Category Archives: Land use & development

Map of the Day: Three Virginias

Source: StatChat blog

Source: StatChat blog

The statistical wonks with the StatChat blog love to depict data in interesting ways. Recently, Luke Juday divvied the Commonwealth into thirds divided by density. In the map above, the yellow mass shows the least densely populated census tracts (fewer than 736 people per square mile), accounting for 94.8% of the state’s land mass. The light green census tracts show the middle third (between 736 and 3,562 per square mile), accounting for 4% of the land mass. Dark green (more than 3,562 per square mile) accounts for 1.2% of the state’s land area. Another way of looking at it: 2/3 of the population lives in 5% of the state’s land mass.

aerial_belmont

The Belmont neighborhood of Charlottesville

“High density” by Virginia standards doesn’t look like Manhattan. Take the Belmont area in Charlottesville. As Juday observes, it’s a neighborhood of mainly single-family houses with a few apartment buildings and stores thrown in. Average density: 5,700 people per square mile.

Writes Juday: “The homes occupy smaller lots and are arranged efficiently via a street grid. The grid makes the area convenient for walking by minimizing travel distance rather than driving time. While most trips in a neighborhood like this will still involve a car, the distances traveled by the cars are shorter. Parking is shared and more dispersed, further conserving space.”

Bacon’s bottom line: Higher density in Virginia doesn’t require packing people into apartment complexes and forcing them onto mass transit. What it takes is building more walkable neighborhoods like Belmont. We could save a lot more farmland, woodland and wildlife habitat. We could reduce expenditure on infrastructure dollars (or, conversely, provide better infrastructure for the dollars we spend). We could reduce driving, energy consumption and CO2 emissions. And we don’t have to enact a slew of new laws and regulations that add more bureaucracy and constrict economic liberty. We just need to remember revive an arcane knowledge — how to build neighborhoods like Belmont — that we once knew.

— JAB

Your Tax Breaks at Work

terraces_at_manchester

Terraces at Manchester

by James A. Bacon

The Terraces at Manchester, a 148-unit luxury apartment across the river from downtown Richmond, opened in August. Its amenities include views of downtown and the river, an outdoor pool, a club room, a sky lounge, a rooftop dog park and, of course, an active urban lifestyle. Its cheapest apartment, with a small bedroom, a small bathroom and a living-kitchen area, rents for $1,200 per month.

Thank to an “affordable housing” ordinance enacted in 2014, the developer was able to pocket $2 million in real estate tax breaks over 10 years by renting 15% of the units to individuals making $41,000 a year or less. The company isn’t required to offer reduced rents in exchange for the breaks.

poolNow City Council has activists’ remorse. Councilwoman Ellen F. Robertson, author of the measure, wants to close the “loophole” she designed in the first place. “Once we realized there was a loophole, we decided to revise the legislation to make it more restrictive,” she was quoted as saying by the Richmond Times-Dispatch. “It was unfortunate that we did have a developer that didn’t operate in the true spirit of the law.”

Yeah, right, it was the developer’s fault! He read the fine print. Shame on him!

“We fully complied with the ordinance,” said Robin Miller, one of the principals in the project. However, he added, after the project’s use of the tax breaks were reported last month, his staff has reduced rents for some tenants.

Isn’t that special? Tenants making up to $41,000 (more than the median household income for the City of Richmond) who voluntarily signed a lease, presumably because they found the cost-to-value proposition attractive, suddenly get a break in their rent. Well, that certainly promotes the cause of affordable housing for the city’s lower-income residents!

So, what’s Robertson’s fix? Here’s the T-D’s explanation:

Robertson … said her proposed changes tighten eligibility requirements for developers seeking to qualify. Among the changes the City Council will consider: requiring developers to charge rent proportional to a qualifying tenant’s income and lowering the maximum salary that a qualifying low-income tenant can make up to $31,200, which is 60 percent of the area’s median income.

If the program changes are adopted, the most an individual tenant could be charged is $780 monthly.

