Tysons Corner: No Place Like Home
Fairfax County leaders are pushing a policy of high-density residential growth near its Metrorail stops, including the planned Metro stations in Tysons Corner, says the WashPost. But that doesn't mean the private sector wants to go along - the developer of a major project there has a different vision for Tysons.
'The plan approved three years ago called for Lerner Enterprises to build 540 condominiums, but the company now says it will build as few as 300 pricier ones...."The county obviously does not welcome this [change], but our ability to force them to do something they don't want to do is very limited," said Board of Supervisors Chairman Gerald E. Connolly (D).So, if we give the market its way and let Tysons become a home to the very wealthy, that puts the rabble out in the countryside, where housing costs less. But then they'll still need to get to and from their jobs in the urban core, where, like it or not, most of the jobs still are and will be in the near future.
At stake at Tysons is Fairfax's fundamental philosophy about growth in a county that has more than 1 million people, thousands of available jobs and little housing left... The problem is that developers are not necessarily as keen as county planners on the notion of building large amounts of housing at Tysons, particularly for employees unable to afford $1.5 million condominiums.'
Unless we push those jobs out to the edges of the urban region, right? So we either force the private sector to do our bidding at Tysons, or in Loudoun (and beyond). Which is cheaper?
posted by Anonymous @ 6:21 AM
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12 Comments:
Oh goodie! A fight between the free market (Capatalism) and forces that wish to restrain it (Socialism). Are there any ringside seats available?
Development in Fairfax County is hardly "free market capitalism." For example, taxpayers are subsidizing land development & zoning services, along with building permits, by more than $31 million (fiscal 2003 through fiscal 2006). Taxpayers also fund the Economic Development Authority by $6.8 million annually; thus, relieving the real estate industry and related businesses from paying their own marketing costs. (The EDA's goal is to increase the percentage of real estate taxes paid by commercial real estate in order to benefit homeowners. However, the percentage of such taxes paid by commercial real estate has dropped from the mid-to-high 20s to around 17%. So much for taxpayer benefits.)
Also, unlike most localities in Virginia that negotiate significant proffers for infrastructure, Fairfax County's current Board of Supervisors collects less cash from builders than some smaller jurisdictions. (Interestingly, in the late 1980s, Fairfax County negotiated $100 million in transportation proffers in connection with the rezoning of Reston central business area.)
Unfortunately for Fairfax County taxpayers, the real estate industry is treated like subsidized national industries behind the former Iron Curtain. Bring on the free market!
Bob, (this has been re-written from the original post) I would argue that the reason developers can command $1.5 million per condominium in Tysons Corner is a matter of supply and demand. Government density restrictions create an artificial scarcity of development opportunities in Tysons. Lerner is merely maximizing the value of its investment in market characterized by tight supply.
The solution is not for the County to tell developers what to build, it's to loosen restrictions on development and re-development in an area where demand for housing is obviously very, very high. An increasing supply of housing there will cut into the premiums that developers like Lerner can charge.
If you read the WP article, you find that the “Smart Growth” proposal for 540 condominium units was a wolf in sheep’s clothing. The actual “Dumb Growth” proposal from Lerner Enterprises was for a minimum number of residential square feet. Smart Growth looks for a balance of households, employment, and sales and services, not square feet.
So this is what it comes down to: force. This is an idea that is an anathema to the way we run our society.
If you want someone to do your bidding, then you should plan to put them on your payroll. Then, and only then, do you have standing to ask (and to care) which is cheaper. If the government wants to provide positive incentives, and if the people who elect the government are in line with what the government wants, and if they are willing to raise the taxes necessary to provide the incentives which are ostensibly for their own benefit, then go for it.
Very seldom will you be able to sell that plan, because most people understand it will wind up being more expensive than the alternative.
On the other hand, many of those jobs are government jobs, and we can put them anywhere we want, without exercising force. We can create telecommuting off site offices for a start, and move, split up and disperse government offices over time. Private sector offices that support and do business will voluntarily follow suit.
The evidence is in that Metro cannot and never will pay its own way, unless you credit it with the development value it causes. If you do that, then you should also credit roads with the development value they cause. And Metro has done nothing to reduce congestion, either. So try this, add a similar amount of public investment in the countryside and then compare the costs and benefits. You could use the investment to move the offices, for example.
Fairfax is going to need more schools to handle the influx of people if the Fairfax philosophy is fulfilled. Where are those schools likely to cost less to build and operate?
