By Josh Feit
After insisting for months that getting big employers to summon their workforces back to the office was the key to a revitalized downtown, Mayor Bruce Harrell rolled out his updated “Downtown Activation Plan” this week without mentioning that increasingly remote strategy. When Amazon announced earlier this year that, starting in May, employees must come in three days a week, the company’s own employees immediately rebelled.
Today, employees are spending about a quarter of their time working from home, according to a recent Stanford University/Census Bureau study. And just last week, noting that “offices are still at half their pre-pandemic capacity,” the New York Times ran with this enervating headline (for those holding out hope for a corporate office rebound): “Return to Office Enters the Desperation Phase.”
In Seattle, telecommuting was already rising sharply prior to COVID, tripling to more than 16,000 downtown workers between 2010 and 2019, according to Commute Seattle. And let’s be honest, a 3-days-in-2-days-out model already represents the startling acknowledgment that the future of downtowns looks different than the traditional model. More important, a mandate that grates against a major social shift hardly seems like the makings of a long-term or sustainable solution.
And so, credit where credit is due to Harrell’s office for finally chilling out on the Amazon panacea and rolling out some longstanding urbanist wish-list items, including a few legislative proposals. Erica posted an in-depth report on Wednesday, and along with Harrell’s (and soon-to-be deputy mayor Tim Burgess’) predictable, go-to policing solutions, the plan does mine some of the real Janette Sadik-Khan stuff that Seattle urbanists have been talking about for more than a decade.
The grab bag includes supporting a broader range of building and street uses—waiving fees to bring more food trucks downtown, for example, and allowing both ground-floor housing and retail on the upper floors of buildings downtown. Likewise, it includes recommendation for a pedestrian-only pilot by prohibiting cars on Pike between 1st and 2nd—a tiny bit of car-free real estate, but I’ll take it. And Harrell’s plan even gives a nod to lidding I-5, a near-decade-old, $2.3-to-$2.5 billion planning nerd agenda item. Most prominently, there’s also legislation in the mix that supports increasing downtown housing stock through targeted up-zones on Union and Pike Streets (with incentives for affordable housing) and also code changes that help turn office space into residential space.
As a neighborhood’s stock drops, it becomes more open to free-rein experimentation, not to mention more open to a diverse economic base of commercial renters.
It’s a nice roundup of ideas, but it misses the mark by emphasizing new, downtown residential housing stock; downtown is already dense and tall. We need to get serious about putting density elsewhere in Seattle, rather focusing on downtown . The first step to reviving downtown isn’t new housing, it starts with embracing the grim commercial real estate market, where vacancies recently increased from 22 percent to 24 percent.
How does embracing vacancies help revitalize downtown? Like this: As commercial vacancies rise—new demand for Seattle office space fell 30% from January 2022 —rents drop. And as rents drop, the weirdos, rather than the big employers, move in. And by weirdos, I mean: creative-class, art-centric, small-scale retail. In short: The rebirth of downtown will be sparked not by Amazon, but by high vacancy rates, leading to low rents, leading to an influx of vibrant, small businesses, leading to new housing demand.
Call it the CBGB theory of city planning. During the sluggish mid-to-late 1970s, New York City’s famously abandoned and spent Lower East Side neighborhood, where CBGB set up shop on Bowery, attracted waves of bohemians who turned the neighborhood into the epicenter of an urban shock wave that would change cities into magnetic destinations for brains, youth, talent, and commerce.
Making analogies to New York City—in the 1970s, for that matter!—certainly seems like a stretch for Seattle. Seattle’s hot tech economy and hot real estate market don’t conjure the “Ford to City: Drop Dead” days of NYC bankruptcy. Nor does Seattle, population 779,000, parallel the creative serendipity that flows through a city of more than 8 million people like New York. But this basic truism makes sense at any level: As a neighborhood’s stock drops, it becomes more open to free-rein experimentation (and yes, graffiti!), not to mention more open to a diverse economic base of commercial renters.
I’m going to put my hope in the new, small businesses that have recently and eagerly started popping up downtown.
The limited data available from real estate analysts such as CoStar suggests that demand for leases on smaller spaces (0-5,000 square feet) has decreased more than 50 percent year over year—suggesting lower rents could come, drawing small businesses downtown.
Consider the arc of this anecdotal observation about the downtown retail renters’ market from the folks at Seattle Restored, a City of Seattle program that pairs downtown landlords with small pop-up style businesses for three-to-six month rental stints, providing grants to help with rent.
