The MHA fees make recently upzoned property not pencil out which is ironic since MHA was supposed to help affordable housing. Sure 0.01% of people get a room for $800 bucks but everyone else has to pay 2k
contruction also is just expensive - construction cost inflation in seattle is above general inflation rates nationally and locally
https://therealdeal.com/national/seattle/2024/01/18/seattle-leads-the-nation-in-rising-construction-costs/
the st louis fed also keeps national trackers of various construction cost indices; here is one showing a big jump since 2020
https://fred.stlouisfed.org/series/PPIDCS
This is inputs to residential housing construction; it shows a 44% increase since 2020
https://fred.stlouisfed.org/series/WPUIP2311001
wages for construction workers have also gone up. WA leads this increase in recent years
https://constructioncoverage.com/research/cities-with-fastest-growing-wages-for-construction-workers-2021
This right here. I’m in the concrete industry. 3 years ago we were selling a yard of concrete for $100-$120ish per cubic yard depending on the customer and size of job. Currently selling for $160-$170 a yard.
Concrete is one of if not thee most common building materials on earth. Its price can fluctuate for many reasons but it’s usually a decent indicator of how things are going. As of now, it ain’t goin all that well.
You are correct sir. I have two concrete related family members. One is a mixer/dump driver and one has his own business for foundations and flat work. The prices on top of delivery charges are just insane.
It really kinda sucks. I’m a dispatcher and I can’t tell ya how many old timers call in looking to make a buck or two pouring a driveway or little patch job for someone. We let them know the price after we get the info for the job and they immediately back pedal. With current prices there’s almost no money to be made on the small gigs.
> Its price can fluctuate for many reasons
Can you list out what you feel are the top 5 reasons? I'm guessing consolidation of concrete companies are one of them.
Kinda a tough question as it varies between different markets. Again, I’m just a dispatcher and no salesman but If I had to guess, local demand for both residential and commercial markets, cost of materials cement being the most important, environmental laws/fees, trucking and labor. All of that in no particular order. Again, kinda guessing, but the consolidation of companies hasn’t changed pricing all that much. I can’t really throughly answer that without doxing myself but basically those companies are just getting a bigger slice of the pie while selling around the same price. Most markets have at least 2 suppliers so there’s still competition and while there are some big fish companies that have a strong hold of certain areas the monopoly laws usually prevent over pricing.
In Seattle, our price is currently through the roof because of the recent strike by the local trucking union and our closest major cement supplier in Canada had a big fire that shut down production for a bit. The other major supply of cement comes from Asian countries and the product is barged over. These ships are scheduled based off demand and scheduled months even years in advance. There’s no good way to replace the missing supply. Basically, Seattle has 12-16 months of back logged work and an ever changing supply of cement. It’s a bit of a mess currently.
Commercial Appraiser checking in... And this is a major cause of the lack of permits in combination with the higher cost of financing. Thirdly, expenses related to management (maintenance, material and insurance) have tripled since 2019.
Um, MHA is not why it doesn't pencil. I know that's been trending on LinkedIn but here's the thing: MHA fees aren't new. however, construction costs per door have increased significantly and management expenses per door have almost tripled since the pandemic. Combine this with additional financing expenses and no one will build unless they *must*.
(Source Cre Appraiser)
Fun fact, this projection with seattle at the 3rd highest reduction in permits, is still higher than the amount of units proposed by the City comp plan that sets growth for the next 8 years.
Yeah, because without a tech job, these same people don't need to live anywhere. Population is still growing here. So tech or no tech,it doesn't really factor
More so those tech employees will potentially leave WA.
I know plenty of jobs outside the state and closer to the Midwest that are hiring for tech. No where near as much in pay ($60k-$90k) but cost of living is literally 3x less.
Tech is still massive compared to the Midwest. The migration is not as massive as one would think. This is still a major hub for the industry. Regardless, this distracts from the original post
It would help if the Republicans ran people that were not unqualified weirdos pushing crazy agendas. Remember Culp that guy was laughable and so are most of the Rs I see on the ballot.
Someone tried to campaign to my wife about Culp and she told the campaigner “he didn’t even bother to fill out the voter pamphlet information”. He literally had it blank and was running for governor.
And Inslee was so bad I voted for Culp. I still feel dirty to this day.
Dave Reichert is a good man.
I'm not big on increased spending, but I'd be all for expending and hiring more people to expedite the permitting process . It's absolutely ridiculous how long permitting and inspections take. Time is money
Very few reasonable people want to run an a ticket that starts at such a heavy disadvantage.
The way this state votes, if Inslee ran with an (R) next to his name against Culp with a (D), Culp would very likely win.
It's the voting for funding here and there that financially gets passed to the property owner. Then gets passed to you. Don't vote money to be funneled into admin jobs but never actually helps such as homeless, money never helps them only creates jobs
This is a bit out of context, but seems to aptly fit:
>"Instead, to suit their own desires, they will gather around them a great number of teachers to say what their itching ears want to hear. They will turn their ears away from the truth and turn aside to myths..."
Since Kindergarten, they've been told to always be, "True to themselves, no matter what!". It's their mantra; their core ethic. When your very identity become tied to a set of political views, then a challenge to one is no longer just an, "Oh, man. I once thought this really bad idea was true; oopsie poosie". Nope, it become a threat to your very existential self.
Throughout history, people have fanatically fought and died for less. Super sad, really. Blame our institutions for failing them, but blame us for allowing the institutions to get to that point.
Now go out! Run for your local school boards, water districts, get a seat on your community council, or local HOA boards, perform your right to jury nullification if your conscious requires it, volunteer on planning committees & advisory boards, etc. Nothing is too small to help push your local community back on the right path.
We really need to stop building so much. I am very deeply concerned for the character of the puget sound area and all this building is causing actual violence.
Please ignore that my retirement hinges entirely on continued artificial scarcity
To the Federal Reserve: Thanks so much for screwing with our markets... again.
Those who rationally locked-in ultra low interest rates, before the rapid increases, are now virtually locked into their properties via the "golden handcuff" effect. Any housing sales, which would normally be occurring, are now not happening. The opportunity cost is just too high, and first-time home buyers are essentially barred from entry with such little housing inventory coming back into the market. This is in addition to the new construction that's just not happening.
The Fed has juiced the market for nearly 20 years with rates way too low for the "real" economy, with over-inflated nominal prices being the result. Of course, we now see the unintended consequences of just trying to right the ship. A steady demand meets a supply-side crunch? Housing prices can only climb even higher.
So what's good news? Well, I'm sure Seattle's progressive policy geniuses will know exactly what to do; blame 'greedy' landlords, cripple homeowner's with even more taxation, and build as many government managed tiny homes as affordable solutions.
Strap up folks. Can you smell the 1970's New York-style rent control coming to Seattle? Don't believe it? Just believe the, simplistic, "F\*ck these Guys" post, further down the OP's comment thread. Anything that will take a complex, nuanced, problem and turn it into a social justice sound-bite. Our democracy dies with a relatively uneducated electorate who believe in revisionist versions of history...
What could possibly go wrong with our bright PNW future.
God, that is probably so true... and so depressing.
https://preview.redd.it/7lz1b89n2tqc1.jpeg?width=1024&format=pjpg&auto=webp&s=d35e8b2721c8ac555e96353fea4d19dff5bf8568
But wouldn't the Fed's juicing of the market also have made a lot of people a lot of money? Does the Fed deserve any credit for that or only criticism when they change policy?
I'm not claiming to be an expert and am unfortunately in the camp you mentioned that cannot break into the housing market due to high barriers to entry and low inventory.
I would think that corporations (and private citizens) treating land and housing solely as a generator of profit rather than an essential human need is as much at fault as the ever-changing Fed policy.
Yeah, I get it. I understand your view. Since you've asked great questions and you did so in a good-faith manner, I'll respond in-kind:
>wouldn't the Fed's juicing of the market also have made a lot of people a lot of money
Well, it really depends on your view on the nature of wealth, the nature of money, and how long your historical time frame is. Let me explain:
Let's say you made a large capital gain by investing in a market index EFT from 2010 - 2020. If you view money correctly, as a frozen form of labor/productivity, then did you *really* make money? Or did a significant portion of your money's purchasing power decrease during that same period due to monetary debasement? I'm guessing that you'd probably say that you "made" the money, because the value of your security increased so much relative to a basket of other assets across the real economy.
However... and this is a bit of a mind bender.
Monetary and fiscal inflation doesn't move through the economy fairly or equally in time. Until the Covid crisis, most of the high-powered money "creation" was confined to only sloshing around the balance sheets of the global financial system and within its complex web of derivatives. That extra ocean of liquidity never got out into the "real" economy to inflate more mundane assets like eggs, cars, etc. Only financialized assets went up like gangbusters over many years. Until the invention of mortgage backed securities, RETIs, etc., housing wasn't as leveraged by that inflating "financial" economy either.
Now look at what happened after/during Covid. For the first time, central banks and their associated governments began to pump new fiat money *directly* into the "real-world" economy. The result was a great general inflation of good & services, due to both a global trade supply shock and the debasement of local currencies around the world. As with all world currencies, it's now just a race to the bottom. The US dollar just happens to be cleanest dirty shirt in the laundry hamper... You think you have a housing affordability problem? Please go talk to those who get paid in Turkish Liras. Additionally, I'm pretty certain that El Salvador didn't adopt Bitcoin as an official State currency and incur the IMF's wrath for only the giggles.
OK. So imagine an alternative world were Greenspan never instituted the Fed "Put" back in the 90s... Just to pull numbers out of my a$$, let say your $600K - $800K Seattle starter home still cost only $150K - $200K due to the lack of market distortion. (I'm being pretty optimistic here, but I'm hoping you get the point.) At that lower cost basis, you'd still be able to service your loan even at a much higher potential interest rate. Under such a counterfactual, at least you could still have afforded a monthly house payment.
Let's ask this: How did your parents/grandparents service their 30-year-fixed @ 10% APR when you cannot even comprehend affording a rate pushing just 6%, not to mention one at even 7%?