Charge rents proportional to the tenant’s income? That sounds like a winner. Imagine how tenants will game the rules on that one (with landlords doing a wink, wink, nod, nod). Say an unmarried couple wants to live in a project qualifying for the tax break. The partner with the lowest income rents the apartment in his or her name, qualifying for a rent reduction. Then the other partner moves in, too, and pays all the utilities and groceries. Trust me, this fix is ripe for abuse.

Here’s an idea: Maybe City Council should stop trying to “fix” the housing market and start acquainting themselves with the law of supply and demand. Instead of passing tax breaks and incentives, maybe it should loosen up zoning restrictions against building new housing stock. If the supply of housing increases faster than the demand, prices will fall.

But what happens, I hear the economically illiterate ask, if builders just build luxury apartments that generate the biggest profits?

Here’s what happens. People moving into the luxury apartments and condos presumably lived somewhere else. They put their properties on the market (or free up apartments for someone else to rent). Someone else moves in, and they create vacancies where they formerly lived. Ultimately, vacancies open up in the lower end of the housing market, creating options that poor people didn’t have before. Here’s the really astounding thing — it doesn’t take any tax dollars, and it doesn’t herd poor people into crime-ridden projects.

Unfortunately, a fostering a free market in housing doesn’t help the politicians. After all, any politician worth his or her salt gets re-elected by “doing something” that proves they “care” (regardless of whether what they do actually works). Even scarier for politicians, their low-income constituents might move out of their district — maybe out of the city entirely — to be replaced by affluent constituents living in luxury apartment who, gadzooks, might vote for someone else!

Sadly, in the war between economic logic and political logic, political logic usually prevails. As the T-D article concludes, Robertson’s proposal is on Council’s consent agenda, an indication that it is considered “likely to receive unanimous approval.”

Putting a Price on the Priceless

jamestown_dig

Jamestown archaeological dig site. Photo credit: Daily Press

by James A. Bacon

In its high-stakes effort to win regulatory approval to build a 500 kV electric transmission line to the Virginia Peninsula, Dominion Virginia Power proposed in December to spend $85 million to mitigate the project’s impact on historical and environmental resources. That’s over and above the estimated $155 million cost to build the 7.7-mile line, which Dominion says is critical to maintain a reliable electric supply to nearly 500,000 residents from Williamsburg to Hampton.

Measures in the draft Memorandum of Agreement submitted to the U.S. Army Corps of Engineers would do nothing to alter the visual intrusion of the 17 towers crossing the James River near Jamestown. But it would allocate $52.7 million to underwrite archaeological work and other improvements in and around Jamestown Island, $15.6 million for water quality improvements, $12.5 million for landscape and battlefield conservation, and $4.2 million to acquire wetlands, restore shorelines and preserve historical resources nearby.

Dominion’s proposal is being circulated for feedback, and there is no guarantee that it will be accepted by the Army Corps, which  is charged with considering the adverse impact of the project on wetlands and historic assets. In the view of some conservationists, nothing can make up for the cluttering of view sheds in and around Jamestown, one of the most important historical sites in American history.

Whatever the Army Corps decides, the MOA still represents a watershed in Virginia regulation. It would be one of the largest sums, perhaps the largest sum, ever proposed to offset the impact of a Virginia utility project on environmental, historic or cultural resources.

“We’ve not conducted an exhaustive file search, but [I] suspect that few final mitigation proposals to resolve adverse effects to historic resources associated with a Corps permit have exceeded a total cost of $85 million,” says Mark W. Haviland, chief of public affairs for the Army Corp’s Norfolk office.

Few spots resonate in the Virginia psyche like Jamestown does, but the state is chockablock with historical sites, cultural sites, landscapes, wildlife habitats and view sheds that many would like to preserve from development. As Bacon’s Rebellion documented recently (see “Clash of Competing Values“), these intangible resources have become so ubiquitous that it is increasingly difficult for energy companies to build gas pipelines or electric transmission lines without crossing multiple assets.

