Idle speculation: US-1 edition

Some people watch “House Hunters” for hours on end, and others peruse Curbed to imagine themselves inside huge mansions. Personally, I’m partial to idly imagining what could happen with those quirky old buildings that show up on the commercial listings.

College Park US1
(Baltimore Avenue looking south from College Park towards Hyattsville and Riverdale Park)

4415 Oliver Street, a two story house turned office just off Route 1 in the Hyattsville Arts District could be renovated into a version of the Form Follows Finance Fourplex. (It might even qualify for a conforming residential renovation mortgage.) It has the right live-work zoning, which is surprisingly scarce in downtown Hyattsville. At $350K for 1800′, it’s cheaper than nearby houses–around the corner, the same $350K only buys you a 1200′ house. OK, so it might only fit 2-3 units instead, but still a good price for someone with some architectural ingenuity. Indeed, it even pencils as a teardown.

An interesting Opportunity Zone play nearby: a 33 acre strip mall at the doorstep of the future Riverdale Park-Kenilworth Purple Line station (one stop from UMd’s research park) is for sale, though probably for a high price. The new, but as-yet unmapped TOD zones in Prince George’s give very wide latitude to its future owner.

Elsewhere in Riverdale Park, there’s a <2 acre residential tract for sale. Looks at first glance like an interesting pocket neighborhood opportunity ( close to downtown Hyattsville! might be able to do something unusual with the street ROW!)–but even the brand-new zoning code only allows large-ish single-family houses there. Blah.

In other news, Forest Glen‘s Castle is back on the market at $2.8 million. I have zero ideas for it; after reading about the place, I’m utterly unable to picture it as anything other than “the Hungarian Whorehouse.”

After those cheers, some (more) jeers for Fairfax County. This vacant quarter-acre lot on Richmond Highway, which appears to be a leftover from a prior subdivision, looks at first glance like a prime chance for a residential scale live/work-plex. But no: “Highway Commercial” zoning doesn’t allow residential by the 7-11 and Five Guys, even though the local sector plan calls for three-story mixed-use. Instead, it would require apartment (or PUD!) zoning… which requires a 2.5 acre minimum lot area, because this is the suburbs. OK, so technically that MLA doesn’t apply in redevelopment areas like Richmond Highway, but c’mon Fairfax, it’s the 21st century, individual vertical mixed-use buildings exist.

Idle speculation: Opp Zone, meet planned community

The Opportunity Zone maps for greater Washington and for Raleigh had two particularly puzzling inclusions: the Lake Anne area in Reston, and the Kildaire Farm area in Cary. How is new investment intended to transform planned communities, which had always been intended to remain exactly the same?

I happen to have a soft spot for both areas (pioneering planned communities in their respective areas) so I looked around at both and just could not figure out how this is expected to work.

OZs require drastic change
In order to qualify as an OZ investment, a real estate investment has to meet the “substantial improvement test” — similar to the Historic Tax Credit. This essentially means that a renovation must “double the basis,” or spend as much on the improvements as the original value of the building (minus the land).

Accountants often use an 80/20 guideline to split the value of a property, with 80% of the value assigned to the building and 20% to the land. Sure enough, the tax value of even the mixed-use shophouses around Lake Anne* is split 80/20.

Reston: Lake Anne Village Lake Anne’s waterfront, with shophouses behind.

That means coming up with the acquisition price, and then spending another 80% of the purchase price on improvements. It’s pretty much impossible to do this within an existing building, unless said envelope is in very bad shape (e.g., a burned shell). The tax values of Lake Anne shophouses run about $650,000, of which $521,000 is the building—a breathtaking amount to spend on anything shy of full reconstruction.

Now, it’s easy to spend that 80% if you’re building something new, like an addition or new buildings. But that brings us to:

OZs pretty much require by-right development
The OZ law reserves its most lucrative tax breaks for capital gains that are reinvested in 2019, and thus deployed into new construction soon thereafter (within 31 months, according to the first set of regulations). And while the program can be used for many kinds of investments, including equity stakes in operating businesses, its most straightforward application is for construction of rental real estate.

In 1984, Reston promised new residents that nothing would ever change. Oops. No changes allowed here.

