Tag Archives: smart growth

Council Must Sustain Elrich’s Veto of Corporate Welfare

On a 7-2 vote, the Montgomery County Council approved a bill that would completely exempt real estate developments on WMATA property from property taxes for 15 years. Councilmembers Tom Hucker and Will Jawando voted against. The Council should sustain County Executive Marc Elrich’s veto of this corporate welfare masked as a social justice housing project.

This bill is such a bad idea that one hardly knows where to begin.

Proponents of transit endlessly sell the considerable funding required for it as the motor for development and smart growth that not only attracts jobs but increases land values and property tax revenues. We are told “if you build it, they will come.” Now, these same people tell us that they won’t come unless we “incentivize” (read: pay) them.

Even stranger, we are to pay these incentives to build high-priced apartments in desirable locations with very little extra affordable housing thrown in above normal requirements. I understand establishing enterprise zones with lower taxes in struggling neighborhoods, but Grosvenor-Strathmore and other Red Line stops don’t fit the bill.

Councilmember Andrew Friedson (D-1) has been quite aggressive in trying to sell Councilmember Hans Riemer’s bill:

None of the WMATA sites are being developed and developers with Joint Development Agreements are walking away all over the region, due to unique infrastructure requirements on these sites, high costs of high-rise construction, etc.

These sites currently collect ZERO property tax, generate ZERO housing, and provide virtually no public benefits aside from surface parking. I view that as an abject public failure, but respect anyone who prefers this status quo.

Multiple fiscal analyses have demonstrated both that high-rise projects don’t work without the incentive and that the Grosvenor project in particular would generate more revenue to the County in impact and income taxes than the property tax abatement (which the county wouldn’t otherwise receive without a project).

Councilmember Friedson argues we need to step up our corporate welfare game to compete when we shouldn’t even play this game. His argument also ignores that demand for homes in Frederick or Fairfax is based on other factors that far outweigh tax incentives linked to individual projects.

The uniqueness of the site argument fails to impress as somehow many buildings have been constructed around the whole region, indeed the whole country, around transit and difficult sites without the magic of tax incentives. (Manhattan exists!) I’m sure WMATA, developers and their supporters on the Council are happy to produce analyses showing otherwise, just as they always have in support of public spending on their agenda.

The incentives are a roundabout subsidy to WMATA. When we establish tax incentives the land becomes more valuable, so WMATA raises the price and recoups much of it. So it’s not even clear what share of this supposedly badly needed incentive the developers will see.

This tax giveaway also won’t increase the housing stock. When it’s built, Councilmembers Riemer and Friedson will point to it and say, “look what we did!” Except there will be another nearby project that didn’t happen because you’ve already pre-satisfied any demand with this one. Montgomery has plenty of land zoned for housing and buildings.

Councilmember Friedson also neglects to mention that the building will not have a zero cost to the county. Providing county services will cost money but Montgomery will receive a lot less than normal to cover those costs.

Andrew Friedson has been touted with much hope, including here, as the Council’s bright new economic light. If he wants to live up to this promise, he needs to shift his focus fast from this old-style ineffective developer welfare to more original ideas to attract commercial business to Montgomery.

The bill reflects Councilmember Hans Riemer’s long-term approach over several terms to housing, which has long dominated the Council. Unfortunately, it has had far more success in pleasing monied interests than it has accomplished in producing affordable housing. No doubt it also pleases David Blair’s developer-heavy crowd.

Councilmember Nancy Navarro has presented herself as second to none as a champion for social justice. She has stood up unflinchingly for often abused undocumented immigrants to the frequent dismay of their opponents around the State. Here, she argued that the Council needed to “be bold” and support this bill.

Except there is nothing remotely new, let alone bold, about giving a tax subsidy to developers. Speeding the production of high-priced apartments strikes me as the opposite of social justice.

I cannot help but wonder why this proudly progressive Council is focused on this legislation at this time when so many county residents are facing far more immediate and desperate problems. Even managing the day to day is still far from ordinary.

Charter Amendment A on Property Taxes

The crowning insult of this legislation is its juxtaposition with County Charter Amendment A. The short version is that the Council majority is now proposing to collect more in property taxes from ordinary residents even as it engages in this tax giveaway that has no valid economic or public purpose.

Charter Amendment A garners support from many because the current property tax system is not ideal for a variety of reasons (not the subject of this post). It effectively asks voters to loosen the very tight tax corset (it can only rise with the rate of inflation) so that the county can collect more if property values rise, as would likely happen now if the measure passes. It’s a tough ask at a time when many have seen incomes drop. One can argue that it is necessary when so many are in need.