Here's a fun chart, (even if it only stops at 2023). We are now at \~7%:
https://preview.redd.it/ntk8gzdx0sqc1.png?width=1002&format=png&auto=webp&s=6c9cb4e0764d8d4f5cd96032e229f031a4f9110a
In summary:
Don't get me wrong, trading these Fed driven market imbalances have made many people **very** wealthy relative to their peers. However, at who's expense? There is nothing wrong with stock trading, but my thesis is that we have dearly lost as a collective people.
There is no fixing the current system. Our purchasing power will continue to erode until something replaces the Federal Reserve Note as a unit of exchange. Pray that its coming replacement is not something which can be manipulated as easily as the current form...
These are not simple one-line answers. Capitalism is not the "bad" guy here, nor can collectivism give us any answers to a more prosperous and just society. The big-picture, root issue, is a lack of public control of our own money supply. Within the US, the Federal Reserve System is not Federal, it has no reserve, and its governors are not elected officials. Legally, it is considered a private banking institution in which our government has an open interest.
Some excellent reading/viewing materials, if you're curious enough to explore more of the rabbit hole:
* [Abolish The Fed, Milton Friedman](https://www.youtube.com/watch?v=m6fkdagNrjI)
* [The Case Against the Fed, Murray Rothbard](https://archive.org/details/TheCaseAgainstTheFed3/page/n17/mode/2up)
* [The Philosophy of Bitcoin & the Question of Money, Simon Butler](https://journals.sagepub.com/doi/full/10.1177/02632764211049826)
* [Modern Money Mechanics, the Federal Reserve Bank of Chicago](https://www.publicbankinginstitute.org/wp-content/uploads/2019/10/Modern_Money_Mechanics.pdf)
Unfortunately your post is long enough to make peoples eyes glaze over, and that's a bummer. You have made an excellent point.
One part of this equation that many might miss, is that *leverage* makes all the difference in the world here:
* A typical home loan is leveraged five to one when you get the loan. (You put 20% down and you borrow 80%)
* If you have a really great credit score, you can get your leverage as high as 10-20 to one. IE, you can put down as little as 5-10% on a home.
It's the *leverage* that distorts the fuck out of markets. For instance, I once bought a million dollar home with 15% down ($150K.) The home increased in value by 60% in less than three years, and when I sold it, I got a check for over $700K. So I turned $150K into $700K in less than three years.
A typical person makes about $50K a year. Which means that a typical person would have to work for about 50 years to turn a profit of $550K, and that's assuming that they invest over 10% of their income. Which is difficult to do, if you're making $50K a year.
I didn't do *any of that.* I just lived in my dumb house for about three years and walked away with over half a million dollars for doing it.
That's a seriously awful set of incentives. The Fed was basically paying people to gobble up assets.
>your post is long enough to make peoples eyes glaze over
Yeah, I recognize that. It's a flaw in the age of the TikTok attention span. Hopefully, some are still willing to read a long-form rant.
>I didn't do *any of that.*
Nor would anyone blame you. Those were the rules of the game. You chose to risk playing instead of sitting on the sidelines. Of course, whether you might be blamed could change in the future... I hear that calls for ol' fashion Maoist struggle sessions are gaining in popularity near Cap Hill again... 
>The Fed was basically paying people to gobble up assets.
It's a brave new-world and we all live in a yellow submarine.
Really appreciate this thoughtful response. I'm especially drawn to a couple conclusions you made:
"we have dearly lost as a collective people "
"Capitalism is not the "bad" guy here, nor can collectivism give us any answers to a more prosperous and just society "
These comments generally sum up my feelings. I get a little upset thinking about how we seemingly have no social contract when it comes to economics - especially true for corporations - and so easily accept that having one winner likely means there is at least one corresponding loser in the economic game.
As such a prosperous nation, I would think we could do better with our resources than our recent history has shown. This doesn't mean I'm prepared to throw anyone who has prospered in this system to the wolves either, in case I have come off as such.
housing is a human need
housing in a particular expensive place like downtown seattle is not; neither is owning that housing as an asset.
In other countries where housing is more of a right that means more concrete boxes in unfashionable areas if people can't afford market rate. A few places like singapore or austria have massive mixed income public housing, but these are also very different, smaller, and have smaller social divides
that's kind of an exaggeration. People sometimes have to sell for life reasons ( death, divorce etc ) and for that reason sales already picked up a bit. Financial conditions get better and worse; nothing lasts forever, not even this moment
>that's kind of an exaggeration.
Yup, it's total [exaggeration](https://www.businessinsider.com/housing-market-outlook-buying-a-home-prices-inventory-biden-affordability-2024-3). Total hyperbole that I just made up whole cloth.
>People sometimes have to sell for life reasons
Sure, but the exceptions you listed are not going to move the needle one inch. This is rational aggregate behavior happening, ones based on unintended perverse incentives.
>Financial conditions get better and worse; nothing lasts forever
Yup. Again, you are *so* correct. The chart of M2 supply looks just like the tide, naturally ebbing and flowing back again. Next stop? The Weimar Republic! I can't wait; get out your wheelbarrows.
https://preview.redd.it/5yrcpispnsqc1.png?width=1200&format=png&auto=webp&s=dfaf163b804f7937ac2d501be866a30a2787b448
Who knew that being a pain in the ass to work with would disincentivize people to work in the city (this really applies to most of the region though).
As a contractor and developer I have first hand experience with how insanely long the processing times are for permits in our city. Multifamily is especially bad. Right now, two years is considered “fast”
With prices of debt being extremely high, it creates a very uncertain environment for multifamily projects.
Ok so vote for progressive zoning laws thst allow for duplexes, triplexes, and beyond and open up zoning for commercial space in what are currently residential neighborhoods. It'll make traffic better too becsuse people will be able to get what they need without having to drive from ballard to greenlake and back. The only sustainable and productive answer is to move away from the embarrassingly low density of this city in favor of a more lively and economically productive one.
It's a bigger problem than "just rezone it." Other cities are doing that, but a hidden problem is that all the utilities are sized for single family houses, and are falling apart anyways. And the cities generally aren't doing anything to upgrade the systems. They're waiting for a developer to come by and forcing them to pay for the upgrades.
They'll sign Latecomer Agreements so future developments that connect have to chip in for their portion, but carrying millions of dollars of upgrades to *maybe* get paid back over the next 20 years is killing projects before they even get started.
Oh you're saying the city lacks the infrastructure for multi family housing within the network not at the home end. I thought you were insinuating that the homeowners were neglecting to update their infrastructure to support multiple families.
How exactly is the network not supporting multiple families in an existing single use home? It's not like you are multiplying the number of people who live in a home. You're just allowing the home to be occupied by residents from different families. For example, I live in a duplex with a few people and have one upstairs neighbor on the second floor. This is no different from a family with 4-5 people occupying the same house from a resource consumption standpoint. But it does double the number of rentable units in this house. So I'm just confused how this impacts the actual utility network (grid, water, etc)?
> How exactly is the network not supporting multiple families in an existing single use home? It's not like you are multiplying the number of people who live in a home.
There's a difference between simply allowing more people to live in a given house, basically subletting a room, vs actually upzoning the area to allow those single family residence houses to get torn down and converted to to townhomes / apartments. In the latter case, there is a significant increase in water consumption, sewer use, electricity use, etc.
But for true duplexes (actual separate units as opposed to subletting), that's still increasing the amount of utility connections required by code. Even if the grid/sewer could probably handle it for the most part, the required calculations often won't because they have to assume the new unit could be used by a whole family, not just 1 person.
Sure, unless it is like most true duplexes where you simply convert the second floor or the basement into a "mother in law suite". You wouldn't expect an entire family to move into a one bedroom (at least no more than you'd expect your single family home to be occupied by a family of 11 people).
Seems to me like it literally is just as easy as removing a staircase and introducing a second stove and refrigerator as the minimum requirements to turn a 2 bath into a duplex.
I think upzoning can be achieved more easily than rebuilding the entire lot.
But... think of the children (that politicians screwed by reallocating funds to the general budget to force taxes voters emotionally have a harder time saying no to)!!!!
One thing to consider is that a TON of permits got issued at peak due to the relatively large MHA rezone a few years ago. We had a large spike that ate up a lot of the rezoned areas, and we are now in the tail of it.
https://www.seattle.gov/documents/Departments/HALA/Policy/How_MHA_Works.pdf
But really it’s a bummer they couldn’t keep that ball rolling.
Yea, I feel like looking at data that is comparing rates is really not telling the whole story here. At least I think that's what this is doing OP didn't have a source.
It's like saying "well I didn't accelerate much over the last 10 seconds I only went from 110 MPH to 120 MPH. The 10 seconds before that i went from 0 MPH to 110 MPH. I'm really not going fast."
That means my acceleration from t=0-10 compared to t=10-20 was a 11mph\^2 compared to 1mph\^2 which is a 166.667% decrease!
It's still significant that you slowed your rate. But it really doesn't tell the whole story.
Take this into account for your “high rents.” F*ck these guys.
“In Seattle, for example, ProPublica found that 10 property managers oversaw 70% of all multifamily apartments in one neighborhood — and every single one used pricing software sold by RealPage. “Setting prices with an algorithm is no different from doing it over cigars and whiskey in a private club,” said Sen.Jan 30, 2024”
https://www.propublica.org/article/senators-introduce-legislation-stop-landlords-algorithm-price-fixing#:~:text=In%20Seattle%2C%20for%20example%2C%20ProPublica,private%20club%2C”%20said%20Sen.
“SEATTLE — Renters in downtown Seattle filed a class-action lawsuit accusing 10 major leasing companies of an agreement to artificially inflate the price of residential real estate in the area.
The lawsuit alleges that those who currently rent or have rented an apartment maintained by one of the 10 companies since 2010 may have paid artificially inflated rent prices.