That timeline leaves precious little time to deal with the uncertainty of, say, the rezoning process. But these two areas are both pretty much entirely within the purview of strictly controlled planned-community zoning districts. Hence, any changes would have to go through not only appearance boards, but also reopening the entire planned community zone — surely a contentious process. There’s a reason why entitled development opportunities in OZs are suddenly drawing lots of investor interest.

While newly issued regulations do permit some space for regulatory delays, no reasonable investor would take on this sort of risk, given that falling afoul of the OZ rules results in tax penalties.

What could happen

Therefore, the only reasonable investment an Opportunity Fund could make would be into an already-entitled, large-scale development. There is one such proposal that’s been tabled near Lake Anne, and on county-owned land no less, which might explain the county’s interest in getting the area certified as an OZ.

Meanwhile, there are a few single-family houses in one corner of the Kildaire Farm tract which are zoned for multifamily, and thus conceivably could be scraped and redeveloped. There’s also a pocket of houses outside the PUD on larger lots, which could be added on to — perhaps using Cary’s surprisingly lenient internal-ADU (“Utility Dwelling Unit”) law.

* Again proving the rule that the key to unique retail is small, divided ownership

Against Euclidean zoning

Since takedowns of Euclid are thankfully all the rage these days…

The most obnoxious question I got during oral defense at UChicago was from a genuine-article “provocative libertarian” economist, who launched a broad attack on zoning as a severe impingement upon “freedom” (i.e., his treasured consumer choices). My stammering defense of zoning then amounted to, pretty much, “because we can.” (Zoning and preservation are, seemingly by historical accident, two of the few broad regulatory tools the US Supreme Court has granted to local governments.) Zoning is what planners do because it’s what we’re taught to do, and what we’re used to doing — but planners rarely question whether it’s the right tool.

In a planning law class back in 2011, we were asked to make oral arguments for or against a theoretical municipality adapting, or tossing out, its existing zoning laws. Having checked that said assignment is no longer being assigned, here are the notes I wrote up for my broadside against the institution of Euclidean zoning.

Coming up with this was pretty revelatory, honestly. I already had ten years of experience with zoning codes and knew that its structure was kludgy — but had also once (at my BA oral defense) mounted a spirited defense of zoning and its Constitutional basis against a purely theoretical attack by a genuine-article Chicago economist.

I’m a little less sold on FBCs these days, having learned a bit more about their limitations and administration — but the anti-Euclid arguments have only been bolstered by what I’ve learned of zoning’s history since.


For too long, our city has struggled to regulate land use under the rubric of a conventional zoning ordinance. This ordinance, although revised within the past generation — unlike in many other major cities[1] — still has its roots in a fundamentally flawed legal framework that derives its authority from the landmark 1926 Euclid vs. Ambler Realty[2] ruling by the Supreme Court.

  • Euclid established a legal framework of regulating use first, density second
  • Society has changed since 1926; social problems, social goals, social structure have all shifted dramatically
  • Our understanding about how to shape cities, and how best to shape cities, has also changed
  • New problems demand new solutions

The zoning code that the city currently labors under suffers from an outdated, inflexible structure that fundamentally cannot address or implement the lofty goals embodied in the city’s ambitious new Comprehensive Plan. If it is to implement that plan—as it is legally obliged to do, under state law—the city must therefore discard its current zoning ordinance and replace it with one organized around form instead of use and density.

