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.

Tuesday, March 20, 2018

21st century underhousing, 20th century zoning, and the controversy over changing the DC Comprehensive Land Use Plan

The Toronto Globe and Mail article, "Toronto’s low-rise neighbourhoods losing density as ‘overhousing’ spreads," mentions a report, published last year by the Ryerson University City Building Institute, called "Protecting Vibrancy of Residential Neighbourhoods," although it doesn't seem to be publicly available.  Cheryl Case, co-author of the report, was quoted in the TGM article too:
She argues the city has not adopted zoning that reflects the smaller family sizes prevalent in the city today, but acknowledges the solution is tougher and more political: "The city needs to develop policies that would develop more housing in neighbourhoods."

The existing zoning rules make that difficult, she says. About two-thirds of the city's residential land permits only one household per structure, and the city's official plan specifies that it hopes to maintain "stable" neighbourhoods by paying attention to "character."
DC: if you're not a high earner, but you bought more than 10 years ago, you're "okay."  DC is similarly divided between property owners and renters, and between higher income and lower income households, and between people who bought their houses sometime, often decades, before 2008.

This date is somewhat arbitrary and was the date of the most recent housing crash, different neighborhoods are/were at different points in terms of attractiveness vis a vis housing choice and the regional residential property landscape. 

I wrote about this a few years ago ("Exogenous market forces impact DC's housing market"), but I could have done a better job.  I accorded some of the rise to the presence of nonresident buyers.  But the reality is that doesn't make that much difference.

More importantly, more people want to live in the city.  And as they are priced out of the most attractive neighborhoods, they choose other neighborhoods.  In any case, this ends up raising prices more broadly.

"One-over neighborhood" is a concept put forth by the Live Baltimore residential recruitment initiative, where people who can't afford to live in the neighborhood they really want to, say Federal Hill, Canton, or Bolton Hill, choose other neighborhoods nearby, that have similar housing stock, but limited commercial and other amenities, and therefore, much lower housing prices, with the aim that the neighborhood will improve and they can still "consume" the amenities already present in the neighborhood next door.

The real estate market in most DC neighborhoods have long since recovered, and because demand for urban living has increased while housing supply has not increased fast enough, more DC neighborhoods are going through price escalation (for example, on my block, high quality renovated houses are selling for more than double what we paid 10 years ago--although our house wasn't renovated).

Revising the DC Comprehensive Land Use Plan.  It's a great lead in to the discussion now about proposed changes in the DC Comprehensive Plan, which activists deride as pro-development ("D.C. mayor seeks to stop costly legal delays to development projects," Washington Post; "Dozens of developers will testify next week before the D.C. Council. Here's why they are upset," Washington Business Journal), while other pro-urban advocates like myself argue a more nuanced position.

Still, because the impetus of the changes is to reduce the success of legal challenges to development projects, activists have the upper hand in their argument.  From the Post article:
District officials say that the changes would end nuisance legal challenges, reduce the cost of doing business in Washington, and expedite the construction of housing units that the city needs. ...

But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods.

Since 2016, 25 appeals have been filed against projects approved by the District, three times the number lodged between 2013 and 2015, according to the District’s Zoning Commission. Members of one community group, Union Market Neighbors, have filed appeals against eight projects in the blocks adjoining Gallaudet University in Northeast, including one that was recently dismissed after the group reached a settlement with a developer.
In short, there need to be changes to the comprehensive plan, that by definition all development isn't "bad," but the Office of Planning has truncated the  process to revise the plan--calling it a new round for approving and extending the plan for 20 more years, without having gone through a set of public processes and hearings before moving the changes forward for City Council approval.

It definitely sets up the Office of Planning and the process for criticism and charges that they are tools of the developers.

Hearings are today ("Expect Crowds at Tuesday's Hearing on Proposed Amendments to DC's Comprehensive Plan," Washington City Paper).

Note that for years I've argued that there needed to be a "campaign" after the approval of the Comp Plan in 2006, a road show, to build a common understanding and consensus for what the plan means.

Plus a lot of the reason for the court cases--besides the anti-development fervor--is because of sloppiness and under-definition in the plan language, which I argue was deliberate from the standpoint of "having and eating cake," and facilitating pro-density changes without being direct.

The Right to the City: is it only for legacy residents?  I discussed this a couple weeks ago in terms of the context of the city's population increase ("Mayor Bowser celebrates 700,000 residents") and seven years ago ("Low income, high income, the market [economy], and the right to the city").