Bacon is in favor of charging congestion fees to force people to change their behavior and live closer to where they work, never mind that work travel is only 20% of the problem. I suggest you plan to subsidise their rent to make it comparable to the cost of their present rent plus travel, fix the inner city schools, build a bunch of open space in the cities, and then compare costs.
I don't have any doubt whatsoever that building in Loudoun and beyond is cheaper, under present conditions. One alternative is to pay the landowners out there for environmental services or whatever in order to raise the value of their properties and make it harder and more expensive for developers to buy. If open space is the issue, and if you can convince the population to pay for it, knock yourself out.
EMR thinks it is OK to force people off their property in favor of more suitable development by other private parties to prevent obscene profits BY THE ORIGINAL OWNERS, as if the new owners won't also make obscene profits.
If you want to talk the free market talk then you need to walk the free market walk. If the county wants 540 condominiums, they can buy the property and put up public housing. We know where that leads.
What has happened is that by restricting the number of homes built, the Fairfax Philosophy has created a market for $1.5 million condos. Surprise! We complain about big developers, but they are caused by FORCING the little guys out of opportunity. I'd like to build a little modest home for someone who wants to live in the countryside and have a horse and a place to ride, but I am FORCED not to do it.
I don't want to see the countryside sprawled all over either, but I'm unwilling to apply force to get my wish. When someone says "we have to put our foot down", I want to kick him in the shin. When we are willing to pay for what we want, then we have some hope of getting it, without using FORCE.
So, when would you like to raise taxes?
Here is an example from another state with similar problems from the San Jose Mercury News.
"State Sen. Tom Torlakson says he is no longer pursuing controversial legislation that would make it easier for areas around transit centers, such as BART stations, to be declared ``blighted'' in order to qualify for redevelopment dollars.
Torlakson, D-Concord, said last week that he is working with Sen. Don Perata, D-Oakland, on proposals to instead help finance high-density transit-oriented development with state bond money."
It works better if you are willing to pay for what you want.
It's like Bacon says about other options: no single effort will solve the problem, the qustion is how much of the problem you can save at what cost. You don't have to apply force to move government offices, but wouldn't the contractors follow?
Businesses agglomerate together in order to reduce their costs or achieve certain economies from being close to each other. But this causes enormous social costs because we have to build infrastructure to serve their needs. Why not charge for "business congestion" the same way we are proposing to charge for traffic congestion? Wouldn't this encourage them to change their behavior? Why should we let them dictate what our commmuting behavior should be, or how to efficiently place our schools, arguably our biggest social cost?
The Pentagon isn't on wheels, but if it was it might make a lesser target. Would it cost less to make it in 25 pieces and spread them around or would it cost less to move the 25,000 homes of people who work there? Who knows?
Metro doesn't pay its own way and it does not reduce congestion. We have thirty years of evidence. We have studies to show that cost effective mass transit would require that coverage be substantially reduced. We have studies that show that cost effective transportation systems, combining all modes, would result in some kind of tolls or congestion fees in addition to the other forms of support. It would result in about a 5% increase in auto traffic in order to achieve optimum net benefit costs for the system.
I didn't say that I-95 shouldn't pay its own way. But if Metro had to pay its own way and I-95 had to pay its own way, if they had their costs and benefits fairly examined, much of Metro would disappear tomorrow and I-95 would still be busy.
Metro does allow more people to travel to the city than can be acommodated by the road system. The question is whether this marginal increase is worth the cost. Doesn't Metro increase sprawl as much as roads but at a higher cost?
Since many Metro riders drive to the station, it doesn't even reduce auto trips, but simply changes their destination. Wouldn't it make more sense to take those 20 pieces of the Pentagon and put them where the Metro stations are now?
That way, instead of driving to the Metro and getting on a train to the Pentagon, They would drive to the Metro and be at the Pentagon. Then, instead of having 25,000 people roaming the halls of the Pentagon, they could hop on the Metro to go from D-wing to C-wing, or they could telecommute. The same total number of trips to and within the office would be dispersed in space and time, resulting in less congestion.
What I do say is that we don't know anywhere near enough to fairly allocate the costs. How much should hybrids pay, how much for trucks, how much for commuters and how much for tourists, how much for businesses, how much for developers, how much for old line fixed income residents?
As TMT said, "...there is no consensus as to the purpose of Virginia spending tax dollars and user fees on transportation resources...? and "even if we could agree on the purpose(s) for state transportation projects, how do we know if and when we are achieving those goals?"
