Katherine Khashimova Long recently published a fine piece of reporting ($) on how many “luxury” condos have unclear ownership, potentially mere financial assets that are left “empty as the city grows less affordable for its middle- and lower-class residents.”
That may very well be the outcome thanks to our many arbitrary restrictions on building enough housing supply to meet demand. But in a more-forward thinking policy environment, the desire of the world’s super-wealthy to park their cash in Seattle would be a huge opportunity.
In such an environment, there would be more projects to meet this demand, which would generate construction jobs, funds for affordable housing, and a myriad of other tax revenues. More importantly, these projects would provide a stream of property tax revenue indefinitely while generating approximately zero demand for public services.
Moreover, as these units can’t leave Seattle and are likely to receive maintenance, they are likely to contribute in a small way to dampening future housing crises. At least some are likely to eventually be owner-occupied or leased. If there is another spike in housing demand, the rocketing asset value is a strong incentive to sell, providing a ready reserve of housing stock that doesn’t require any construction or permitting delays to come on the market.
In the real world, these projects consume some of the tiny allotment of land allowed to absorb population growth, so that we can preserve endless single-family monotony. We wring our hands on extending regressive taxes to address social problems, while leaving $100 bills on the sidewalk.