Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Monday, December 03, 2012

More discussion of the height limit #1: Grant height increases conditionally, in return for significant public benefits, not as matter of right

Monday Properties building in Rosslyn, Arlington County, Virginia.  Flickr photo from the company. This building is about 50% taller than the highest buildings in DC.

Thinking about the height limit discussion more, there's a lot more to the issue than has been discussed so far, other than the most basic economic arguments in favor and the historic and viewshed arguments against.

If we're going to explore what allowing taller buildings means, it's essential to consider the matter completely, from all angles, to ensure that if change occurs, the best possible results are obtained from the outset, rather than years later, if ever.

Point number one is that permission to build taller buildings should come with public benefits, and this can only happen if it is required as part of the approval process.  The typical "matter of right" zoning process provides few opportunities for public benefits.

DC and zoning.  The way zoning works in DC is that the code specifies the allowable height, density, and uses by zone.  If the proposed use meets the criteria, it is "matter of right" and can be built with minimal review.

The problem from a community standpoint is that this is more focused on enabling minimum and minimal requirements, not on achieving the best possible result.  See "New years post #6 -- the crazy thing about U.S. zoning is that it's not designed to maximize overall land value" for an extended discussion on this point, as well as the discussion here, "Lessons from Walmart's foray into Washington, DC."

The disadvantages of this are multifold.  Probably one of the best examples of how granting density bonuses without requiring design review or other considerations is the NoMA district.  I have an extended entry on this "NoMA revisited: business planning to develop community."  And the City Paper has also written about this recently as well, "It's Not Easy Getting Green."

The developers weren't required to provide public benefits in return for the density.   Nor was design review, which resulted in a wide variety of innovative opportunities being lost as well.  This  ends up making the district less competitive vis-a-vis other neighborhoods, including the Capital Riverfront.  See "Frontin'" also from the City Paper.

Not to mention that the current height and density maximums put a significant limit on the opportunity to fund community benefits anyway.

It's marginally better with Planned Unit Developments, which allow a density bonus (but still constrained by the height limit, so it's not all that significant) in return for "community benefits."

In my opinion, DC doesn't do a good job of monetizing the value of community benefits that derive from variances, density bonuses, and exceptions (see the blog entries "Community benefits agreements revised again" and "What community benefits are supposed to be versus what people think they are about" which outline a framework for much better structuring of the process than is done currently)."

Arlington County flips the process around, and gets far more community benefits in return for allowing denser buildings.  Unlike in DC, matter of right there generates low value development, while negotiated projects are high value.

The standard matter of right zoning allowed for buildings in the Wilson Boulevard corridor is not particularly dense.  If developers want to build much denser projects, they must go through a negotiation process, somewhat comparable to DC's PUD process.  Since property values there are already based on the maximum possible density, developers opt for the tougher, harder, and ultimately more financially beneficial negotiation process, so that they can build taller and bigger.

But it's not just about allowing taller buildings.

Arlington ensures that through this process it gets more in return because from the outset they (1) do a better job of defining what they want (in particular contributions to public space in a variety of ways) and (2) structure the negotiation process which focuses the negotiation and obtains maximum social and economic value from the benefits received.

A couple examples that stand out include how Founders Hall (a large facility with a capacity of about 450)  at George Mason University's Arlington campus is open to community organizations for use for public events, as a function of the development agreement between the County and the school.  This supports community organizations, providing access to a large space that is larger than spaces normally available to community groups, and with access to a wider range of hours than is typical for public buildings.

Another is how the Crimson Partners project at 3901 Fairfax Drive will include a 13,000 square foot black box theater for use by cultural organizations, while simultaneously the space can also be used during the day as a conference and meeting facility.

Additionally, all negotiated projects are required to do transportation demand management programming, because Arlington's Growth Policy is focused on adding development while simultaneously minimizing additional motor vehicle traffic.

Another Arlington example of targeting bonus density in return for achieving desired goals is how in 1999, to encourage developers to construct to LEED standards, back when LEED was a new concept, Arlington put in a system of additional density bonuses with the objective of having more buildings constructed to Green Building standards.  This year, as LEED has become a standard practice and market requirement, Arlington has toughened the requirements somewhat (see the table on this webpage).

Seattle also has a couple interesting examples of much more significant proffers being offered in return for significant zoning benefits. (In both cases, Arlington and Seattle, those communities have an advantage compared to DC currently because they can offer significant density increases and DC can't.)

