Jobs Rushing from Downtown Seattle to Suburbs

Jobs Rushing from Downtown Seattle to Suburbs
June 20, 2011

Wendell Cox

Wendell Cox is a senior fellow of The Heartland Institute; a consultant to public and private... (read full bio)

There are few downtown areas in the nation more attractive than Seattle’s. Downtown Seattle is a dream of spontaneous order and a fascinating place well worth exploring. It is one of the nation's great walkable downtown areas, with a mixture of older and newer buildings, hills, Ivars Acres of Clams and the Chief Seattle fire boat on Elliot Bay, Pioneer Square, the Pike Place Market (itself the home of the first Starbuck's coffee shop) and a hyper-dense 100,000 jobs per square mile.

Downtown boasts the L. C. Smith Tower, which from 1914 to 1966 was the tallest office tower in the west, at 42 floors and nearly 500 feet. Now Smith Tower ranks no better than 35th-tallest downtown. Seattle has built so aggressively that a visitor to the observation deck would see more looking up than down.

Smith Tower is dwarfed by a skyline containing some of the nation's most impressive office architecture, such as Columbia Center and the Washington Mutual Building, which was named for the subprime mortgage lending champion.

Yet condominium and office property values have dropped, partly the result of a decrease in employment in the area.

Condominium, Office Busts
Downtown Seattle experienced one of the nation's strongest central city condominium booms, though its success (and that of others) has long been drowned out by the high-pitched chorus of the Portland missionary society. As in Portland, Atlanta, San Diego, Los Angeles, and other newly resurgent downtown areas, however, Seattle's condominium boom is now a bust, resembling that of a subprime-baby remote desert exurb halfway between San Bernardino and Las Vegas.

Even so, the condominium neighborhoods of downtown Seattle are more attractive than what they replaced. Eventually, the large inventory of empty units will be sold or converted into rental units.

Downtown's condominium bust has spread to its office market as well. The vacancy rate is now more than 20 percent.

Employment Bust
Data from the Puget Sound Regional Council of Governments (PSRG) indicate the depth of the employment problem. From 2000 to 2009, employment in the downtown core declined more than 12 percent, with a loss of 20,000 jobs. But it would be a mistake to conclude downtown Seattle's employment decline stems from the Great Recession. The losses occurred before. In 2007, the last year before the recession, employment had fallen nearly 18,000 from 2000.

Downtown Seattle's employment decline mirrors trends around the nation and indeed around the world. Downtown Seattle accounts for only 8.4 percent of employment in the four-county area, something that would surprise an airline passenger looking at its tall buildings from above.

The balance of the City of Seattle has done somewhat better, having lost 3 percent of its employment since 2000.

Suburban Job Surge
All of the employment growth in the Seattle area has been in the suburbs. While the city, including downtown, was losing nearly 30,000 jobs in 2000-2009, the suburbs of King, Pierce, Snohomish, and Kitsap counties added 90,000 jobs (see table). Suburban Redmond, home of Microsoft, added 19,000 jobs all by itself.

Even Tacoma, the old second central city and long since defeated challenger to Seattle, added a modest number of jobs between 2000 and 2009.

City Transport Emphasis
These trends might suggest local transportation agencies would be rushing to provide sufficient infrastructure to the growing suburbs. Not so. Planners are scurrying about to build one of the nation's most expensive light rail systems with lines converging on downtown, to feed 20,000 fewer jobs today and perhaps 30,000 or 40,000 fewer in the future. Perhaps this is the train that "got a whole city moving again," as the television commercials put it?

What about growing Redmond? It's on the map. The line is scheduled to reach Redmond sometime between now and the end of time.

Wendell Cox (demographia@gmail.com) is a visiting professor at Conservatoire National des Arts et Metiers, Paris, principal of international public policy firm Demographia, and a senior fellow at The Heartland Institute. Used with permission from Demographia.com.

Wendell Cox

Wendell Cox is a senior fellow of The Heartland Institute; a consultant to public and private... (read full bio)