Friday photo: Cranes at the Wharf, from spring into summer

Cranes at the Wharf, 10 July

10 July 2015.

Cranes at the Wharf

15 March 2015.

I’ve been trying out a faux-time-lapse-photo series of the ongoing construction of the Wharf, the mega-project just a few blocks down the street. The photos are taken from the Case Bridge, under the “L’Enfant Promenade, Keep Right” sign.

Since the lower photo was taken in March, the piers have been substantially completed, thousands of foundation piles have been nailed into the ground, excavation has been completed for the sitewide underground parking garage, and some of the first structural supports. Since the site is just about at sea level, substantial pumping will continue to keep seawater out of the hole until the foundation is complete. Two of seven tower cranes have arrived on this side.

Also, be sure to check out my posts at Greater Greater Washington. I used to crosspost all of them, but haven’t done so as much lately.

DC built 13% less housing over the past decade than its own citywide plan calls for

A version of this post was posted at Greater Greater Washington.

Nine years ago, the District of Columbia adopted a Comprehensive Plan to guide planning efforts throughout the city. At the time, the District’s population had just started to perk up after six decades of decline, and the plan reasonably foresaw that growth could continue into the future. Yet even though the District’s population has grown substantially, its housing stock isn’t keeping pace.

Three years before the comp plan was adopted, Mayor Anthony Williams pointed to recent population gains when he announced a bold goal to bring 100,000 new residents to the District within a decade [PDF]. The 2006 Comprehensive Housing Strategy Task Force recommended adding 55,000 new housing units over 20 years (a recommendation reaffirmed by a 2012 housing strategy update). Not only would that figure meet long-term population growth goals (accommodating 114,400 residents at the then-current household size of 2.08), but it seemed attainable: The District issued building permits to 2,860 housing units in 2005.

The comp plan incorporated much of the Housing Strategy, noting in its Housing Element that “The increase in [housing] demand has propelled a steep upward spiral in housing costs, impacting renters and homeowners alike… The housing shortfall will continue to create a market dynamic where housing costs increase faster than incomes.” To address the shortfall, the plan’s very first policy opens with the statement: “The District must increase its rate of housing production if it is to meet current and projected needs through 2025 and remain an economically vibrant city,” and raised the forecast slightly, to 57,100 additional housing units over the plan’s 20-year horizon.

The city as a whole isn’t meeting its goals

Yet despite all the new construction over the past decade, including two building booms, DC’s currently on track to miss its 2025 goal by 13%. Instead of building 2,855 units per year, DC’s averaged fewer than 2,500 each year over the past decade.

dc permits

The big reason why is that homebuilding nationally came to a near-standstill during the 2008 crisis, and the District was no exception: building permits crashed by 81% from 2005 to 2008, and remained at low levels through 2010. Many proposed projects, like CityCenterDC and Half Street, came to a halt when banks collapsed. Yet all that time, the city’s population, and thus the demand for new housing, continued to grow.

Construction has since rebounded to new highs, with 39% more building permits issued each year between 2011 and 2014 than in 2005. Still, the new boom hasn’t yet erased the 3,000-unit backlog from the slow years.

To get back on track, building permits would have to keep up at recent years’ record-setting pace for at least another three years — and perhaps longer, since the next ten years will also inevitably include another economic slowdown that will subdue construction.

Housing growth has lagged population growth

Even though housing construction has lagged projections, the city’s population has continued to grow. Instead of moving into new housing, all of these new residents have in recent years just filled holes in the existing housing stock.

Vacant units — the slack in the District’s housing market — have steadily disappeared in recent years. Between 2010 and 2013, the Census reports that the number of vacant housing units in the District plummeted by 13,319 (or 31%), far outpacing the 6,850 units that were added to the District’s housing stock.

It’s convenient that so many vacant housing units just happened to be available just when the District’s population began booming, but that feat can’t continue forever. A growing population will, at some point, require new housing.

Indeed, current market indicators show that there’s still tremendous demand for newly built housing: Even though a record number of new apartments have been built, they’re being snapped up as soon as they’re available.

The recent slowdown in the District’s population growth isn’t reason to rest: It could be that slower population growth is a result of inadequate housing growth. Slower population growth largely results from reduced domestic migration, and the #1 reason behind domestic out-migration from DC is because of its inadequate housing. (No surveys track why people choose not to move to DC in the first place, but the reasons are likely similar.)

Yet meeting local environmental goals requires even more population, and housing

David Alpert’s article on Sunday referred to the District and the greater Washington region’s aspirations to a greener future, which require that the District add many more residents. DC’s Sustainable DC Plan, which was adopted in 2012, acknowledges that the District needs to “increase urban density to accommodate future population growth within the District’s existing urban area,” and sets a target of welcoming 250,000 new residents by 2032. That target implies at least 100,000 new housing units, a figure confirmed by recent studies from George Mason University and echoed in the region’s long-range plans.

Adding more residents to the region’s core will result in a substantially smaller environmental impact than adding those residents at the region’s edges. Accommodating more population growth within existing built areas, like the District, reduces the overall environmental impact of new development, and not only by diverting pressure to pave over outlying wildlife habitat and green space.

