Bacon's Rebellion

John Bull and Carol Scott with the Daily Press have written a perceptive article, “Awash in Cash, But Who Gets Soaked?”, detailing the surge in property taxes on the Virginia Peninsula: 58 percent on average since 2001. Soaring real estate assessments have allowed local governments to reduce nominal tax rates even while collecting record revenue and spending it all.

The danger is that local governments aren’t treating the revenues as a windfall. Rather, they’re hiring more employees and offering generous raises, decisions that will be hard to reverse if favorable economic conditions change.

Those financial decisions lay the foundation for a problem when the housing bubble deflates and local tax revenues grow stagnant.”The worst part will be when property values fall – and they will,” said Pete Sepp, spokesman for the National Taxpayers Union in Alexandria, a national anti-tax organization. “Governments will scream they don’t have enough money and there will be tax increases.”

The Bacon’s Rebellion blog has been issuing the same warning for more than a year now, though mainly with an eye toward Northern Virginia where real estate prices have been the strongest. Clearly, the danger is not limited to one part of the state. It’s gonna get ugly, folks, real ugly.

Proposed development of 28,000 residential units in the “Dulles South” area of Loudoun County would create regional gridlock for miles around, maintains a Virginia Department of Transportation preliminary analysis of the traffic impact. By 2025, the proposal would generate 300,000 trips per day, creating hours of stop-and-go traffic as far away as Herndon, Fairfax city and into Prince William County.

The Washington Post has the story here. Sayeth the Post:

Investment needed to prevent such gridlock could “easily” reach hundreds of millions of dollars, VDOT spokeswoman Joan Morris said. That’s on top of the billions of dollars already planned to extend Metrorail to Dulles and widen three of the highways in question.

The analysis represents the first application by the Kaine administration of a new law enabling VDOT to conduct detailed traffic impact analyses of local development projects. The Kainiacs picked a good place to start — the tip of the spear of growth… the development frontier of Loudoun County, which has been consistently one of the fastest two or three growing municipalities in the country over the past decade.

Del. Joe May, R-Loudoun, had the best quote:

“This is another excellent example of why we’re going to have to coordinate land use with transportation,” said [May] who believes the Dulles South plan would overwhelm the region. “The plan reminds me of those words on so many toy boxes, ‘Batteries Not Included.’ Only in this case, the words should be: ‘Roads Not Included.’”

But not everyone is panicking. Observed Loudoun Supervisor Stephen J. Snow (R-Dulles): The VDOT project does not include nearly $200 million in road construction and other public improvements that would be financed as part of a proposal by Greenvest, a Fairfax County developer, to build 15,000 housing units and supporting commercial space in the area.

Meanwhile, the Greenvest proposal moved one step closer to approval with an 8-0-1 vote by the Loudoun County planning commission to increase planned residential densities in a “transition” area west of Dulles airport. The transition is designed to segue between the farms and hamlets of western Loudoun and and the suburban-style development spilling from Fairfax County into eastern Loudoun. Leesburg2Day.com has that story.

Update: Here is a copy of VDOT’s letter to the Loudoun County Department of Planning, and the accompanying map showing 2025 traffic volumes and projected levels of service.

Kudos to the Greater Richmond Transit Company (GRTC) for thinking entrepreneurially. The GRTC has identified an unmet market niche: Richmonders who commute to Northern Virginia. The public transit system is soliciting bids from private bus companies to run express buses from Richmond-area Park ‘n’ Rides to the Virginia Railway Express station in Fredericksburg, where the riders would take the VRE to complete their trips.

VRE estimates that 100 regular riders who board the VRE in Fredericksburg come from the Richmond region. Some ride in van pools, others drive by themselves. CEO John Lewis Jr. told the Richmond Times Dispatch that he thought express buses could attract as many as 130 riders. Bids from the private bus companies will determine if the service can be operated with passengers picking up the entire cost.

Two points to be made:

First, that’s exactly the kind of thinking we need from our public transit companies — and from private bus operators as well. (Question: Why haven’t private bus operators spotted spot this opportunity already? If they did, what prevented them from acting on it?)

Second, as traffic congestion gets worse, more long-range commuters will find it worthwhile to shift to shared-vehicle transportation. Economics 101. Traffic and congestion will not increase in a straight-line projection, as the Virginia Department of Transportation assumes in its long-range traffic and budget forecasts.

