Category Archives: Development

Riemer’s Zoning Proposal Breaks Trust and Will Be Abused (Part III)

Councilmember Hans Riemer has proposed making much easier to build additional accessory dwelling units (ADUs) with the best of intentions. Yesterday’s post looked at why it will likely raise housing costs, even though it is intended to do the opposite, and burden county infrastructure. Today, I look at why the proposal breaks trust with residents and remains open to serious abuses.

Breaking Trust with Residents

The county literally just finished revising its entire zoning code in a pro-development direction. We also just revised the rules on ADUs only a few years ago. Yet here we are once again revising the code in a major way. And the changes are all uni-directional to allow more. Always.

In a single stroke, Hans’s legislation undermines all of the county master plans by drastically increasing the number of potential units in any area. In Bethesda, we just finished the process and already upped the existing density considerably. Is it any wonder so many county residents are mistrustful of planning processes and county government?

Homeowners value stability in neighborhoods. After all, buying a home is the single largest and more personally important investment most people will ever make. While some will welcome the changes, others will feel that they’ve just been cheated. As one resident articulated at the forum, not everyone wants to live on a congested street next to an AirBnB.

Why We Can’t Have Nice Things

“Never assume a good motive when a bad motive will do” is not the most positive outlook on life but a very good approach when thinking about how some people will do their best to stretch and to misuse new rules.

While ADUs may help some achieve the positive goals emphasized by Hans, one can easily imagine how these rules will be abused despite Hans’s commendable attempt to build in protections. The law requires that ADUs can only be built by people on their principal home’s property. In theory, this should prevent a developer from buying a home, tearing it down and building either a duplex (in apartment or attached townhouse form) or two detached houses with one twice the size of the other.

Except that it won’t. Someone who flips houses can just buy it, say he plans to move into it, tear it down, build a duplex or two detached houses, sell, and repeat. Alternatively, I imagine developers could construct contracts with existing homeowners that pre-arrange the sale to maintain the fiction that the new duplex or second house is the idea of the existing homeowner. As often occurs in such situations, county planners will determine that it complies with the letter of the law and have no choice but to approve the plans.

I bet someone with more knowledge of housing law could come up with even more ways to accomplish the same goal without breaking a sweat. Heck, by the time that lawyers for developers are done, we’ll be thanking them for only building two units.

Making it possible to build more will make the land more valuable, and thus less affordable. Existing residents who can’t afford the higher property taxes will have to sell. Others will leave because they thought they were living in a neighborhood but found themselves in a construction zone. Either way, the hiked prices render the Montgomery dream out of reach for many more more families–all in the name of affordable housing.

It could well result in tearing down entire neighborhoods to build pricey duplexes. Why not make a killing doing something its supporters have labelled building affordable housing? Some would undoubtedly cheer and call it “smart growth” but that’s not how it’s being sold. Moreover, there is no guarantee that the new homes won’t be placed far from transit.

Share

The Opposite of Intended: How Riemer’s Zoning Proposal Will Increase Housing Costs (Part II)

Yesterday, I introduced Councilmember Hans Riemer’s proposal to make it much easier to build accessory dwelling units (ADUs) in single-family home neighborhoods around the county. Today, I being to explore why the current proposal may well exacerbate the problem it is designed to solve while further burdening county infrastructure.

Affordable or More Expensive Housing?

While sold as a means of advancing affordable housing, Hans’s proposal to make it much easier to build ADUs could have precisely the opposite effect. As Hans pointed out at his forum on the idea, over 30% of Montgomeryites already are house poor and devote a disproportionate share of their incomes to housing. Will banks be willing to lend to people who already have trouble making ends meet to construct new units?

Even worse, housing values on properties amenable to additional units will rise. After all, property becomes more expensive the more income you can generate. This is why developers always press for more density. Instead of making MoCo affordable, Hans’s legislation will contribute to the problem it aims to solve by making existing homes more expensive.

Property taxes will go up with rising land values. While incomes have been stagnating, taxes continue to rise—not least because the county hiked them by 9% before the last election. Increasing values further will result in higher taxes that many residents, even those not house poor, will not find it easy fit into their budgets. Again, banks are unlikely to lend even more money for the construction of ADUs to the already financially stretched.

Poor Housing Code Enforcement

As several forum attendees highlighted, county housing law enforcement is a joke. One woman explained how she has tried fruitlessly to get rules enforced on her block for over 15 years, including by contacting Councilmembers Hans Riemer and Nancy Navarro.

Hans didn’t disagree but touted that the county wanted to address the issue, citing repeatedly an additional $1 million allocated to housing code enforcement and the keenness of the new county executive to fix this problem.

But enforcement is often not systematic let alone muscular. Riemer’s bill limits ADU occupancy to two adults. If the county isn’t even enforcing rules people support regarding overcrowding and parking that protect both tenants and neighbors, does anyone think that the county is going to kick out a kid when she turns 18 or needs to come home at an older age? What about other relatives or friends who needs a place to stay for more than just a few days?