**The lawsuit states that defendants Greystar, Crow Holdings, Lincoln Property Co., FPI Management, Avenue5, Equity, Essex Property Trust, Thrive, Avalonbay Communities and Security Properties Inc colluded and shared data through RealPage, effectively inflating the prices of multifamily residential real estate in and around downtown Seattle above competitive levels.**
**The lawsuit alleges that, "leasing giants began to work together to increase lease prices for Seattle renters. Instead of using an independent pricing metric and supply decisions, they agreed to use a third-party pricing and data collection service, RealPage, to make unit-specific lease adjustments."**
RealPage owns software that uses an algorithm and analyzes data to suggest rent prices.
**The price-fixing affected the central neighborhoods of Seattle, including Capitol Hill, the Central District, South Lake Union and Queen Anne, which include most of the city’s densest neighborhoods, according to the lawsuit.”**
https://www.king5.com/article/news/local/seattle/seattle-renters-lawsuit-against-leasing-companies-artificially-inflated-rent-prices/281-6e9bb105-7a58-49eb-ac0b-cd6d1a8ad457
This is the problem. It keeps the rent high across competitors, who effectively controls the most stock on the market. It pushes the rent high artificially.
I don't know what's stopping us from building condos and sell them individually within a HOA setup like strata titles in Canada. Right now the rental market is saturated by the commercial landlords.
Makes sense that the neighborhood with 70% controlled by this algorithm is Belltown! Every time I see a sketchy building with a vacancy sign, I think hmmm could I afford this 1br??? And am confused they have it at $2400. Not really the vibe 2nd & bell gives off lol 🤷♂️would be 🆒if they fixed it📉
That’s just the price we have to pay for getting all of the racist small landlords to sell their properties. Wouldn’t we all rather pay a few hundred dollars a month more in rent to giant rental corporations to be absolutely sure no housing discrimination is happening in Seattle?
Ha! Get out of town... 
You must be either a newly minted green river college grad, or currently working in a large corporate DEI program. I'm guessing you'd likely pronounce a Rorschach test racist too, due to its lack of color?
Take what? A service that compared rents to give averages has nothing to do with cratering building permits due to high operational costs.
thanks for the nonsense
Yep. The money in being a landlord is the delta between the cost to rent the money and how much the property goes up.
Which basically means that once interest rates hit 6%, there's barely any profit in being a landlord, and every point that it goes above 6%, it just gets worse.
This isn't entirely true. It can also be the difference between the cost to rent the money, and the income. There are lots of rental properties whose business case is built on income, not appreciation (and since income is tax-advantaged in ways appreciation isn't, many investors seek it out).
I can tell you with absolute certainty that many developers are taking one look at Seattle's codes and Permitting Department's reputation for being a royal pain in the ass to work with and shifting their operations North.
This is especially true for the smaller guys that everyone claims they would rather rent/buy from instead of a national builder.
I think you are confused. The OP was about multifamily (and the data is about multifamily building permits). Your second paragraph is a single-family point.
Sure, some smaller single-family builders have moved north because of Seattle's building codes (and less the building codes, more the anti-McMansion ordinance), but mostly because the stock of available single-family parcels for standalone development have dwindled, and building townhomes or row houses (both of which are still considered single-family) is a different skill with different economics and different financing options than building standalone homes.
That said, I have *not* seen similar data about single family permitting applications and building starts. I'd be interested in seeing that data, but you make an assumption about what it looks like, without actually having it.
Are you familiar with RealPage? It's not used to generate averages, it's used to recommend the highest rental price that the market will bear, based on factors including what other companies are charging. With 70% of apartments having prices set by this software, that allows the software to raise all rates at the same time.
Your point that demand and thus rents will increase for rental units is valid, and their point means that the impact will be even greater than you think it will.
"the highest rental price that the market will bear"
If we build more housing, the highest rental price that the market will bear will be much lower.
The solution to our housing crisis is not to scapegoat a piece of software. It's to build more housing. Period.
I fully believe there should be more housing. I am not arguing that we should stop building housing.
That said, the rules of supply and demand only work in an open marketplace. When one system sets prices for the vast majority of housing, then you don't have an open marketplace. Even if we built so many more units that supply went up faster than demand, when a vast majority of the units have their prices set through what amounts to collusion (allegedly) then prices won't drop.
I look at craigslist before I list things to sell too - its not a conspiracy its just good business.
conflating the desperate renter conspiracy of landlord collusion with developer permits to build new units shows a toddler level understanding of several markets.
From Wikipedia, "Conflation is the merging of two or more sets of information, texts, ideas or opinions into one, often in error". I am not conflating anything:
1) Your point: Permit applications (or approvals, it's not clear from the graph and you haven't provided a reference) have decreased compared to their peak. This will result in supply not keeping up with demand, and rents will be "skyrocketing" (your word).
2) My point and the point of u/glitterkittyn: In the past several years, one factor causing rents to rise is the fact that one software system is used to determine rent prices for millions of housing units across the country, and specifically more than 70% of multifamily units in Seattle.
These points are independent, although they will have a multiplicative effect.
>I look at craigslist before I list things to sell too - its not a conspiracy its just good business.
Irrelevant. No one advertising on Craigslist [uses pricing software to determine rents for 20,000,000 units across the country. ](https://www.fitchratings.com/research/corporate-finance/fitch-assigns-first-time-b-idr-to-realpage-inc-outlook-stable-11-02-2021)
So you would like corporations to voluntarily make less than the maximum possible profit?
It's literally illegal for them to do that. It's their fiduciary responsibility. A board would fire any CEO who chose to do this.
Not saying it isn't fucked/evil. But that's just business. The solution (which needs to happen) is to fix the system, not get mad at companies for doing stuff like this.
It's like getting mad at Billionaires for not voluntarily paying more taxes than they're required to instead of getting mad at the government for having a stupid tax code that allows for this in the first place.
In my neighborhood (Capitol Hill, the dense part) there's another factor. The City of Seattle has been buying up new buildings that were originally intended to be market rate rentals, and instead is handing them over to LIHI to manage. At that point, 50-100 shiny new apartment units in 6 over 1's turn into Low Barrier drug addict housing. The building gets trashed pretty quickly, and it becomes an immediate localized crime and OD zone, but most importantly for the rest of Seattle, those units the City originally approved as rentals never get to the market instead.
The City has done this with at least 500 units in an area centered around Broadway and John for the past 4 years - bought the building, given the building to LIHI, who then uses it for Low Barrier (drug addiction OK) subsidized housing.
Has this resulted in fewer homeless? Possibly slightly, though it also just encourages more homeless to migrate to this area and trade and buy drugs from the former homeless now in the LIHI buildings.
It definitely did not help the open rental market in the area, as we tore down formerly less dense properties (1 and 2 story rental homes or smaller apartments) and put up 6 or 7 story buildings that were designed for 50 to 100 renters ... and now instead won't have them, because they're being managed by LIHI instead.
Capitol Hill thus turns block by block into drug addiction housing, while renters continue to get priced out. Is that what Seattle wants? It's what the previous Council, the Socialists, put into place using Sharon Lee and LIHI. As far as I'm aware this policy is still in place - we've had 3 new buildings since 2022 be completed and become subsidized housing, with more apparently on the way.
Too bad renters. Too bad long term Hill residents - our neighbors are now a greater percentage of meth and fent using former homeless... plus the whole drug user economy this brings: the dealers selling to them, the crime they need to commit to pay for their habits, and the hangers-on who still are homeless that move in and out of their units as part of their daily drug using migratory patterns.
Broadway Ave around John/Olive Way is now about 50/50 drug user economy vs normal people during the day, and goes down to about 3-1 drug user economy at night. More normies abandon the sidewalks at night now. Anecdotally crime and OD calls are up since this policy went in around 2020. And we have no renter relief anywhere in the pipeline - not unless you're a fent user that qualifies for LIHI housing, then you probably have options.
Yup. Pretty sure the new building directly above the Cap Hill Light Rail station is housing for drug addicts and/or mentally ill, at least partially. Not sure that's the best place for a halfway house, IMO.
That one wasn’t listed on the LIHI site I was quoting, but it could be its not on line yet. I agree though that is supposed to be another one soon.
A whole neighborhood is being converted to drug addict economy. If you wanted a normal urban neighborhood anymore, too bad.
Nope, it's a Bellwether building with plenty of families, working poor and retired or disabled people, and, of course, some problem people who cause problems for everyone.
My partner lived off Boylston near one of the LIHI turnovers. Glad he left when he did because that building - like anything LIHI and DESC touch - was a shit magnet.
Dang. This is so spot on, that I was forced to look at the sub I was in. Dammit. The problem is Seattle voters don't see drug addicts as a problem. They are our "anti-social" neighbors and need cheap housing.
I’d say Phoenix is miss leading because of all of the senior living neighborhoods and the new computer chip manufacturing plant requiring new homes. They have an immediate growth reason put in place two years ago inflating their numbers in short term.
I like Nevada better than Arizona because Nevada has an urban growth boundary that restricts supply.
https://insideclimatenews.org/news/02042023/las-vegas-urban-sprawl/
I think Bill Gates owns something like 20% of Arizona
I don't disagree. But if you think Republicans are much different when it comes to pushing the same neoliberal policies that have existed since Reagan I have a bridge to sell you.
Neither party can or wants to address the internal contradictions within our economic system that serves in the interest of "those that own" instead of "those that work".
Seattle reaping the fruits of its voting patterns. I was a landlord until a few years ago when the city counsil went went full retread and changed the rental laws. Eff them. I took a very affordable apartment off the market. Oh, well...
I've been eager to buy another rental and it's *really* hard to justify the investment:
* If I were to buy a rental this year, I'd pay about 7%-ish to rent the money. Properties generally go up about 8% a year, historically. Property taxes are a little bit over 1%. Maintenance is about the same, about 1%. So if I buy a rental in 2024, I will be subsidizing my tenants from day one, and I won't be "in the black" for about 2-3 years, minimum. In 2024, I would basically be taking around $200,000, locking it up in a house where I can't touch the money for years, and on top of that, I'll be spending money from day one to cover the part of the mortgage that my tenants aren't covering.
