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, August 24, 2016

Will D.C.’s Housing Ever Be Affordable Again?

Is the title of an article in The Atlantic Magazine.  My short answer is no.

Here's why.

1. DC is a small place, about 61 square miles. But about 1/3 of the land is owned by the federal government or other institutions and therefore can not be built on for housing. (Unless the institution goes out of business, which does happen, but not that often.  One example is St. Paul's College in Brookland.  Earlier a section was sold off to EYA, which built no lot rowhouses on the land.)

 Most of the city that can be developed, especially single family housing districts, has already been developed. It is very difficult to make over single family districts into multiunit, denser housing.  Plus, the new housing would cost more than the old housing because it would be new.

Montreal (tri) plexMontreal's plex housing type fits 5-6 units in the same space as two rowhouses in DC.

2.  During the period when the bulk of DC's housing stock was constructed, the buildings constructed were relatively small, compared to other cities.  (Think of NYC tenements vs. single family rowhouses in DC.)

This continues to restrict how many people can be accommodated in rowhouses and rowhouse neighborhoods.

3. Height and therefore density controls significantly reduce the ability to add substantive amounts of new housing.

Besides most of the city has already been developed, so practically speaking, new housing can only be added to commercial districts, transit stations, and institutional properties.  Given the height limit, 16 stories is about the maximum allowable height of a building in DC.

But that's in the central business district, Downtown and adjacent areas.  Outside of the core, the zoning-based height limit is much less and six stories is a more typical height, four is common, although in some districts--Petworth, Columbia Heights, Waterfront--some buildings are closer to ten stories.

Cheap infill rowhouse, 500 block of M Street NE
Most of DC's rowhouses are small, topping out at two or three stories.  Note the cheap infill rowhouse in this image, from the 400 block of M Street NE.

4. Demand has increased for a relatively fixed stock of housing. Therefore, prices go up. DC is now a strong real estate market.

 And as the prices further escalate in the in-demand areas, people seek out nearby housing in less-in-demand communities (in what Live Baltimore calls the "one-over neighborhood" phenomenon), reconnecting these neighborhoods to the in-demand portion of the city's housing market.

5. Plus the demand for new housing is still greater than the supply, even with the multiunit apartment and condominium buildings that have already been added to the market, so housing prices stay high except over multi decade timelines.

6. This is because by definition new construction is priced at the top of the market.

7. Inclusionary Zoning, or requiring that new housing being constructed set aside some units to be rented or sold to lower income households, has no impact on the existing building stock and it doesn't create a portfolio of "old" affordable housing.

8. Plus as pointed out in the article, the city hasn't focused on acquisition of existing housing to maintain affordability. In other words, there is no program to maintain affordability, other than the program which allows residents of multiunit buildings to join together to purchase the property in certain situations, which is a decent program. By contrast, cities like New York have pursued multiple actions and developed multiple programs that aim to preserve and expand the stock of affordable housing.

9. Neighborhood resident activism with regard to zoning and building approvals reduces the actual built density of new construction within the current zoning limits (see 1). This means that many multiunit buildings are constructed at a height and density less than allowable zoning. Note that by "allowing" built housing to be less than maximum legal density, it also costs the city property tax revenue as well as reduced income tax and sales tax revenues as an opportunity cost because of fewer residents.

The five story Allegro building in Columbia Heights is about two blocks from the Metro Station and one block from an eight story apartment building constructed in the early part of the 20th Century.

10. The city's zoning code doesn't provide an automatic density bonus for housing constructed within one or two blocks of Metrorail stations.

E.g., I can point to new buildings in my neighborhood, within two blocks of Metro that are easily 2-3 stories shorter "than they could be" given the existence of nearby transit infrastructure.

The three and one-half story Willow and Maple Apartments in Takoma DC are about two blocks from the Metrorail station.  Across the street is a taller four story building and across the border in Takoma is a one-off ten story office building.

Very Long Term Solutions

First, we must recognize that adding housing to an already strong market, because it is newly constructed, will only stabilize housing prices relatively in the short term, except that it may reduce demand on the single family housing market a bit, by providing a greater number of housing tenure options and more housing generally.  However, in the long term, on a 30 to 50 year time frame, prices will stabilize as these properties are paid off, and as the housing inventory expands signficantly.

2.  Legalize higher height and density.  (Mostly, I argue this because of DC's need to remain competitive vis a vis suburban jurisdictions and to increase the tax base to the point where increased revenues could finance intra-city heavy rail transit service.  See "DC Height Study Public Meetings This Week and the long term implications for transit expansion in DC.")
3. Baring that, add a density bonus in commercial districts and transit station catchment areas.  Currently, the limit in many areas is about 6-7 stories.  In many districts outside of the core, new multiunit buildings max out at about 4 stories.

