Take a look at this: http://www.zillow.com/homedetails/514-N-78th-St-Seattle-WA-98103/48767725_zpid/. That's the house we lived in, bought in 1997 for $182,500, barely improved, rented out and sold in 2016 for $719,000! On the left, you will see a picture of the house as it was when we lived in it. The smaller picture to the right shows what it looks like now.
Well, our erstwhile landlords finally got a respectable do-over commissioned and sold the house for a luridly gross equity uptick of $530,000 over what they paid for it. From the picture on Zillow, it looks sound, if somewhat sterile, compared to the lovely livable dwelling it was before. But let's not allow sentiment to run away with the issue. The last thing the owners were trying to make out of this was some kind of magical, ecologically sensitive masterpiece. Right from the outset, their goal was to make as much money out of owning the property as they could, which is their prerogative, and, as you can see from the obscene markup, they did pretty well at that. Before someone jumps down my throat and points out that they must have spent at least $40,000 getting it ready for sale, let me make clear that they took an awful lot of money from us during the twelve years we lived there - $210,000 - which, if they'd invested it wisely - making an average of, say, 3%/annum - and stuck to their other, diverse sources of income for living expenses, including a military pension and social security, would have given them more than enough to cover that cost without any use of the principle. Before all that gets your head in knots, let's just consolidate it all into one net profit figure of somewhere close to $740,000, before taxes and other forms of erosion associated with the process. One thing you don't need to include as some kind of hidden cost is anything they may have spent on the property while we were there. We kept track. It was around $75. Yes, let me spell that for you, seventy-five dollars!
The true hidden cost is what happened to us, financially speaking, over that twelve year period - the folks who built the third bedroom in the basement at their own cost - plus what happened to the ecological niche the house constituted for the other living things that abode in harmony there - the bountiful hazelnut tree, the bitter cherry, the pacific yew, the plum tree, the photinia and camelia that afforded privacy and shelter for birds, the stellar's jays, wilsons warblers, yellow-rumped warblers, western tanagers, the sparrows, the robins, the chickadees that produced ten generations in the houses we provided for them, the five species of bee we'd see on our flowers, the paper wasps, hornets, moths and butterflies, the squirrels, raccoons, tree rats - everything, right down to the earthworms whose number our efforts so greatly increased. Gone are the aforementioned trees and with them, the habitat they provided for all the other creatures, right down to the earth worms who no longer forage on the compost we made from the leaf litter we cleaned up.
Finally, there's the lost opportunity cost to society of having people who were already rich getting even richer, while those they rented to exited the picture a lot older and in a worse net wealth position than a decade ago. Supplementary paying work is exceedingly difficult to come by in this remote area and the building we bought has structural defects we did not know about at sale and which we can't afford to have a contractor fix. HAD WE BEEN HELPED TO BUY THE THE HOUSE WE WERE RENTING FOR THE $300,000 IT WAS OFFERED TO US AT IN 2011, GIVEN IT THE SUPERFICIAL FIXES IT NEEDED AND THEN SOLD IT FOR ONLY A HALF-MILLION, OR SO - AS WAS OUR PLAN, EXACTLY - WE'D NOT ONLY BE FREE-AND-CLEAR, WITH CASH TO SPARE, BUT ALSO IN A REAL HOME OF OUR OWN ON THE RESIDENTIAL LOT WE OWN OUT HERE (BUT NOW CAN'T AFFORD TO DEVELOP). In that scenario, our ex-landlords would still have made a respectable profit, just not the absolute killing they did, and our respective states of wealth would have been far less divergent.
You may ask, why didn't we buy the house? Well, we tried, but we couldn't get anyone to help us buy it.
People cluck and moan about America's growing wealth dichotomy, finally realizing (especially in this populist-driven election cycle) what a threat it poses to the proper exercise of American democracy. Let them reflect on the fact that it is through lost wealth-building chances like this one that the dichotomy grows fastest, much less than through disparate pay. More people need to learn better how wealth is acquired, protected and spread around society. The consequences of "missing the boat", when one of life's rare wealth-enhancing opportunities comes along can be profound, all but ensuring an old age of grim struggle ahead.
So, in the net accounting of all things under the sun, I ask you, is the fact that they managed to sell the house for a lifetime holding gain of well over half a million dollars a gain or a loss?
Naturally, we have strong opinions of our own about how things turned out. If we even deign to think about Seattle, at all, it is with a combination of the darkest feelings. Doing so leaves me depressed, filled with a sense of dread about how we will fare in a world intoxicated by notions of wealth at any cost and pointless personal excess for a select few, even as it slips inexorably toward the cliffs of mindless self-destruction. What can you say about life when earnest stewardship and kindness is rewarded with grinding penury and grievous insecurity while callous indifference for everything other than financial gain walks away with a royal excess of security and comfort?
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