It turns out “there are currently 13 high-rise apartment or condo buildings of at least 24 stories in development or planning in the downtown area. The average is 39 stories. Another 24 high-rises are in the proposal pipeline, according to city and industry reports,” writes Paul Roberts for CrossCut.
The woman from the Emerald City told me the tallest building in Seattle was soon to be built. Perhaps she was talking about Miami developer Sonny Kahn’s proposed 102-story 4/C project which has attracted adverse attention from the FAA.
It’s believed that even if Kahn shortens the building it’ll cost $700 million and the top floor will command $15,000 a month in rent, for “a vertical mansion offering everything from 24-hour concierges to personal shopping and dog-washing, all linked by ‘intelligent mobile technology’ that allows staff to anticipate a tenant’s every need,” Roberts explains.
No one will construct the world’s tallest building in Seattle. But, considerable clusters of cranes must mean we’re near a top.
The number of units in downtown Seattle is set to explode, unless a crash gets in the way. Prior to 2010, the number of high-rise rental units in Seattle’s urban “core” was just 2,960. By 2020, the total is projected to be 16,543.
Normal folk are not wanted, “the towers are key to attracting a very specific category of newcomer — the ‘creatives’ widely seen as the secret sauce for a hot urban economy,” explains Roberts.
Combined with a lower cost of capital brought about by a lower rate of interest, land owners will seek to build more capital-intensive structures and, at the margin, this will cause land to be put to alternative uses. In the central business district, this means more intensive use of land and thus higher buildings. Simplified, higher prices for land reduce the ratio of the per-floor cost of tall vs. short buildings and thus create the incentive to build buildings taller to spread the land cost over a larger number of floors. Lower rates of interest also reduce the cost of capital, which facilitates the ability to build taller. Thus, higher land cost leads to taller buildings.
Seattle, Mr. Cantillon would contend, you’ll notice.
Reprinted from DouglasinVegas. Douglas French is former president of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth.