Seattle About to Implode

As the Antiplanner noted last week, Seattle is the only major city whose transit ridership grew in 2017 because the city has concentrated nearly 300,000 jobs in its downtown area. Yet, as noted earlier this week, Seattle transit ridership is starting to decline. That decline may may rapidly accelerate if the city council approves a proposed so-called “head tax” on all businesses that earn more than $20 million a year, which basically means Amazon and a few other companies.

The proposed tax would charge employers 26 cents per hour that each employee works in the city, or about $500 per full-time employee per year. For Amazon, which has something like 40,000 jobs in Seattle, the tax would amount to around $20 million a year — more than a quarter of total head-tax revenues — for the first couple of years, then go up to $30 million a year. The revenues from the tax would be used to provide affordable housing for homeless people.

Amazon was so perturbed by this that it halted construction on a new office tower it was building in downtown Seattle and threatened to pull all of its employees out of another existing building. When Seattle city councillor Kshama Sawant held an outdoor press conference, laid-off construction workers disrupted the meeting with shouts of “no head tax.” Despite this, members of the city council insist they will approve the tax.

This is far from the only reason why Amazon and other large employers may want to move out of Seattle. Seattle famously imposed a $13 per hour minimum wage in 2016 that is scheduled to go up to $15 per hour in 2021. Most Amazon jobs in downtown Seattle probably pay well over $15 per hour, but many of its support businesses are hurt by this.

Like so many other places, Seattle housing prices are shooting upwards and homelessness is a serious problem, so the city council passed an ordinance forbidding landlords from doing criminal background checks of potential tenants. That’s certainly going to make developers want to build new rental housing — not!.

Nearly all of these problems are self-inflicted. Many can be traced to the region’s 1984 urban-growth boundary, which put the vast majority of King County off limits to development. Despite serious housing affordability problems, county planners opposed a boundary expansion in 2016. In doing so, they had the support of the Seattle Times editorial board, which argued that the purpose of the boundary is to “preserve permanently the region’s vital diversity of land uses, habitat and rural economic activity.”

In other words, the planners who drew the boundary in 1984 had perfect knowledge about how all land in the county should be used, not just in 1984 or even 2016 but forever, and anyone foolish enough to question their omniscience somehow doesn’t care about “rural economic activity.”

In fact, men in their youth also face trouble getting erection at one time or other, but this condition is absolutely normal as sometimes stress or fatigue makes it difficult get viagra no prescription Read Full Report to erect. What do you know about GMO’s (genetically-modified organisms)? GMO’s have been linked to many different health buy super cialis problems across America. Kamagra, which is a generic version of Pfizer’s viagra for cheap prices is manufactured by Ajanta Pharma. Additionally, avoid meals which contain sugar, caffeine, junk foods, simple carbohydrates and hydrogenated fats. levitra professional samples The reality, of course, is that Washington, along with the rest of the nation, has a huge abundance of rural areas for all the rural economic activities we might want to take place. Yet the most productive and fastest-growing economic activities are taking place in urban areas. Using urban-growth boundaries to drive up real-estate prices is killing the goose that laid those eggs.

The Times also pointed to a King County Buildable Lands Study that claimed the region has enough land to meet future housing needs at least through 2031 without expanding the growth boundary or rezoning any neighborhoods. If that were true, however, then housing wouldn’t be expensive. All the study shows is that planners not only don’t understand economics, they are willing to spout nonsense that is contradicted by the price of every recently sold home in the region. Just why the Times editorial board lapped up this idiocy is a mystery.

Another self-inflicted policy is Seattle’s lax approach to the homeless, which has led to many parks and nearby areas areas being littered with “contaminated dirty syringes, urine, feces, and hazardous materials.” Some people would be homeless no matter what housing cost, some homelessness is a result of the high housing prices, but Seattle’s only solution to the homeless is to spend lots of money on subsidies to affordable housing.

Which brings us to a third self-inflicted problem: the massive 2016 tax increase that the Puget Sound Transit Authority persuaded voters to approve for more light rail. When taxpayers got their bills for the new taxes, they revolted and have voted down numerous school levies and other local taxes that they previously would have passed.