People who live in dense settings close to the regional core live more lightly on the earth as a matter of course: Residents of the urban core drive less than half as much as residents of sprawling suburbs — a fact that regional transportation plans rely upon to keep traffic congestion, and road expansion, down.

DC can take a fresh look at housing

As Alpert wrote on Sunday, “a great opportunity” to review DC’s housing needs “will come when the District begins the process of revising its Comprehensive Plan.” As part of that review, the Office of Planning should examine the comp plan’s policies in light of the District’s new, more ambitious goals — and the District’s failure so far to deliver sufficient new housing to meet demand.

Yet it’s getting harder, not easier, to build new housing in the District. New zoning restrictions, like the “pop-up ban,” have made it even more difficult and costly to build new housing units in large swaths of the District. Even when proposed developments meet existing zoning, they often face costly and time-consuming litigation.

Since the comp plan guides the zoning regulations, a revised comp plan should guide future zoning changes to make it easier for the District to meet its housing and environmental goals. A revised comp plan should also determine where new housing can and should go; a future post will show how the existing comp plan has fallen short in that regard.

Friday photo: The pre-NIMBY era

Once upon a time, before there were NIMBYs

Once upon a time, citizens’ leagues sought greater population as an end unto itself, knowing that more people would bring more services and more opportunities. Dallas is still famous for its boosterism, but nowadays talk of more growth will probably bring out at least a few complaints about traffic congestion.

(Button seen at Old Red, the Dallas County history museum.)

Friday photo: Mixed residential densities vs. single-density zoning

Richmond: around the Fan

Monument Avenue at Belmont, Richmond, Virginia: one, two, and six-family houses, side by side, on one of America’s most famous residential boulevards

Many of America’s most celebrated urban neighborhoods, like the Fan in Richmond, have a fine grain of different residential densities. Neighbors might live in buildings of broadly similar sizes, but at substantially different densities. But the entire premise of American zoning, as established in Euclid vs. Ambler, was to maintain uniformly single-family districts — uniquely among any country, as Sonia Hirt as shown.

The world’s best loved cities are the way they are not because of zoning bylaws but in spite of whatever zoning may now be in place… Serendipity, complexity, conjunction, anticipation, surprise and delight: these very human experiences are what great cities offer. But zoning is a blunt, inflexible tool. Zoning is by definition exclusionary, limiting things to a preordained set of possibilities. It determines what cannot be done, rather than what can be It does not anticipate nor nurture new, untried forms of city-building or habitation. It does not, in short, encourage the city of desire.

So little of the [American] city was built before zoning was introduced that its more deleterious effects are much magnified. There is very little evidence of the organic city, the intricate web of urban spaces and built forms that rose before the heavy hand of zoning was applied. There is no “old town” core of narrow lanes and multiple layers of use. And there is very little unpredictability, no edge. At the risk of sounding simplistic, it is boring.

— Lance Berelowitz, “Dream City” (Douglas & McIntyre, 2005), pg. 223.

Richmond: around the Fan

Bonus: down the street, an illegal mix of uses. Orchid shops and churches, oh my!

CNU conversations: Retrofitting suburbia, organically?

Asheville

The South Slope area just south of downtown Asheville, now known for its many breweries, had an earlier incarnation as a Motor Mile of auto-related businesses. Before the 1930s, it was mostly small houses.

Now that many cities’ favored quarters have started to run out of pre-war neighborhoods (e.g., streetcar suburbs) to gentrify, the next frontier involves mid-century neighborhoods. Yet the typical cycle of gentrification requires fully depreciated, “aged buildings”,” as Jane Jacobs wrote (and Margie Zeidler marvelously retells).

In these instances, the “aged buildings” — Levittown-era subdivisions, proto-strip malls, little office buildings — suffer from two flaws:

  • An old Modern building can be more liability than asset. The mass-produced materials of that era are often toxic and less-than-durable, and construction quality was sometimes questionable.
  • The density and connectivity are often sub-critical to create a walkable urban place. Infilling is an option, but it is by definition expensive.

Under Neil Smith’s “rent gap” theory of gentrification, these places are doomed to decay and decline until their higher use justifies full demolition and replacement — rehabilitation is hardly even justified. And given the tremendous need to backfill infrastructure, full replacement is particularly costly.

Tactical and modular approaches to infill show some promise at reducing construction costs. To reduce the costs of rehabilitation, certain smaller jurisdictions have thrived through selective non-enforcement of building codes (going beyond a “lean” approach). Even though the very notion of artist-led gentrification began with plenty of code violations, it all seems so much less romantic today.

One possible exception: industrial buildings tend to have flexible interiors, relatively central locations, and (most notably) high lot coverages. In places where their relatively poor street connectivity and access can be surmounted, relatively high job densities could be accommodated within the existing low-rise building stock.

How growing income inequality affects places, part 2: The favored quarter gets richer, the wrong side of the tracks still suffers

The same divergence in fortunes appears to be accentuating price differentials between metropolitan sectors (essentially, “sides of town”). In an economy where the rich are getting richer than everyone else, the rich side of town is also increasing its comparative advantage over everywhere else.