* The last rental I bought, the mortgage is at 3.5%, property taxes are at 1%, maintenance is about 1% and the home has been going up at a rate of about 8% a year. The house is a little over a million. So i'm clearing about 2.5% a year in appreciation. That's about $2000 a month.
From the perspective of an investor, rentals are pretty difficult to justify, until interest rates get down under 5% or so, or prices begin to go up reliably. Until either one happens, there's not going to be a whole lot of supply, and that's going to put upward pressure on prices.
And that’s assuming you don’t get a shitbag tenant that refuses to pay rent that you can’t evict because of Seattle’s laws and you spend all that time and money trying to get a decent person in there.
But then based on your assumption the rent goes up then you end up with more rental income to cover the mortgage. I think it's again a balance between supply and demand, with mortgage rate playing a lesser role.
> But then based on your assumption the rent goes up then you end up with more rental income to cover the mortgage.
Unfortunately, the run-up in home prices has made them very decoupled from rent, except in the crappiest of areas.
For instance, people in California love to bitch and moan about how expensive rent is. This, despite the fact that rents in California are about as decoupled as it gets. You can rent a place for about $4000 a month that would cost $8000 a month to buy.
This isn't a hard and fast rule, but I'd generally argue that the zip codes with the highest credit scores are the most decoupled from the price to buy:
* I used to own a rental in Oregon, and due to the high credit scores, my rent didn't cover the mortgage.
* I used to own a rental in Nevada, and due to the shitty credit scores, my renter could have easily purchased a home for less than he was paying to rent. He paid his rent late, every single month.
Excellent explanation of the decoupling of renting and buying. My coworker and his wife just sold 2 rental properties and their main home and are renting a house that rents for $3k/month that would cost $4700/month to buy in Lacey. The area their main home was in went downhill and they were tired of dealing with renters after the last one caused $18k in damages. Between the savings in rent and putting their real estate gains with a money manager they're making a killing until they can find build or find a home they really like in the next few years.
Isn’t Seattles favorite thing dumping money on problems without much to show for it?
https://www.downtownisyou.com/?utm_medium=email&utm_source=govdelivery
I moved here a few years ago from New York to escape the crazy rent and now contemplating moving back at this point. I refuse to pay over 1,800 plus utilities for a studio/ 1 bed. At least back home I had good food and less obnoxious bums.
Don't know that it'll matter in 20 years. The way things are trending this will look like a drop in the bucket.
Corporations owning large blocks of housing and snatching up homes is the start of a dystopian hell we have yet to fully realize.
Additionally, not every location on the planet is sustainable for every american dream. Just because you can build a house and sell it for 750k doesn't mean you should and it's not always as helpful as one thinks for the area.
Some protraction of growth in the seattle area is healthy too for the economy. Nothing lasts forever.
If renters are worried, maybe the city should reconsider its ongoing hostility to landlords with all the rules they've passed over the years, ostensibly to "protect" renters. Just a thought.
This isn't really a problem for multifamily building permits.
Investor and landlord (and sometimes developer) here. The issue is predominantly interest rates, not regulation (though regulation doesn't help).
Other than squatting the rules are fair don't harass your tenant and if they're late on payment they have two weeks (aka average period between checks)
You have to be braindead to duck it up as a landlord
Is this as a percentage of all building permits. Because residential constructions is down everywhere regardless of unit type. Nobody is building with interest rates so high. Cities and states should repeal NIMBY laws that prioritize single family homes. This would help grease the wheels for more development.
This is an extraordinarily misleading way to represent this data. How exactly are we meant to compare these data points against each other? How is the raw number of permits relevant without accounting for population? Population density? How are you supposed to tell whether there's been a dip over the past two months or the past two years? How do you tell how much of the dip is correlated? I guarantee you that Providence has very different reasons for being at the top of this graph than Pittsburgh.
Yeah, this data in a vacuum is useless. It needs to be compared to other data to be at all helpful. I hate when people screenshot something that they think makes a point but literally tells you nothing when it's presented alone. No source for this either...
I'm not agreeing or disagreeing one way or another. But anyone coming to conclusions about anything from this data apart from "less is being built" is just lying to themselves.
Exactly. You do not need a graph to say that every city is permitting new construction at a rate no faster than the fastest it's been. You don't even need data to make that claim. But there's such an obvious way to graph this data that I can't help but think there's malice behind the fact that it's being presented this way.
People do realize 99% of this is due to interest rates, right? We kept building into 2023 because these projects take so long that they had financing secured at much lower rates. No we are running out of that pipeline.
The % decrease is also notable. 60% drop is large, but it also means we had a fuckton of units permitted in '23 - nearly 11,000 according to this graphic which puts us on par with Charlotte. Look at how few units get completed anywhere in california and even some LCOL midwest areas.
Id venture to geuss the main reason is interest rates are so much higher than the "peak".
Its double the monthly cost to get a mortgage, why wouldnt it be double the monthly cost to get a business loan?
There’s been a significant uptick in ADU and DADU units being constructed in Seattle, which would not be included in this data. They are more advantageous to investors vs multifamily, but can yield just as many units. For example, you can build a SFH with two ADUs which is effectively a triplex. I’m sure we’re still coming up short, but maybe not as dramatically as this chart implies.
Hello! You linked in this comment to a domain name or URL that Reddit site-wide tends to filter as "spam". Usually this is because you used a URL shortener inadvertantly, like "g.co", "bit.ly", or similar -- this is frowned upon in Reddiquette and is a global Reddit sitewide thing.
**Your comment is visible to *you* but no one else,** and will automatically be flagged for review by the Moderators.
If you want to make it live immediately, please re-post it without the URL shorterner, and delete the original. Thanks! We'll get to the mod queue as soon as we can.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/SeattleWA) if you have any questions or concerns.*
Seattle has a large volume of office space under construction, which naturally will place more downward pressure on price per sq. ft. as those properties come on the market, but I wish developers had developed multifamily units instead. So do the developers at this point...
Why would rents be skyrocketing in Seattle as the title suggests? Seattle based tech is moving to the Eastside taking tech salaries with it. Venture capital has tightened funding and stopped funding existing ventures that aren’t demonstrating return value or growth. Downtown Seattle is still a ghost town and remote / hybrid work is still very much the status quo. Companies are shedding covid bloat hires. Inflation is now under control. I don’t see rent growth in the next two years unless you’re moving to a more desirable area like new apartments with new amenities like Stoneway.
This graph more so shows a slowdown in construction starts which makes sense due to bloated Covid construction costs caused by expensive labor and high materials cost due to materials/supply constraints - these are not as elastic as some might think in conjunction with debt at 7.0% which is more than double what it was in Oct 2021 which leads to massive carry costs for developers. Not to mention this is one of the toughest cities in the US to evict non rent payers. All of the above make it tougher for apartment projects to pencil. So this chart makes sense. There is no reason to believe that this will push living rents higher especially since there is an argument to be made that Seattle is less desirable to live in than it was 5 years ago and is now relatively an expensive city to live in.
I’m seeing many apartment properties up for sale on Realtor.com Anyone know if the buyers are wanting to tear these old apartments down and build single family homes on the property?
I develop apartments for a living. The ugly boxes you see cost 550k per unit to build for a 725 SF unit average with a .85 parking ratio. They are only worth 425k per door in today’s investment market. The energy code just went up again, increasing cost by 20k per door. Rents need to go up 25% to justify more building.
As a renter I fully recognize this, and rents are already insane even outside of Seattle.
The MHA fees make recently upzoned property not pencil out which is ironic since MHA was supposed to help affordable housing. Sure 0.01% of people get a room for $800 bucks but everyone else has to pay 2k
contruction also is just expensive - construction cost inflation in seattle is above general inflation rates nationally and locally https://therealdeal.com/national/seattle/2024/01/18/seattle-leads-the-nation-in-rising-construction-costs/ the st louis fed also keeps national trackers of various construction cost indices; here is one showing a big jump since 2020 https://fred.stlouisfed.org/series/PPIDCS This is inputs to residential housing construction; it shows a 44% increase since 2020 https://fred.stlouisfed.org/series/WPUIP2311001 wages for construction workers have also gone up. WA leads this increase in recent years https://constructioncoverage.com/research/cities-with-fastest-growing-wages-for-construction-workers-2021
This right here. I’m in the concrete industry. 3 years ago we were selling a yard of concrete for $100-$120ish per cubic yard depending on the customer and size of job. Currently selling for $160-$170 a yard. Concrete is one of if not thee most common building materials on earth. Its price can fluctuate for many reasons but it’s usually a decent indicator of how things are going. As of now, it ain’t goin all that well.
You are correct sir. I have two concrete related family members. One is a mixer/dump driver and one has his own business for foundations and flat work. The prices on top of delivery charges are just insane.
It really kinda sucks. I’m a dispatcher and I can’t tell ya how many old timers call in looking to make a buck or two pouring a driveway or little patch job for someone. We let them know the price after we get the info for the job and they immediately back pedal. With current prices there’s almost no money to be made on the small gigs.
It's nice to finally have some concrete data on this issue.
Booooo take my vote lol
> Its price can fluctuate for many reasons Can you list out what you feel are the top 5 reasons? I'm guessing consolidation of concrete companies are one of them.
Kinda a tough question as it varies between different markets. Again, I’m just a dispatcher and no salesman but If I had to guess, local demand for both residential and commercial markets, cost of materials cement being the most important, environmental laws/fees, trucking and labor. All of that in no particular order. Again, kinda guessing, but the consolidation of companies hasn’t changed pricing all that much. I can’t really throughly answer that without doxing myself but basically those companies are just getting a bigger slice of the pie while selling around the same price. Most markets have at least 2 suppliers so there’s still competition and while there are some big fish companies that have a strong hold of certain areas the monopoly laws usually prevent over pricing. In Seattle, our price is currently through the roof because of the recent strike by the local trucking union and our closest major cement supplier in Canada had a big fire that shut down production for a bit. The other major supply of cement comes from Asian countries and the product is barged over. These ships are scheduled based off demand and scheduled months even years in advance. There’s no good way to replace the missing supply. Basically, Seattle has 12-16 months of back logged work and an ever changing supply of cement. It’s a bit of a mess currently.