No Idea of Infrastructure Cost

Speaking of those kids, how many additional entrants will the public schools need to accommodate and how much will it cost? Hans opened his forum by lamenting that young families can’t afford MoCo. Presumably, if his proposal works, MCPS will get more students.

I asked Hans if he had any idea of the impact on the county budget due to the need for not just schools but more police and so forth, and he doesn’t know but “doesn’t think it will have a big impact.” I can’t say I will have much faith in any belated estimates generated by people already squarely behind the idea. My head is still spinning from the idea that lack of knowledge of the cost or the impact was apparently no barrier to county planners expressing so much support at the forum.

Hans suggested, however, that the impact would be minimal. He imagines that the number built here will fall between the 40-50 per year built now and the over 500 per year built in Portland, Oregon. Except that is almost surely an under-guesstimate. The City of Portland has only two-thirds the population of MoCo and more live in apartment buildings, so it has a lot fewer homes where you could construct an ADU.

Moreover, Portland is a terrific city, but it’s not exactly a model for affordable housing. Prices have risen rapidly in recent years and there is no sign that ADUs have altered that trend. Ironically, Montgomery and Portland share a major driver of high housing costs: green belts off limits to new construction that export sprawl and raise prices inside the belt.

Next Up: Breaking Trust with Residents

Tomorrow’s post looks at why Hans’s proposed zoning change breaks trust with residents and how it is open to abuses that the county won’t be able to stop despite Hans’s laudable efforts to prevent them.

Share

Riemer’s Proposed Zoning Changes Will Have Major Impact & Need Serious Work (Part I)

Montgomery County Councilmember Hans Riemer, now in his third council term, thinks that not enough residential units are being built in the county and has been peppering his email list recipients with arguments about how we need to build more.

Interestingly, Hans has reached these conclusions not long after the previous council completely revised and simplified the zoning code in a sharply pro-development direction that gives developers increased flexibility to pursue their plans. Master Plan revisions have also added millions of developable square feet in areas such as Bethesda and White Flint.

Hans’s New Dream: Accessory Dwelling Units

Even after all of these changes, Hans now has offered a zoning text amendment (ZTA) that would increase development possibilities in single-family home neighborhoods around the county. He wants to make it easier to build separate apartments or buildings, known as accessory dwelling units (ADUs) on the same single-family home property. The core idea is that they are autonomous living units with their own entrances.

Hans sees this as a way of creating more affordable housing in Montgomery. New smaller units would be more affordable. Building a rental unit might allow people to buy into Montgomery and help make the mortgage payment. Under Riemer’s proposal, the units could be up to 50% of the size of the main home and he would reduce or eliminate requirements for additional off-street parking. Only two people No more than two adults but an unlimited number of children could live in them.

It would facilitate multigenerational living and aging in place by allowing parents and adult children to live on separate residences on the same property. (Alternatively, that possibility may discourage many parents and children.) Older residents could also supplement fixed incomes by renting out the unit or the original home.

Planning Board Chair Casey Anderson and Planner Lisa Govoni attended and provided supportive information and commentary at a forum organized by Hans that presented only positive information. Several attendees of the public also shared anecdotes about how the proposal might meaningfully help them. I should also mention that Hans was unfailingly polite to the few dissenting voices, though I disagree with his belief that county residents widely hold negative views about renters.

Serious Problems

But Hans’s proposal is not nearly ready for prime time. The proposal itself has serious problems in terms of its workability in terms of its own goals and lack of an iota of information on how it will impact the county budget or infrastructure. Tomorrow, I begin to explore why.

Share

Housing Initiative Partnership Responds

HIP Logo

Last week, I published a blog post on the conundrums facing the Purple Line Compact effort to preserving affordable housing and commercial rents in areas around new Purple Line stations. At the end of the piece, I wrote that I’d welcome hearing more from Compact proponents about “creative ideas to ease the collision of fundamental economic forces with real social needs.” I appreciate that Maryann Dillon, Executive Director of the Housing Initiative Partnership, took up this public invitation. Here are her thoughts:

In his article on October 2, “Fair Development Compact Pipe Dream”, David Lublin rightly argues that a “central goal of the Purple Line is to improve transportation connections” and that, as a result, “the land around the stations should become more desirable and valuable”.

He cites Bethesda, Silver Spring, Ballston and Clarendon as successful examples of places that have become more desirable given their access to transportation including Metro. These places boast stronger tax bases that help local governments provide better services. I think we all can agree that these are four of the most desirable and attractive destinations in the DC metro area, and that, as a result, they naturally have increased in value.

What David fails to note, however, is that all four of these locations are beneficiaries of progressive housing policies by the Montgomery and Arlington County governments put in place well before revitalization occurred.

Forty years ago, Montgomery County pioneered the concept of “inclusionary zoning”. Called Moderately Priced Dwelling Units (MPDUs), Montgomery County’s program requires developers of over 20 residential units to include 12.5% of the units as affordable to working families earning less than 80% area median income ($85,600 for a family of four). The MPDU program has created thousands of homes affordable to moderate income renters and homebuyers scattered in every neighborhood of the County. In this way, a broader range of residents can live near transportation and jobs, reducing the burdens on our roads from long-distance commutes. A mix of housing types makes it easier for employers to find workers for their restaurants, hotels, offices and local services that make these communities special, let alone the teachers, fire and police personnel necessary to maintain their high quality of life. Montgomery County commits around $50 million annually from its own general revenue to support affordable housing development in its most desirable communities.