One quarter of the United States workforce could do their jobs from home, according to a report by the National Technology Readiness Survey, but only two percent telecommute full time, and only nine percent do so part time, according to a Reuters story.

P.K. Kannan, professor at the University of Maryland business school, which co-sponsored the survey of 1,015 U.S. adults, conjectured that people still like “face time” at the office as well as the social interaction of the office. Also, he observed, the average 20-minute commute each way really isn’t so bad.

If the average commute isn’t so bad, maybe the hue and cry over traffic congestion is overblown.

On the other hand, the survey deals in national averages, which may be meaningless. What is the telework participation rate in New Urban Regions, like Washington, where traffic congestion is more burdensome?

(Hat tip to Robert Jackson for pointing out the Reuters article.)

Add Spotsylvania County to the list of local governments taking responsibility for local transportation improvements. Voters approved the issuance of $144 million in bonds in a referendum last fall. Now the County is negotiating a preliminary design contract for the projects with Spotsylvania County Infrastructure, LLC., a consortium of construction and engineering firms, according to the Free Lance-Star.

Once the contract is approved, SCI can begin collecting data–including vehicle counts, and the county’s growth and development patterns–in order to develop solutions for unclogging the congested roads. “It’s done in a very open way,” Clark Bottner with Shirley Contracting, told the newspaper. “You also have to look into the future, and say, ‘What is the plan for this road? Is it going to stay residential? Is it going to be high-density, low-density?’ You’ve got to come up with something that has some [life] length to it.”

There may be more to the story than appears in the newspaper, so I base my comments on limited knowledge. It appears that the County and the Consortium are projecting the future path of development and planning road improvements accordingly. That’s good. What’s bad is that there is no indication in the article that the County plans to alter its land-use policies in any way.

Added money for Spotsylvania roads could be a very good thing if it supported the creation of a Balanced Community with a mutually supporting mix of housing (serving varying income levels), offices, retail, recreation and amenities in a relatively concentrated area. It will be disastrous if it perpetuates the Business As Usual pattern of scattered, disconnected low-density development. In that case, the Board of Supervisors will find that $144 million will buy it only temporary traffic relief.

We warned more than a year ago that it might happen, and now it’s happening: After five years of double-digit increases, Northern Virginia property values are expected to increase only one percent this year, according to the Washington Post. The region hasn’t seen a drop in prices yet, as I feared might happen, but that still could come. As Bill Turque reports of Fairfax County:

The number of homes sold in the first five months of 2006 fell more than 20 percent, to 8,232, compared with the same period in 2005, according to an analysis by county staff. Listings of homes for sale have increased more than threefold since May 2005. Houses in Fairfax are now on the market for an average of 56 days, compared with 21 days in 2005. Multiple bids are not as common. And in May, homes sold for 97.3 percent of list price, compared with 101 percent in May 2005.

Fairfax County is wrestling with the implication for taxes. Soaring values allowed the County to cut its tax rate to $.89 per $100 of assessed value, the lowest in modern history, while still increasing the average take from homeowners. Fairfax homeowners are paying an average of $328 more in taxes than last year.

The pain of $328 per year in higher taxes is bearable, I’ve argued, when homeowners can console themselves that their property values have increased $50,000 to $60,000. For years, people could remortgage at lower rates, offsetting the higher taxes, or just borrow against the higher value of their homes. But now the refinancing boom is spent, climbing interest rates make it more expensive to borrow, and thousands of homeowners with Adjustable Rate Mortgages will find themselves paying more. Northern Virginia politicians are facing political dynamite.

Most people are familiar with the concept of “financial” capital and “human” capital. Theorists have found useful the concept of “social” capital as well. And then there’s “natural” capital, the assets bequeathed by nature. We’ve been drawing down our stock of natural capital pretty rapidly. Now, in Virginia at least, we’re getting a handle on just how fast we’re doing so.

Every two years, the Virginia Department of Environmental Quality surveys the quality of Virginia waters, which include 50,357 miles of rivers and streams, 116,058 acres of lakes and reservoirs, and 2,248 square miles of estuaries. DEQ establishes whether the waters are capable of supporting six categories of use: aquatic life, fishing, shell fishing, swimming, public-water supplies and wildlife.

The bad news, emphasized in the MSM headlines was this, as reported by the Fredericksburg Free Lance-Star: 8,984 miles of rivers and streams in Virginia are unable to support any or all of six categories of use–aquatic life, fishing, shell fishing, swimming, public-water supplies and wildlife. That’s up 29.6 percent from 6,931 miles in 2004.