4.  Make it city policy to not lop off a floor or two of new projects so that residents feel like they are part of the process out of a recognition that such practice reduces the amount of housing available and increases cost--that if they are concerned about housing access and housing prices, then they need to follow through with congruent practice designed to increase housing access and stabilize housing prices.

5.  Encourage the creation of accessory dwelling units in a systematic manner and make building regulations on the practice more nuanced -- in other words, allow more units on a larger properties, encourage units in transit station catchment areas,  rather than just one unit per lot, regardless of the size or location.  See "Granny flats' – a solution to housing crunch – come under fire," Christian Science Monitor.  From the article:
A resident of Portland, Ore., Mr. Peterson owns a company called Accessory Dwelling Strategies, which seeks to educate the public about the benefits of building a granny flat, or accessory dwelling unit.

He gives talks about designing and constructing ADUs and consults with realtors about the best ways to market secondary homes. He also runs a citywide ADU tour of Portland in an effort to prove that secondary homes can enhance neighborhoods rather than spoil them while allowing owners to make a profit.

“It’s a way for middle-income homeowners to create a passive income stream and flexibility for themselves,” Peterson says. “It’s a compelling form of development opportunity that is entirely market-driven … [but] not done by huge, large scale, well-heeled developers. It’s kind of a grass-roots form of housing movement.”

And it's growing, he says. In 2015, Portland saw three times the number of applications for ADU permits than in 2009, when it first waived system development fees and reduced the cost of permits by up to $15,000, OregonLive reports. Portland now approves slightly more than 100 ADUs annually, more than almost any other city in the US, Peterson says.
6.  Build denser public housing projects.  Complement the developments with great social and community programs to encourage mixed income and community stability.  But the policy over the last 20 years has been to reduce the size of the developments, thereby reducing the amount of housing available.

Bonus policy, semi-related

I was shocked to see an article in the Washington Business Journal, "D.C. doesn't want deeper levels of affordability in JBG's Eckington project" about how the city's Department of Housing and Community Development opposed a proposal by a developer to add more affordable housing to a project, but only if the housing was managed by the developer.

The Condo Shop is a condominium sales and marketing firm based in Philadelphia.

The city needs to develop the equivalent of a market-oriented affordable housing property sales and management agency that can be "nonprofit" but managed and marketed like how the private sector does it, with companies that specialize in selling condos, such as McWilliams-Ballard or Urban Pace.

Rather than separate marketing efforts for each separate development, combine it all into one program.  Focus on maximizing production and rental/sales of affordable housing units rather than bureaucracy.

Such an agency needs to be run with a private sector verve, which for the most part is not possible by typical government employees.  The way that Arlington County runs its transportation programs is an example of such a repositioning, based on social marketing practices ("Social Marketing the Arlington (and Tower Hamlets and Baltimore) way").

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At 11:16 AM, Anonymous Anonymous said...

1. EOTR is about 1/5 of the city and isn't really part of the market economy.

The key lesson that I read here is that in redeveloping EOTR we need to build it 4-5 stories.

2. DC is a very small part of a metropolitan area, and can afford to place working class housing elsewhere.

Surprised you haven't said anything about the recent Baltimore initiative to buy houses in the Baltimore County and rehouse people there.

3. We overly protect long term DC residents over shorter term ones.

4. The city run IZ program is designed just to do that -- make sure long DC residents get those apartments.

5 DC is in a unique position that it would rather get residents than office space. For taxing purposes. In a normal metro area the entire L'Enfant city might be commercial space rather than 85% residental . Going to have long term implications for commuting patterns.

At 11:36 AM, Blogger Richard Layman said...

What great points. THANK YOU.

1. Yes! I hadn't thought of it in exactly those terms but absolutely. In my writings on CDCs building low income housing in low income communities and not improving the micro economy, it comes down to not enough residents and not enough residents with money to spend.

So adding density adds residents, hopefully some with money, thereby supporting local commercial districts, etc.

But the policies for East of the River (e.g., the WCS SFH not the multiunits) stress under-density.


2. I didn't know. I haven't been too good lately about keeping up with the Baltimore Sun.

About 11-12 years ago there was a searing article in the Gazette about the impact of HOPE6 on Prince George's County, displacement of the poorest from DC to PGC. Frankly, I don't see DC as needing to pay for the poor to live in the suburbs.