Decades ago, routing pipelines and transmission lines wasn’t the complex task that it is today. It was a relatively straightforward exercise to calculate the fair-market value of farmland, timberland and houses to compensate landowners for lost economic value. But the determinants of economic value for land have evolved. Increasingly, Virginians in rural areas purchase property for the views they offer or the natural habitat they conserve, not for their ability to extract income. Moreover, various public and private entities are identifying habitats and view sheds as worth protecting — historical sites and districts; federal, state and local parks; scenic highways and scenic rivers; private conservation easements and public conservation zones;  and wetlands, wildlife habitat and more.

Can a price tag be put on an acre of habitat for the rare Cow Knob Salamander? How much is it worth to preserve the view from James Madison’s library window at Montpelier? What is the value of an obscure Civil War battlefield such as the indecisive 1864 cavalry clash at Samaria Church in Charles City County?

Much of the conflict between utilities and conservationists stems from regulators’ inability to value intangible assets that loom large in nearly every project, thus making it impractical for utilities to pay meaningful compensation. Dominion’s proposal is significant because it attempts to offset the adverse visual impact on Jamestown-area historical resources by funding the creation of non-visual benefits.

Both utility executives and their foes acknowledge the trade-offs between economic growth, jobs and profits on the one hand and hard-to-value historical, cultural and environmental assets. The great public policy question is what weight should be given to one and what weight to the other.

For years Virginia was a “a manufacturing powerhouse,” says Margaret Fowler, co-founder of the Save the James Alliance and one of the more outspoken foes of the Surry-Skiffes Creek transmission line project. “We were undeveloped, we needed power, we needed factories. Industrialization happened. At some point … we became sensitive to what we were losing — air quality, water quality, visual beauty. Has the pendulum swung too far? I don’t think so. But I understand the dilemma.” Continue reading

The Great Inversion Continues Apace

Renovated house for sale in Church Hill for $310,000. Twenty-five years ago, I purchased a house on the same street about seven blocks away for $28,000, renovated it to comparable condition and sold it a few years later for $110,00. I should have stayed in Church Hill!

Renovated house for sale in Church Hill for $310,000. Source: ZIlllow

by James A. Bacon

The Richmond metropolitan economy has been an also-ran since the 2007-2008 recession, so it came as some surprise to see that Zillow, the online real estate marketplace, listed our burg as the expected 4th hottest housing market in 2016.

The bizarre thing about the ranking is that forecast home value appreciation of 2.2% was half that of the other Top 10 metropolitan regions (Denver, Seattle and Dallas-Fort Worth led the way, with anticipated appreciation of 5% of more). But Zillow included unemployment rate and income growth in its metrics of “hotness,” and by those measures Richmond scored pretty well. Anticipated income growth of 1.2% was the highest of the Top 10 metros by a small margin, and unemployment of 4.4% was in the middle range.

Of greater interest was Zillow’s dive into real estate sub-markets. (I couldn’t find these numbers online, so I quote them from the Richmond Times-Dispatch story.) Despite horrendously bad schools and a lingering crime problem, real estate values are booming in the city. Predicted performance for selected neighborhoods:

Church Hill — + 6.7%
Carytown — +5.3%
Fan — +4.8%
Barton Heights — + 4.7%
Forest Hill Terrace — + 4.6%

If neighborhoods in Richmond’s urban core are hot, values in outlying neighborhoods likely are growing slower than the 2.2% average rate. Thus, despite record low gasoline prices (the lowest in decades, on an inflation-adjusted basis) that reduce the cost of commuting, people still want to live in walkable communities in the metropolitan center.

The Great Inversion — the shift in preferences for walkable communities in urban cores — continues apace.

Update: Speaking of the Great Inversion, how about this news — GE is relocating from the leafy Fairfield, Conn., suburbs to downtown Boston. Quoth the Wall Street Journal: The move to Boston’s waterfront is “a bet that the talent it needs is better recruited and groomed in a city than an office park.”

