Category Archives: purple line

Should There Be Rent Control Near the Purple Line?

By Adam Pagnucco.

Council Member Marc Elrich, who recently equated potential gentrification near the Purple Line with “ethnic cleansing,” is taking flak for his remarks and is not backing down.  We will leave it to others to judge his choice of words.  But what interests us is the policy proposal he has made: specifically, Elrich would like to see rent control imposed near Purple Line stations.  That’s worth discussing.

Economists tend to disagree on many issues but a huge majority of them oppose rent control.  Liberal New York Times columnist Paul Krugman has written, “Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.”  A massive review of economic research on rent control found evidence that it encourages conversions of rental units into condos and leads to higher rents in non-controlled units.  Rent control repeal in Cambridge, Massachusetts led to a surge in property values in both controlled and non-controlled units and a 20% increase in housing investment.  Even Communists denounce rent control.  In 1989, Vietnamese Foreign Minister Nguyen Co Thach told a news conference that rent control did more damage to his capital city than American bombs.  “The Americans couldn’t destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy.”

One need not go to a Communist nation to observe the effects of rent control.  MoCo has a good example of that policy right here at home: the City of Takoma Park, which passed a rent control law in 1981.  We examined U.S. Census data to analyze how the city’s housing stock compares to the county’s.  Below we show that just 10% of the city’s housing was built in 1980 or later, much lower than the county’s percentage of 47%.  That’s not a fair comparison since the city is much older than the vast majority of areas in the county.  However, other older areas inside the Beltway like Downtown Bethesda (27%), Chevy Chase (20%) and Downtown Silver Spring (26%) have much higher percentages of their housing built in 1980 or later than Takoma Park.

It gets worse.  Takoma Park has been losing rental housing units for years.  Below we show the city’s total, owner-occupied and renter-occupied housing units in 2000, 2010 and the five year period of 2011-2015.  During that time, the city’s total housing units fell by 4% and its renter-occupied units fell by 18%.  Owner-occupied units increased by 10% and vacancies rose by 30%.  No housing policy that produces double-digit losses in rental units can be described as good for renters.

Takoma Park’s housing decline is not going to turn around soon.  According to the site plans, preliminary plans and sketch plans listed on the MoCo Planning Department’s development tracking map, only two housing projects with a combined seven units are pending in Takoma Park.  Those units are all single family, which are exempt from the city’s rent control law.

This extract from the Planning Department’s site plan map shows the huge contrast in development plans between Takoma Park and Downtown Silver Spring.

The implication of all this is clear: housing developers are steering clear of Takoma Park’s rent control law.  These folks are not going to be any more enthusiastic about rent control near Purple Line stations.  Why does that matter?  When it comes to building new housing, there are basically three options.  First, you can build it near transit.  Second, you can build it away from transit, thereby incurring the associated congestion and environmental costs.  Or third, you can try to block it from being built, and that’s one probable effect of rent control.  But that won’t stop population growth – instead, it will result in overcrowded housing, unsafe living conditions and code violations.  (Such phenomena are not unknown in some areas of the county.)  Rent control near the Purple Line just encourages options two and three.

Finally, the Purple Line is a huge investment, costing at least $2.65 billion to construct.  Only an insane society would pour billions of dollars into a transit project and then stop new housing from being built next to it.  Even Vietnamese Communists would agree.

Disclosure: Your author is a long-time supporter of the Purple Line and is a publicly listed supporter of Council Member Roger Berliner for Executive.

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Elrich: Without Rent Control, Purple Line Will Cause “Ethnic Cleansing”

By Adam Pagnucco.

In response to a question about just cause eviction and rent control at the Progressive Neighbors County Executive forum, Council Member Marc Elrich stated that the Purple Line would cause “ethnic cleansing” without a rent control law.  Elrich said:

I support rent stabilization and I think we need to be honest with ourselves about this.  If we throw up our hands about this and say the market will determine the price of housing and the market alone will determine that, then we are going to wipe out neighborhood after neighborhood in Montgomery County.  If you did that, then if you did not put rent stabilization around the Purple Line stops, for example, then the neighborhoods around the Purple Line will not continue to exist.  They will be bought, they will be repurposed and they will go to other people.

When we did the Long Branch plan, and Park and Planning came in and said we want to rezone all the existing housing in Long Branch, I accused the Planning Board of ethnic cleansing.  And I said some people do it with the gun, you guys are doing it with the pen but the truth is those folks would be gone and they would be gone forever…

Elrich’s remarks begin at the 2:29 mark of this video taken by Ryan Miner.

Disclosure: Your author is a long-time supporter of the Purple Line and is a publicly listed supporter of Council Member Roger Berliner for Executive.