1. The zoning code is organized first and foremost around the outmoded paradigm of regulating use.

  • Zoning began as a way to regulate nuisances inherent in many urban land uses[3]
  • In particular, Euclid set up a list of reasons for regulating land use: fire apparatus, safety (crime), reduce traffic and confusion and thus street accidents, nervous noise, “favorable environment in which to rear children,” “free circulation of air and monopolizing the rays of the sun…”
    • Zoning codes since then have focused on these, since it set the regulatory precedent
  • Yet since the 1920s, many of the externalities and nuisances that zoning was originally intended to prevent have been regulated separately
    • Pollution of air and water
      • Laws preventing industrial pollution have been so successful that the primary sources of urban air and water pollution are now “non point source”[4]
        • Has little to do with large industrial facilities
        • Outside the realm of control for zoning
        • Indeed, to the extent that runoff and smog are caused by parking lots and automobiles, our region’s emissions are likely exacerbated by suburban zoning
      • Enforcement and monitoring of these laws is done by specialized, trained teams[5] better able to protect neighbors from nuisance—even hidden ones, like toxic chemicals—than mere distance
    • Noise
      • Leading complaint is airplane noise, which is increasingly regulated by federal law[6] and by airport regulations
    • Fire suppression through much more stringent fire codes, including sprinkler and fire alarm requirements
      • Fires have become so rare[7] that our fire department responds to more car crashes than fires
        • To the extent that our zoning ordinance foster auto-dependent development, it could actually be undermining life safety
      • Public health
        • Antibiotics, not fresh air in houses ensured by zoning ordinances, that ultimately cured the low-level tuberculosis pandemic
        • Improved sanitation and medicine, not zoning, takes credit for public health advances of 20th century
          • 4 of the 10 most long-lived countries in the world are very high density city-states (Monaco #1, Macau #2, Singapore #7, Hong Kong #8), all of them prime examples of the high density and mixed uses that Euclidean zoning “protects” Americans from in the name of our health. The United States is #50 by the same measure.[8]
        • Housing code minimums in many respects are broadly superseded by today’s living standards
          • Tenement Law remains in effect, and its remnants are throughout the zoning ordinance
            • Definitions of families and households are woefully out of date, given shifting family composition[9] towards non-family households
              • “group houses” of house-mates particularly young adults or students[10]
              • co-housing usually requires contentious zoning changes
            • Minimum space per occupant outdated
          • Today’s use and bulk restrictions in the zoning ordinance have at best a tenuous nexus to actual public health, safety, and welfare
            • Setback laws
              • No public health need has ever been established for a one-acre-lot zoning category, nor for 100 ft. front setbacks
              • Instead, such excessive standards are more likely to ensure that no homeowner need view another’s laundry lines
            • Separation of uses
              • What public health objective is facilitated by ensuring wide distances between residences and modern industrial facilities?
              • Such facilities are nowadays as likely as a typical household to work with toxic chemicals
            • Noxious uses can and are handled and sited with other regulations
              • Siting of public facilities like landfills and prisons regulated under state law
              • Siting of alcohol-related uses largely accomplished outside zoning
              • Sign regulations are already outside city’s zoning ordinance

2. The zoning code’s “cumulative” structure inherently valorizes single-family housing above all else, which has insidious effects throughout the system

  • Cumulative or pyramid zoning establishes single-family housing at the top of the ladder, and they are allowed in almost all zones—“They must not be a problem to anyone, so they’re allowed in all zones”
    • The pyramid intrinsically valorizes larger single family houses and larger lots
    • Zoning sets up a proscriptive approach, typically with maximums or minimums but rarely sets two bounds. One end is almost always left open, and the net result is that it makes less dense, sprawling development easier to build in more zones
      • Maximum FAR = smaller buildings always welcome
      • Maximum density = fewer houses always welcome
      • Minimum lot size = bigger lots always welcome
      • Minimum parking requirements = bigger parking lots always welcome
      • Minimum setbacks = bigger yards always welcome
    • Proscriptive approach typically results in all development within a district adhering to the maximums, preventing any diversity of building types and promoting segregation by income and family type[11]
  • Maintaining property values and residential exclusivity are specifically mentioned in Euclid as an appropriate use of zoning laws (“development of detached house sections is greatly retarded by the coming of apartment houses”)
  • “Affordability” is the opposite of exclusivity, and there has been momentum towards that end of the spectrum
    • Affordability is an integral part of the housing section of the comprehensive plan
    • Inclusionary zoning has been debated locally
    • Housing and transportation have grown substantially as a share of household expenditures since the 1920s[12]
  • Nuisance flows both ways: not only are detached houses threatened by other uses, but other uses are threatened by residents. Cumulative zoning does a poor job of protecting from residential users.
    • Industrial operations are constantly threatened by residential neighbors, so much so that some cities have developed restrictions to protect industrial zones[13]
    • Farms at the exurban edge receive complaints by neighbors over early-morning noise, smells, truck and tractor traffic
    • Nightclubs frequently threatened by encroachment of residential, particularly owner-occupied housing, into the industrial and commercial areas that they typically locate in
    • Although our zoning ordinance does not protect views, residents are much more likely to block new construction if it obstructs their views; this inhibits commercial growth, particularly at the edges of downtown
  • Zoning’s emphasis on promoting single-family residential protects against overcrowding, but what about under-crowding?
    • Over-crowding was a public health concern, typically associated with tenements
    • Now more likely associated with large immigrant families living in single-family houses
    • Under-crowding also has consequences, mostly associated with suburban sprawl—particularly the high cost of providing public services, from life safety to transportation
    • Evidence shows that zoning codes’ bias against multi-family construction has led to the systematic under-supply of multi-family across entire metropolitan areas[14]
  • Despite many attempts to fix the code, the blunt distinction based on occupancy poorly addresses the range of moderate density housing types available
    • Euclid ruling created a bright line distinction between single and multi-family: “[apartments] bringing, as their necessary accompaniments… increased traffic and business… [traffic increase injurious to children in] “quiet and open spaces for play”[15]
    • Creates problem in existing areas of mixed single- and two-family houses
      • Contextual infill, or even replacing what’s already there, becomes very challenging
    • Accessory apartments, coach houses, and “granny flats” cause a lot of trouble with the zoning ordinance—there’s a spectrum between “bedroom” and “housing unit” but the zoning code doesn’t make that distinction
    • Interesting low-scale multi-family building types—zero-lot-line houses, bungalow courts, courtyard apartment houses—have been prohibited under conventional zoning and can only be built under onerous discretionary approval processes