This means Seattle has little ability to raise ordinary taxes to pay for the homeless shelters that social justice warriors demand be built. So the council has effectively decided to impose a millionaire’s tax on the companies that employ the most people in the city.

Amazon wouldn’t be the first major employer that Seattle chased out of town. Boeing was once the dominant employer in the Puget Sound region, but a combination of land-use politics, unions, and traffic congestion persuaded the company to move its factories and other facilities to South Carolina and other places) and its headquarters to Chicago. Microsoft and other high-tech companies were growing as Boeing was leaving so the impacts were minor. But if Amazon goes, along with its retinue of suppliers, there might not be anyone else to fill the gap.

This would bring Seattle transit ridership crashing down even faster than has been seen in other cities. In a real sense, Seattle succeeded where Portland, Denver, and other cities failed in turning itself into a late-nineteenth-century city with a high percentage of downtown jobs reached primarily by mass transit. But the costs of that transition, in terms of high housing and other real estate prices not to mention the political cost of electing shallow public officials who don’t understand economics, mean that this success may be short-lived.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

8 Responses to Seattle About to Implode

  1. rmsykes says:

    On the other hand, they have successfully kept down the numbers of Blacks in the city, and that might be the true goal.

  2. Frank says:

    Kshama Sawant is an idiot. Most people in Seattle are either very liberal or outright socialists. They will soon get what they deserve. Good and hard.

    Glad I left Seattle.

  3. MJ says:

    Sawant reportedly characterized Amazon’s decision to halt construction on its new office building in response to the proposed head tax as “blackmail”. I wonder how she explains her idea of holding the city’s largest employers for ransom in exchange for more funds for useless affordable housing/homelessness gestures?

  4. LazyReader says:

    Awww, poor Amazon, don’t wanna shell out 20 million.
    Amazon was the second-most valuable company in the country, worth nearly $800 billion and behind only Apple. However, the company paid no U.S. income taxes on a $5.6 billion in domestic profits last year thanks to a $789 million windfall from the new tax law, according to the Institute on Taxation and Economic Policy.
    Amazon get’s $1.46 in subsidies for every parcel they send because the Post Office has to carry it the rest of the way.
    Throughout its history, Amazon has consistently reported minimal profits, meaning it has paid very little in taxes since taxes are assessed based on profits. While that strategy is generally seen as sacrificing profits for market share and long-term competitive advantages, it’s also a way of avoiding taxes, especially compared to its rivals, who pay some of the highest tax rates in business. Between 2008 and September 2017, for example, Walmart (NYSE: WMT) paid $64 billion in income tax, compared to just $1.4 billion for Amazon, even though Amazon has been the more valuable company for several years now.

  5. Frank says:

    Hey Lazy Reader, your statism is showing. You’re also factually incorrect, as usual. Additionally, this assenine , job-killing socialist scheme would apply to more companies than just Amazon.

    Think before you post.

    According to regulatory filings, Amazon paid a combined total of $412 million in federal, state, local and foreign taxes last year. In 2015 it paid $273 million in combined taxes, and $177 million the previous year.

  6. LazyReader says:

    Man whatever. Amazon.com Inc. has good reasons to amplify its presence in Washington. Big tech’s long honeymoon of public goodwill is over and the company feels the painful transition as much as competitors like Google parent Alphabet Inc. and Facebook Inc. Amazon is fighting to be seen as a job creator, not a job killer, and is often blamed when traditional retail outlets close.
    But he and other wealthy elites have long championed Government being the provider of salvation. But ot pay for governments benevolence you have to pay the government………And when the collection plate hits their lap it’s shoulder shrugs.
    It’s easier to pull an excuse out your ass than a dollar out of your wallet.

  7. Frank says:

    Statist, who copied and pasted crap from Motley Fool, is called out for claiming Amazon has “paid very little in taxes” and shown that Amazon has paid hundreds and hundreds of millions in taxes.

    His response: “Whatever man.”

    Whatever yourself. No individual and no corporation should have to pay taxes as taxation is theft. Again, this idiotic headtax scheme will kill jobs and create more homelessness in the process. All to house a few deadbeat mental case druggies who would be better off dead.

  8. the highwayman says:

    Yet you teahadi’s and the regressive left have so much in common :$

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