A lot of property management companies began reaching back out, perhaps realizing renters weren’t willing to pay the high prices, they were now looking for smaller renters.
When I first contacted them in April for any insights about downtown’s small space retail market, they believed landlords were willing to hold out for high rental prices. They didn’t have any hard data, but said they noticed larger real estate/property management companies were rescinding initial offers to work with the program, likely holding out hope to rent at full market value.
However, recently they noticed a change. This week they gave me an update, saying it looked more like a renters’ market these days: About a month after we first spoke, they told me, a lot of property management companies began reaching back out. Perhaps realizing commercial tenants weren’t willing to pay the high prices, they were now looking for smaller renters. The program’s success so far backs up this theory: With 30 spaces now filled, the program is well on its way to hit its goal of 45 small businesses set up by the end of the year.
With that in mind, I’m going to put my hope in the new, small businesses that have recently and eagerly started popping up in PubliCola’s neighborhood (Pioneer Square), such as The Monkey Bridge II, OHSUN Banchan Deli & Café, and Café Lune—none of these are a subsidized Seattle Restored business, by the way. In short, I’d rather bank on them than on Harrell’s plan for new high-rises on 3rd (conveniently ousting McDonald’s, I imagine)—or phantom Amazon employees, for that matter.
The city should focus less on policies of willful denial—landowners imagining high rents and Amazon execs mandating against reality—and focus more on attracting eager small businesses. The city can do this by passing zoning regulations that favor or even mandate smaller square footage spaces. Let the weirdos, not the bros, take the lead in reviving downtown.
Josh@Publicola.com
This is why some cities never really hit rock bottom (or they bounce back fairly quickly). Seattle has had many booms and busts — this might be one of them.
Personally, I think we should try and convert offices to public schools (both K-12 and higher ed). The old Marine Hospital (Pacific Place) is a great model. It required help from the state, as they added a lot of classroom space for healthcare training programs. There are a bunch of nonprofit organizations there as well. Seattle Public Schools has been trying to add a school downtown for quite a while — now would be a great time to do that.
There are inevitable short term course corrections & bumps in the road, but everyone in the world of finance knows market forces always prevail. Downward trends are hardships for the many who can’t ride it out, but they are also opportunities for the few who can.
The result is more wealth being less diversely held and more concentrated. A great example of this was when the “Great Recession” hit Seattle. South Lake Union was an underdeveloped collection of various small businesses, dilapidated buildings and vacant lots. The market plunged, money was tight for borrowers & lending institutions, not to mention local governments. The stage was set. Then came Vulcan, & friends. The rest is history.
Some weirdo hipster business might pop up on month to month leases downtown. But they will be there just to fill the vacancies, while the bigger deals are being made behind the scenes.
Allowing ground floor housing would be a huge benefit to any revitalization. Residential buildings with floor level retail were a horrible idea that only contributed to the massive housing shortage we have now.
Feit’s point that lower rents present economic opportunity is excellent; the market will respond. There may be office building loans at risk. No one can know how long the working from home trend will continue; it is difficult to forecast from inside the Covid well. There is ample reason to bring workers together for collaboration and random interaction for the exchange of ideas. We continued to urbanize after the 1918 flu. Is Zoom really that good? Do we really want food trucks competing with the struggling brick restaurants? We can find some streets to pedestrianize: Bell Street, Union Street west of 2nd Avenue, Pike Place in midday. We should allow buses on the 100 blocks of Pike and Pine streets as they were before fall 2012. The big dud in the mayor’s list is the Center City Connector streetcar; instead we should kill it and place many more already funded bus trips on 1st Avenue. Seattle’s transportation capital is scarce; the CCC may take about $300 million; all to make transit worse. the two existing line are flawed and sunk cost. Consider the many other capital needs: sidewalks, bridge maintenance, pavement management, RR capital. Each streetcar hour cost about 1.5 bus hours; the bus routes are already funded; the CCC would require new subsidy. Consider the conversion of office buildings to residential; the NYT Upshot had two recent stories; the floor plate and windows are important; older buildings may be easier to convert.
I think the primary difference between the LES and downtown Seattle is that lots of people live the LES, and downtown Seattle is mostly office buildings and retail and no one lives there. If more people live downtown, more people will shop there, and it will create a good flywheel of investment. If downtown remains only offices and retail, it’s not going to work.