3. Yet use and density regulation is powerless to affect urban design

  • Zoning, by itself, makes for a lousy way of controlling urban design
  • Its proscriptive approach forbids bad development, instead of encouraging good development[16]
  • This failing can be seen in the vast array of other methods that have emerged to attempt to regulate urban design and achieve better development
    • design review committees
    • discretionary approvals (site plan review, planned unit developments)
    • special exceptions, zoning changes
    • overlay, character, neighborhood districts
    • historic designations and conservation districts
      • These have proliferated to such a great extent partly because they are the only reliable way to regulate design
      • Yet they are only able to maintain the existing appearance of a district, rather than guide growth into something else
    • private development covenants and restrictions
      • These have become so complex and punitive that they are often confused with zoning in the public mind—because what else could possibly be so complicated?
    • Net result is a system of Byzantine complexity, completely beyond the comprehension of all but a select few zoning lawyers and zoning administrators
    • Ludicrous over-regulation results for small projects, such that a contextual infill set of townhouses in a historic district—the sort of development that will be needed if the city is to promote more infill—requires just as many approvals and months of work as an 300-acre subdivision
  • The primary means of controlling design in the zoning ordinance is through setbacks and through Floor Area Ratio, a crude measure of building bulk. FAR is particularly ignorant of urban structure, block structure, and scale
    • “FARs by themselves give communities little control over the shape and placement of buildings”[17]
    • Rewards tall buildings, assembling large lots
    • The 110-story Sears Tower was built as-of-right under Chicago’s FAR restrictions, originally intended for 16-story high-rises
  • “Zoning’s lack of a positive prescription for physical form has facilitated the intrusion of incompatible development types into traditional urban neighborhoods.”[18]