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Gauging the Purple Line’s Prospects

Judge Richard Leon’s decision that the failure to scrutinize the potential impact of Metro’s stagnant or declining ridership on the Purple Line requires a supplemental environmental impact statement (SEIS) has been controversial to say the least. But what is the likely long-term impact on the light-rail line’s future?

The Purple Line faces a number of hurdles at this point, so let’s examine each in turn.

Rest of Judge Leon’s Decision

Judge Leon still has to issue the rest of his decision on many other portions of the lawsuit. Much of the remainder rests on claims of environmental harms caused by the Purple Line. As a conservative who tends to read such statutes tightly, it seems unlikely that Judge Leon will also delay the project on these grounds.

Appealing Judge Leon’s Decision

Purple Line defenders will need to appeal the decision requiring more study of the impact of poor Metro ridership on the PL. Though I remain deeply skeptical of the projected PL ridership numbers, light-rail proponents have a strong probability of winning the appeal. The National Environmental Policy Act’s (NEPA) focus on environmental impact will facilitate claims that the judge reached beyond the statute with his demands for new ridership studies.

The Cost of Delay

Even though they will likely win their appeal, gaining an injunction to allow the State to move forward immediately will be more difficult. Any costs created by delay–the State says these run at over $13 million per month–have been caused by the failure to allow the NEPA process, including judicial proceedings, to play out before beginning so much work. This should not engender much judicial sympathy. Additionally, courts are reticent to issue injunctions and use them, well, judiciously. Still, it could happen.

The Washington Post reports that the State would need to shut down the project around August 1. I don’t really buy this claim because it was part of the State’s effort to pressure a quicker decision out of the Judge. (The choice by Gov. Hogan and other PL proponents to follow Trump’s lead by impugning not just a judge but also his wife likely had no impact but it’s not a model that I would imitate.)

The State has also set this up as too big to fail. MTA states it would suffer an $800 million loss if it shut down the project. Deputy Project Director Mike Madden even says that there are no contingency plans. These claims alone should invalidate Hogan’s claims of bringing business sense to Annapolis.

What sensible businessman would sign a contract entailing heavy losses before the federal funds guarantee with no contingency plans? My guess is that this was done precisely to make it politically impossible to pull the plug.

The Trump Administration

Dependability has not been Trump’s hallmark. FTA has a window open only so long to sign a federal funding agreement. The window could shut before the State can sign. Of course, Trump could also just kill the project if someone explains to him where Maryland is, points to the blue on the map, and reminds him that Republican Gov. Hogan refused to back him.

At this point, however, FTA seems eager to sign the agreement. Who knows what will happen in Washington these days, but my bet is that the State can get the agreement if it can surmount the other obstacles. Despite some major last minute hiccups, odds remain good that the Purple Line will eventually come our way.

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Hogan Smears Federal Judge to Hide State’s Lack of Transparency

Spreading Lies

Larry Hogan joined in the attacks of the most extreme Purple Line supporters in accusing U.S. District Court Judge Robert Leon of being conflicted in the case.  As Bethesda Beat reported:

Hogan, who discussed the project with U.S. Transportation Secretary Elaine Chao during a meeting last month, said the $900 million can’t be “shaken loose” because of Leon’s alleged conflicts.

“Secretary Chao can’t do anything about a judge whose wife happens to be involved in an opponent group and who has a conflict of interest who’s making a decision to hold this up,” Hogan said.

However, there is no real evidence of the claim that Judge Leon’s wife is involved beyond her membership in a citizens association that has opposed the project:

Christine Leon, the judge’s wife, has been a block captain for Andover Road for the Brookdale Citizens Association since at least 2005, according to documents posted on the associations’ website. The association is part of the Citizens Coordinating Committee on Friendship Heights, which testified against the Purple Line in 2008 during a public hearing hosted by the state and submitted written testimony on stationery that noted the group was “representing the Citizens Associations of Brookdale, Chevy Chase Village” and other nearby communities. There’s no evidence that Christine Leon personally lobbied against the project.

One can only imagine the cries of sexism that would have emerged from Purple Line Now if the judge had ruled the other way and Purple Line opponents accused him of a conflict. Hogan went to spread a bizarre outright lie:

“But even with federal funding, we can’t move forward because of a judge who lives at a Chevy Chase country club,” Hogan noted.

Leon’s house is actually about 3 miles from Columbia Country Club in the Brookdale neighborhood of Chevy Chase.

Of course, Greater Greater Washington joined in the smear.

Lack of Transparency or Responsiveness

If the State thought there was a real conflict, they would have brought it up before the case was heard. As it stands, these sour grapes look designed to cover up the State’s total lack of transparency or responsiveness regarding the question of ridership raised in the judge’s decision.

Specifically, the judge wanted to know how the steady decline in Metro’s ridership will impact estimated ridership on the Purple Line. As is well known, Metro ridership has been affected by its chronic problems along with the rise of ride-sharing services like Uber and Lyft as well as telecommuting.

