Redevelopment Requires Scale

BIGGER PICTURE | Every teardown creates a simple choice: build bigger or build more expensive.

A conversion is defined as the act of tearing down an existing single-family detached structure and replacing it with a new structure of varying unit totals. Data pertain to over 3,000 conversions identified in Seattle. Graph source: AEI Housing Center

The Triangle has enjoyed decades of consistent economic growth, at the same time that many established neighborhoods have refused to allow new homes. More dollars chasing the same number of homes means higher housing prices, and worse affordability.

More specifically, it means higher residential land values, since the houses themselves are aging and depreciating. Most Triangle houses were built last century, and have therefore aged to the point where most of the house may need replacement (age comes for us all!). A worn-down, inexpensive house on expensive land eventually becomes untenable, not only for buyers but more importantly for lenders. (The usual guideline is that once the land becomes more valuable than the house upon it, that ho…