'Who is buying Seattle?': New report issues warnings on Seattle's luxury housing boom
Seattle's luxury housing boom will worsen inequality and affordability in the city, according to a new report, which calls for officials to require more transparency on who is actually buying luxury real estate in the area.
The report -- “Who is Buying Seattle? The Perils of the Luxury Real Estate Boom for Seattle,” from the Program on Inequality and the Common Good at the Institute for Policy Studies -- studied eight luxury condominium buildings with units that have an average taxable property value of $2 million.
It found of the 1,635 units looked at, 12% were owned by limited liability companies or trusts that don't reveal the actual people who own the property. With trusts, the report said, the owner is "obscured by a trustee who manages the asset on behalf of an anonymous beneficiary."
More expensive units have a higher chance they are owned by a trust, trustee, LLC, or other corporate entity, according to the report. In one building looked at, nearly half of the units were owned by LLCs or trusts.
“The skyline of Seattle is being transformed without fully knowing who is buying luxury properties,” said Chuck Collins, the lead author on the report, senior scholar at the Institute for Policy Studies. “The burden is on the city to show how this building boom will benefit ordinary Seattle residents and not worsen economic inequality in the city.”
The report asserted the city's lack of affordable housing is "being supercharged by global capital seeking a stable and safe haven." It said many of these luxury condominiums are being used as a "wealth storage unit" for people. It warns this could make Seattle vulnerable to crimes such as money laundering and tax avoidance.
“While Seattle has less anonymous ownership than cities like New York and San Francisco, the city should monitor future building trends closely to protect itself,” Collins said in the report.
The report also found of the 1,635 units studied, just 39% of the owners were registered to vote at those properties, which could suggest these aren't the primary residences for the owners.
According to the report, the city's luxury housing boom can create some jobs and up the property tax revenue for Seattle, but it has a series of negative consequences, including higher land and housing costs, more inequality and a "more vulnerable future."
"The consequences of Seattle’s luxury housing boom have had devastating effects on working families, and families of color in particular," the report noted. "More housing, built exclusively for people in the richest 1 percent of income and wealth holders, has accelerated, not reversed the city’s unaffordability problem and persistent racial wealth divide."
The report makes a series of recommendations for the city, and urges officials to look at new luxury units coming to the market and their ownership patterns. Some of the report's suggestions include requiring that property owners disclose who is buying property, instituting a vacancy tax and ordinance and mandating that new buildings are carbon emissions neutral.
The report also calls for city officials to rally behind state and national real estate ownership transparency policies.
Seattle and King County face a severe lack of affordable housing. In recent months, officials have been putting forth new solutions to add more affordable units to the area and proposing ways to both prevent people from becoming homeless and help those experience homelessness to find affordable homes.
The report warns that decisions being made now could have consequences in the future, and urges officials to be aware and take action.
"Who is buying Seattle?" the report said. "The answer is: We don’t know who the real owners are."