The State’s response to the judge’s concern was not to present any analysis but instead to thumb its nose at the court and declare such an analysis unnecessary. The claim of the unimportance of transfers directly contradicts the State’s own website, which highlights as a major benefit that the light rail “Connects to Metrorail Green and Orange lines and both branches of the Red Line.” Oops.

The State’s failure to respond to Judge Leon is a continuation of its total lack of transparency on how the ridership figures were calculated. MTA has consistently refused to divulge critical information about how the ridership numbers were calculated by Parsons Brinckerhoff. Call it a faith-based initiative.

Frankly, I have little expertise as to the legal or substantive merits of judge’s decision. I’m not a lawyer let alone an expert in environmental law. Nor do I know Judge Leon or anything about his record. But leaving legal questions entirely aside, why is the State so desperate that it must demean the court? Why has the State stonewalled and hidden the critical ridership analysis? If the Purple Line is so great, why not reveal all?

Why the secrecy?

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Where the Purple Line Goes from Here

In the wake of District Court Judge’s Richard Leon’s decision that the Purple Line Final Environmental Impact Study (FEIS) violated the National Environmental Policy Act (NEPA) by failing to take into account ongoing Metro problems in their ridership estimates, the defendants have several different options.

First, defendants can produce the Supplemental Environmental Impact Study (SEIS) required by the District Court. According to the Maryland Transit Administration (MTA), this would set the project back by six months and could unravel the public-private partnership. I suspect that this is hyperbole and that MTA would manage to do it more quickly, though the study would need to be substantial enough to satisfy Judge Leon.

Alternatively, the defendants can appeal. Maryland Secretary of Transportation Pete Rahn has said that Maryland will appeal the ruling. Except that the decision about any appeal rests with the Federal Transit Administration (FTA) and the Justice Department, as the federal government is the defendant in the lawsuit.

As a first step towards any appeal, the federal government would need to seek a stay of Judge Leon’s ruling. The decision on any request for a stay would be a critical moment. If appellants win their request, the Purple Line could continue to proceed even as the appeal moves forward.

In order to receive a stay, the federal government would like have to show substantial, irreparable harm from a delay and the appellate court would have to deem them likely to win their appeal. In my view, the first condition would not be hard to demonstrate. The second point also strikes me as winnable, if only because NEPA suits tend to fail. But I’m not a lawyer–I don’t even play one on TV–and the Judge’s decision increases uncertainty.

Whether they are granted a stay or not, MTA and FTA would most likely wisely start to produce an SEIS so that they are prepared regardless of the outcome of the appeal. If FTA wins an appeal, they won’t need it but the money is small beans in comparison to the overall cost of the project. The appeals process could well take longer to conclude than an SEIS.

Regardless of the outcome, Judge Leon’s decision has highlighted MTA’s flat unwillingness to produce information on how it calculated Purple Line ridership. In effect, this biased and politicized agency is saying “trust me” to the public on this enormously expensive project–eerily reminiscent of Donald Trump’s “believe me.” Even the ardently pro-PL Washington Post acknowledged this fundamental issue in its editorial decrying the decision:

Granted, Maryland transit officials have not been sufficiently transparent about how they arrived at ridership numbers. And if their estimates for the Purple Line fall short of forecasts, it could prompt the state to raid other revenue sources to pay off the project’s construction debt.

Additionally, Purple Line advocates are in the uncomfortable position of explaining (1) their utter faith that Metro ridership will rise even though it has declined for several years despite strong regional growth, (2) why we should believe that the trend toward telecommuting and biking, which they use to explain the decline, will cease, and (3) why Metro’s deep problems will be solved anytime soon, despite the recent derailment of the brand new Silver Line.

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Federal Court Rules Against Purple Line

Today, D.C. District Court Judge Richard Leon issued his opinion in the case challenging the Environmental Impact Study (EIS) for the Purple Line light-rail project. The nub of the ruling is that the Federal Transit Administration (FTA) was “arbitrary and capricious” in its failure to demand a reexamination of the impact of declining Metro ridership on projections of future Purple Line ridership.

In plainer English, the judge thinks that Metro’s continuing failures could well mean that the Purple Line will carry significantly fewer people than projected–a claim difficult to examine as the State has kept the methodology for estimating ridership a closely held secret.

In the legal battle, the State argued unconvincingly that the Purple Line is unaffected by Metro as it is a different mode even as it claimed in the EIS that the Purple Line is needed to connect people to Metro. Seriously, this was the State’s claim (see p. 6 of the opinion).

The ruling was a surprise because winning a case under the National Environmental Policy Act (NEPA) is difficult.  As the Court mentioned in the opinion, the scope of review is “narrow” and “a court is not to substitute its judgment for that of the agency.”