It didn’t hurt that Boston offered $145 million in incentives, including $25 million break in city taxes and $120 million in state infrastructure spending such as roads and parking. But New York, which recruited GE heavily, reportedly offered even more. The incentives influenced which downtown urban setting GE selected, not whether to stay in the ‘burbs or not.

What Virginia Millennials Are Looking For

indicators

Source: Wason Center for Public Policy. Click for legible image.

by James A. Bacon

Three out of four Virginia Millennials (belonging to the 18- to 36-year-old age cohort) are largely satisfied with the quality of life in their communities. But local quality-of-life indicators often fall short of what Millennials are looking for, and many are open to moving to other parts  of Virginia or even to other states. So finds a new survey of 2,000 young adults in “Virginia Millennials Come of Age” by the Wason Center for Public Policy at Christopher Newport University.

The survey covered a wide range of topics, including political involvement, civic engagement, personal financial outlook and news sources. But of particular interest to this blog are the questions relating to quality of life. Given that creative and educated young adults contribute disproportionately to a region’s innovation and vibrancy, community leaders need to understand the factors that attract and drive them away.

Judging by the metrics selected, Millennials in Northern Virginia are most satisfied with the quality of life in their communities (despite the traffic!), followed by Hampton Roads. They are less satisfied in the Richmond region, and least satisfied in South/Southwest Virginia.

The metrics include: access to public transportation, walkability, proximity to work and/or school, proximity to parks and shopping, a mix of housing, good public schools, safe neighborhoods, proximity to family, a diverse population, and having enough people of their own age. (Those are all reasonable metrics, but I would argue that the list is incomplete and, therefore, gives an incomplete picture. How about the cost of living? Or the quality of the food scene? Or proximity to arts and culture? Or opportunities to engage in the community — a factor rated highly by Millennials, according to the survey?)

The survey asked respondents to evaluate how important these quality-of-life indicators are when thinking about moving somewhere new, and how well each one describes their present community. The "gap" represents the difference between the two.

The survey asked respondents to evaluate how important these quality-of-life indicators are when thinking about moving somewhere new, and how well each one describes their present community. The “gap” represents the difference between the two. (Click for larger image.)

Wason didn’t analyze the data this way, but I find it interesting that proximity to amenities — work, schools, shopping, entertainment, parks and recreation — all ranked in the top half of the list. The desire for compact communities is reinforced by the identification of “walkable areas” as a priority. It stands to reason that neighborhoods in which amenities are “close” are also more walkable.

Virginia policy makers should pay close attention to this finding as they think about transportation and land use priorities.

The desire for proximity and walkability does not translate into a wholesale endorsement of the Smart Growth agenda, however. The desire for a “range of transportation options” — which presumably includes mass transit — was second lowest on the list. The perceived gap between the ideal and reality was negligible.

Likewise, the desire for a “mix of types and values of housing” was only middling. However, I’m not sure that most respondents had a clear idea of what the question meant. Did they think it referred to communities in which housing was integrated with offices, retail and other amenities — the Smart Growth desiderata? Or were respondents focusing on the importance of “affordable” housing? Two very different things A follow-up survey might delve deeper.

Also interesting is the fact that a “diversity of people in the area” ranked lowest on the list. That may not be a topic that preoccupies the average Millennial as much as it does the academic community.

The old-fashioned values of safe neighborhoods and good public schools also rank high. (It would be interesting to see how Millennials without children compared to Millennials with children in evaluating the importance of public schools. I would be willing to wager that parents consider school quality a lot more than singles do.)

All things considered, the survey results suggest that Virginia lawmakers and civic leaders have cause for concern if they want the state to remain an attractive location for young people. Virginia Millennials are highly mobile, with 65% saying they are thinking about moving within the next five years. Of those, 38% say they would consider moving to somewhere else in Virginia, and 27% somewhere outside of Virginia. Within Virginia, Northern Virginia is by far the most popular destination. Regions in the rest of the state have their work cut out for them.

