Wednesday, November 02, 2005

The Cost of Living in Stafford Co.

Stafford County, where home prices now average about $409,000, last night decided to nearly double its proffer 'request' per single-family homes to about $38,000, says this story in The Free Lance-Star. Board members said the increased was needed to offset rising costs for transportation and public education.

Also yesterday, a panel recommended that state officials pursue one of two proposals to add HOT lanes down I-95 to the Fredericksburg region, says the Washington Post. If the HOT lane project is ever built commuters from Stafford, Spotsylvania and the greater Fredericksburg region will be able to buy their way into a quicker commute to jobs in metro Washington. And then, with the certainty of their commute established, more people will want to move to Stafford, only they'll actually decide to move to neighboring Caroline or King George counties, where proffers are way lower. And so on.

5 Comments:

At 9:18 AM, Blogger Ray Hyde said...

OK, so as long as it is cheaper to drive than it is to buy a place with equivalent space close in, people will drive. What is new here?

A recent study concluded that increasing the density of urban areas will lower the home prices, perhaps as much as 15%. Surprise, surprise, people don't want to live in crowded areas. No wonder Arlington and Fairfax residents are opposed to more densification: it will hit them in the pockets.

By offering the convenience of HOT lanes authorities are recognizing that citizens want to be able to drive.

I wonder if Stafford authorities calculated what the effect will be on existing home valuations or the home owners affordability index. Apparently you have concluded that most people will decide that places still farther away are more affordable.

So, is the Stafford decision one that supports needed infrastructure, one that makes stafford homes more valuable, or one that actually sends their problems elsewhere?

When every county is pursuing a policy designed to beggar thy neighbor, they will eventually discover that such policies are a net loss.

 
At 4:58 PM, Blogger Jim Wamsley said...

“Surprise, surprise, people don't want to live in crowded areas. No wonder Arlington and Fairfax residents are opposed to more densification: it will hit them in the pockets.”

What???

Why are builders adding units in Alexandria, Arlington and Fairfax County? Are they are building them to see them stand empty?

I think they are building them because of market demand. What is missing is market pricing on transportation. If we had congestion pricing on all the roads congestion would disappear. Transit would be able to compete. Money would be directed to solving congestion. The builders in Stafford, Caroline or King George counties would find that their competition would be builders that are serving the market demand. Not those who are in business because of transportation subsidies, lower proffers and rising taxes.

 
At 10:08 PM, Blogger Toomanytaxes said...

Market conditions affect whether and how much housing prices will increase because of the higher proffer targets. There's an interesting study from California that shows builders have a harder time recovering mandatory development impact fees from lower-priced housing than from upper-bracket housing. Also, its more difficult to recover all of those fees as the housing market slows.

How far will the Fed raise interest rates and what impact will higher rates have on mortgages and real estate sales? Those are the interesting questions.

 
At 12:12 PM, Blogger Ray Hyde said...

I didn't say that developers would not build (or sell if they did), I said that existing residents were opposed to more densification, as in Fairfax Citizens for Responsible Growth.

If we had congestion pricing the congestion would disappear. But where would it go? People still want pizzas and haircuts, and jobs. They would then preferentially find them where congestion pricing did not exist. More sprawl.

Let's be honest. Transit can never compete on an apples to apples basis: locations served, speed, comfort, freight capacity, and price. It can compete in narrowly defined and artificially created markets, during rush hour, provided people will accept a lower standard of service.

We cannot solve existing congestion except by tearing down existing structures and moving the traffic elewhere. Practically speaking that means we cannot solve existing congestion.

The study I mentioned was supported by a group that promotes new urbanist ideas. Their argument was similar to one EMR has made: the solution to high urban prices is to build more housing there. My comment was intended to point out that these people are promotong ideas (for others) that those others (existing citizens) don't all accept. (TooManyTaxes for one.)

One reason they won't accept these ideas, aside from not wanting still more crowding and congestion, is that they now have evidence it will also affect their property values. This strikes me as a bad marketing ploy on the part of New Ubanists.

EMR has pointed out, as you have, that prices are high because of demand: people pay because they recognize the value represented by high prices.

Partly. There are more people competing for the available properties. There are other factors causing high prices:scarce land, the complexity of developing multifamily units, high transportation costs due to existing congestion, etc. People don't value high prices, they value low prices, and they will travel to get them.

I know a young woman who just moved out of her condo, a metro stop away from her job, for a townhouse farther away with more space. I also Know a man who sold a spacious home in McLean for and even more spacious home in Fauquier. Others have made opposite choices, but there is demand in all markets.

TooManyTaxes is correct: one reason proffers are popular is that they cause a capital gain for existing owners. They make low income housing less likely and they are a form of snob zoning.

Therefore, those people that don't value higher prices will seek out places with transportation subsidies (no congestion tax), lower proffers, and more space. They will trade more travel or travel to different places than that used by the high-cost, in-town buyers.

If we shut off the availability of rural land, we can't very well claim that causes more "demand" in town. If the demand for space in town is causing high prices, we can't meet that demand by making the spaces smaller, as the study shows.

I repeat my question is the Stafford decision one that supports needed infrastructure, one that makes stafford homes more valuable, or one that actually sends their problems elsewhere?

 
At 9:08 PM, Anonymous Anonymous said...

I'd pay $10k/year to the Commonwealth for a license to be able drive like a NASCAR driver. That would cut my commute time by half an hour. We need better educated drivers that are competitive yet respectable to one another to push & pull each other along the way. I belive cars are tough enough now to handle a little bump draft. If I did that, I believe that would cut even more time off my commute.

Of course I am being extreme. My point is that the beter the trained drivers - would a little team work ever hurt? - the better everyone would benefit. The government's role in this woud be better study of traffic congestion. Imagine a government sector that payed as much attention to oversight to its tracks during a race.

Better educated drivers, oversight, and community invovlement are key to solving traffic congestion.

 

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