Vulcan Partners is proposing to give Seattle almost an acre of land, which Seattle would use to construct affordable housing abutting a market rate mixed use project, in return for density increases.  The project is controversial for many reasons, but the value of the land is approximately $12 million and hardly insignificant.  See "McGinn-Vulcan plan would put 24-story buildings on Lake Union" from the Seattle Times.

"Monetizing community benefits for public space conversion and other considerations: Seattle" discusses how online seller Amazon has offered a range of community benefits, including the acquisition of a streetcar and payment for 10 years of operating expenses for the street, worth almost $6 million, in return for alley closings which would allow them to have a contiguous campus and taller buildings in association with their proposal to build a new headquarters campus.

Conclusion

So DC could treat a change in allowable building height in one of two ways. Doing it the same as the way things work now, they could just change the zoning and allow taller buildings as a matter of right.  Or, height and density increases could be allowed, but only through a PUD-type process, with required negotiations that result in significant community benefits in return for the height and density.

1.  Developers provide community benefits only to the extent that they receive positive marginal economic returns from the action.

2.  Mass and height limits on DC buildings make it difficult to generate the kinds of extraordinary economic returns necessary to justify community benefits except when absolutely required.

3.  Being able to grant density bonuses enabled by changing the Height Limit would give DC more options  and greater means than exists currently for achieving community benefits and other worthy public policy goals.

4.  But in order to achieve such benefits, DC must treat density increases as economically valuable and not merely give them away, which is what treating height and mass as "matter of right" does.

5.  As part of the process of awarding height increase bonuses, DC should set up a highly structured negotiation process that yields substantive community benefits.  The process should be based on creating consensus priorities for the city and neighborhoods, monetization targets of the value of the density increase, a framework for considering and structuring benefits (see "Community benefits agreements revised again"), with a great deal of accountability and transparency.

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5 Comments:

At 3:53 PM, Anonymous charlie said...

As I said on GGW, bad choice on using Arlington. I'd agree with you that the process may be better, but the relaity is the county board has been hijacking this more and more to get "goodies" aka artishphere, affordable housing, and now the black box.

Given that vacacy rates around Wilson and Ft. Myer, I really doubt that it is helping. Monday is investing a lot to try and make Rosslyn cool since they own most of it.

And that is the crux of the issue. Using the goverment to capture the externality and reduce transaction costs is a highly inperfect process. How do we set up a system that is less prone to being hijacked?

And in specific with the height limit, the negatives (viewsheds, sunlight, downdrafts, giant loading docks and loss of alleys) are very hard to quantify.

 
At 5:42 PM, Anonymous H Street LL said...

I disagree with the first comment. I thought it was a very well written and actualized piece.

In addition, with all the modeling folks can do nowadays, every one of those negative external factors could be calculated and accounted for.

Most important, and not touched on in this piece, is how do you convince others who are skeptical about increasing the height limit?

 
At 7:33 PM, Anonymous charlie said...

Well, I read this as a plea NOT to deal with the height limit until DC governance issues are taken care of.

In any case, this may be an interesting read as well:


www.forbes.com/sites/eamonnfingleton/2012/12/03/how-job-creation-programs-backfire-on-states-and-cities/

 
At 8:51 AM, Blogger Richard Layman said...

1. I am saying the height limit discussion should be used as a fulcrum to improve the public benefit from the development approval process.

It won't happen if we don't ask.

2. Convincing people about the height limit specifically? Hmm. I wasn't intending, exactly, to write a post about that. I will consider doing so as part of this series. Thanks for the suggestion.

3. Re job creation programs, the NYT had two big take out pieces on business tax incentive programs, and there's been some other stuff related, that I have been meaning to write about, including Living Social.

But yes, I agree with Matt Yglesias that it's better to focus public monies--for the most part--on creating the infrastructure and playing field for exchange, rather than helping specific businesses (e.g., like CoStar or Living Social or those f*ers at Bureau of National Affairs--once their property tax abatement expired, they high-tailed it to Arlington, etc.).

P.S., related to #1, I mentioned the economic reasons, theoretical I grant you, about why to favor the height limit, in writings and publicly starting around 2006.

 
At 8:53 AM, Blogger Richard Layman said...

sorry, I meant why to favor "increasing" allowable heights... I mentioned it in the DC Retail Action Strategy Planning sessions, which were 2006-2007.

 

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