It's complicated.  But I will repeat what I wrote a couple weeks ago.
Today, interestingly, the DC Grassroots Coalition for Planning sees adding population as a zero sum game, with the presumption that adding population by definition comes at the expense of those of lesser means, diminishes neighborhoods, etc.

One of their complaints is the planning for achieving a greater population, of one million being touted in the current comprehensive planning process.  (Note that this number was expected to be achieved in 1980, according to the city's 1950 comprehensive plan.)

-- "Who Owns the 'Right to the City'? Moving Towards Urban Inclusivity," Yale F&ES Blog>
-- "David Harvey: The Right to the City," New Left Review 53, September-October 2008
-- "Do We Have a Right to the City?," Jacobin Magazine

Is the right to the city only possessed by those who already live in it?

Is only capital afforded the right to shape the city? Obviously not, as pointed out by Foglesong in Planning the Capitalist City (Prezi precis; intro).

But as discussed in Growth Machine (sociology) and Urban Regime (political science) theories about city politics and governance ("A superb lesson in DC "growth machine" politics from Loose Lips (Washington City Paper)," 2006), capital is the most motivated of actors.

I think back to what the city was like in September 1987 when I first moved here, and I prefer to live in a community that is growing.  Even if I believe that the planning and governance functions could be a lot better, there is no question that the added population supports a better and wider range of amenities, public safety, etc., which contribute to improved communities.
Right to the City discussion.   While those who laid out the tenets of this argument, including LeFebreve and Harvey likely would be surprised to have to consider the rights of the better off to be part of the discussion about who can live in the city, I don't think they would entertain the idea that cities only belong to the people who already live there, that new entrants not only have no rights but are banned

The solution to housing price escalation and gentrification is more housing, not less.  The one thing we can be assured of is that if more housing isn't built, people of lesser means will be displaced, as people with more income and wealth have greater ability to buy housing, especially as prices escalate.

That's something that most of DC's activists refuse to acknowledge. Not adding to housing supply doesn't change the reality of market economics and that people with more money will continue to bid up prices and capture assets.  That they'll be more advantaged, not less, if housing supply stagnates in the face of increased demand.

And despite the fact that the DC Court of Appeals agreed with the argument as discussed in the Post article:
But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods. ...

The number of legal challenges in the District surged after the appeals court in 2016 overturned the Zoning Commission’s approval of a project to redevelop McMillan Park in Northwest into a complex of residential units, offices, a new park and a supermarket.

The development’s opponents successfully argued that zoning officials failed to consider the project’s potential to intensify gentrification. The opponents also contended that the officials had violated the city’s own regulations by permitting buildings denser than allowed under the D.C. Comprehensive Plan. The plan is the District’s compendium of policies that guide its evolution in housing, transportation, economic development and the environment.
the reality is that you can't forbid development merely because it attracts higher income residents.

At the same time, how do we deal with the changes that come with new residents who are wealthier and attracted to urban living for reasons different than what attracted those of us "who are already here"?

While I am not sure what the answer is to that question, it definitely isn't "don't build more housing."

Housing and generational inequity.  The TGM also has an article ("Even house-rich homeowners agree: Vancouver has an affordability problem") about the Vancouver housing market and how some residential property owners who have benefited from the pricing escalation acknowledge that it works for them but not others.

From the article:
Vancouver homeowners, after years of focusing on their growing equity and ignoring the housing inequality around them – have come to a new awareness: high home prices are crippling the region. The city is now divided according to those who got into the housing market early enough that they could afford to buy and those who feel as if they've been shut out.
Inter-generational coalition in DC joins in opposition to new residents. But a goodly number of long time residents also see any type of new development as anathema by definition, even when most such housing is not constructed in the place of existing housing, but as an addition to housing supply.

In Canada an organization called Generation Squeeze has been created to address the issue of wealth disparity between generations, and acknowledges class differences.

OTOH, the people leading the fight against changes to the DC Comp Plan -- and I am first to state that the process by which the proposed changes are moving forward is seriously flawed -- seem to believe they have common economic interests, although one group is younger and tends to not own property, while the older residents do own property.

Here the inter-generational coalition has been created not out of a desire to address how wealth and income disparities shape the local housing market and unfair outcomes, but to create a common front against new residents and new housing, even though the older resident property owners benefit from price escalation and may share household wealth characteristics with some of the "new residents" or potential new residents.

The group seems to see new development as only benefiting the well off and "new" residents, although I would argue that older residents already owning property advocate this position merely to ward off potential changes to their neighborhoods, mouthing concern for "affordable housing."

