DC and streetcars #4: from the standpoint of stoking real estate development, the line is incredibly successful and it isn't even in service yet, and now that development is extending eastward past 15th Street
Much of H Street NE is more than one half mile in walking distance from a Metrorail Station.
Significant development coming to Benning Road. Last week's report in the Washington Business Journal ("Developer hopes to extend 'attraction' of H Street NE to the east with 180-unit project") about a new development on the 1700 block of Benning Road, more than 1.5 miles from Union Station, but a site that will be served by the new streetcar, is another confirmation that the streetcar is a success economically, even before it has started serving passengers.
Current conditions: the right side of this photo shows the south side of the 1600 block of Benning Road NE. The site mentioned above is in the middle left.
Without a streetcar, development in that part of the H Street-Benning Road corridor is completely unimaginable.
It is imaginable now, but still gutsy, given that the streetcar hasn't started serving passengers yet, and has been subject of a lot of angst and opposition and a kind of diffidence on the part of the city's elected officials. It appears that the current administration isn't too eager to move streetcar expansion beyond H Street, as plans originally intended.
Streetcar service makes all the difference to a developer. According to Jerry Zayets, Director of Multifamily Acquisitions and Development for Capital City Real Estate, the developers of the 1701 H Street project, the streetcar is the reason why they are developing at this location.
As he said in an interview:
"We love infrastructure. And we were confident that the city would move forward and bring the streetcar into service."
Streetcar images from Fullertography.
The streetcar line is a significant quality upgrade of transit service compared to bus, and this reshapes residential and business location decision making favorably, in a manner comparable to the value of proximity to subway service.
Mr. Zayets confirmed the project has been harder to finance because the location is in a part of the corridor that hasn't been considered "premium" before, given that it is so far from a Metrorail station (1.6 miles from Union Station, more than one mile from Stadium-Armory station).
The site is outside of the comfort zone of the typical sources of real estate capital who see developing Downtown or around Metrorail stations as low risk, and have a hard time getting their heads around developing a high quality dense residential project more than one mile from a Metrorail station, even with streetcar service and lower land cost.
Note that another firm is pursuing a project on the 1600 block of Benning Road too.
Because of the streetcar, sites beyond the half mile walking distance of a Metrorail station are being developed in a significant manner on H Street. Of 11 projects in various stages east of 5th Street NE, six are dense, 6 to 7 stories.
No other part of the city beyond the catchment area of a Metrorail station can make a similar claim.
This map shows five Metrorail stations and their catchment areas: Union Station on the southwest, NoMA on the northwest, Stadium Armory and Benning Road on the southeast, and Minnesota Avenue on the northeast.
This estimate does not include any of the development west of 5th Street NE.
On the left of this photo, the buildings pictured have been demolished, and two apartment buildings are being constructed, worth more than $200 million. The projects will include a Whole Foods Market at 6th Street.
That is mind-boggling, far beyond what any of us imagined when we created the H Street Main Street revitalization initiative almost 15 years ago.
And that doesn't include sites that are likely to be redeveloped for which plans have not been developed (Hechinger Mall, CVS site, parking lot of Delta Towers, Atlas Flats north, UPO site on 17th Street NE, northern parking lots of RFK Stadium, etc.).
It itself, the streetcar service will reshape the "Starburst Intersection," where H Street, Benning Road, Maryland Avenue, 15th Street, and Bladensburg Road," as a node of density, comparable to the impact of a Metrorail station, but without a Metrorail station.
There is no question that as more sites are redeveloped, especially east of Bladensburg Road, the value of new development serviced by the streetcar on the eastern side of the corridor will top $2 billion.
That excludes valuation of development west of 5th Street NE, of which the streetcar is an influence, but only somewhat, because proximity to Union Station and the NoMA Metrorail station is a greater driver, even though the Burnham Place project on the Union Station railyard is prioritizing streetcar access.
Reports say the streetcar has cost $200 million so far.
The value of new development in response to the streetcar is already almost four times greater than the cost of the streetcar. Property tax revenues on the buildings, along with sales tax revenue from the retail and income tax on new residents and generated by the new jobs will be significant.
If that isn't success, I don't know how to define success ("Transportation chief asks if troubled District streetcar system can be saved," Washington Post, March 2015).
How can the city be satisfied with not continuing to expand streetcar service beyond H Street?