LA office rents

This split was apparent during a recent trip to Southern California. The region might still be “polycentric,” but where one side of town — the Westside favored quarter — now completely dominates local wealth creation. What were merely lopsided prices before have now become absurdly imbalanced, with mediocre buildings on the Westside commanding top rents while perfectly nice areas, like Long Beach and Pasadena, are lagging badly.

In cities where houses or offices on the “right” side of town are scarce, such real estate becomes a privilege only available to the wealthiest people — who, as we’ve noted, are getting wealthier. Even though real estate prices generally track local incomes, the favored quarter of Los Angeles now has prices that track only the exploding incomes of the ultra-rich.

This Redlands ISEA animation of LA-area housing prices from 1988 to 2011, over the course of several cycles, illustrates the “flight to quality” that has occurred during the three busts (mid-90s, early-00s, 2010). At the start, high-value areas are relatively well dispersed across the basin, with only the inner city (particularly the near south and east) suffering from low prices. But, over time, the cumulative advantage of being near the beach increases over time — especially because prices don’t fall as much during the busts, but grow by just as much during the booms.

The trend is perhaps in sharpest relief in high-Gini areas like LA, but is broadly occurring across the country. Joe Light reports in the Wall Street Journal that lower-priced houses are lagging even as prices nationally rebound:

Between January 2006 and May of 2015, the median value of homes in the bottom third of the market has dropped 13% to $101,900, according to Zillow. The median in the middle third is down 6% to $172,600, while in the top third it is off 4.5% to $325,800… The [disinvestment] cycle has been hard to break in large part because low-wage workers have seen little, if any, income growth during the recovery—putting them in weak position to qualify for mortgages.

Recently, Rolf Pendall at the Urban Institute identified the most and least privileged neighborhoods in metro areas nationwide in the 1990, 2000, and 2010 censuses. Over those two decades, the most privileged neighborhoods saw home values rise by an extra $80,000, and their residents actually benefitted from that gain — their homeownership rate is twice as high as in the least privileged neighborhoods. (Since fewer than half of households in the least privileged areas are homeowners, their property value gains accrued to someone else.) Privileged neighborhoods also stockpiled human capital: the growth in their college attainment rate was four times higher than in the least-privileged areas.

This has tremendous implications for intergenerational social mobility, which is closely tied to income, human capital, and wealth. Not only do wealthier families have more private resources for their children, but in a country where schools are largely funded with local property taxes, wealthy communities have more public resources for their children. Thus, the “segregation tax” that penalizes property values in majority-minority communities creates a vicious cycle, and one that is only getting more pernicious — sadly illustrated recently by the events in Ferguson, Missouri.

Locally, stagnant housing prices in Prince George’s County have contributed to an ongoing foreclosure crisis. Stagnant housing demand from the “underwater limbo” is compounded by its relative isolation from the favored quarter’s jobs engine, and the area’s ongoing “segregation tax” discount. For example, in 1965-1975, the Levitt firm built two large “Levittowns” in suburban DC — Belair in north Prince George’s and Greenbriar in south Fairfax. Even though these are the favored and less-favored sides of their particular counties, near-identical ranches recently sold for an average of $300K in Bowie and $440K in Fairfax.

Meanwhile, formerly moribund downtowns adjacent to job-creating Favored Quarters are finding some success reinventing themselves as the easiest place to add new residential, away from the fierce FQ NIMBYs. The boom in downtown LA’s residential and retail market diverges sharply from its flatlining office market — which still suffers from 20%+ vacancy even though dozens of office towers have been converted to other uses. Downtown Atlanta and Dallas are similarly benefitting from escalating prices to their north.

Friday photo: Greedy developers built your city

Two rental houses on Capitol Hill

I recently came across these plans by a fantastically wealthy land speculator, seeking to profit by ruining DC’s pristine Capitol Hill neighborhood with a towering building crammed full of tiny rental “microunit” apartments for immoral singles — rather than wholesome nuclear families! This kingpin practices his avarice from posh Fairfax County, within a “resplendent” mansion overlooking the Potomac.

This paragon of greedy, out-of-town developers is, of course, George Washington, the very namesake of Washington city. Cities don’t arise via immaculate conception; they’re built by developers.

John DeFerrari’s book Lost Washington has a much more detailed account of the houses, showing that the NIMBY nightmare of “out of scale” “overdevelopment” was indeed what this city, and all other cities, was built on. (Otherwise, we’d all still be in caves!) Washington wrote to his architect, “Although my house, or houses… are I believe, upon a larger scale than any in the vicinity… capable of accommodating between twenty and thirty boarders.” A later, even greedier, developer popped up (and popped-under) the ruined buildings in the aftermath of 1814’s fire, and the buildings grew to six stories tall. Anti-pop-up NIMBYs might take heart from its fate: it then descended into criminal infamy and was bulldozed for a park.

[The plans in the photo above are from GW’s Albert Small Collection.]