Both generations fail to acknowledge the realities of the DC housing market or public finance, in that if you want the local government to intervene in the housing market and pay towards construction of lower cost housing, it needs money to be able to do so, and city revenue streams are almost wholly dependent on property, income, and sales tax revenues.

Effect on PUDs.  Many of the changes have to do with what are called "planned unit developments," which in return for "community benefits," provide a density bonus.  Because of the threat of challenge, many developers are choosing to forego the PUD process.

This facilitates their project, but has catastrophic opportunity costs because projects are smaller with fewer units, thereby not making a meaningful difference in additions to housing supply and helping to slacken price escalation.

From the WBJ article:
David Alpert, founder and president of Greater Greater Washington and an organizer of the D.C. Housing Priorities Coalition, said his group is pushing the city to change language in the comprehensive plan that will allow the "PUD process be able function well."

Alpert's coalition includes the support of organizations that, on occasion, do not see eye to eye — multiple developers like Menkiti, MRP Realty and Ditto Residential, numerous advisory neighborhood commissions, the Coalition for Smarter Growth, D.C. Fiscal Policy Institute and SEIU 32BJ.

"We want it to be able to function where the Zoning Commission can hear from the community, they can hear from the neighborhood advisory commission, it can determine what community benefits are possible in a project and then it can make a decision saying that the community benefits are sufficient to approve that project and have every project move forward," Alpert said.

Alpert said the legal challenges have become so pervasive that many developers are no longer pursuing PUDs.

"They are building smaller projects. There are no community benefits," he said. "There is less housing being created. There's less affordable housing being created."

He also said there needs to be clearer language in the comp plan about preserving and creating affordable housing.

"It's possible to avoid displacement in a way that is in partnership with the development community," he said.
The crazy thing about this is for the most part, PUDs are being employed in places that weren't housing to begin with. So they aren't reducing the amount of existing housing--with a couple of high profile exceptions.

Although previously discussed, the best way to deal with affordable housing production will be discussed in another entry.

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At 12:03 PM, Anonymous charlie said...

More a response to your piece on CRE a few weeks back.

Again big picture - these are monetary problems. We are deliberately inflating assets.

Easier to do that than bail out banks.

In certain markets, you can see how RE pricing is completely unmoored from fundamentals. Vancouver is a great example.

Manhatten ultra-luxury is another.

Again in DC people paying $1M for a house in Petworth can look the same to a 29 year GGW reader who wants to buy in the city. Unfortunately it isn't -- DC markets are still pretty fundamental (Georgetown Mansions aside) and it reflection of how much money is floating around.

For example I can name two friends who've bought 1M+ places with cash.

Yes, a nonprofit manger making 65K a year isn't going to compete with that.

Bay Area is largely the same problem, as is NYC. A lot of money you're competing with.

The problem in DC is a huge part our inventory is tied up. Rather than give seniors a RE tax exemption, we should be giving them rebate on cap gains and transfer taxes in order to move that stuff into the market.

Likewise my beef with rent-control and Section 8, and income limited housing.

At 12:15 PM, Blogger Richard Layman said...

wrt being unmoored, my older writings focused a bit too much on nonresident purchases. Here that's much less of an issue. As you say, what's driving sales in all DC neighborhoods, even in those neighborhoods like Georgetown which do have some significant nonresident participation, are the fundamentals of choosing to live in the city day to day.

At 12:16 PM, Blogger Richard Layman said...

Wow, I don't have rich friends.

We are talking about the same thing though. Basically, more people want to live in the city. And more of these people have a lot more money, compared to the people who used to want to live in the city, back when it was not a preferred/socially acceptable choice (e.g., did you choose to live in Arlington originally, was that because DC was still gnarly?).

Not building more housing isn't going to send away the people who are motivated, the people who have money. They'll just bid up the properties.

That being said, OP and the elected officials aren't very good about discussing these issues in practical ways.

Not unlike how the Republicans use social issues to get people to vote for them while their primary agenda item is cutting taxes on corporations and the wealthy, deregulation, and diminishing government, the owner class joins in with nonowners on a seemingly common agenda.

In the end, if we don't build more housing, we can guarantee that all but the highest income households will be displaced.

At 4:03 PM, Anonymous Anonymous said...

I first lived in Cleveland Park, but realized that DC was going downhill big time in 1995 when a rapist chased down a naked lady on Macomb. Or maybe it was the other way around.