I guess this “worked” in NYC, in that the LES got some cool stuff, was cheap and fun for awhile, became safer, fancier, and more expensive, then less cool and fun. Of course, CBGB’s then closed…YMMV on exactly when the peak was. Or, for a closer-to-home example, Belltown in the 1980’s to now!
There are a lot of counter examples, though, where it didn’t “work.”
Amazon’s back in the office, btw, and SLU is packed. They’re just not located downtown, which everyone in the political class snd this article seem oddly determined to ignore.
I love how urbanists are now paraphrasing the hated Richard Florida while not crediting Richard Florida. Poor -> Bohos/Gay -> Hipsters -> Wealthy People. Same old. Eventually someone can start whining about gentrification one we move far enough along the predictable process.
Im all for a diverse downtown economy that can weather some ups and downs, but let’s acknowledge what a catastrophe COVID-times were for BIPOC businesses in our city center. Last I read, over 400 were lost during lockdowns, and you know these weren’t big tech firms or banking, they were the bodegas and lunch spots run by immigrant families…Glad to see progressives finally get on board with downtown revitalization. The area generates a ton of tax benefit for our social safety net, and there’s no transportation infrastructure anywhere else quite like it: it’s a terrible space to waste.
At the time of CBGB, the Bowery was not under construction with builders carrying pre-pandemic construction loans at pre-pandemic rates. And walking Pike/Pine vs walking the Bowery or the meat packing district in the 90s? Yea, no. I agree that we need to be more creative and holistic. But what I don’t see from Harrell or most of Seattle’s dense approach is land.
Land to grow things on, land to lay on the grass. Land to let kids have places to play. Every day someone is working the land in Danny Woo Park. Why aren’t there more parks like this. Why are Pea Patches reliant on empty lots? Why is Whitesvil…err Ballard the only place where we can find streets to close and experiment with turning into food courts? There are a couple of streets next to King Street station that would be prime targets for that sort of revitalization.
We need livable neighborhoods with services that don’t close at 5pm or restaurants that are only open on Game day. Does that include bars & restaurants? Yes. And art school at the art studio. Maybe offer classes to the local community at something under $150/hour. And a dry cleaner and a bakery and day care. It takes families of all shapes and sizes. And I would posit that the CID and not Pike/Pine would be a great place to start revitalization. They already have history of being pre-disposed to be willing to do it themselves and the community is growing.
The first step towards changing the retail/office/residential landscape in Seattle is understanding “landlords” don’t really have much power to change things. The real players in commercial real estate are banks and investors. Most downtown properties have debt against them and the rent the tenants pay mostly goes to servicing that debt. Office space in Seattle was built with the idea that rents wouldn’t go down… it’s very difficult to drop the price of rent below the number needed to service the building’s debt. Lucky for Seattle, Harrell seems like the mayor to help parties working through these sorts of issues and avoid empty buildings and bankruptcies. Although more empty buildings are on their way. Markets go up. markets come down– it’s the nature of the beast.
I think there’s this often unspoken and untrue lie the Seattle Left keeps perpetuating…. it’s the vision of some Daddy Warbucks class who “owns” all the real estate in Seattle and keeps the “underclasses” paying high rents and actively foils any attempt at the “urban renewal” that folks like Josh envision. This isn’t true. Here’s a few things to think about as Seattle goes forward…
Seattle grew by 20% and added a lot of housing… more housing than anyplace in the USA except Florida. All the new construction didn’t help affordability one bit. How could any new construction in the future help affordability in the future?
Nice things cost money. Low income housing costs over 350k per unit to build in Puget Sound. The idea that new units can be built that pay for themselves with sub $2000 a month rents needs to go away. Seattle is a high dollar town to live in.
Puget Sound currently has way too much retail. Developments like U-Village are what killed downtown retail, along with online retail. The region will have a wave of bankruptcies as retail resets to a lower number of places. Given its problems with drugs and general filthiness, the Seattle downtown outlook is one of the worst in the region.
The CBGB didn’t fix NYC’s woes in the 1970s any more than the Community World Theater fixed Tacoma’s problems in the 1980s.
Great theory Josh, long live CBGB! I say take it a step further, create a tax so great that Amazon and greedy developers abandon Seattle completely and as the teeming masses of useless techies flee Seattle and leave the SLU towers of glass and steel, with their $3500 a month studios empty, the City can snatch them up for pennies on the dollar and house the real Seattleites being boxed out. City Hall doesn’t have the guts to do that though.