4. Further amendments will only worsen matters.

  • Much tinkering has been done around the edges of our zoning ordinance
    • overlay districts
    • mixed use zones for downtown and neighborhood commercial streets
  • These changes do not address zoning’s failings in 90% of the city
  • Changes like these merely shovel more complexity and opaqueness onto what is already an opaque process
  • Changes like these are typically reactive
    • Every so often, someone finds a loophole in the zoning ordinance, exploits it, ruins neighborhoods, and then shames City Council into closing it using yet another zoning patch. This process is not unique to our city.
      • The “Vancouver Special” was a 1980s abuse of accessory unit regulation, resulting in numerous out-of-character houses[19]
      • “Four plus ones” and “dingbats,” apartment buildings hovering over a sunken parking podium, addressed the shortage of studio apartments in 1960s Chicago and Los Angeles but were found unsightly by neighbors
    • Rarely do we launch such code-fix efforts until damage has already been done to a neighborhood
    • Has been done a few times in conjunction with neighborhood plans, but such neighborhood-specific zoning (like overlays) just add even more complexity to the zoning code
  • Result is a Frankenstein of regulation: far too complex text and procedures. Neighbors and citizens cannot understand and cannot reinforce zoning administration
    • “And so, we have, as they say, the best—really the worst—of all possible worlds. We have every possible world.”[20]
  • Zoning is no longer a reliable and predictable guide to neighborhood change
  • Has become too easy to game the zoning system through politics
    • Find a zone that fits your needs (regardless of what the property is) and get the property spot-rezoned, since the assumption is that everything is ripe for rezoning
    • Go for a discretionary approval, under which just about anything is negotiable
  • The fundamental structure of zoning is unable to cope with modern concerns. Attempts to update zoning have up-ended the zoning system and made it overly complex. This complexity makes zoning inherently arbitrary and capricious, raising due process concerns.

5. The future: a form-based code

  • “What can you recommend, when the very theory behind such a zoning resolution—not merely its detail—needs drastic overhaul and rethinking?”[21]
  • “It became evident that this regulatory framework was really what was driving suburbia, sprawl, and the things that were bring criticized as being inefficient and unsustainable.” – Elizabeth Plater-Zyberk[22]
  • The city needs an entirely new framework for guiding sustainable neighborhood change
  • A new framework for zoning should not be proscriptive (thou shalt not) but instead prescriptive (thou shall), and reward performance (outcomes) rather than merely measuring inputs
  • As Jane Jacobs pointed out, the typical zoning ordinance focuses on use when the scale that use operates on is typically a greater determinant of its impact on the neighbors, and court cases have found that small industrial uses are largely compatible even in residential areas[23]
  • The basis of our zoning should be one that fosters mixed communities, rather than having segregation (by use and bulk) as its core principle
  • A form-based code (FBC) seeks to use buildings to shape public spaces, not to have buildings that merely enclose private spaces[24]
    • Such a code regulates the form (shape) of buildings, thus granting great certainty to neighborhoods about what kind of buildings will be built—particularly compared with the insufficient bulk restriction that FAR provides
    • An FBC also addresses in detail how buildings interact with streets and other public spaces, the basics in how buildings are “good neighbors”
    • An FBC is perhaps the tool best able to implement the urban design goals of New Urbanist plans; hence even cities with relatively modern codes have adopted FBCs in order to realize specific development plans
      • Milwaukee commissioned a specific FBC to realize Beerline B, a particularly innovative and excellent infill development
    • An FBC still contains use restrictions, but use controls are secondary to building form controls
    • Unlike a PUD or other such discretionary approval, a FBC can apply design controls equally to multiple landowners across a broad area. This allows for high-quality design, executed by many stakeholders (instead of a stultifying large project), and the evolution over time of an urban area in accordance with a plan[25]

[1] For example, New York City’s current code dates to 1961; several other cities with codes of similar age (Baltimore, Chicago, Philadelphia) have only recently rewritten their codes.

[2] Village of Euclid, Ohio vs. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926)

[3] Hadachek vs. Sebastian, 239 U.S. 394, 36 S.Ct. 143, 60 L.Ed. 348 (1915)

[4] In the Washington, D.C. region, the primary air pollutant is ozone, of which a plurality (40%) comes from autos. “Ozone Pollution,” Clean Air Partners, accessed 5 October 2011, http://cleanairpartners.net/ozoneinfo.cfm

[5] In particular, state environmental protection agency

[6] “Stage 4 Aircraft Noise Standards,” Federal Aviation Administration, 14 CFR Part 36

[7] Dan Mihalopoulos and Michael Lipkin, “In Tough Times, Fire Department Untouched,” Chicago News Cooperative 13 May 2011

[8] “Country Comparison: Life Expectancy at Birth,” CIA World Factbook, accessed 6 October 2011, http://cia.gov/library/publications/the-world-factbook/rankorder/2102rank.html

[9] City of Ladue vs. Horn, 720 S.W.2d 745 (Mo.App. E.D.1986)

[10] McMinn vs. Town of Oyster Bay, 498 N.Y.S.2d 128, 488 N.E.2d 1240 (N.Y. 1985)

[11] Jonathan Barnett in Congress for the New Urbanism, Codifying New Urbanism, Planning Advisory Service 526 (Chicago: American Planning Association, 2004), p. 5

[12] Total “shelter” costs rose from 23.3% of consumer expenditure in 1918 to 32.8% in 2002, a 41% increase. Bureau of Labor Statistics, “100 Years of U.S. Consumer Spending” (BLS Report 991), pg. 10, 58.