According to the Maryland Transit Administration (MTA), this result should delay the Purple Line:

[D]uring a June 15 hearing in the case, lawyers for the MTA and federal government said redoing the ridership forecasts would push back the project by six months and could unravel its $5.6-billion, 36-year public-private partnership.

In a subsequent court filing, lawyers for the Maryland Attorney General’s Office said having to redo the ridership forecasts “would be profoundly disruptive and could jeopardize the Purple Line project” because it could “have cascading consequences on the project schedule and financing arrangements.”

As MTA has so many times, I suspect it will change its tune in light of the decision and come up with an SEIS more quickly, so I doubt very much it will kill the project. Nevertheless, the irony remains that the proponents favor the project on environmental grounds. Yet the Court has delayed the Purple Line for failure to comply with environmental law.

To be continued.

 

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Transit-Oriented Development? LOL.

The first Purple Line associated development project is going up and –surprise–is about development rather than transit-oriented development. At Chevy Chase Lake, EYA is building  “62 stately” “luxury elevator townhomes” that start at $1.5 million. All will have two car garages.

Why the two car garages if everyone is going to be riding the Purple Line? Unless you think elevators count, that sure doesn’t sound like transit-oriented development, and surely places into question claims that ridership of people who live near Purple Line stations will be unusually high.

Despite the claims that the Purple Line would increase affordable housing in Chevy Chase, even as quite a few existing affordable housing units get knocked down, this development is not about that goal either. I suppose one can make the trickle-down development argument that increasing supply will lower the price–not one usually associated with progressives who support the project. But we could have done that without billions on the Purple Line.

What is this really about? Thanks to our public subsidy, the owners and developers of the land can build more and make a tidy profit on the roughly $100 million for which they intend to sell the units, which will be valued for their close-in location to DC, proximity to Bethesda and Silver Spring and good school district more than the pricey Purple Line. Accompanied by some shops, I imagine it will be a very nice place to live.

Attracting more wealthy taxpayers and raising the value of the land will also increase the County tax base–good for the County and its economic health. The irony, of course, is that in the future many of the same people who supported the Purple Line as a “social justice” measure will use undoubtedly use this development as an example of the growing economic divide in the County even though the policies they supported made this happen.

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Hogan’s Think Tank Says It’s Time to Shut Metro

In the wake of yesterday’s blue skies Metro shutdown, the Maryland Public Policy Institute says it’s time to “end Metrorail”:

The closure will prompt yet another round of calls for increased government funding of the system. But instead of forcing federal, Maryland, Virginia, and D.C. taxpayers—most of whom scarcely use the rail system—to further subsidize Metro and its riders, public leaders should be discussing how to wind down and ultimately close the failed transit system. . . .

Dauntingly, Metrorail is about to face enormous new expenses. The core of the system is reaching the end of its 40-year functional life. WMATA officials can try to nurse it along, but that will be costly and riders will face many more disruptions like today; ultimately, costly and environmentally damaging reconstruction will be needed. And after all that expense, the system will still be a high-cost, low-capacity, inflexible failure.

The Maryland Public Policy Institute is the think tank arm of the Hogan administration with Hogan serving as an Emeritus Director of the group along with former Gov. Bob Ehrlich. Hogan’s brain trust proposes that we shut Metro even as Hogan moves forward to build the Purple Line to connect its defunct branches.

Beyond its modest proposal, the piece raises the issue of how Hogan plans to help fix Metro and to cover the State’s share of the ever increasing costs of fixing its aging and ailing infrastructure. So far, the Governor and the General Assembly, as well as Montgomery and Prince George’s Counties, have been silent on this question.

This lack of direction continues even as riders long ago grew tired of the decline of the system with no sign of management or leadership able to address the serious problems. The Purple Line increases the pressure, as its commits the State to a large but ultimately unknowable sum of money (estimated at $5.6 billion). Conveniently, the bill comes due only after Hogan has long skedaddled out of the Governor’s chair.

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Prince George’s Out Negotiates Montgomery

As explained previously on 7S, Prince George’s County Executive Rushern Baker played hard to get on ponying up additional funds for the Purple Line in an effort to set up his County to extract concessions in price and other matters. Turns out he succeeded at both:

Prince George’s County has tentatively agreed to commit an additional $20 million to finance the Purple Line in exchange for assurances from state transportation officials that construction will begin within its borders and the command center be built there, a top aide to County Executive Rushern L. Baker III said Thursday. . . .

“I agree to accomplish each of these requests,” [Transportation Secretary] Rahn replied in an Aug. 12 letter to Baker.

Montgomery agreed to pay $40 million in additional costs and received nothing.

Baker negotiated a better deal than Montgomery County Executive Ike Leggett or Council President George Leventhal. His County will pay half as much in additional costs, obtain more, and still have the light-rail project he supported move forward.

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