Of course, there is a proviso: The state is finding more impaired areas this year because the survey has added new waters, and some water-quality standards have been tightened.

Bottom line: The headlines are meaningless. As much as the survey has improved, it’s still hard to tell if water quality if improving or not. But the exercise is critically important. We need to know whether we’re drawing down our natural capital or replenishing it. That means expanding the survey from 90 percent of state waters to all 100 percent. It also requires making apples-to-apples comparisons, on the basis of comparable standards, of water quality.

The centerpiece of the Kaine administration’s Northern Virginia transportation policy is financing construction of the Rail-to-Dulles extension of the Metro system. Not only will the heavy rail project cost an estimated $4 billion in capital costs, it will incur an ongoing subsidy of tens of millions of dollars yearly. It would make Gov. Kaine’s job a whole lot easier if Metro management could be trusted to run the trains efficiently and on time.

The Washington Post published a devastating series of articles about Metro inefficiencies last year. In an editorial today, Examiner.com credits Interim Manager Dan Tangherlini with making positive changes since taking the helm February, but chastises the bureaucratic organization for shameless spinning of its performance metrics. Stated the editorial:

Metro managers must think that nobody notices when they fudge statistics, cover-up problems and fail to communicate truthfully with the public. But people eventually find out they’re being scammed — and wonder what else the transit agency is hiding from them.

Metro is a critical piece of the Washington New Urban Region’s transportation infrastructure. But if Metro management wants that $4 billion extension to Dulles Airport — plus ongoing subsidies from now until… forever — it had better work harder to maintain its credibility.

The American Center for Law and Justice has filed a federal lawsuit against Fairfax County on behalf of the McLean Bible Church. The suit challenges a finding that the county zoning code prohibited Bible study and religious ministry classes at the church because the church did not include them as part of its special use permit issued in 1999!! If the church wanted to conduct study classes, the county said, it must qualify as a college or university… Or, so says the ACLJ’s version of the story in a press release issued today.

“Like any other house of worship in the country, an integral part of the church’s ministry is a study of the Bible, and the writings and beliefs sacred to its religion,” said Jay Sekulow, Chief Counsel of the ACLJ. “When Fairfax County approved the church’s use permit there was no issue that religious education, which had already taken place at the church since the 1980s, was a central aspect of its mission.”

The suit asserts that Fairfax County’s actions violated the church’s constitutional rights to religious free exercise, freedom of speech and association, and equal protection.

In 2001, the church entered into an agreement with Capitol Bible Seminary to administer some aspects of its Bible study and religious ministry classes. The church does not issue any academic credit, nor does it attempt to confer any academic degrees. However, because CBS may award credit for classes held at the church, the county maintains that the church must obtain qualification as a college or university in order for classes to continue.

In response, the ACLJ contends, the church is a house of worship and has no desire to be officially recognized as a college or university. Said Sekulow: “When the government acts to ban religious activity through zoning or land use regulations, the … law requires it to show it has a compelling, overriding interest supporting its action. Fairfax County has made no such showing.”

[Concluding paragraph deleted. Author’s explanation can be read in the comments.]

Barton Hinkle with the Richmond Times-Dispatch is one of the few newspaper pundits in Virginia to take the trouble to probe beneath the he-said-she-said coverage of the taxes-and-transportation debate. He actually — gasp! — does his own research. And sometimes he offers insights that are new even to an old journalistic hand who, like myself, has been covering land use and transportation issues for years.

Witness Hinkle’s column today. He makes a number of valid points but one stands out: Over the past two decades, he observes, the number of lane-miles of road and highway overseen by the Virginia Department of Transportation has increased nine percent. By contrast, the number of lane-miles increased only 2.4 percent nationally over the same period.

That creates a problem. As Hinkle notes, “VDOT faces a mathematical dilemma imposed by the nature of its business: Current budget growth accelerates future budget growth. That’s because VDOT has to spend money on maintenance as well as construction. A dollar spent on construction this year creates demand maintenance dollars in future roads.”

Thus, the relentless climb in maintenance funding is due to more than the faster-than-inflation increase in construction costs — it’s due to the steady expansion of Virginia’s road and highway network.