[13] Joel Rast, Remaking Chicago (DeKalb, Ill.: Northern Illinois U.P., 2002)

[14] Jonathan Levine, Zoned Out (New York: RFF, 2005), pg. X.

[15] Euclid

[16] Ellen Greenberg in Congress for the New Urbanism, Codifying New Urbanism, Planning Advisory Service 526 (Chicago: American Planning Association, 2004), p. 39

[17] Jonathan Barnett in Congress for the New Urbanism, Codifying New Urbanism, Planning Advisory Service 526 (Chicago: American Planning Association, 2004), p. 3.

[18] David Rouse and Nancy Zobl, “Practice Form-Based Zoning,” Zoning Practice, May 2004, p. 1.

[19] John Punter, The Vancouver Achievement (Vancouver: UBC Press, 2003), p. 118.

[20] Norman Marcus, “A Brief History of the Zoning Resolution,” in Marcus, ed., Zoning for the New Century (New York: Real Estate Board of New York, 2000), p. 15.

[21] Jane Jacobs, The Death and Life of Great American Cities (New York: Random House, 1961), p. 235

[22] Nate Berg, “Brave New Codes,” Architect July 2010, p. X.

[23] Goldman vs. Crowther, 147 Md. 282, 128 A. 50 (Md.1925)

[24] Robert Steuteville, Philip Langdon, et al, New Urbanism Best Practices Guide (Ithaca: New Urban News Publications, 2009), p. 188

[25] Steuteville et al, 186-187

Overrated and underrated cities

Screen Shot 2018-09-16 at 18.07.47

 

Which cities did I expect to enjoy visiting, and which ones did I enjoy in reality? Here’s a 111%, completely, utterly, totally subjective look at 57 cities in North America, reduced to a scatterplot. Since the data labels might overlap, a link to the full spreadsheet is here.

Overall, I found that about 75% of cities are about as hyped as they deserve, with the hype being informed mostly by overall population and media buzz. This makes the outliers all the more interesting. The most overrated cities:

  • Austin
  • Miami (tie)
  • Cleveland (tie)
  • Boulder (tie)
  • San Francisco (tie)

Yes, Cleveland (4,2) tied San Francisco (9,7).

Surprisingly, I’ve found more cities are underrated, probably because I had an exceptionally fine experience:

  • Philadelphia
  • Madison
  • Asheville
  • Ottawa
  • Minneapolis
  • Richmond
  • Newark
  • Buffalo
  • Providence

As always, YMMV. Based on visits mostly within the past decade.

Recently: winning the war on sprawl, over-preservation, office to residential, shared streets, tax bill

I’ve recently published several articles over at GGWash.