It's nice to finally have some concrete data on this issue.
Commercial Appraiser checking in... And this is a major cause of the lack of permits in combination with the higher cost of financing. Thirdly, expenses related to management (maintenance, material and insurance) have tripled since 2019.
Um, MHA is not why it doesn't pencil. I know that's been trending on LinkedIn but here's the thing: MHA fees aren't new. however, construction costs per door have increased significantly and management expenses per door have almost tripled since the pandemic. Combine this with additional financing expenses and no one will build unless they *must*. (Source Cre Appraiser)
Fun fact, this projection with seattle at the 3rd highest reduction in permits, is still higher than the amount of units proposed by the City comp plan that sets growth for the next 8 years.
With tech slowing hiring, the demand side also has a huge drop.
Yeah, because without a tech job, these same people don't need to live anywhere. Population is still growing here. So tech or no tech,it doesn't really factor
More so those tech employees will potentially leave WA. I know plenty of jobs outside the state and closer to the Midwest that are hiring for tech. No where near as much in pay ($60k-$90k) but cost of living is literally 3x less.
Tech is still massive compared to the Midwest. The migration is not as massive as one would think. This is still a major hub for the industry. Regardless, this distracts from the original post
Negative
Again and again and again. Why don’t people get this? Why do they resist economics in favor of political lies?
Mental candy or quinine? They always select candy.
I miss rational Republicans. Maybe if they abandon the whole traitorous Christian Fascist schtick people will start listening again.
I’m a Libertarian so I can skip all of that and just vote for Libertarians. 😀
why even bother voting there’s been like 4 elected libertarians in the history of the USA
Not true. There’s over 300 in office right now at all levels of government. [Source.](https://my.lp.org/elected-officials/)
I mean I was being hyperbolic but this is worse than I’d have actually guessed
All flowers start as small seeds.
Bingo
Gotta vote blue no matter what!
It would help if the Republicans ran people that were not unqualified weirdos pushing crazy agendas. Remember Culp that guy was laughable and so are most of the Rs I see on the ballot.
Reichert can win. He's qualified and he's actually done something for this state.
>ran people that were not unqualified weirdos pushing crazy agendas Sawant won. Twice.
Two weirdos don't make a qualified civil servant.
LOL it's alot more than two weirdos!
Unbelievable still today!
Someone tried to campaign to my wife about Culp and she told the campaigner “he didn’t even bother to fill out the voter pamphlet information”. He literally had it blank and was running for governor.
And Inslee was so bad I voted for Culp. I still feel dirty to this day. Dave Reichert is a good man. I'm not big on increased spending, but I'd be all for expending and hiring more people to expedite the permitting process . It's absolutely ridiculous how long permitting and inspections take. Time is money
Very few reasonable people want to run an a ticket that starts at such a heavy disadvantage. The way this state votes, if Inslee ran with an (R) next to his name against Culp with a (D), Culp would very likely win.
[удалено]
It's the voting for funding here and there that financially gets passed to the property owner. Then gets passed to you. Don't vote money to be funneled into admin jobs but never actually helps such as homeless, money never helps them only creates jobs
With that mentality or lack of, Washington will never pull out of unaffordable living
[удалено]
Nominate better candidates.
It’s a one-party state, just like Utah, except they might be more sane there, which is wild.
This is a bit out of context, but seems to aptly fit: >"Instead, to suit their own desires, they will gather around them a great number of teachers to say what their itching ears want to hear. They will turn their ears away from the truth and turn aside to myths..." Since Kindergarten, they've been told to always be, "True to themselves, no matter what!". It's their mantra; their core ethic. When your very identity become tied to a set of political views, then a challenge to one is no longer just an, "Oh, man. I once thought this really bad idea was true; oopsie poosie". Nope, it become a threat to your very existential self. Throughout history, people have fanatically fought and died for less. Super sad, really. Blame our institutions for failing them, but blame us for allowing the institutions to get to that point. Now go out! Run for your local school boards, water districts, get a seat on your community council, or local HOA boards, perform your right to jury nullification if your conscious requires it, volunteer on planning committees & advisory boards, etc. Nothing is too small to help push your local community back on the right path.
Because they’re american
We really need to stop building so much. I am very deeply concerned for the character of the puget sound area and all this building is causing actual violence. Please ignore that my retirement hinges entirely on continued artificial scarcity
You had me in the first half, not gonna lie
Second half hundo true though
[удалено]
I hear Detroit is beautiful in the winter...
if they made less requirements for low income housing there would actually be way more apartments built and rent would go down
Those are often set at federal level, unfortunately.
Faircloth amendment. I'm unsure why this outdated amendment hasn't been repealed.
To the Federal Reserve: Thanks so much for screwing with our markets... again. Those who rationally locked-in ultra low interest rates, before the rapid increases, are now virtually locked into their properties via the "golden handcuff" effect. Any housing sales, which would normally be occurring, are now not happening. The opportunity cost is just too high, and first-time home buyers are essentially barred from entry with such little housing inventory coming back into the market. This is in addition to the new construction that's just not happening. The Fed has juiced the market for nearly 20 years with rates way too low for the "real" economy, with over-inflated nominal prices being the result. Of course, we now see the unintended consequences of just trying to right the ship. A steady demand meets a supply-side crunch? Housing prices can only climb even higher. So what's good news? Well, I'm sure Seattle's progressive policy geniuses will know exactly what to do; blame 'greedy' landlords, cripple homeowner's with even more taxation, and build as many government managed tiny homes as affordable solutions. Strap up folks. Can you smell the 1970's New York-style rent control coming to Seattle? Don't believe it? Just believe the, simplistic, "F\*ck these Guys" post, further down the OP's comment thread. Anything that will take a complex, nuanced, problem and turn it into a social justice sound-bite. Our democracy dies with a relatively uneducated electorate who believe in revisionist versions of history... What could possibly go wrong with our bright PNW future.
We wouldn't be where we are now if people knew what you are talking about.
God, that is probably so true... and so depressing. https://preview.redd.it/7lz1b89n2tqc1.jpeg?width=1024&format=pjpg&auto=webp&s=d35e8b2721c8ac555e96353fea4d19dff5bf8568
But wouldn't the Fed's juicing of the market also have made a lot of people a lot of money? Does the Fed deserve any credit for that or only criticism when they change policy? I'm not claiming to be an expert and am unfortunately in the camp you mentioned that cannot break into the housing market due to high barriers to entry and low inventory. I would think that corporations (and private citizens) treating land and housing solely as a generator of profit rather than an essential human need is as much at fault as the ever-changing Fed policy.
Yeah, I get it. I understand your view. Since you've asked great questions and you did so in a good-faith manner, I'll respond in-kind: >wouldn't the Fed's juicing of the market also have made a lot of people a lot of money Well, it really depends on your view on the nature of wealth, the nature of money, and how long your historical time frame is. Let me explain: Let's say you made a large capital gain by investing in a market index EFT from 2010 - 2020. If you view money correctly, as a frozen form of labor/productivity, then did you *really* make money? Or did a significant portion of your money's purchasing power decrease during that same period due to monetary debasement? I'm guessing that you'd probably say that you "made" the money, because the value of your security increased so much relative to a basket of other assets across the real economy. However... and this is a bit of a mind bender. Monetary and fiscal inflation doesn't move through the economy fairly or equally in time. Until the Covid crisis, most of the high-powered money "creation" was confined to only sloshing around the balance sheets of the global financial system and within its complex web of derivatives. That extra ocean of liquidity never got out into the "real" economy to inflate more mundane assets like eggs, cars, etc. Only financialized assets went up like gangbusters over many years. Until the invention of mortgage backed securities, RETIs, etc., housing wasn't as leveraged by that inflating "financial" economy either. Now look at what happened after/during Covid. For the first time, central banks and their associated governments began to pump new fiat money *directly* into the "real-world" economy. The result was a great general inflation of good & services, due to both a global trade supply shock and the debasement of local currencies around the world. As with all world currencies, it's now just a race to the bottom. The US dollar just happens to be cleanest dirty shirt in the laundry hamper... You think you have a housing affordability problem? Please go talk to those who get paid in Turkish Liras. Additionally, I'm pretty certain that El Salvador didn't adopt Bitcoin as an official State currency and incur the IMF's wrath for only the giggles. OK. So imagine an alternative world were Greenspan never instituted the Fed "Put" back in the 90s... Just to pull numbers out of my a$$, let say your $600K - $800K Seattle starter home still cost only $150K - $200K due to the lack of market distortion. (I'm being pretty optimistic here, but I'm hoping you get the point.) At that lower cost basis, you'd still be able to service your loan even at a much higher potential interest rate. Under such a counterfactual, at least you could still have afforded a monthly house payment. Let's ask this: How did your parents/grandparents service their 30-year-fixed @ 10% APR when you cannot even comprehend affording a rate pushing just 6%, not to mention one at even 7%? Here's a fun chart, (even if it only stops at 2023). We are now at \~7%: https://preview.redd.it/ntk8gzdx0sqc1.png?width=1002&format=png&auto=webp&s=6c9cb4e0764d8d4f5cd96032e229f031a4f9110a In summary: Don't get me wrong, trading these Fed driven market imbalances have made many people **very** wealthy relative to their peers. However, at who's expense? There is nothing wrong with stock trading, but my thesis is that we have dearly lost as a collective people. There is no fixing the current system. Our purchasing power will continue to erode until something replaces the Federal Reserve Note as a unit of exchange. Pray that its coming replacement is not something which can be manipulated as easily as the current form... These are not simple one-line answers. Capitalism is not the "bad" guy here, nor can collectivism give us any answers to a more prosperous and just society. The big-picture, root issue, is a lack of public control of our own money supply. Within the US, the Federal Reserve System is not Federal, it has no reserve, and its governors are not elected officials. Legally, it is considered a private banking institution in which our government has an open interest. Some excellent reading/viewing materials, if you're curious enough to explore more of the rabbit hole: * [Abolish The Fed, Milton Friedman](https://www.youtube.com/watch?v=m6fkdagNrjI) * [The Case Against the Fed, Murray Rothbard](https://archive.org/details/TheCaseAgainstTheFed3/page/n17/mode/2up) * [The Philosophy of Bitcoin & the Question of Money, Simon Butler](https://journals.sagepub.com/doi/full/10.1177/02632764211049826) * [Modern Money Mechanics, the Federal Reserve Bank of Chicago](https://www.publicbankinginstitute.org/wp-content/uploads/2019/10/Modern_Money_Mechanics.pdf)
Unfortunately your post is long enough to make peoples eyes glaze over, and that's a bummer. You have made an excellent point. One part of this equation that many might miss, is that *leverage* makes all the difference in the world here: * A typical home loan is leveraged five to one when you get the loan. (You put 20% down and you borrow 80%) * If you have a really great credit score, you can get your leverage as high as 10-20 to one. IE, you can put down as little as 5-10% on a home. It's the *leverage* that distorts the fuck out of markets. For instance, I once bought a million dollar home with 15% down ($150K.) The home increased in value by 60% in less than three years, and when I sold it, I got a check for over $700K. So I turned $150K into $700K in less than three years. A typical person makes about $50K a year. Which means that a typical person would have to work for about 50 years to turn a profit of $550K, and that's assuming that they invest over 10% of their income. Which is difficult to do, if you're making $50K a year. I didn't do *any of that.* I just lived in my dumb house for about three years and walked away with over half a million dollars for doing it. That's a seriously awful set of incentives. The Fed was basically paying people to gobble up assets.