But the Baltimore example sounds more like the "Moving to Opportunity" program of HUD, first piloted in Chicago. In some cases it works, in others it doesn't, except over long periods of time ("use values of housing and all that").

It's not like Baltimore City doesn't have super excess inventory. They don't need to be spending $ outside of the city.... unless the city and county would merge as I have suggested in the past.

... + Balt. Housing Authority is poor and have suggested selling off buildings to come up with $.

Baltimore has a lot of issues that don't lend themselves to quick comments.

... wrt Moving the Opportunity, I do see the need for investments in programming etc. in the communities ("place") rather than paying for them to live elsewhere ("person" policies).

3. ABSOLUTELY. "What's mine is mine, what's yours is negotiable."

But it's taken me more than 50 years to figure out that politics isn't about the future, and future generations, but only preserving the now.

4. Sort of, maybe. I remember the original campaign. It was a campaign for a program without there being an overall housing policy.

What I learned is that when you have an exogeneous change in demand and circumstances (in this case the change in the course of the city because Marion Barry was no longer mayor and Anthony Williams was), if you don't have plans and programs already in place, you're f*ed, that you are always behind, always reacting.

Although a typical "great" housing master plan likely wouldn't have addressed height limit, lopping off floors, etc.

5. I'm not sure I fully agree with you. DC still wants and needs office development that complements the federal presence and drives demand for activity, visitation and housing.

But we can be selective about it. Office districts don't need to leak out much from the core. As we've already proved, SE Waterfront and to some extent NoMA have a hard time building out office.

Plus, how much potential office left the core for the suburbs because of the height limit and the commensurate increase in cost/s.f.?

E.g., in other areas, even Rosslyn, rents are 1/3 less, 1/2 less as you go farther out (Tysons).

At 11:49 AM, Blogger Dan Reed said...

That Willow & Maple development in Takoma is really handsome, but I am amazed it's just 3 stories. Okay, not that amazed, considering that the EYA condo building next to the station has been delayed for 10 years. I don't think Willow & Maple would've looked much worse at 4 floors (or 5!) considering the high-quality of design, detailing, and finishes that went into it.

At 11:58 AM, Blogger Richard Layman said...

We toured W&M a couple months back. They did a nice job. Great bike room. Well appointed apartments. They bought art from local artists for the walls instead of generic art, etc.

The outside is well designed, in the "Second Empire" style that the Adventists were using when they built a lot of buildings in Takoma.

... the only reason why I think that building is low is that it could get approved now, and long term (e.g., 30 years), when the CVS lease runs out, they can redevelop the whole site into something significantly bigger.

At 12:00 PM, Blogger Richard Layman said...

One correction. If you can believe it, for EYA, the process at Takoma Metro has been underway for 17 years.


People wonder why the process to get a finished "product" takes so long. And why costs go up...

At 12:23 PM, Anonymous charlie said...

sorry first comment was me.

Baltimore program:

At 12:46 PM, Blogger Richard Layman said...

it sure sounded like you.

anyway, according to the article it's a MTO like program, in response to segregated housing policies.

However, it doesn't seem reasonable for the city housing authority to be buying suburban housing, when there is plenty of housing to be had in Baltimore, e.g. Union Square as one example.

At 2:23 PM, Blogger Mari said...

"Build denser public housing projects."

Good lord no.

It's called concentrated poverty, and that's a bad thing. It's also bad when there are a bunch of Section 8 vouchers in one spot too. Dense public housing has been tried in Chicago (Robert Taylor Homes, read American Project by Sudhir Ventaktesh) and other cities and it has been found wanting.

At 3:04 PM, Blogger Richard Layman said...

Um, not that you DK that I know about that issue ... I am not talking about a housing development at the scale of Co-op City, but more housing units than existing. I understand concentrated poverty. But deconcentration has issues too in terms of opportunity cost of land and displacement -- both major issues in HopeVI.

I was going to try to do consulting on a DC housing authority project that is being rebuilt, and I realized that they were unable to do all the things I suggested because they started out with a set number of units which didn't adequately use the site and because of the overall size, wasn't big enough to provide the economies of scale necessary to support extraordinary "amenities".

The issue is management, programming, etc. You can't really provide it very well when the developments are too small.

That's been a problem with social housing in the US, as well as lack of investment in programming and management.

cf. Vienna and Singapore models for how to do social housing way better. I DK about the UK experience. I think concentrated poverty has been an issue there, but at the same time so has been disinvestment in local govt. UK councils historically have been particularly effective in building social housing.


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