Likewise, the Arlington County Affordable Housing Ordinance offers developers seeking additional density in the site plan process the choice of providing affordable units or contributing to the Affordable Housing Investment Fund. The Special Affordable Housing Protection District (SAHPD) as outlined in the General Land Use Plan identifies existing affordable housing sites within the County’s two Metro Corridors that are planned for site plan projects of 3.24 FAR or higher. Existing affordable housing units are to be replaced on a one-for-one basis, again with the goal of protecting and preserving the mix of housing types and prices that can help keep these corridors dynamic and diverse. Arlington has committed $13 million in the current fiscal year to support its Affordable Housing Investment Fund.

Last year, the Prince George’s County Council passed inclusionary zoning legislation and charged the County Executive with recommending areas of the County in which this zoning would apply. While the recommendations have been made, County Council has not yet taken any action on them. Unlike its neighbors, Prince George’s County does not dedicate any of its own resources to develop or renovate affordable housing.

On August 30, 2014, the Washington Post published a story, “Affordable rents fading away in DC’s housing picture” which described the imbalance between the overbuilt “luxury” rental market and the continued loss of more affordable and moderately prices apartments. Montgomery and Prince George’s Counties share the distinction of having 50% of their renters “cost burdened”, where they spend more than 50% of their gross income on rent. Another surprise… both the District and Montgomery County have a higher number of households earning less than 50% of the area median income than does Prince George’s County, despite perceptions to the contrary.

Surely we all understand that the Purple Line will be an economic boost for the neighborhoods along its way. But, as higher density is introduced into some of these redevelopment corridors, our State and Counties should take measures to protect the residents and small businesses that have kept many of these areas thriving, despite the lack of investment in properties for so many years. These residents kept the faith in the bad years. They should share in the rewards once the good years finally come.

Share

Fair Development Compact Pipe Dream?

compact1

The rally for a compact to promote fair development in relation to the Purple Line will occur on October 6th. What is the compact according to its promoters?

compact2

In essence, the key purposes of the compact are to prevent the displacement of affordable housing and small businesses currently located near Purple Line stops.

I look forward to seeing how they plan to square this circle.

Obviously, a central goal of the Purple Line is to improve transportation connections. And if people can more easily get from one place to another, the land around the stations should become more desirable and valuable, which will make it harder to afford to live and more expensive to operate a business near the stations as rents for housing and commercial space rise.

Indeed, proponents claim that the Purple Line will propel economic development around the stations. If successful, the spike in land prices will be far stronger than caused by faster transportation alone. It should also cycle in a positive way.

Think about places like Bethesda, Silver Spring, Ballston and Clarendon. As more businesses open and more people travel to the area, it becomes more desirable to locate businesses there. Similarly, more people will want to live near jobs and the commercial establishments in the area.

Just as improvements to the educational system or reductions in crimes make a place more attractive to open a business or establish a residence, ease of access both in terms of transportation and customers has the same effect.

Land prices will rise, as will rents for housing and businesses. Of course, the State and the County want this to happen. It’s not just a side effect but the point of spending $2.5 billion to build the Purple Line.

And hardly for nefarious reasons. As Montgomery County Councilmember George Leventhal has often explained correctly, economic growth generates jobs–not to mention the taxes that pay for services.

Local and state governments are always looking for ways to increase the tax base because the demand for services naturally exceeds the monies available. Moreover, if growth doesn’t occur, the demand for services rises even as funds dry up.

[And let’s avoid for now the political dynamite surrounding the benefits to the County’s budget balance–if not moral deficit–of attracting wealthy residents or displacing poorer ones to other jurisdictions. For our purposes, we’ll just assume that they stay in the County even if they have to move.]

In short, the proposed compact is likely to have success only to the extent that it tilts against the economic goals of the Purple Line. Some stations may attract much less growth than others–just compare the Metro stops in Prince George’s to those in Montgomery. In these areas, prices will rise comparatively less and they will remain more affordable.

Squaring the circle of displacement and growth seems all but impossible. If the County somehow prohibits or slows rents from rising on housing or businesses, it inhibits the growth of its tax base and undermines a central rationale for building the Purple Line.

To an extent, the inevitable concentration of growth around some stations but not others may provide some relief. But probably not in some areas that deeply concern Casa de Maryland like Langley Park, which is a natural prime target for redevelopment as middle-class residents get displaced from other more expensive areas.

It will not all be bad. Economically rising residents who have managed to acquire properties will benefit if they end up making a tidy profit if and when they decide to sell their land. Small businesses who have longer terms leases will see their customer base rise. And many will relocate successfully, though others will not.

And perhaps the proponents of the Compact have creative ideas to ease the collision of fundamental economic forces with real social needs that development around the Purple Line will not address.

If so, I look forward to hearing more about them. Engagement of an interested public and government on the problem may provide real benefits. But it’s not going to be easy.

 

Share