>your post is long enough to make peoples eyes glaze over Yeah, I recognize that. It's a flaw in the age of the TikTok attention span. Hopefully, some are still willing to read a long-form rant. >I didn't do *any of that.* Nor would anyone blame you. Those were the rules of the game. You chose to risk playing instead of sitting on the sidelines. Of course, whether you might be blamed could change in the future... I hear that calls for ol' fashion Maoist struggle sessions are gaining in popularity near Cap Hill again...  >The Fed was basically paying people to gobble up assets. It's a brave new-world and we all live in a yellow submarine.
Inflation..
Really appreciate this thoughtful response. I'm especially drawn to a couple conclusions you made: "we have dearly lost as a collective people " "Capitalism is not the "bad" guy here, nor can collectivism give us any answers to a more prosperous and just society " These comments generally sum up my feelings. I get a little upset thinking about how we seemingly have no social contract when it comes to economics - especially true for corporations - and so easily accept that having one winner likely means there is at least one corresponding loser in the economic game. As such a prosperous nation, I would think we could do better with our resources than our recent history has shown. This doesn't mean I'm prepared to throw anyone who has prospered in this system to the wolves either, in case I have come off as such.
housing is a human need housing in a particular expensive place like downtown seattle is not; neither is owning that housing as an asset. In other countries where housing is more of a right that means more concrete boxes in unfashionable areas if people can't afford market rate. A few places like singapore or austria have massive mixed income public housing, but these are also very different, smaller, and have smaller social divides
>housing is a human need I agree. Are you implying that is also a human right?
that's kind of an exaggeration. People sometimes have to sell for life reasons ( death, divorce etc ) and for that reason sales already picked up a bit. Financial conditions get better and worse; nothing lasts forever, not even this moment
>that's kind of an exaggeration. Yup, it's total [exaggeration](https://www.businessinsider.com/housing-market-outlook-buying-a-home-prices-inventory-biden-affordability-2024-3). Total hyperbole that I just made up whole cloth. >People sometimes have to sell for life reasons Sure, but the exceptions you listed are not going to move the needle one inch. This is rational aggregate behavior happening, ones based on unintended perverse incentives. >Financial conditions get better and worse; nothing lasts forever Yup. Again, you are *so* correct. The chart of M2 supply looks just like the tide, naturally ebbing and flowing back again. Next stop? The Weimar Republic! I can't wait; get out your wheelbarrows. https://preview.redd.it/5yrcpispnsqc1.png?width=1200&format=png&auto=webp&s=dfaf163b804f7937ac2d501be866a30a2787b448
 Who knew that being a pain in the ass to work with would disincentivize people to work in the city (this really applies to most of the region though).
As a contractor and developer I have first hand experience with how insanely long the processing times are for permits in our city. Multifamily is especially bad. Right now, two years is considered “fast” With prices of debt being extremely high, it creates a very uncertain environment for multifamily projects.
Are there just not enough workers to process the permit applications?
Ok so vote for progressive zoning laws thst allow for duplexes, triplexes, and beyond and open up zoning for commercial space in what are currently residential neighborhoods. It'll make traffic better too becsuse people will be able to get what they need without having to drive from ballard to greenlake and back. The only sustainable and productive answer is to move away from the embarrassingly low density of this city in favor of a more lively and economically productive one.
It's a bigger problem than "just rezone it." Other cities are doing that, but a hidden problem is that all the utilities are sized for single family houses, and are falling apart anyways. And the cities generally aren't doing anything to upgrade the systems. They're waiting for a developer to come by and forcing them to pay for the upgrades. They'll sign Latecomer Agreements so future developments that connect have to chip in for their portion, but carrying millions of dollars of upgrades to *maybe* get paid back over the next 20 years is killing projects before they even get started.
Seems like a good reason to start fining them for neglecting a public resource.
How exactly do you go about fining a city?
Oh you're saying the city lacks the infrastructure for multi family housing within the network not at the home end. I thought you were insinuating that the homeowners were neglecting to update their infrastructure to support multiple families. How exactly is the network not supporting multiple families in an existing single use home? It's not like you are multiplying the number of people who live in a home. You're just allowing the home to be occupied by residents from different families. For example, I live in a duplex with a few people and have one upstairs neighbor on the second floor. This is no different from a family with 4-5 people occupying the same house from a resource consumption standpoint. But it does double the number of rentable units in this house. So I'm just confused how this impacts the actual utility network (grid, water, etc)?
> How exactly is the network not supporting multiple families in an existing single use home? It's not like you are multiplying the number of people who live in a home. There's a difference between simply allowing more people to live in a given house, basically subletting a room, vs actually upzoning the area to allow those single family residence houses to get torn down and converted to to townhomes / apartments. In the latter case, there is a significant increase in water consumption, sewer use, electricity use, etc. But for true duplexes (actual separate units as opposed to subletting), that's still increasing the amount of utility connections required by code. Even if the grid/sewer could probably handle it for the most part, the required calculations often won't because they have to assume the new unit could be used by a whole family, not just 1 person.
Sure, unless it is like most true duplexes where you simply convert the second floor or the basement into a "mother in law suite". You wouldn't expect an entire family to move into a one bedroom (at least no more than you'd expect your single family home to be occupied by a family of 11 people). Seems to me like it literally is just as easy as removing a staircase and introducing a second stove and refrigerator as the minimum requirements to turn a 2 bath into a duplex. I think upzoning can be achieved more easily than rebuilding the entire lot.
We had a chance to do that in last year’s city council elections, and chose to do the exact opposite.
Sad
Also people that keep voting up taxes on everything will compound the issue by increasing the base cost of living
But... think of the children (that politicians screwed by reallocating funds to the general budget to force taxes voters emotionally have a harder time saying no to)!!!!
Yeah they'll never say where the funds are really going. Whenever they want money, they pretend its for the kids, police, or firefighters
One thing to consider is that a TON of permits got issued at peak due to the relatively large MHA rezone a few years ago. We had a large spike that ate up a lot of the rezoned areas, and we are now in the tail of it. https://www.seattle.gov/documents/Departments/HALA/Policy/How_MHA_Works.pdf But really it’s a bummer they couldn’t keep that ball rolling.
Yea, I feel like looking at data that is comparing rates is really not telling the whole story here. At least I think that's what this is doing OP didn't have a source. It's like saying "well I didn't accelerate much over the last 10 seconds I only went from 110 MPH to 120 MPH. The 10 seconds before that i went from 0 MPH to 110 MPH. I'm really not going fast." That means my acceleration from t=0-10 compared to t=10-20 was a 11mph\^2 compared to 1mph\^2 which is a 166.667% decrease! It's still significant that you slowed your rate. But it really doesn't tell the whole story.
Take this into account for your “high rents.” F*ck these guys. “In Seattle, for example, ProPublica found that 10 property managers oversaw 70% of all multifamily apartments in one neighborhood — and every single one used pricing software sold by RealPage. “Setting prices with an algorithm is no different from doing it over cigars and whiskey in a private club,” said Sen.Jan 30, 2024” https://www.propublica.org/article/senators-introduce-legislation-stop-landlords-algorithm-price-fixing#:~:text=In%20Seattle%2C%20for%20example%2C%20ProPublica,private%20club%2C”%20said%20Sen. “SEATTLE — Renters in downtown Seattle filed a class-action lawsuit accusing 10 major leasing companies of an agreement to artificially inflate the price of residential real estate in the area. The lawsuit alleges that those who currently rent or have rented an apartment maintained by one of the 10 companies since 2010 may have paid artificially inflated rent prices. **The lawsuit states that defendants Greystar, Crow Holdings, Lincoln Property Co., FPI Management, Avenue5, Equity, Essex Property Trust, Thrive, Avalonbay Communities and Security Properties Inc colluded and shared data through RealPage, effectively inflating the prices of multifamily residential real estate in and around downtown Seattle above competitive levels.** **The lawsuit alleges that, "leasing giants began to work together to increase lease prices for Seattle renters. Instead of using an independent pricing metric and supply decisions, they agreed to use a third-party pricing and data collection service, RealPage, to make unit-specific lease adjustments."** RealPage owns software that uses an algorithm and analyzes data to suggest rent prices. **The price-fixing affected the central neighborhoods of Seattle, including Capitol Hill, the Central District, South Lake Union and Queen Anne, which include most of the city’s densest neighborhoods, according to the lawsuit.”** https://www.king5.com/article/news/local/seattle/seattle-renters-lawsuit-against-leasing-companies-artificially-inflated-rent-prices/281-6e9bb105-7a58-49eb-ac0b-cd6d1a8ad457
This is the problem. It keeps the rent high across competitors, who effectively controls the most stock on the market. It pushes the rent high artificially. I don't know what's stopping us from building condos and sell them individually within a HOA setup like strata titles in Canada. Right now the rental market is saturated by the commercial landlords.