  • Sprawl is slowing, but that doesn’t have to mean higher housing prices.” The downtown high-rises under construction only tell half the story of Greater Washington’s housing growth story. While all those cranes are easy to see from afar, what isn’t immediately apparent from the airport (but might be from a plane) is that many fewer acres of the countryside around us are being bulldozed for subdivisions–which for the past century has been where most lower-cost, low-rise housing was built. As a result, the region as a whole isn’t building enough housing for our rising population… Not only is supply overall not keeping pace with demand, but a large fraction of the new supply is in the housing market’s priciest segment: expensive high-rise construction, on expensive downtown land.
  • DC has more historic buildings than Boston, Chicago, and Philadelphia combined. Why?” Nearly one in five properties in DC are protected by local historic designation laws. DC is so prolific at handing out historic designations that we have more historic properties than the cities of Boston, Chicago, and Philadelphia combined, which together have almost eight times as many properties as DC. While this policy has ensured harmonious architecture across much of central Washington, it also means that Washingtonians are much more likely than residents of other cities to have their construction plans delayed or denied on subjective grounds by a historic review board.
  • Historic preservation in DC saves the loudest neighbors, not the finest buildings.” DC’s surfeit of historic structures results from several factors, notably the broad application of rather vague criteria for designation. As Roger Lewis has written, “the HPRB decision is inevitably a judgment call because much of the evidence for historic designation is inherently subjective.” Since every resident “squeaky wheel” is invited to request historic designation for just about any site in the District, many do — and overwhelmingly, they succeed.
  • DC’s countless thirtysomething office buildings stare down mid-life crises.” No other region can match Greater Washington’s density of 1980s and 1990s office buildings — we built over a million cubicles’ worth, almost as many as in the much-larger New York and Los Angeles regions. Now, these buildings are facing mid-life crises; many require substantial additional investment, as key building systems (like air-conditioning, plumbing, elevators, and roofs) require overhaul or replacement, just as the office market has changed.
  • Not every obsolete office building is cut out to become apartments.” Some, but not all, of these old offices can become residences, depending on their location, price, and layout. Despite considerable media coverage, office conversion has been comparatively limited in greater Washington for a variety of reasons, including a relatively healthier office market and a lack of specific incentives for the practice. Residential conversion offers some promise, but will not be a panacea for either the over-supply of offices, or the under-supply of affordable homes, because not every obsolete office building can be converted to housing.
  • Metro needs a loop to lasso riders from this growing corner of DC.” The way the District is growing is creating another rail bottleneck on the other side of town that will have to be addressed in the future. The Capitol Riverfront is easily the fastest-growing part of DC right now, and by some accounts one of the fastest-growing neighborhoods in America. If all 11,978 new housing units proposed within the Capitol Riverfront get built, the area around Navy Yard station would have the largest household population of any Metro station. Metro’s ridership forecasts, which now factor in development proposals, foresee that the area’s rapid growth might require additional investments, like a new subway line.
  • How are the Wharf’s shared spaces working out?” When the Wharf opened last month, it instantly became the largest expanse of “shared space” streets in the country. Over the past few weeks, it seems like these streets are largely working as they were designed. Even though a few of our commenters were skeptical about whether the approach would work here, so far there haven’t been any major complaints or adjustments needed.
  • The GOP tax plan would make housing and infrastructure more expensive.” Eliminating Private Activity Bonds and New Markets Tax Credits, as the House GOP’s tax code overhaul proposes, would have deep ramifications for funding infrastructure and affordable homes in the region.
  • The latest Republican tax bill changes commuter benefits, but probably not yours.” Tax law will only indirectly affect most area commuters.
  • Added 26 January: “A bold California bill would ease transit oriented development. How would a similar approach affect DC?” A bill recently introduced into the California legislature boldly proposes that every transit corridor in the state be rezoned to permit mid-rise apartments. In Slate, Henry Grabar writes that it’s “just about the most radical attack on California’s [housing] affordability crisis you could imagine.” In the Boston Globe, Dante Ramos writes “the bill may be the biggest environmental boon, the best job creator, and the greatest strike against inequality that anyone’s proposed in the United States in decades.”

 

Recently: instant neighborhoods, unmasking institutional capital, dockless bikeshares compared

Cranes around Navy Yard, from roof of 100 M SE

Three things I’ve written elsewhere this week, the first two inspired by the mechanics of my neighborhood’s growth:

1. “Instant neighborhoods” don’t make for great cities, but DC insists on them in GGWash. I really do relish living in a neighborhood that’s growing and changing quickly, but it’s a little bit unnerving to think that we may be repeating the biggest mistake of Southwest’s past — the hubristic assumption that our best-laid urban plans can anticipate every need, for all time.

2. Meet the everyday people who own these iconic Washington-area buildings in  GGWash. Amidst a lot of dark insinuations about outside money, it’s kind of funny to uncover the rather more quotidian reality of who’s paying for all these new buildings.

3. I wrote a Twitter thread about riding all four of the new, dock-less bike sharing systems that have launched in DC this past week. Click through for the reviews:

 

The problem is inequality, not speculation

Need homes? Build homes (even the Communist youth thought so in 1946)

In 1946, even the Communist Party USA agreed that the obvious solution to a housing shortage was to build housing. Why is that controversial now?

