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