The New Virginia Way

Virginia Beach Mayor Will Sessoms

Virginia Beach Mayor Will Sessoms

In the cause of chronicling the endless pageantry of corruption and abuse of power in Virginia, we turn today to an article in the Virginian Pilot:

[Virginia Beach] Mayor Will Sessoms pleaded no contest Monday to a single misdemeanor charge of violating the state’s Conflict of Interest Act. The remaining four charges against him were dropped as part of a plea agreement with a special prosecutor.

The deal included prosecutor Mike Doucette’s recommendation that the mayor not be removed from office and that Sessoms make a donation of $1,000 to the Virginia Coalition for Open Government. A $500 fine – the maximum penalty for the Class 3 misdemeanor – was suspended. …

Doucette said he recommended that the mayor not be removed from office because he didn’t believe the circumstances called for it.

The no-contest plea stemmed from a 2011 incident in which Sessoms voted for a proposal by Madison Landing LLC to rezone a site to build 14 condominiums in Virginia Beach. While the request was unanimously approved, Sessoms cast his vote without disclosing he had served as trustee on two loans obtained by Madison Landing in the months before the vote.

For a recap of Sessoms’ conflict-of-interest embroglios, click here.

Bacon’s bottom line: Once upon a time, shady politics used to be the province of big-city and rural-courthouse political machines. But suburban skullduggery has been on the rise ever since big-time real estate development raised the stakes in Virginia’s fast-growth counties. There is huge money in real estate development, and a thicket of laws, regulations and subsidies (in the form of transportation projects that create value for newly developed land) combined with aggressive NIMBYism creates incentives for developers and their political allies to take short cuts. It’s usually difficult to spot the conflicts of interest because so many real estate entities are privately held partnerships with minimal requirements for ownership disclosure.

We don’t need more laws and penalties, but Virginia could use more transparency. One good place to start would be to require real estate partnerships to publicly file ownership interests.

Richmond Boldly Plotting a Post-19th Century Mass Transit System

The truth comes out: Richmond's bus system still organized around century-old street car routes.

The truth comes out: Richmond’s bus system still organized around century-old street car routes.

by James A. Bacon

The City of Richmond has procured funding for a study to see if GRTC Transit System bus routes can be organized more efficiently, reports the Richmond Times-Dispatch. The study will bring in the Jarrett Walker + Associates consulting firm that showed how rearranging the route structure could triple the frequency of bus service in Houston without requiring additional funding.

“The bus service we’ve been running off of was designed on the basis of the old streetcar lines in Richmond and many of these things have not been looked at since then,” said Ben Campbell, an organizers of the advocacy group TVA Rapid Transit.

At last, a sign that the mass transit in the Richmond region is moving into the 20th century! Given that it’s now the 21st century, we still have a ways to go. But, hey, it’s progress.

One goal of the study will be to adjust routes to connect with the planned bus rapid transit system, the Pulse, that will run along the Broad Street corridor between Rocketts Landing and Willow Lawn. One goal will be to determine where bus stops can be consolidated with Pulse stations to facilitate connections.

Hopefully, Jarrett Walker + Associates will do more than show how to reorganize the bus route structure, as important as that is.  The City of Richmond also needs a long-range plan that encourages higher-density, mixed-use development along Broad Street and provides sustained investment in streetscapes to create an environment inviting to pedestrians walking between transit stops and businesses along the route. Without these fundamental supporting elements, the Pulse is a recipe for losing money.

Outside of downtown, most of the Broad Street corridor consists of low-density, ’50s- and ’60s-era dreck that cries out for redevelopment. Permitting higher densities will give landowners an incentive to invest in their properties; higher densities also will generate more traffic to support the transit service with paying customers. Turning Broad Street from an autocentric wasteland into a corridor where people will actually enjoy walking, shopping, working and even living also will require a sustained commitment of public funds to burnish the public realm. If plans for such rezoning and public improvements exist, however, they haven’t seen the light of day in local media.

My nightmare scenario is that the city is rushing forward with expensive bus rapid transit plans without putting the necessary support elements into place. I am crossing my fingers and hoping that Jarrett Walker + Associates will emphasize the connection between mass transit, land use and walkability — and that City Council will pay attention.