In a recent fit of contrarian cutesiness (which I partly responded to earlier, here), Chuck Marohn wrote about out-of-control housing prices: “The simple answer is downzoning.”

That’s as dishonest an answer to the question as Tommy Lasorda, in those vintage Ultra Slim Fast commercials, saying that the secret to out-of-control weight is spaghetti-and-meatball dinners — the daily treat, rather than the three calorie-restricted, high-fiber shakes that you choke down the rest of the day.

Marohn balances his call for downzoning with a casual mention of his previous “floating height limit” idea — allowing, across all zones, somewhat bigger buildings than the norm. This would, in essence, upzone the vast majority of metropolitan American land that’s currently zoned solely for low-rise single-family residential, while lowering allowable heights in the much smaller proportion that’s subject to more-lenient commercial zoning. (Of course, in his contrarian telling, a call for raising allowable building heights for 90% of America is titled “the case for height restrictions.”)

He pins the blame for metro Portland’s housing affordability crisis — and, by extension, the broader housing-affordability crisis afflicting bicoastal Blue America — on property speculation, saying that developers are bidding up residential land prices around transit in hopes of winning rezoning to build multifamily TOD. Thus, his call for downzoning, to frighten off those vile speculators. There certainly exist a few situations where transit-oriented speculation distorts markets — I’ve written about these pretty extensively in GGWash, pointing to why “parking craters” surround Metro stations instead of 8-story high-rises.

But these are fringe situations, affecting only a few square miles across the entire country. Even when I lived in the highly desirable, transit-accessible neighborhood of Bucktown, where zoning was infamously corrupt, the upzones that the local alderman brazenly sold did not result in the dumpy single family houses being replaced with parking-light apartments, as Chuck’s hypothesis holds. In fact, the exact opposite occurred: dumpy, parking-light apartments were replaced with swanky single-family houses! In countless other areas which have been downzoned, housing prices have increased regardless of speculation.

Why? Because the price increases in Bucktown, and on Portland’s east side or Los Angeles’ west side, have little to do with transportation (Chuck’s bailiwick) — and much more to do with rising income and wealth inequality, both within and between regions, combined with a largely static land-regulation regime that hasn’t adapted. The gains accruing to the wealthiest means that the wealthy can bid up housing prices, substantially raising housing prices in high-income regions where both demand and barriers to entry are high. As I wrote earlier, this imbalance has held on for decades in some cities, particularly in coastal California, and the political dynamic that sustains it appears to be utterly implacable.

As I also wrote earlier, the economies in different regions have diverged in a way that has fed this dynamic. Economists Stijn Van Nieuwerburgh and Pierre-Olivier Weill found that “house price dispersion” between regions increased much faster than income inequality between regions (which has also been increasing): their statistical measure of the variation in house prices increased by 38 percentage points, vs. 8.6 points for wages, from 1975-2007. As their paper explains,

The increase in productivity dispersion creates flows of workers towards high-productivity metropolitan areas, driving local house prices up because of limited housing supply. Conversely, households flow out of low-productivity areas, driving local house prices down. This increases house price dispersion.

The situation has gotten even worse since the 2007 crisis, with housing prices in wealthy Census tracts increasing almost twice as fast as those in more modest areas.

Just to be sure, the Harvard Joint Center on Housing Studies examined metro-level data about the uneven recovery in house prices more closely and observed:

a strong case for the gap between recent changes in supply and demand exerting a strong upward pressure on house prices… the overriding importance of the imbalance between population growth and housing stock growth in explaining trends in prices…

Sure, pointing the finger at transit, multifamily, and TOD burnishes Chuck’s prickly-independent bona fides, a long tradition in Upper Midwest politics. But he’s searching only within his narrow sphere of expertise (transportation) to find the cause of problems that have much larger global causes — and which don’t lend themselves to his hyper-local bootstraps approach.

Update: Portlanders have already studied and diagnosed their problem — as in Bucktown, it’s inequality and McMansions, not multifamily zoning. Their solution is not downzoning, but rather to switch up the zoning in lower-density neighborhoods, increasing the number of units allowed while reducing FAR allowed.