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Real Estate: Crib Notes by Joe Nabbefeld



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Crib Notes
By Joe Nabbefeld

November 13, 2014

Crib Notes: Apartment developers today delivering easy commutes, fun Saturday mornings

By JOE NABBEFELD
Special to the Journal

Dylan Simon, a broker with Colliers focused on selling apartment buildings in and around Seattle, claims in a recent newsletter that he does NOT want to “live where he works.”

Whuh? Huh? He seems like a hip, happenin guy. Looks like he makes enough coin to pick wherever he wants to live in Seattle. Why the heresy?

Simon goes on to say he's not the only one: “Millennials don't want to live where they work.”

But then Simon clarifies: He wants to live “PROXIMATE” to where he works. Crib Notes thinks that means “close to.”

Like so many of us, he wants to make that nasty back-and-forth time as short as possible. And to make it enriching instead of soul-killing.

Imagine a nifty 5- or 10-block walk amid street trees, coffee shop scents, maybe a flower vendor or two, friendly hellos, versus spending two hours twice a day with a white-knuckle grip on the steering wheel.

Buy more gas? Or another latte, croissant and fresh bouquet for a loved one? Support the cute flower vendor? Or support Exxon-Mobile and the automobile-maker-industrial-complex?

Not everyone gets to boil it down to such an easy choice. And that's the key word in creating urban housing: Choice. Never “either this or that.” The idea is to offer many choices — as many as possible, really.

So the choices should range from living AND working in your home (call it “live-work”) at one end of the spectrum, to living an easy walk from work (call that “proximate”), to living a long commute from work.

The “long commute” choice is getting harder to do and it will get worse — here and throughout the country. It's unhealthy, spiritually and physically, and has never been good for the environment.

There have been times when folk thought the “long commute” option was healthier for their checkbooks. But that's only because they didn't fairly count the costs. Here's one they overlook: the expense for all those highways, highway patrol officers, maintenance projects, ambulances etc., and it's getting even more costly. Here's another: The nearly $10k per year it costs to own and operate a vehicle.

(It's not quite a fair comparison to say it costs upwards of $10,000 per year to maintain and operate a car compared to NOT owning a car, since most folk who live-work or who live proximate still own a car if they can. But you get the picture: they spend a lot less than the nearly-$10k per year.)

Let's flesh out the spectrum of choices more. For one, we make different choices during different life phases. Rent a micro studio early in the college years. We may then rent a stacked apartment, accessed via a tinny elevator. Maybe next we buy a small house too far from work. Then a bigger one in the next city. Far too many then head to the suburbs for a spell. These days many are selling that big home to move back closer to where they work, often into a condo.

What are the choices for the single woman in her 40s? For the single-earner family of four living on a “working wage”?

As the Seattle area surges in this latest economic boom, home prices and rents are rising and that, as you all know, severely limits the lower-earners' choices if they want to live proximate to work. As Crib Notes has already expostulated, transit — like light rail — is how they stay proximate to work.

Dylan Simon, meanwhile, focuses mainly on how these questions play out for renters, not homeowners. Simon is a broker for large apartment buildings, and he also holds a law degree from UCLA and a degree in mechanical engineering. As a lawyer he worked on corporate leveraged buyouts, and after Hurricane Katrina he spent some years “personally redeveloping apartments in New Orleans.” Simon said 10 years ago he had a three-hour round-trip commute every day in the San Francisco area.

He likes to write on this stuff. One of his recent blog posts tackled “live proximate to work” through the prism of what developers and institutional buyers of large apartment complexes need to figure out to adequately hedge these big investments.

He called the post “Saturday Mornings & The Urban Myth.” Renters don't want to “live where they work,” he wrote. They want to live where they like to spend Saturday mornings.

“Given a choice — and you want renters who have choices, they pay the most — renters will live where they want to spend time socializing, recreating and enjoying limited free time,” Simon wrote. “Delivering a housing solution that is predicated on a deeper understanding of motivations for being proximate to work ... is surely a step in the right direction, and a step to better meeting renter demand, and thusly investment returns.”

Having worked in development, Crib Notes can say that there's a lot less science and data analysis going into those decisions than many folk may think.

But tool around Seattle and you'll see “live proximate” precisely in play. Almost every one of those giant construction holes topped by cranes are big apartment projects (rentals). And here's where they are:

• Just about every block east of Fremont, around 34th and Stone Way. That's east of the big Google offices.

• Just about every block near 12th, Madison, Pike and Pine on Capitol Hill, just up Denny Way from Amazon.

• Just about every block east of the Alaska Junction in West Seattle, one long bridge away from downtown Seattle.

• Near the new PCC site in Columbia City, with a nice flat walk to light rail into downtown.


Joe Nabbefeld is a Realtor with Windermere Capitol Hill. You can reach him at www.RealSolutions.biz. He was the DJC's commercial real estate editor back in the late 1990s and early 2000s.


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