Arlington ended up saving me a few hundred a month in taxes as well.

RE: rich friends, yep — overrated, they just make you question your life!

Here is the point on fundamental / supply demand. If you believe in filtering, you’re always going to be creating new housing at the price the market will bear. So the density arguments fail on that front.

No amount of missing middle is going change that.

What is needed is turning over older 30+year properties. And, as you point out, bring up the density scale in an area. The answer there is clearly design review, but the GM /GGW hate that becasuse it slows down development even more.

At 8:02 AM, Blogger Richard Layman said...

wrt design review, it's not that f*ing hard. In the 1660s in London they figured out and created "pattern books."

The use of pattern books (and catalogs of manufactured architectural elements like cornices and patterned brick) is discernible in the architecture of houses in Georgetown and Capitol Hill, buildings constructed by small scale producers working up from being tradesmen.

Pattern books allowed them to produce an attractive building without an architect.

New Urbanists are big on pattern books too.

At 8:09 AM, Blogger Richard Layman said...

Well, turnover is one element. But it's dealing with:

- overhousing as discussed, making it easier to have subunits and or rental but with better protections for owners

- underhousing, making it easier to have ADUs, break up houses, selective additions (with design review). Potentially even to convert contiguous lots into apartment buildings (THAT WOULD BE VERY CONTROVERSIAL). Systematic program to build ADUs as carriage houses, basement units especially, focused on areas within 1 mile of Metrorail.

- underhousing -- add housing to transit stations and commercial districts, increase the density beyond current standards, e.g., there is no reason for their to be 4 story buildings at the Fort Totten Metro, or near to the Takoma Metro, at least 6 maybe 7 stories are appropriate. so density bonuses for transit, commercial districts

- underhousing - think about judicious changes to the height limit. The thing is that tall buildings in emerging areas aren't likely to be that successful. you have to start with the core, where everyone wants to be.

wrt affordable housing, instead of relying on the market, designate a leading CDC (none in DC really qualify) to be a primary builder, allocate some parcels for 100% affordable. In situations like McMillan or the AFRH, allocate some of the development (lots) to 100% affordable housing production.

At 8:16 AM, Blogger Richard Layman said...

The biggest problem is that with owner occupied housing in multiunit buildings you pretty much only get one bite at the apple. The situation in Huntington where a garden apt. condo assn. agreed to dissolve in favor of payouts and more density is the exception that proves the rule.

A four story condo selling out to become a taller building? Not sure it will ever happen.

So the lost development potential in terms of number of units is lost forever.

That's why some of the changes to the framework element are reasonable.

But the city hasn't even said it is important as directly as I said it in the comment.

it's not about the legal challenges making it tougher for developers, so much as it is about the number of units, the total addition to housing supply. Given the demand-supply conundrum, the city needs more units not fewer.

also, as I wrote about a lot 10+ years ago, the community benefits negotiating process is extremely flawed. It needs to be tightened up considerably. I've argued it was left loose to limit the potential $ payout on the part of developers.

At 10:14 AM, Anonymous Anonymous said...

WRT "turnover". To what extent is this self-correcting? Baby boomer death rates should start ramping up. How does this factor into housing affordability/supply in say 2022, 2025?

At 10:38 AM, Blogger Richard Layman said...

with the caveat that I am not an economist, I would say not much.

As long as demand is greater than supply price escalation will be present.

Plus the sellers want to maximize their return. Therefore, the houses come onto the market at current prices if renovated, or at a reasonable discount if the property is marketed as needing a full renovation.

E.g., the house on our block that sold for about $840 fully renovated, originally sold out of the estate of the deceased owner at about $445 marketing it as needing a complete renovation (which it did).

Another house in the neighborhood, marketed as needing a full renovation, sold for $465, but to people who intended to live there as is/with some modifications, and improving the property over time.

interestingly, while flippers are usually excoriated justifiably for doing bad work, these houses need to be "refreshed" at least every 40-50 years to be appealing and a-ok.

I will say that the house down the block, while they did some things I wouldn't have done, was a superb renovation.

At 11:44 AM, Blogger Richard Layman said...

Forgot about this pattern book for east of the river:

WHAT IT DOESN'T DO AND WHAT IS SORELY NEEDED is provide "design guidance" for additions, both additional stories and on the rear that is in keeping with the building types.

Obviously, there are examples, even in DC of three- and sometimes, four-, story rowhouses, and certainly elsewhere.

It's amazing how so often popups get it wrong aesthetically.


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