{"id":13836,"date":"2020-09-22T10:24:14","date_gmt":"2020-09-22T14:24:14","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=13836"},"modified":"2020-09-22T10:24:20","modified_gmt":"2020-09-22T14:24:20","slug":"smart-growth-or-corporate-welfare-part-one","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=13836","title":{"rendered":"Smart Growth or Corporate Welfare? Part One"},"content":{"rendered":"\n

By Adam Pagnucco.<\/em><\/p>\n\n\n\n

For many years, MoCo has focused its land use and economic development policies on transit-oriented development. Since 2006, the county has adopted eight master plans<\/a> centered on Metro stations, another four centered on Purple Line stations and one more centered on Corridor Cities Transitway stations. Another plan is in the works for Downtown Silver Spring<\/a>.<\/p>\n\n\n\n

The capstone for the Metro-based plans is development on top of the Metro stations themselves, which requires joint development agreements with WMATA. Placing the highest density on Metro stations, along with nearby parcels, enables the county to balance growth, transportation and environmental priorities in its march towards the future. For fifteen years, that\u2019s what we have been told.<\/p>\n\n\n\n

Now we are told that this approach won\u2019t work without taxpayer subsidies.<\/p>\n\n\n\n

The problem is that most, if not all, development on top of Metro stations is not proceeding. And that is because of economics. In order to be economically viable, Metro development projects must charge rents or condo prices sufficient to not only cover construction costs, financing and investor returns but also the unique costs associated with Metro station sites. The economics are particularly difficult with high rise projects, which have higher material and construction costs than wood-frame projects. And so the county council has proposed Bill 29-20<\/a>, which would eliminate property taxes on Metro station development projects for 15 years and replace them with undefined payments in lieu of taxes to be set later.<\/p>\n\n\n\n

In justifying the bill\u2019s purpose, consider these remarks by Council Members Hans Riemer and Andrew Friedson, the lead sponsors of the bill, and Planning Board Chairman Casey Anderson at the council\u2019s first work session<\/a>.<\/p>\n\n\n\n

\n\n\n\n

Riemer<\/span>
I want to say that this is a smart growth proposal. This is about making development feasible where decades of inactivity has demonstrated it is not feasible. If you look at Montgomery County and our Metro stations, you will almost universally see empty space on top of the Metro stations and despite efforts by WMATA over many years to support development at those stations, to solicit development on their property, there is very little that has happened. And there is very little that has happened recently, in the last ten years or so. Very little high rise, especially, and because of a shift in the market, I think which is driven by regional economic shifts and global economic shifts that have made the cost of high rise construction prohibitive except in the most high rent communities\u2026<\/p>\n\n\n\n

I think very broadly speaking, we have sought to channel all of our development, almost all of it, through a smart growth framework. We want to get housing that is high rise. We want to discourage sprawl. But the problem is we have not \u2013 the market isn\u2019t producing the high rise that we have zoned for, that we want. And so the end result is we\u2019re not getting much development. We\u2019re not getting very much housing. We\u2019re not even getting much commercial development.<\/p>\n\n\n\n

Friedson<\/span>
The idea that we\u2019re forgoing revenue and that has a direct cost, that we\u2019re leaving money on the table, we\u2019re not leaving money on the table \u2013 the table doesn\u2019t exist currently. That is the issue. There is no development, there is no investment. At best, the table is going somewhere else. It\u2019s been shipped to another region of the country. It\u2019s been shipped to another county. The whole point here is to create the opportunity. You know, the idea that we would be serious about transit-oriented development, that we would be serious about meeting our significant housing targets to address the housing crisis that we currently face but wouldn\u2019t be willing to do anything about it is troubling. And we need a game changer. We need something to change the economic development path that we\u2019re on, we need something to change the housing path that we\u2019re on, that currently does not work. And I will say our housing situation, that is our version of a wall in Montgomery County. What we do with housing is a decision that we make on whether or not we want new residents here or not. That\u2019s the local government version of whether we put up a literal or proverbial wall to say who can and who can\u2019t live here, who we want and who we don\u2019t want here.<\/p>\n\n\n\n

Anderson<\/span>
Will the development happen anyway? And I think the market is not just speaking, it\u2019s screaming that the answer is no. Because you don\u2019t have to take any particular real estate developer\u2019s word for it, you can see what\u2019s happening in the real world. It\u2019s not just in Montgomery County, you can look at what market rents are at every Metro station in the region and you\u2019ll see that there\u2019s a few, particularly in Northern Virginia and in Bethesda, where rents can justify new high-rise construction there. Everywhere else, the answer is no, and that\u2019s not just true of Grosvenor, or for that matter Forest Glen, as you mentioned, it\u2019s also true of White Flint.<\/p>\n\n\n\n

\n\n\n\n

In considering these remarks, let\u2019s remember who is saying them. It\u2019s not County Executive Marc Elrich, who voted against numerous transit-oriented development master plans when he was on the council<\/a>. It\u2019s Casey Anderson, who has served on the Planning Board for nine years and chaired it for six; Hans Riemer, who has served on the council for ten years and is the current chair of its planning committee; and Andrew Friedson, who has emerged as the council\u2019s principal champion of economic development during his first term in office. These are not development critics as Elrich has been. Anderson in particular, and Riemer to a lesser extent, are two of the architects of the county\u2019s Metro-oriented land use policy and they are saying that it has failed.<\/p>\n\n\n\n

They are also saying that the only way to rescue it is through what may ultimately become the biggest application of corporate tax breaks in the county\u2019s history.<\/p>\n\n\n\n

Are they right? We\u2019ll discuss it in Part Two.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. For many years, MoCo has focused its land use and economic development policies on transit-oriented development. Since 2006, the county has adopted eight master plans centered on Metro stations, another four centered on Purple Line stations and one more centered on Corridor Cities Transitway stations. Another plan is in the works for … Continue reading Smart Growth or Corporate Welfare? Part One<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[151,2319,1820,1054,338,90,452],"tags":[1545,806,2335,2100,2259,872,1993,1513,1622],"class_list":["post-13836","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-andrew-friedson","category-corporate-welfare","category-development","category-economy","category-hans-riemer","category-metro","tag-adam-pagnucco","tag-andrew-friedson","tag-casey-anderson","tag-corporate-welfare","tag-development","tag-economic-development","tag-economy","tag-hans-riemer","tag-metro"],"jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-3Ba","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/13836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13836"}],"version-history":[{"count":3,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/13836\/revisions"}],"predecessor-version":[{"id":13839,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/13836\/revisions\/13839"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}