But it is insupportable for the majority of the Montgomery County Council to offer a tax holiday to developers while increasing the take from ordinary citizens. It’s not progressive. It’s not liberal. It’s just bad economic policy wrapped in gaudy rhetoric that doesn’t stand up to scrutiny. It goes against this county’s good government traditions.

County Executive Elrich was right to veto this bad bill. The Council should vote to uphold his veto tomorrow.

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Busting Three Metro Myths

The six graphs – one for each Maryland branch of the Metro – in today’s post reveal the ridership figures for all Maryland Metro stops from 2005 through 2016. They’re not encouraging either for the health of the system or cherished myths around it.

Transit Always Heralds Urbanism

“If you build it, they will come.” Usually not. In Maryland, only three stops have become high traffic urban nodes: Bethesda, Silver Spring and Friendship Heights – the latter is shared with the District. The other 24 stops have not witnessed remotely this level of impressive urban development or Metro ridership. Outside the urban three, the highest ridership occurs mainly at end-of-the-line commuter stops, such as Shady Grove, Greenbelt and New Carrolton.

Transit advocates and developers are both very attached to this myth. The former because they believe fervently in transit. Developers like it because they are permitted to build far more when transit is built, which allows them to make a lot more money even if nobody ever rides it. Proximity to transit also raises the value of their property at somebody else’s expense.

The uncomfortable truth is that no nodes similar to Bethesda or Silver Spring – or Ballston or Rosslyn – have emerged in Prince George’s County. Leaving aside the terminus stops, ridership is not very high and certainly not growing. And the terminus stops have seen more precipitous declines than in Montgomery – 34% at New Carrollton, 21% at Greenbelt, and 20% at Branch Avenue.

Thriving Urbanism Heralds More Transit Riders

Not necessarily. Bethesda, Friendship Heights and Silver Spring have continued to grow yet ridership has declined. In 2016, all three served many fewer riders than at their peak – 15% in Bethesda, 17% in Silver Spring, and 20% in Friendship Heights.

Transit is a positive for these areas but it’s only one factor among many. It’s not that smart growth or new urbanism is totally off base. The focus on transit may lead to overestimation of its importance to successful development. Density and the mixture of residential and commercial looks more crucial to their continued success. It’s why places like the Kentlands thrive even though they’re nowhere near Metro.

There is little sign that less intense development around Metro stations other than the big three has increased ridership either. Throughout the Maryland portion of the system, ridership has tended to stay flat or decline. Remember that this has occurred despite population increases in both Prince George’s and Montgomery.

Declining Ridership is Temporary

Two major excuses are given for Metro’s declining ridership: the financial crisis and Metro’s “temporary” maintenance backlog. At this point, the former explains little as the recession is over and the population is now higher, so Metro should have more riders. The latter is belied by the similar decline in Metro’s bus ridership. Moreover, SafeTrack will not bring the system back to tip-top condition but simply prevent its complete collapse, as General Manager Paul Wiedefeld has been at pains to point out.

The wheel of technological change is driving changes in transportation patterns fast. Increasing numbers of jobs can be done via telecommuting. Competition from services like Uber and Lyft are remaking the taxi industry and attracting many new riders. Every price increase in Metro or its parking lots only makes them more competitive – and the price of both is likely to head up.

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A Critical Moment for MoCo’s Smart Growth Movement

By Adam Pagnucco.

2018 is shaping up to be a big year in MoCo politics.  The Executive seat and four seats on the County Council have opened up due to term limits.  Dozens of people are considering running for county office and some are already doing so.  Discussions are underway among both business and progressive groups on how to prepare for the elections.  But one critical group is so far conspicuously absent:

MoCo’s smart growth community.

Smart growth advocates have some big asks of county elected officials.  They want the county to finance a bus-rapid transit network that will cost hundreds of millions of dollars.  That is at the same time that the county is trying hard to pay for what could be billions in school construction costs.  Smart growth groups are also seeking to terminate M-83, a planned Upcounty highway with significant support among its prospective users.  The current County Council is dealing with the Bethesda master plan and the next one will be deciding a host of others.  And at the state level, smart growth advocates are trying to convince the Governor and the General Assembly to support dedicated funding for WMATA.  Any one of these issues would be serious asks, but together they comprise an agenda that is expensive, difficult and costly in political capital.

When other groups have similar hard asks, they participate in the electoral process to enhance their prospects.  Business entities contribute money.  Labor unions contribute money, make endorsements and run direct actions by their members.  Other groups like the Sierra Club, NARAL, the volunteer Fire Fighters, the League of Conservation Voters, NOW and Casa in Action play too.  The smart growth movement does none of this.  That’s turning into a serious problem.