Since this blog is supported by PEC, I work under the assumption that the first goal is to preserve open space, the second is to reduce pollution, the third is to keep taxes low. Other than that, it appears to me that any other considerations such as how people live, what congestion or opportunities they have, whether they are jammed shoulder to shoulder on a train, doesn't matter much as long as they conform to what PEC thinks is desirable.
Unless you want to set the priorities in some other order, I don't see that open space is a straw man: it is a criticl resource we need to protect and share. I'm in favor of keeping open space and reducing pollution, too, but I'm opposed to force, in favor of fairness, and I recognize that a better society costs a lot of money.
As for speculation, now you are just trying to make me angry. I'm surrounded by dozens of families that have been on their farms for generations. At one time they made a modest living that way, but those times are gone. They are interspersed with large new homes built on large lots that were once farms, and they are populated with people who now believe we need to save this prime farmland. Those large homes on large lots are interspersed with service districts where other new residents have been placed by the authorities in charge of opportunity.
The arrival of these large homes and service districr residents has further increased the value of the remaining land, making farming even less possible. The increase in land value has nothing to do with the remaining landowners being there: to call them speculators is mean-spirited and unfair.
According to numbers supported by PEC they are already paying taxes at 300% of what they get in services, and have been for years. To now say that other taxpayers, those new people in their large homes, are subsidizing the farmers only valid escape strategy strikes me as not only putting the cart before the horse, but hitching him up bass ackwards.
Calling what is happening to these people speculation just indicates a total lack of imagination and understanding of what is really going on. Some of the farms, that those fine large homes sit on parts of would still be here had they not been effectively forced to a) subdivide all at once, and b) sell only large lots. Those rules were put in place under pressure from PEC.
The large lot strategy is a failure as demonstrated by EMR. Now we need a better plan that offers the farmers an exit strategy that doesn't rob them blind just because they happen to be the minority that managed to hang on to their open space the longest.
I'm open to any free market suggestions you may have. My suggestion is that if you want to have farmers, then you need to find a way to pay them enough to stay farmers.
Who are you going to sell to, if you have no development rights, or very limited ones? Your choices are to sell it to someone who is so wealthy that they don't have to care about their assets, which is a pretty small market. Or you can sell to a developer who has the resources and is willing to take the risk that he can get a zoning change. In this environment, even if he is willing to pay the full cost of infrastructure, providing we can agree on what that is, the answer is still likely to be no, so that is a small market also.
If you are zoned agricultural, and no other activites are allowed, then you are stuck in a fixed income environment, surrounded by development that, as you point out causes your taxes to go up. At present, every farm in the county is losing money, statistically speaking. It is almost not a question of highest and best use, its a question of no use.
That simply cannot continue indefinitely.
The way it is set up now, the only way out is 1) The entire farm will be subdivided at once 2) it will turn into large homes for the wealthy on large sprawling lots.
I agree with EMR that this is not the desired result. The desired result is to keep the space open and not build on it. But if the taxes keep gong up and the income doesn't that gets harder and harder to do, and more and more of the burden of saving other taxpayers money lands on the fasrmers shoulders.
There are no utilities here. People provide their own well and septic. Whether they build here or in town, the same school seats will be required, which is the single largest cost.
It is exactly as TMT has pointed out: there is a tug of war between rights. The county previously assigned building rights, and later took them away. How can you say that the owner has not lost an asset, particularly since the county is now willing to buy precisely the same assets? If the owner is denied the highest return, how can you say that he has not lost an asset?
True enough, if it turns out that other taxpayers pay a higher price because of his activities, then they are losing an asset also. If that is the only argument, then the only thing that is necessary to allow construction is a proper allocation of the costs of one compared to the costs of many, but that has never happened. At a recent public meeting a Fauquier supervisor admitted he didn't know how that was done.
Again, finding out what the proper allocation of costs and rights are does not produce the desired result. The desired result is to prevent the building.
So it is your argument that other taxpayers fund the infrastructure that is the red herring here.
And it isn't even a good argument. It is based on a cost of community services argument that is widely recognized as flawed. Economists at the Colorado School aof Agriculture and rural development have concluded that "One cannot say as a matter of principle that rural development represents a net tax loss."
Furthermore, if I buy your argument, every existing house has its infrastructure subsidized, because almost no house pays its full cost, according to the cost of community services argument.
What is the value or fairness of one existing subsidised taxpayer saying to another, "You can't be subsidised."?