There’s one aspect to VDOT’s dilemma that bears illuminating. Much of that nine percent increase in lane-miles is, for all intents, useless to the vast majority of citizens. Those lane-miles reside primarily in cul de sac subdivisions, which means they are utilized by only a handful of subdvision residents and the occasional visiting UPS truck. (To see what I mean, study the photo above from Overland Park, Kansas.) I don’t know the figure for increase in lane-miles for critical connector and arterial roads, but I’m certain it’s far lower than nine percent — it’s probably closer to the national average of 2.4 percent.

This gets us to a foundational problem for Virginia’s transportation system: a cul de sac/collector/arterial pattern of road development in which half (or more) of the lane-miles are way underutilized and the other half is overloaded and congested. You don’t see the same mismatch in urban centers where the grid-street system predominates. Urban centers do have quiet side streets with little traffic, but a higher percentage of urban lane-miles is devoted to moving people at faster speeds.

Moral of the story: It’s not how many lane-miles you build, it’s where you build them and how you connect them.

(Photo credit: George Butler Associates, Inc.)

Gov. Timothy M. Kaine is hopping mad at the House of Delegates for stripping $22 million in earmarked projects for everything from day care in Charlottesville to sewage overflow in Lynchburg. He stumped the state yesterday to generate some ink castigating the House GOP for petty partisanship and… how else do I put it… for being mean. Daily Progress reporter Bob Gibson covered the Governor’s stop in Charlottesville at a day care center:

Kaine said his budget amendment would have provided child daycare scholarship money to keep working families on the job and off welfare. One mother told him she would have to stay home with children and not hold a job if daycare scholarship funds were not available.

Making mothers go back on welfare. Mean, mean, mean!

How else can you describe a General Assembly that approved a miserly $34 billion biennial General Fund budget, which, according to a June 30 press release from the Governor’s office, included (my words in parentheses):

• Record funding for K-12 education, including a four percent pay raise for teachers, and more than $1.5 billion in overall funding increases;
• A $200 million investment in the Chesapeake Bay (mostly for waste-water treatment plants);
• More than $40 million in investments in early childhood programs, including the Virginia Early Childhood Foundation, additional investments in the At-Risk Four Year Old Program, and addressing the waiting list for young children needing waiver slots…
• More than $120 million invested in community mental health and mental retardation care, including additional waiver slots for people with mental retardation and developmental disabilities and innovative services to serve people in the community rather than in institutions;
• Funding for construction of a new Eastern State Hospital and planning funds for replacement of three other mental health and mental retardation facilities (Western State Hospital, Central Virginia Training Center, and Southeastern Virginia Training Center).

I’m sorry, but if that Charlottesville daycare center were truly a priority, Gov. Kaine could have found a few thousand dollars from among the multi-millions in other spending he approved.

The Shape of the Future makes many points about affordable and accessible housing. Two of them are:

1. To support a prosperous, stable and sustainable society the housing delivery process must change because now it is delivering the wrong size house in the wrong location for those who need better housing the least. Trickle down helps those at the top of the food chain, not those who need housing.

2. A major reason for locational and size dysfunction is that municipal and county controls, programs and incentives related to housing focus on the unit scale. The unit is only one of the five scales of organic components that make up Balanced (Alpha) Communities.

In a Sunday WaPo story (“In Land of Giants, Smallest Houses Bigger Than Ever: Home Buyers Redefine Concept of Starter Home,” Alec MacGillis Page 1A) focuses on the first point but misses the second.

Most of the “experts” quoted are not “wrong,” they just do not yet understand the context – that same context we discuss in this week’s column with respect to governance burnout.
Those quoted in the story who came closest to understanding were New Urbanists.

Unfortunately, many New Urbanist think of development in terms of their own cute and precious “projects.” These projects are often Beta Cluster and sometimes Beta Neighborhood scale. That is one step better but only 2 / 5s of the way home.

We need strategies for Alpha Communities that are made up of Alpha Villages. Alpha Villages are in turn made up of Alpha Neighborhoods and Alpha Neighborhoods of Alpha Clusters composed of Alpha Dooryards.

Great homes of any size are Units in Alpha Dooryards, Alpha Clusters, Alpha Neighborhoods and Alpha Villages that make up Balanced (Alpha) Communities. Anything else is uncivilized.

EMR

In my column in the new edition of the Bacon’s Rebellion e-zine, I develop an idea that has become a recurring theme in this blog.