New real estate development along the H Street corridor
|Building name||Address||# of units||Value|
|Stationhouse||701 2nd Street NE||375||$165MM*|
|Senate Square||200 block north||476||$210MM*|
|Capital City Realty||301 H Street NE||25||$9MM*|
|Telesis||315 H Street NE||25-40||$12MM*|
|360 Apartments||360 H Street NE||270||$120MM*|
|Ava||300 block I Street NE||140||$60MM*|
|Douglas Development||501 H Street||25||$11MM*|
|H Street Condominiums||601-645 H Street NE||307||$135MM*|
|Apollo||600 H Street||430||$189MM|
|Rock Creek Realty||600 block north||32||$15MM*|
|H Street Connection||800 block south||368||$162MM*|
|Wall Development||1115 H Street NE||16||$6MM*|
|The Maryland||1350 Maryland Avenue NE||84||$40MM*|
|TBD||1401 H Street NE||34||$15MM*|
|Atlas Flats||1600 Maryland Avenue NE||257||$36MM|
|Valor Development||1603 Benning Road NE||300||$100MM*|
|1701 H Street NE||1700 Benning Road NE||180||$60MM|
* = the value of the project is an estimate, and the cost does not necessarily include the cost of land.
Is it merely a matter of allowable zoning? Alex B., commenting on a previous entry in this series, pointed out that H Street NE has different zoning conditions from many other areas in the city, which allows for taller buildings. He's right. In fact, H Street has similar height condition allowability comparable to streets like Wisconsin Avenue, Connecticut Avenue, and 16th Street, which are known for tall apartment buildings.
Probably not, the zoning has been in place for a long time. But from 1974 to 2006 excepting the senior housing and office buildings constructed as part of the post-riots H Street Urban Renewal Plan, only four buildings of that height had been constructed east of Union Station.
Since 2006, four sites have been developed at that height, clustered on the 200 and 300 blocks of H Street, as well as three buildings north of K Street, proximate to the NoMA Metrorail station, which aren't included in the listing below. Now at least five sites east of 6th St. are being developed to that height, and one of the original four sites is being expanded.
Other areas with similar zoning conditions aren't experiencing comparable development. Georgia Avenue has similar zoning conditions to H Street, and outside of the area immediately around the Metrorail station at the intersection of Georgia and New Hampshire Avenues, it is not experiencing construction of the larger buildings being built on H Street NE.
(This will change somewhat with the redevelopment of the Walter Reed campus, which is about three quarters of a mile from the Takoma Metrorail station. Douglas Development also proposes a taller building on Eastern Avenue at the Maryland state line, which is about one mile from the Silver Spring Station, but abuts South Silver Spring, which is marked by buildings taller than what is allowable in DC.)
A classic case is the "Walmart" at Georgia and Missouri Avenues (about 1.5 miles from any Metrorail stations) touted unfortunately by many urbanists as an example of pro-urban chain retail entry--but the building is a one story, single use building, even though the site had been permitted for mixed use and up to 450 apartments ("Missouri loves company," Washington City Paper, 2009).
By contrast Walmart's two stores in DC that are part of mixed use developments, multistory buildings mixing retail with either commercial space or housing, are both within one-half mile of Metrorail stations.
So it's fair to argue that the development on H Street east of 5th/6th Streets is mostly attributable to the streetcar. Or that the streetcar has accelerated the development of the sites.
It's definitely true for development east of Bladensburg Road. Jerry Zayets, was very clear about the streetcar line as being essential to their decision to develop so far away from a Metrorail station. As he said:
"We love infrastructure. Rail in the ground [and streetcar] is completely different from bus. Bus routes can change. Rails stay in place."
Developers and choice riders like rail more than bus. Rail service, previously in our area only heavy rail, but now about to include streetcar and eventually light rail (in Montgomery and Prince George's Counties in Maryland), is in-the-ground service that shapes decision making not just of developers but of residents in choosing where to live and businesses in choosing where to locate. Bus service doesn't compare.
Remember the quote from the other day?:
If choice riders aren't using transit then developers will pay little attention to transit availability when making development decisions.In 2003, I suggested that H Street Main Street should develop a "housing development policy" for our retail trade and interest area, including Bladensburg and Benning Roads, calling for mixed use redevelopment at Hechinger Mall and the extension of the city grid to the northern parking lots of RFK Stadium.
It's incredible to see now that this can and will happen, although over extremely long time horizons and with "pump priming" actions like the streetcar.
Extending streetcar service deeper into Ward 7 as a revitalization initiative. Earlier plans for the streetcar called for extension of the service south on Minnesota Avenue and Benning Road, to the Benning Road Metrorail station. Likely that would be as rejuvenating for those streets as it is for the H Street district.
Georgia Avenue. Similarly, Georgia Avenue has languished for 20 years as a slew of Councilmembers (Jarvis, Fenty, and Bowser) all claimed they would reverse the decline.
Outside of the developments at the Petworth Metro, spurred by WMATA's sale of land on the west side of the station, which became the Park Place Apartments, not much has happened.
The area around Howard University has languished for decades, and the university has had many failed attempts trying to create a "Howard Town Center." The Walter Reed campus will be redeveloped (even when the campus was "open" the commercial properties nearby weren't all that) but in a manner that won't realize all the opportunities that were present in the site.
Streetcar service, in strong markets anyway, likely can be a "revitalization solution" for corridors, which are otherwise difficult to improve. This will be the topic of the fifth post on DC and streetcars.