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.

Wednesday, April 17, 2013

Wasted space: #1, #2, #3 and #4 -- not maximizing housing development opportunities in DC

The Washingtonian Magazine reports in "Seller's Market," that DC metropolitan area's hot real estate market--hot in Northern Virginia and DC in especially--is likely to remain so, in large part because the pipeline of new housing isn't very big, because of changes to the real estate financing and construction industry post- the 2008 real estate crash.

In DC in particular, most of the traditional single family housing opportunities have long since been built out, so mostly new owner-occupied housing will be condominiums in multi-unit buildings, located in mixed use developments on major commercial streets such as Wisconsin Avenue, Georgia Avenue, H Street NE, etc.

But getting zoning approvals, especially for projects that require public processes, is very difficult, and usually over time, projects get downsized some, as a way to provide some "give backs" in response to community opposition.

10 units here, 100 units there, 50 units here and 440 units over there, etc. and pretty soon the opportunity cost of lost housing production becomes significant.

Plus zoning regulations generally are focused on enabling the minimum for a particular property, not the best project.  I think that the regulation process needs to be turned upside down, and refocused on enabling better projects, and making it a lot harder to get approvals for minimal projects.

1.  When the new Safeway supermarket was constructed on Wisconsin Avenue NW in Glover Park, I said it was a waste of air space to not build some housing above.  Given the location, it would have been in high demand for market rate housing.

That being said, Tesco Supermarkets in the UK has made the point that building housing above their supermarkets could be a good opportunity for the creation of lower priced workforce housing.

I made a similar point more recently with regard to a new Menards Home Center in Minot, North Dakota.  See "Workforce housing and Menards, Minot, North Dakota."

2.  The same is true over the Giant Supermarket that is being constructed on Wisconsin Avenue in the Cathedral area.  While they are constructing not quite 150 units of housing there--most will be rental at least initially, with some SFH rowhouses on a different part of the site--more housing could have been inserted onto the site.

3.  The Walmart being constructed as a single use building on a 4 acre site at the corner of Georgia and Missouri Avenues NW.  Earlier plans for the site were for a mixed use project with retail on the ground floor and more than 400 apartments above.

Building housing at that location, like the Wood Partners project on Rte. 1 in Fairfax County, the Beacon at Groveton, or the impact of the construction of new housing (apartments) on top of the Petworth Metro Station a couple miles south on Georgia Avenue (at that particular location, Safeway's store is being redeveloped also, as part of a multistory development with a new store on the ground floor and housing above), could have had transformational positive impact on revitalization of Upper Georgia Avenue, by bringing more and new residents (and customers) to the corridor.

4.  I found this story in the Washington Post Real Estate section, "Calistoga project takes shape in Kalorama," on a forthcoming upscale project in Kalorama pretty interesting.  While they could have built up to 20 units, they decided to only build 9 units, with a car space for each.  They set the number of units to the maximum number of parking spaces they could provide.  I think that more units would have been better for the city, but it was a wash for the developer.

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At 3:36 PM, Anonymous Anonymous said...

well, a big part of this is the HPRB which is completely reactionary and seeks to downsize everything that comes before it. Hines was another case in point. all of these are lost opportunites- however- in the future people will eventually realize the mistake of not allowing more density- and then these buildings will be built upon/built out- and this will be a lot more expensive than doing it in the first place. Boards like the HPRB should stop wasting time and resources and get out of the business of restricting density- we should be doing everything we can to INCREASE density throughout the city. These people are just making a height limit reform more and more essential. If more density is allowed the height limits could remain in place loger- so they are actually working against their own desires by cutting density on these lowrise buildings. IDIOTS !!!!

At 3:52 PM, Anonymous charlie said...

All good points, but lets remember why we have a condo shortage -- and too many apartments in the pipeline.

And it is financing. Much harder right now to get financing to build a new condo building rather than an apartment.

(This is true across the county. Multi-family home starts up 31%, single family down).

In almost every example, you're quite right, they could have added some apartments. But we are looking at an overflow -- 25K units coming -- and the developers can do the math. Wasn't worth the marginal cost of adding it.

At 4:52 PM, Blogger Richard Layman said...

yes, I should have mentioned financing. It's why Bozzuto is so active locally. They have access to funds and a management company ready to manage properties.

At 5:35 PM, Anonymous charlie said...

The financing is a macro issue.

That being said, the best response by the city would be slow approvals on new apartments, and speed them on condos.

I found a chart today that was matching how much multi-family is being overbuilt. DC is overbuilt, not as bad as Raleigh, NC or SF.

Also this: the Growth Machine in a list?

At 5:38 PM, Blogger Richard Layman said...

well, yeah... I'm on the list too.

At 5:39 PM, Blogger Richard Layman said...

I know about the macro, but I am particularly impressed with how JBG and Bozzuto, because of financing, were able to scoop up lots of projects over the past few years, when various other developers were dropping out.

At 10:11 AM, Anonymous charlie said...

Well, I've often accused you of being the caring face of the growth machine.

In any case, it is interesting to see the split in elites; very few elite law firms on the list. Compare that to China, which is truely an investment led country. The real money is still running service economy here, not RE.

(and that is the problem with the growth machine analysis -- hard to say who is in or out).

RE: bozzuto/JBG, yes, that is the root of the problem is we've got cheap money for a few players, but it isn't being spread out enough.

However, imagine a world where the WMATA and DC pension funds invest $5B to build a blue line.

At 10:15 AM, Blogger Richard Layman said...

... fortunately, not to my face. I have enough phobias and concerns about maintaining my integrity.


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