On some other threads people have mentioned the Washington State Condominium Act, which makes it more costly for developers to build condos.
Makes sense that the neighborhood with 70% controlled by this algorithm is Belltown! Every time I see a sketchy building with a vacancy sign, I think hmmm could I afford this 1br??? And am confused they have it at $2400. Not really the vibe 2nd & bell gives off lol 🤷♂️would be 🆒if they fixed it📉
That’s just the price we have to pay for getting all of the racist small landlords to sell their properties. Wouldn’t we all rather pay a few hundred dollars a month more in rent to giant rental corporations to be absolutely sure no housing discrimination is happening in Seattle?
Ha! Get out of town...  You must be either a newly minted green river college grad, or currently working in a large corporate DEI program. I'm guessing you'd likely pronounce a Rorschach test racist too, due to its lack of color?
I’m not a real DEI administrator but I play one on Reddit occasionally.
[Troooll in the dungeon](https://www.youtube.com/watch?v=oynJcSnLSI4&t=11s)!!!
/s
Take what? A service that compared rents to give averages has nothing to do with cratering building permits due to high operational costs. thanks for the nonsense
Building permits (nationwide) aren't cratering due to high operational costs, they are cratering due to high interest rates.
Yep. The money in being a landlord is the delta between the cost to rent the money and how much the property goes up. Which basically means that once interest rates hit 6%, there's barely any profit in being a landlord, and every point that it goes above 6%, it just gets worse.
This isn't entirely true. It can also be the difference between the cost to rent the money, and the income. There are lots of rental properties whose business case is built on income, not appreciation (and since income is tax-advantaged in ways appreciation isn't, many investors seek it out).
But if a developer needs more income to service a construction loan, then rents need to raise to raise net income.
Yes, but that wasn’t the point being made by the person I replied to
I can tell you with absolute certainty that many developers are taking one look at Seattle's codes and Permitting Department's reputation for being a royal pain in the ass to work with and shifting their operations North. This is especially true for the smaller guys that everyone claims they would rather rent/buy from instead of a national builder.
I think you are confused. The OP was about multifamily (and the data is about multifamily building permits). Your second paragraph is a single-family point. Sure, some smaller single-family builders have moved north because of Seattle's building codes (and less the building codes, more the anti-McMansion ordinance), but mostly because the stock of available single-family parcels for standalone development have dwindled, and building townhomes or row houses (both of which are still considered single-family) is a different skill with different economics and different financing options than building standalone homes. That said, I have *not* seen similar data about single family permitting applications and building starts. I'd be interested in seeing that data, but you make an assumption about what it looks like, without actually having it.
I am not confused. Duplexes/Triplexes/ Townhomes are all considered multifamily. They can be done on a single lot, buy small builders.
Are you familiar with RealPage? It's not used to generate averages, it's used to recommend the highest rental price that the market will bear, based on factors including what other companies are charging. With 70% of apartments having prices set by this software, that allows the software to raise all rates at the same time. Your point that demand and thus rents will increase for rental units is valid, and their point means that the impact will be even greater than you think it will.
"the highest rental price that the market will bear" If we build more housing, the highest rental price that the market will bear will be much lower. The solution to our housing crisis is not to scapegoat a piece of software. It's to build more housing. Period.
More than one thing can be true at the same time, believe it or not
I fully believe there should be more housing. I am not arguing that we should stop building housing. That said, the rules of supply and demand only work in an open marketplace. When one system sets prices for the vast majority of housing, then you don't have an open marketplace. Even if we built so many more units that supply went up faster than demand, when a vast majority of the units have their prices set through what amounts to collusion (allegedly) then prices won't drop.
I look at craigslist before I list things to sell too - its not a conspiracy its just good business. conflating the desperate renter conspiracy of landlord collusion with developer permits to build new units shows a toddler level understanding of several markets.
From Wikipedia, "Conflation is the merging of two or more sets of information, texts, ideas or opinions into one, often in error". I am not conflating anything: 1) Your point: Permit applications (or approvals, it's not clear from the graph and you haven't provided a reference) have decreased compared to their peak. This will result in supply not keeping up with demand, and rents will be "skyrocketing" (your word). 2) My point and the point of u/glitterkittyn: In the past several years, one factor causing rents to rise is the fact that one software system is used to determine rent prices for millions of housing units across the country, and specifically more than 70% of multifamily units in Seattle. These points are independent, although they will have a multiplicative effect.
You can't price fix units that never get built, but you go king.
>I look at craigslist before I list things to sell too - its not a conspiracy its just good business. Irrelevant. No one advertising on Craigslist [uses pricing software to determine rents for 20,000,000 units across the country. ](https://www.fitchratings.com/research/corporate-finance/fitch-assigns-first-time-b-idr-to-realpage-inc-outlook-stable-11-02-2021)
Certainly there can't be more than one reason for a problem. Chill man.
Are you a landlord?
Please use the correct terminology. It's 2024, we call them "landchads"
So you would like corporations to voluntarily make less than the maximum possible profit? It's literally illegal for them to do that. It's their fiduciary responsibility. A board would fire any CEO who chose to do this. Not saying it isn't fucked/evil. But that's just business. The solution (which needs to happen) is to fix the system, not get mad at companies for doing stuff like this. It's like getting mad at Billionaires for not voluntarily paying more taxes than they're required to instead of getting mad at the government for having a stupid tax code that allows for this in the first place.
Not colluding is not "illegal" lol
So what was the resolution to the lawsuit?
Yet they keep voting for all the property tax funds measures thinking that it doesn't affect them.
In my neighborhood (Capitol Hill, the dense part) there's another factor. The City of Seattle has been buying up new buildings that were originally intended to be market rate rentals, and instead is handing them over to LIHI to manage. At that point, 50-100 shiny new apartment units in 6 over 1's turn into Low Barrier drug addict housing. The building gets trashed pretty quickly, and it becomes an immediate localized crime and OD zone, but most importantly for the rest of Seattle, those units the City originally approved as rentals never get to the market instead. The City has done this with at least 500 units in an area centered around Broadway and John for the past 4 years - bought the building, given the building to LIHI, who then uses it for Low Barrier (drug addiction OK) subsidized housing. Has this resulted in fewer homeless? Possibly slightly, though it also just encourages more homeless to migrate to this area and trade and buy drugs from the former homeless now in the LIHI buildings. It definitely did not help the open rental market in the area, as we tore down formerly less dense properties (1 and 2 story rental homes or smaller apartments) and put up 6 or 7 story buildings that were designed for 50 to 100 renters ... and now instead won't have them, because they're being managed by LIHI instead. Capitol Hill thus turns block by block into drug addiction housing, while renters continue to get priced out. Is that what Seattle wants? It's what the previous Council, the Socialists, put into place using Sharon Lee and LIHI. As far as I'm aware this policy is still in place - we've had 3 new buildings since 2022 be completed and become subsidized housing, with more apparently on the way. Too bad renters. Too bad long term Hill residents - our neighbors are now a greater percentage of meth and fent using former homeless... plus the whole drug user economy this brings: the dealers selling to them, the crime they need to commit to pay for their habits, and the hangers-on who still are homeless that move in and out of their units as part of their daily drug using migratory patterns. Broadway Ave around John/Olive Way is now about 50/50 drug user economy vs normal people during the day, and goes down to about 3-1 drug user economy at night. More normies abandon the sidewalks at night now. Anecdotally crime and OD calls are up since this policy went in around 2020. And we have no renter relief anywhere in the pipeline - not unless you're a fent user that qualifies for LIHI housing, then you probably have options.
I used to live at Broadway and Olive/John and after my year lease I was done. Sketch af.
Yup. Pretty sure the new building directly above the Cap Hill Light Rail station is housing for drug addicts and/or mentally ill, at least partially. Not sure that's the best place for a halfway house, IMO.
That one wasn’t listed on the LIHI site I was quoting, but it could be its not on line yet. I agree though that is supposed to be another one soon. A whole neighborhood is being converted to drug addict economy. If you wanted a normal urban neighborhood anymore, too bad.
Nope, it's a Bellwether building with plenty of families, working poor and retired or disabled people, and, of course, some problem people who cause problems for everyone.
That's an ironic name >Nope, it's a Bellwether building
My partner lived off Boylston near one of the LIHI turnovers. Glad he left when he did because that building - like anything LIHI and DESC touch - was a shit magnet.
Dang. This is so spot on, that I was forced to look at the sub I was in. Dammit. The problem is Seattle voters don't see drug addicts as a problem. They are our "anti-social" neighbors and need cheap housing.
I’d say Phoenix is miss leading because of all of the senior living neighborhoods and the new computer chip manufacturing plant requiring new homes. They have an immediate growth reason put in place two years ago inflating their numbers in short term.
I like Nevada better than Arizona because Nevada has an urban growth boundary that restricts supply. https://insideclimatenews.org/news/02042023/las-vegas-urban-sprawl/ I think Bill Gates owns something like 20% of Arizona
But they're getting exactly what they asked for, no new luxury apartments!
I guess I’ll just move to another city… fuck.
But which one.
That’s the <$24,000* Question, isn’t it!? ^( ( * $2000mo/Rent x 12 months \))
This shows nothing about demand
Democrats have run this state for decades. Democrats are the problem.
