by Dick Hall-Sizemore
This is going to be an interesting session; probably a nightmare for Republicans. Much of the public attention has been on gun legislation, but there are other areas in which Democratic initiatives have been bottled up in the past and now will have a much better chance of being enacted.
One of these areas is housing. In an earlier blog today, Jim has highlighted one proposed piece of legislation dealing with “middle” housing. There is another bill that I had heard about earlier, which I think also addresses a housing issue that we have discussed on this blog. That is HB 6, introduced by Del. Jeff Bourne. D-Richmond. The bill would forbid someone from refusing to rent or sell a dwelling on the basis of the source of income or payment by the person seeking to rent or buy. In effect, it would prohibit landlords or property sellers from refusing to accept housing vouchers.
Bourne introduced this legislation in the 2019 session. It died in a House committee, without even being given the consideration of being referred to a subcommittee to be heard. Continue reading
by James A. Bacon
Suburban Virginians were the key swing voters who gave Democrats majorities in both houses of the General Assembly. It will be interesting to see if Democrats now manage to alienate them.
Del. Ibraheem Samirah, D-Herndon, has submitted a bill, HB 152, that would require zoning ordinances in localities across the state to allow “middle housing” — duplexes, townhouses, cottages and other structures — in neighborhoods zoned for single-family dwellings.
Samirah characterizes the mandate as an “affordable housing” initiative. He quite accurately says that residential zoning restrictions restrict the supply of new housing construction by limiting housing units to one per lot. But rhetorically he goes off the rails. Describing suburbs as “mostly white and wealthy,” he implies that people wishing to live in safe, peaceful neighborhoods are guilty of racial discrimination.
“Because middle housing is what’s most affordable for low-income people and people of color, banning that housing in well-off neighborhoods chalks up to modern-day redlining, locking folks out of areas with better access to schools, jobs, transit, and other services and amenities,” he wrote on Facebook (as quoted by the Daily Caller, a conservative web publication). Continue reading
A neighborhood of detached single-family dwellings in Arlington.
by James A. Bacon
Arlington County plans to study the “missing middle” in its housing market: homes that fall between apartment-sized units and single-family dwellings — in its housing market.
Ninety percent of the county’s residential land is zoned for detached, single-family houses. The median housing price in the county falls between $530,000 and $640,000, and the arrival of Amazon is likely to drive prices even higher. A big part of the problem, says Richard Tucker, acting coordinator of Housing Arlington, is restrictive zoning. WAMU summarizes his thinking:
Too much single-family zoning is leading to a proliferation of teardowns, Tucker says. In neighborhoods throughout the county, property owners are bulldozing smaller single-family homes to make way for mansions that swallow up entire lots. Teardowns are common in neighborhoods where zoning is restricted to single-family construction, Tucker says, but they’re expensive to build and own, so they don’t contribute affordable housing to the county. They also take up a lot of land that could be used more efficiently, he says.
If owners had the option to build duplexes and triplexes instead of McMansions, Tucker says, maybe they would. “What we hope to do is identify other options for these property owners,” the planner says.
You’ll have to pry my gun from… More than 90 governing bodies in Virginia have voted to declare themselves Second Amendment sanctuaries, reports WDBJ. Ninety! Unbelievable. Thousands of citizens have appeared at board meetings across the state to demonstrate their support for the resolutions. Virginia Citizens Defense League President Philip Van Cleave said the sanctuary movement is unlike anything he has seen in his years of advocacy. “It’s like the difference between driving a car and being in a rocket ship.” Sigh. I personally don’t have a problem with these resolutions. But if only rural Virginians cared as much about pocketbook issues.
More transportation cross subsidies in the works. Virginia officials and the Northern Virginia Transportation Commission are negotiating a proposal to dedicate a portion of toll revenues on Interstate 66 inside the Beltway to construction of new Metro facilities near Rosslyn and construction of a second freight/commuter rail span between Virginia and Washington, D.C. The toll revenues would back the issuance of bonds to pay for construction of the rail projects, reports WTOP. Virginia drifts further and further away from a user-pays transportation funding system. This idea can be justified only on the grounds that mass transit can provide more mobility than a comparable investment in other road projects. I wonder what light VDOT’s Smart Scale ranking system could shed on this.
Evictions down. Since a New York Times article highlighted the high rate of evictions in Virginia cities, state and local officials have been allocating resources to reduce the number. Through September of this year, the incidence of evictions has dropped about 19% in the City of Richmond, where it was the worst, and 14% across Virginia, according to a Capital News Service analysis of court data. This is encouraging news… as long as it doesn’t have the unintended consequence of dampening the supply of low-income rentals.
Foreclosed house on the market in Richmond for $103,587 — 1,434 square feet of living space. Source: Zillow.
by James A. Bacon
Broadly speaking, there are two ways to create a supply of affordable housing in Virginia. One is to loosen zoning restrictions so developers and home builders can build more houses and apartments, thus relieving scarcity and putting a downward pressure on prices across the board. The other is for the government to arrange for the construction of lower-income housing. Governor Ralph Northam is doubling down on the latter strategy.