And if the taxpayer he is talking to happens to be a farmer who has been paying 300% of his costs for some number of years, and is not subsidised according to the cost of community services argument, then aren't you simply telling him that he is not to be allowed the same asset that every other taxpayer has (the subsidy everyone else gets)? Isn't that the same as taking an asset?
If you can't see how unfair what is happening to landowners is, then you really don't understand what is happening. Even TMT gets it. But even if you fix that unfairness and ration the costs correctly, it doesn't provide the desired result - keeping the land open.
There are only three ways that can happen: the land is held by people who are so rich they don't care what happens to their assets, the land is purchased by the public and everyone can enjoy it, or the people who want to keep it open provide the income to keep it open.
It's just like the corner drugstore. If you don't spend enough money to keep it open, pretty soon you have a CVS, and you will probably have to drive there.
So where is the money going to come from? It can't come from the farmer, it has to come from somewhere else: the rest of the community. You are either going to subsidize the development, subsidise the farms, subsidise the purchase of parkland, or get a bunch of homes for the very rich.
I'm assuming the goal is to keep the land open: but if the real goal is to avoid paying for what we want, then tell me I'm wrong.
But if we avoid paying for what we want, then the rich people who want those big homes and fine lots will get them at a discount, and we will have subsidised them. Eventually they will petition for more building rights: to subdivide or add "guest houses". Maybe our children can live there.
Believe me when I tell you, I'm on your side. Don't get wrapped around the axle because we disagree. I want the same things you do, but you are proposing policies that guarantee you won't get what you claim to want.
"A perfect example of this can be seen in Toronto. Until 1976, Toronto was a moderately-sized city that served as the financial capital of Canada. Permanent change began when a seperatist government was elected in the Province of Quebec, which caused a flood of multi-nationals who had for years called Montreal home to flee that city for Toronto. Changing immigration policies in the 1970's also contributed to population growth.
Today, Toronto has become a city bursting at the seams, with scant ability to pay for the infrastructure projects that can adequately keep pace with its dizzying growth. It now has to deal with a number of problems that could be crippling if not addressed. Although property taxes are much higher in the city than in surrounding areas, the city still seems plagued with pot-holed roads, as well as an incomplete mass transit system. The city is faced with a looming crisis in waste management, and to top it off, summer smog is making this city in the north seem more like Los Angeles.
Commuting has become a nightmare, as real estate prices in the city core force workers to live in suburbs that can impose a 3-4 hour daily commute - a situation that places more pressure on people to create a reasonable work-lifestyle balance.
It seems almost predictable then that a report published by the Canadian Urban Institute indicated that a Toronto is now facing stiff competition by neighboring communities who are luring companies away from the city. Although a disproportionate property tax burden is the main driving factor, there are other contributing factors as pointed out by the Globe and Mail:
A large chunk of the higher tax bill is due to the province's education tax, which is set at a higher rate for businesses in Toronto than it is for those elsewhere. The report calls on the province to level the playing field across the GTA.
But the study, which was funded by the Toronto Office Coalition, an association of owners and tenants in high-end offices in the city, also cites other factors. It says traffic congestion, and the lengthy process required to get a new building approved, are also driving away new development in Toronto.
In the end, it always comes back to the same question: how long is this sustainable before people start realizing that fundamental change in organizational configuration is required to allow things to move forward?"
http://gillinc.blogspot.com/2005/06/in-toronto-congestion-leads-to.html
Some people apparently have a different idea of what represents fundamental change.
Interestingly, some special interests groups still point to Toronto as an example of what good transit policies can achieve: policies which many now believe have failed or are failing. For example Toronto is now reducing service and raising fares for its bus services.
Land in and of itself - without access is not worth much.
Go buy some land up in Canada where you have to fly in to it.
So, it's bogus to claim that land-owners have "righs" especially development "rights".
They have a perfect right to sell but the value of their property depends, in fact, on infrastructure and services and those are paid for by people other than the landowner.
No one is gauranteed a certain return on their stock portfolio and similarily no land-owner has any right to expect that it is the government and taxpayers responsibility to guarantee the provision of infrastructure and services to enhance the value of their land.
This is the fundamental argument about roads - which do heavily influence the value of property because increased/better access is clearly affects it value.
If you really wanted a fair system then calculate truly the costs of infrastructure and services - both capital and operational to serve those who would seek to live on developed land, assign them the fair and equitable costs and see what happens to the value of land and in particular to land speculation.