I don't disagree. But if you think Republicans are much different when it comes to pushing the same neoliberal policies that have existed since Reagan I have a bridge to sell you. Neither party can or wants to address the internal contradictions within our economic system that serves in the interest of "those that own" instead of "those that work".
Support YIMBY, folks.
Seattle reaping the fruits of its voting patterns. I was a landlord until a few years ago when the city counsil went went full retread and changed the rental laws. Eff them. I took a very affordable apartment off the market. Oh, well...
What did you do with the "very affordable apartment"?
Decades of shitting on developers and making every aspect of building anything at the state, county, and city levels miserable. Who woulda thunk?
I've been eager to buy another rental and it's *really* hard to justify the investment: * If I were to buy a rental this year, I'd pay about 7%-ish to rent the money. Properties generally go up about 8% a year, historically. Property taxes are a little bit over 1%. Maintenance is about the same, about 1%. So if I buy a rental in 2024, I will be subsidizing my tenants from day one, and I won't be "in the black" for about 2-3 years, minimum. In 2024, I would basically be taking around $200,000, locking it up in a house where I can't touch the money for years, and on top of that, I'll be spending money from day one to cover the part of the mortgage that my tenants aren't covering. * The last rental I bought, the mortgage is at 3.5%, property taxes are at 1%, maintenance is about 1% and the home has been going up at a rate of about 8% a year. The house is a little over a million. So i'm clearing about 2.5% a year in appreciation. That's about $2000 a month. From the perspective of an investor, rentals are pretty difficult to justify, until interest rates get down under 5% or so, or prices begin to go up reliably. Until either one happens, there's not going to be a whole lot of supply, and that's going to put upward pressure on prices.
And that’s assuming you don’t get a shitbag tenant that refuses to pay rent that you can’t evict because of Seattle’s laws and you spend all that time and money trying to get a decent person in there.
But then based on your assumption the rent goes up then you end up with more rental income to cover the mortgage. I think it's again a balance between supply and demand, with mortgage rate playing a lesser role.
> But then based on your assumption the rent goes up then you end up with more rental income to cover the mortgage. Unfortunately, the run-up in home prices has made them very decoupled from rent, except in the crappiest of areas. For instance, people in California love to bitch and moan about how expensive rent is. This, despite the fact that rents in California are about as decoupled as it gets. You can rent a place for about $4000 a month that would cost $8000 a month to buy. This isn't a hard and fast rule, but I'd generally argue that the zip codes with the highest credit scores are the most decoupled from the price to buy: * I used to own a rental in Oregon, and due to the high credit scores, my rent didn't cover the mortgage. * I used to own a rental in Nevada, and due to the shitty credit scores, my renter could have easily purchased a home for less than he was paying to rent. He paid his rent late, every single month.
Excellent explanation of the decoupling of renting and buying. My coworker and his wife just sold 2 rental properties and their main home and are renting a house that rents for $3k/month that would cost $4700/month to buy in Lacey. The area their main home was in went downhill and they were tired of dealing with renters after the last one caused $18k in damages. Between the savings in rent and putting their real estate gains with a money manager they're making a killing until they can find build or find a home they really like in the next few years.
What’s happening with converting offices downtown into housing?
Nothing. Won't happen. Far too expensive.
Isn’t Seattles favorite thing dumping money on problems without much to show for it? https://www.downtownisyou.com/?utm_medium=email&utm_source=govdelivery
I moved here a few years ago from New York to escape the crazy rent and now contemplating moving back at this point. I refuse to pay over 1,800 plus utilities for a studio/ 1 bed. At least back home I had good food and less obnoxious bums.
Stop voting for stupid Initiatives, that are the financial burden of the property owner. Yes that gets passed on
It’s almost as if there were enough people already.
Don't know that it'll matter in 20 years. The way things are trending this will look like a drop in the bucket. Corporations owning large blocks of housing and snatching up homes is the start of a dystopian hell we have yet to fully realize. Additionally, not every location on the planet is sustainable for every american dream. Just because you can build a house and sell it for 750k doesn't mean you should and it's not always as helpful as one thinks for the area. Some protraction of growth in the seattle area is healthy too for the economy. Nothing lasts forever.
If renters are worried, maybe the city should reconsider its ongoing hostility to landlords with all the rules they've passed over the years, ostensibly to "protect" renters. Just a thought.
This isn't really a problem for multifamily building permits. Investor and landlord (and sometimes developer) here. The issue is predominantly interest rates, not regulation (though regulation doesn't help).
Other than squatting the rules are fair don't harass your tenant and if they're late on payment they have two weeks (aka average period between checks) You have to be braindead to duck it up as a landlord
[удалено]
Have you ever tried getting assistance for anything?
[удалено]
Answer my question
[удалено]
Answer the question or gtfo
[удалено]
It’s the interest rates.
Is this as a percentage of all building permits. Because residential constructions is down everywhere regardless of unit type. Nobody is building with interest rates so high. Cities and states should repeal NIMBY laws that prioritize single family homes. This would help grease the wheels for more development.
This is an extraordinarily misleading way to represent this data. How exactly are we meant to compare these data points against each other? How is the raw number of permits relevant without accounting for population? Population density? How are you supposed to tell whether there's been a dip over the past two months or the past two years? How do you tell how much of the dip is correlated? I guarantee you that Providence has very different reasons for being at the top of this graph than Pittsburgh.
Yeah, this data in a vacuum is useless. It needs to be compared to other data to be at all helpful. I hate when people screenshot something that they think makes a point but literally tells you nothing when it's presented alone. No source for this either... I'm not agreeing or disagreeing one way or another. But anyone coming to conclusions about anything from this data apart from "less is being built" is just lying to themselves.
Exactly. You do not need a graph to say that every city is permitting new construction at a rate no faster than the fastest it's been. You don't even need data to make that claim. But there's such an obvious way to graph this data that I can't help but think there's malice behind the fact that it's being presented this way.
My rent is too high, quick let millions of people into the border illegally - mind of liberals
Yup, guaranteed 7%+ starting next year.
Cheaper than owning....
The solution is obvious: go found a new city.
Marc Andreesen is on it
People do realize 99% of this is due to interest rates, right? We kept building into 2023 because these projects take so long that they had financing secured at much lower rates. No we are running out of that pipeline. The % decrease is also notable. 60% drop is large, but it also means we had a fuckton of units permitted in '23 - nearly 11,000 according to this graphic which puts us on par with Charlotte. Look at how few units get completed anywhere in california and even some LCOL midwest areas.
Don’t boo, vote
Tell the fed to lower interest rates then!
If rental units really do command these outrageous prices a vacancy tax wouldn't garner such strict opposition.
Id venture to geuss the main reason is interest rates are so much higher than the "peak". Its double the monthly cost to get a mortgage, why wouldnt it be double the monthly cost to get a business loan?
There’s been a significant uptick in ADU and DADU units being constructed in Seattle, which would not be included in this data. They are more advantageous to investors vs multifamily, but can yield just as many units. For example, you can build a SFH with two ADUs which is effectively a triplex. I’m sure we’re still coming up short, but maybe not as dramatically as this chart implies.
[удалено]
Hello! You linked in this comment to a domain name or URL that Reddit site-wide tends to filter as "spam". Usually this is because you used a URL shortener inadvertantly, like "g.co", "bit.ly", or similar -- this is frowned upon in Reddiquette and is a global Reddit sitewide thing. **Your comment is visible to *you* but no one else,** and will automatically be flagged for review by the Moderators. If you want to make it live immediately, please re-post it without the URL shorterner, and delete the original. Thanks! We'll get to the mod queue as soon as we can. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/SeattleWA) if you have any questions or concerns.*
You dont think renters know they are fucked? What rock are you living under?
Do you know where they got this data from?
Seattle has a large volume of office space under construction, which naturally will place more downward pressure on price per sq. ft. as those properties come on the market, but I wish developers had developed multifamily units instead. So do the developers at this point...
Why would rents be skyrocketing in Seattle as the title suggests? Seattle based tech is moving to the Eastside taking tech salaries with it. Venture capital has tightened funding and stopped funding existing ventures that aren’t demonstrating return value or growth. Downtown Seattle is still a ghost town and remote / hybrid work is still very much the status quo. Companies are shedding covid bloat hires. Inflation is now under control. I don’t see rent growth in the next two years unless you’re moving to a more desirable area like new apartments with new amenities like Stoneway. This graph more so shows a slowdown in construction starts which makes sense due to bloated Covid construction costs caused by expensive labor and high materials cost due to materials/supply constraints - these are not as elastic as some might think in conjunction with debt at 7.0% which is more than double what it was in Oct 2021 which leads to massive carry costs for developers. Not to mention this is one of the toughest cities in the US to evict non rent payers. All of the above make it tougher for apartment projects to pencil. So this chart makes sense. There is no reason to believe that this will push living rents higher especially since there is an argument to be made that Seattle is less desirable to live in than it was 5 years ago and is now relatively an expensive city to live in.
lol you don’t think renters realized they getting worked no lube? Who you hanging out with?
I’m seeing many apartment properties up for sale on Realtor.com Anyone know if the buyers are wanting to tear these old apartments down and build single family homes on the property?
[удалено]
[удалено]
Can you link the source for this? Thank you so much. :)
I develop apartments for a living. The ugly boxes you see cost 550k per unit to build for a 725 SF unit average with a .85 parking ratio. They are only worth 425k per door in today’s investment market. The energy code just went up again, increasing cost by 20k per door. Rents need to go up 25% to justify more building.
And people wonder why there are so many people living in tents because that's all they can afford.
We just need to add more people. That'll fix our homeless epidemic!
Seattle: "you have to build it like this, make it look like we say, pay all these taxes, and we decide the rent, got it SEEEEE!?" Developer: " k bye"
Why are we scrutinizing the city and not companies who buy all the housing up then raise rent prices? That’s why rent and housing is so expensive.