The starting premise is this: When government makes transportion improvements — highways, transit stations, interchanges, road widenings, whatever — it creates economic value for the landowners lucky enough, or shrewd enough, to own property in the right location. The public (through the agency of the government) creates this value, not the landowner. Why, then, shouldn’t the public capture some of that value to help finance the transportation improvement?
Virginia transportation policy relies overwhelmingly upon taxation of motorists to build the improvements, and to a lesser degree upon tolls levied upon the users of a particular facility. In some localities, developers contribute to the funding of road improvements through proffers, but the proffers are rarely integrated into a coherent system. I propose a four-part approach to major transportation projects:

• Create a Community Development Authority (CDA) to issue bonds to pay for public improvements such as roads, light and heavy rail lines, transit stations or even bus shelters.
• Overlay the CDA with a Tax Increment Financing (TIF) district that taxes the landowners who benefit from the public investments. Use the revenue stream to pay off the CDA bonds.
• Sweeten the pot, as necessary, by giving landowners the right to develop their parcels at greater density. The combination of higher density and public improvements would more than compensate landowner/developers for the expense of the special tax district.
• Require developers to implement Traffic Demand Management (TDM) plans to offset local congestion resulting from denser development. It is critical that these plans be robust, capable of taking large numbers of cars off local streets. They also must be sustainable, capable of standing on their own after developer has completed the project and has ended subsidies to van pools and other ride-sharing programs.

I don’t pretend this approach will work everywhere. It won’t. But it can work in a lot of places. When combined with the other alternatives explored on this blog — congestion tolls, telew0rk, ride sharing, VDOT reforms, intelligent transportation systems and all the rest — there’s no reason that Virginia can’t stitch together an effective transportation policy without recourse to higher taxes.

Bacon’s Rebellion columnist Chris Braunlich has pinpointed a fundamental problem with the education systems in Virginia and most other states: Funding formulas are based on the wrong metrics.

Education funding is designed for “Ozzie and Harriet.” The stars of that old ‘50s-era TV show were not poor, they spoke English, their children rarely had acknowledged disabilities. Furthermore, they and their neighbors never moved out of the neighborhood and always attended the nearest school. If some kids didn’t do as well as others, if there were achievement gaps … well, people just looked the other way. Guys named “Lumpy” could always make a decent living as an auto mechanic.

But in a standards-based era, achievement gaps are not, and cannot, be tolerated. The jobs of tomorrow, whether rocket scientist or auto mechanic, demand a higher level of skill, training, and education than those required to fix a 1955 Chevy.

Citing the bi-partisan work of the Thomas B. Fordham Institute, Braunlich suggests that school funding should “follow the child.” This is similar to a voucher program, but it sidesteps the ideological divisions of vouchers because it applies only to public schools. It also differs from vouchers in that children with with disabilities or limited English proficiency would bring more money with them. Such a system, writes Braunlich, would:

Drive those dollars down to the school level, empowering school-based leadership to decide how best to spend the funds educating the students. By putting resources for decision-making at the school level, principals can do for kids what’s needed at their particular school, not what’s decided at the district level. If one school needs more tutoring, or another needs an additional aide, or a third needs more teacher training for new teachers – the school chooses, rather than a “one-size-fits-all” central office decision.

Drawing from analysis conducted by Richmond economist Christine Chmura, Doug Koelemay has written a column, “Connecting the Crescent,” that will change the way downstate Virginians perceive Northern Virginia.

We downstaters have always recognized (and envied) the incredible economic success of NoVa. The more enlightened of us have even appreciated the disproportionate contribution that NoVa has made to the Commonwealth’s tax base. What we residents of the Rest of Virginia (RoVa) have not sufficiently understood was the growing contribution that NoVa businesses are making to growth in our downstate communities. Here are the key numbers:

For the five years ending in 1995, the [Chmura] report notes, Northern Virginia firms created 17,191 new jobs in other areas of the state. That’s an average of 3,400 jobs a year downstate. For the five years ending in 2000, Northern Virginia firms created 28,560 jobs in other areas of the state, an average of 5,700 jobs a year. And for the five years ending in 2005, Northern Virginia firms created 36,191 jobs in other parts of the state. That’s an average of 7,200 jobs a year, double the rate of the early 1990s.

Playing on its defense industry ties, Hampton Roads has been the primary beneficiary of NoVa’s dynamism, but the Richmond region has benefited as well.

Koelemay, a Northern Virginian who sallies frequently to Richmond and other downstate locations, draws the inevitable conclusion: It’s in RoVa’s self interest to ensure that NoVa’s economic prosperity continues. If that means investing more in transportation, then so be it.