People ARE free to live where they want and work where they want - but they fundamentally should bear the equitable costs of the consequences of those decisions.
If someone wants to use 100 miles of road surface every day - there
IS a real cost to that not only in maintenance but in providing them a "spot" on that road - road capacity.
The reason we're behind on roads is simply because we have failed to allocate actual costs to those that use them. People now drive longer and further and they've eaten up every bit of excess capacity that ever existed and paid not enough for it to be able to replace that capacity.
This is really all about money and cost avoidance - nothing more.
The landowner did not establish the rights. The government did. Then the government changed the rules. So a guy goes and does his homework and buys a piece of property that the government tells him in writing that he can subdivide 10 times. He pays a price based on that information.
Then the county changes the rules and says nope, you now have two development rights.
This is entirely different from your stock market analysis. It is one thing if the value of your stock or land goes up or down. It is quite another if the government takes 80% of your stock away. You could make the argument that government changes rules all the time that might affect the value of your company and your stock. But in that case it affects all stocholders equally.
In the case of land, you live in a house that was already subdivided from someplace, so if the government changes the rules it doesn't affect you at all but it affects other stockholders by 80% of their value.
Sure, your land still exists, and so does the company. The company and the land still have the same value. But the value of the development rights is independent of the land. But now that the government controls 80% of your stock or 80% of the development rights, then the value you hold the value you hold is less.
The government recognizes that the development rights have value independent of the land, because they are willing to buy them, in some cases. When the government first established the building rights, it was actually a reduction in rights from the previous condition where you could do as you pleased. Having once established the rights and having allowed commerce to proceed on that basis, the government is honor bound to stand by its word.
In my particular case, the state took sixty acres of land and ran 6 lanes of highway and an interchange in. Now you are telling me I can't build because I haven't contributed enough to roads, or because there aren't enough. In my case I have plenty of road availble, at least here. 40 miles away, there are traffic jams, but why is that my problem? This proves that at least in some cases roads are not the issue, we just don't want growth.
According to commonly used estimates only the most expensive homes pay enough in taxes to suuport their infrastructure. So you are entirely correct in saying that we have failed to allocate the costs to those that use them, and that is the people who are already here.
If you now charge the full costs to each new user, he is then subsidising your previous failure to pay your full costs. But we don't charge the user, we charge the big bad developer and only for new capital costs. And once the home is sold, we set the the tax rate at a level that is too low to provide and care for the services it uses.
Blaming the new guy for ALL of the "increased" cost is clearly unfair because some of the increase in demand is rreally pent up demand that we existing dwellers caused and didn't pay for.
The same people that say homes don't pay their full costs also point out that farms pay 3X their costs. I would be perfectly willing to buy your argument that people should be charged their full costs, because it would cut my costs by 2/3. On the other hand, since I a(or my family) have been paying 3x lo these 200 years, and since the state took sixty acres for roads, I have actually a very hard time believing that I haven't already given my share to support infrastructure.
What is really going on here is only partially for roads and infrastructure, after all we are already paying for most of it, it's just the unfunded portion we are arguing about. And all of us contribute to the unfunded portion. It is really because we don't want to see the land gobbled up, and I don't either. But I submit that punishing the people who have been most successful in keeping the lan the longest is NOT the way to encourage them to continue doing it.
Around here the unfunded portion is about $2100/year. Even if we don't build a single new home. That is the amount extra we would have to pay, just to take the present inequities out of the system. It is grossly unfair to hammer one group when everyone isw underpaying.
The development rights were established by the government. To say that no loss is incurred when they are taken away is bogus. It is not the rights that are bogus, they are real and have a tradeable value.
Suppose you live on a block that is all duplexes. You have inherited a house that was occupied by a large family so it was never duplexed. Now you get divorced from your wife, so you decide to divide the house and duplex it, but the county says no.
Your value as two half houses is more than your value as one house, which you now can no longer afford to keep.
The same people are still there and yet you are denied the same activity that all your neighbors have already conducted over the years, simply because you are a new development. The guy who buys a new house doesn't materialize from nowhere. He is already out there driving around etc. So just like the Duplex there is no new person involved.
Except that, as TMT points out, the government is simultaneously going out of its way to attract new people and jobs. You need to blame the government for creating the new demand, not the guy who owns the land. He didn't create the demand, but as a result of it he can no longer keep his land. He eventually MUST sell, he has no choice unless he has unlimited income.
That's why all those houses got duplexed.
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