Many of the pieces are in place for the smart growth community to be politically potent.  They have a coherent, well-developed ideology with potential appeal to many.  They have a flagship blog, Greater Greater Washington, with a vast readership around the region.  They have several effective advocacy groups like the Coalition for Smarter Growth, Purple Line NOW and Action Committee for Transit.  They have formed issue-based alliances with others including some parts of the business community, environmental groups and the anti-M-83 group TAME.  And they have substantial support for some of their priorities.

What they don’t do is direct political action.  There is no smart growth organization that makes endorsements, raises and contributes money and finances independent expenditure campaigns advocating for and against candidates.  The closest thing they have to a political tool is Action Committee for Transit’s scorecards, which are handed out sporadically and not mass emailed or mass mailed.  For politicians who take risks in supporting the smart growth agenda, there is no assurance of offsetting electoral rewards.  That is one reason why M-83 continues to survive despite the alleged opposition of six Council Members plus the County Executive.

Now consider the stakes.  The leading vote-getter in recent at-large elections is Council Member Marc Elrich, who has voted against three transit-oriented master plans along the Purple Line route and is a top-tier candidate for Executive.  Total Wine co-owner David Trone, who could potentially spend over $10 million if he runs for Executive, is an open M-83 supporter.  (See his tweet below.)  The views of many council candidates on smart growth issues are totally unknown.  One thing is sure: all of these candidates will hear from citizens who oppose the Purple Line, transit-oriented development, bus-rapid transit lines and any potential tax hike that will be needed to fix WMATA.  How much will they hear from supporters?

Because of the sheer number of open seats in the county, 2018 will be a watershed year in the history of MoCo politics.  Will it be a watershed year for the smart growth movement?  Or will it be a year in which candidates who pay lip service to smart growth priorities get elected and then water them down once in office, not fearing any consequences?

Smart growthers, that depends on you.  The time to step up is now.

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The Giant Purple Credit Card, Part III: Is Pro-Purple Anti-Transit?

Opportunity Costs

The choice to spend vast sums of money on one project requires foregoing other choices. The tangled finances for the Purple and Red Lines (see also here) render it especially obvious. When the fares from Baltimore’s public transit system are needed as a backstop in case Purple Line fares are lower than hoped, the use of the Transportation Trust Fund (TTF) for non-Purple purposes is obviously going to be quite limited.

The plans to move ahead also with Baltimore’s Red Line should further assure that the TTF is tied up for literally decades. Indeed, the two projects have been closely tied together in order to build political support. It is hard to imagine moving ahead with one project without the other, as legislators in one metro area are unlikely to want to fund an incredibly expensive project in the other unless their constituents share in the benefits.

Existing Transit Needs

Montgomery and Prince George’s County already have an extensive public transit system. Both are integrated into WMATA’s Metro and Metrobus system. Each operates its own bus system: RideOn and TheBus. Both are also tied into the MARC system.

All parts of the system have suffered from cutbacks and need investment in infrastructure. Metro, the lungs of Washington’s transit system, remains in particularly dire need of money to maintain and to upgrade its infrastructure. Placing so many chips on the Purple Line will constrain the ability of the State to aid Metro–Montgomery and Prince George’s cannot expect to get all of Maryland’s transportation funding.

Less widely heralded in Montgomery in the face of perennial Metro problems–endless single tracking, escalators that don’t work, overly crowded trains at rush hour despite stagnating ridership–have been the cutbacks to MARC and Ride-On. Oddly, we reduced transit service designed to connect to the Purple Line even as we move forward with building it.

Foregoing Other Transit Opportunities

Some key supporters of the Purple Line recognize these implicit tradeoffs even if they don’t advertise them. In the at-large County Council debate in Chevy Chase, new Council President George Leventhal derided Councilmember Hans Riemer’s support for additional Ride-On service. He and other Purple Line supporters have also expressed great skepticism about the proposed countywide bus-Rapid Transit System (RTS).

The irony here is that for the cost of building the Purple Line, we could build a RTS that would serve all parts of the County. Indeed, a Purple Line incorporated into an RTS would accomplish most of the goal at far less cost than the proposed light-rail system even according to MTA’s own analysis (see also here).

Purple Line supporters like to accuse opponents of being anti-transit–it’s a good simple communication meme that boils down a complex decision to good versus bad. Except that wanting to spend transportation dollars wisely and get the most for our tax dollars is pro-transit. Opposition to expanding bus service and continued negativity regarding an RTS that could serve the whole county sure doesn’t sound pro-transit.

The Bottom Line

We shouldn’t starve our existing transit system and forego future opportunities in order to build the Purple Line and the Red Line. Ironically, we could build cheaper RTS versions of both that would save the State billions–not chump change–and allow for additional transit and road improvements that would truly aid economic development and the ability of all Marylanders to reach jobs far more broadly. Now that’s smart growth.

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