings and big projects.
If only small lots were available, big companies might just invest in lots of small projects. But there have been big lots to set up on, and not just out in the boonies: downtown Bellevue superblocks, SLU, some big Ballard lots, Century Link parking lot, Central Link TOD. This will continue to be the case for some time, with at least the following coming up: Northgate TOD (there’s the KC Metro land, sandwiched between Northgate Mall and the office park, both huge and monolithic blocks that we should hope will at least do a little work to interact better with the public street network), South Kirkland P&R, Aspirational Downtown Lynnwood (however good or bad this turns out, the lots it happens on will be big), the Spring District, Group Health redevelopment… am I missing anything?
And maybe that’s the problem along Central Link. Everyone perceives the RV to be a risky development compared to a lot of these other places, and the big companies have ample opportunities that are practically risk-free. Meanwhile the small developers just aren’t feeling the recovery yet and can’t get credit. As for the unattractiveness of MLK itself, well, a street that you can’t cross for quarters of miles at a time does have its challenges. It might be harder to bring street-level activity there than some nearby blocks. Aren’t we glad we saved so much money by building Link at-grade?
(Clarification: there are (at least) two ways to read the first sentence of the second paragraph of my post. The one I intended was “If the only lots available were small, big companies might settle for building lots of small projects.” Not, “I wish small lots were available, so that big companies might develop them.” As I understand it, the supply of small lots available to developers should be pretty steady, as a natural result of housing turnover. Even some big lots were made out of small lots, like the Ballard Blocks; clearly big developers prefer big lots!)
Right now, the utility of Link to get places, even if you live right next to a station, is limited, in that it goes only two useful places – downtown and the airport. Getting anywhere else is still a pain the ass, as witness by these travel times:
Capitol Hill: 41 minutes (not including up to 20 additional minutes waiting for the not-super-reliable 8 to show up)
Green Lake: 70 minutes (Link + 16)
Ballard: 75 minutes (Link + 40)
West Seattle: 53 minutes (technically a one-seat ride on the 50, but horrendously slow)
Renton: 44 minutes (Link->106)
Bellevue: 1 hour (Link->550)
Microsoft: 67 minutes (Link -> 545) (could be faster if you are able to take the Connector from Columbia City)
UW: 1 hour (Link->71/72/73/74)
I do realize that some of these travel times will improve once Link is fully built out (although many won’t). However, one relatively cheap stopgap would be to extend the Car2Go service area another mile southward to include the Othello Station vicinity (and expand the fleet a bit to maintain availability). There are just too many places you can go where driving is vastly quicker than any available transit option.
And because of this, every development still has to include a parking space for every resident, which goes right into increasing costs and small lots being unattractive (parking, unless underground, takes up a lot of space).
Yes, Link does do a good job of allowing the cars parked there to be used less. But as long as every resident still feels compelled to have a car, developers will still feel compelled to build a parking space for every resident.
Requiring taxi and car service fleets to base a certain minimum percentage of their fleet in that area would also be beneficial.
Even for DT it’s not so great. From one review at apartmentratings.com:
Slightly lower rent doesn’t balance out the cost of pretty much requiring that you pay for parking and the cost of purchasing and maintaining a car. There’s no there there and as the saying goes, “You can tell the pioneers by the arrows in their backs.”
My way of judging the character of a neighborhood is to count how many storefronts have steel bars or gates across them. EVERY storefront in that area is built that way. If stores have to armor up that heavily to avoid crime, I don’t want to live there.
Link has boosted land values in the Rainier Valley, just not to the extent need to justify construction of stacked flat buildings (apartments) by and large yet. PSRC bemoans the increase in land value, but the land value is simply an expression of what can be paid for the land in light of its potential ….promoting new development was never going to be an easy lift in this corner of SE Seattle. Ten years ago, Othello at MLK was not a good place to even consider investing, and now its a marginal proposition. That is a big change. We need to be realistic about the values of potential users and how much rail access really weighs in to the location decision vis a vis other values.
This discussion infuriates me. It’s simple! It’s called a REAL ESTATE MARKET. An at-grade slowish (compared to driving) train does NOTHING for a REAL ESTATE MARKET that was terrible to begin with.
Are you sure about that? Parking downtown is on the order of $12/day, which is why a majority of downtown workers take the bus. So the correct time comparison is between a bus trip and a train trip, and it’s much faster by train.
I’d think there’s value even in the commute improvement, though neighborhood improvement should be a strong effect as well. Do you have any data to back up the claim that it does “nothing”?
Yes, I am sure. They’re not building new market rate development for people who take the bus *everywhere*, not until you and I start, anyway. There’s not enough cultural things (outside of perhaps Columbia City in the not-as-distant-future) to keep people in RV all the time. No where from Beacon Hill South is really like Cap Hill or SLU or Belltown where you can really LIVE without ever leaving.
Commercial development is based on one thing: rent growth. So in order for development to pencil, rents in the RV have to rise. A lot. Who is paying more in RV? My guess is people who would still want cars, if you can convince them it’s a desirable enough spot in the first place. I have a report by Dupree+Scott on my desk that shows higher apartment rents in Magnolia than either Beacon Hill or RV as of 3/2013. You have to first have a real estate market with paying customers. Period.
As to your point about commute improvement: the train from Beacon Hill to downtown doesn’t change the neighborhood around the station by itself. People don’t move JUST for their commute. By that logic suburbia would be dead already, bye bye Bellevue :(. Instead, we should try some additional mortgage incentives that promote LEMs (Location Efficient Mortgages) AND add parklets (seating areas that are built in parking spots) in front of cafes, art galleries, and renovate grocery stores to be sidewalk fronting with cars in back. We can discuss the latter three at the first REIT meeting.
Trains aren’t silver bullets, there’s more to life than getting places. It’s ALL about getting people out of cars, onto their feet, and giving them mobility at that point. To do that, they have to be able to have basic needs and cultural activities where they are.
And get places as fast and as conveniently as they could in a car.