Yesterday the Governor announced that his proposed budget will include $92 million in new funding to address housing affordability, eviction rates, and housing for the disabled. Of that sum, $63 million will go to the Virginia Housing Trust Fund, which provides financing for affordable housing.
Here’s the irony. In the Richmond region, the cost for the Richmond Redevelopment and Housing Authority to build new “affordable housing” units runs as high as $250,000 per unit. The median home value — half of the houses on the market are more expensive, half less expensive — in the Richmond market is $223,400, according to Zillow. In other words, it costs government more to build a unit of low-income housing than for the private sector to provide middle-income housing. Continue reading
Map credit: Econ Focus
by James A. Bacon
The City of Norfolk is gearing up to take full advantage of tax breaks contained in the 2017 Tax Cuts and Jobs Act. City Council has designated the St. Paul area, home to three 50s-era housing projects, as an “opportunity zone.” Plans call for demolishing the three projects and replacing them with mixed-income development. The city will receive $30 million in Housing and Urban Development funds to jump-start redevelopment, but the bulk of investment is expected to come from the private sector.
More than 8,700 such opportunity zones have been designated across the country; about 10% are located within the 5th Federal Reserve Bank district, which includes Virginia. Through a mix of incentives, investors in opportunity zones can defer, reduce or in some cases eliminate capital gains taxes in the zones.
While the tax breaks may prove effective at channeling investment capital into the designated zones, it is an open question if it will actually help the poor people living there, writes Jessie Romero in the current issue of Fed Focus, a publication of the Federal Reserve Bank of Richmond.
The size of the potential tax break is what could lure new investment, but it depends on how profitable the investment is — which depends in part on rising property values and rents. So some observers fear that in many places, the opportunity zone designation will create or hasten a process of gentrification to the detriment of lower-income residents who don’t own their homes and instead are forced out by rising rents.
This strikes me as a legitimate concern. Indeed, the criticism goes to the heart of almost every government-subsidized redevelopment project. The more successful a project is commercially, the more likely it is to displace the very people it is meant to help. Continue reading
NIMBYs against hemp. Farmers across Southside Virginia have turned to growing hemp (the THC-free version used in industrial applications) as a replacement crop for tobacco. But at least one Dinwiddie County neighborhood has risen in revolt. A hemp farm near the Lake Jordan neighborhood emits an offensive odor. The smell is so bad that it’s getting into peoples’ houses and permeating their clothing, reports the Progress-Index. “We’re worried that they’re going to continue planting around, which would basically mean [that] people will have to leave or just tolerate unbelievable skunk-like odors,” said Jarrod Reisweber, a director of the homeowners association. Daniel Lee, vice chairman of the Board of Supervisors held out the hope that, if solutions could be found to control the odor of hog farms, a remedy could be found for hemp as well.
Amazon offers $20 million toward affordable housing. Amazon is offering $20 million to the Arlington County Affordable Housing Investment Fund in exchange for permission to build a bigger headquarters complex than county zoning allows. The sum would amount to the greatest single infusion of money into the fund, reports the Washington Post. Amazon wants to increase the size of its proposed 22-story office towers from 1.56 million square feet to about 2.15 million square feet, reduce the number of parking spaces, and increase penthouse height. If we assume an average of $50 per square foot for office space in Arlington, Amazon’s concessions are worth about $30 million. That’s gross value. Once construction costs are excluded, Amazon would net significantly less. By that comparison, the $20 million offer seems pretty generous.
Virginia Schools turn to solar. An increasing number of public and private schools in Virginia are utilizing solar power. The number of schools with solar has nearly tripled since 2014 — from 20 to 86, reports the Richmond Times-Dispatch. A niche industry has evolved in which entrepreneurs package solar Public Purchase Agreements (PPAs) in which schools put no cash down and start generating positive cash flow from the first year. Pete Gretz with the Middlesex County school system says that ground-mounted solar saved just under $50,000 at its elementary school site. “There’s no drawback to this,” he said. “It’s completely a win-win.” Continue reading
by James A. Bacon
Homelessness in the Richmond metro area has dropped by more than half since 2007, from about 1,158 homeless people to less than 500 this year. It is one of the great anti-poverty success stories — one of the few anti-poverty success stories — of our time. This dramatic improvement results from a dramatic shift in homeless policy from a model that sheltered families for as long as two years to a “rapid rehousing” model that gets them out of shelters and into permanent housing as quickly as possible.
As a national movement, rapid rehousing began in earnest with a Housing and Urban Development demonstration project in 2008. It has contributed to significant gains in communities across the country, but few have embraced the new paradigm with the enthusiasm of the Richmond region. To see the philosophy in action, I visited the Hilliard House shelter, in eastern Henrico County, operated by Housing Families First.
The Hilliard House is a solid brick housing complex with private rooms, a communal dining room, shared living space, and a cloistered courtyard. It is a clean, safe place where homeless families can regroup. Thanks to generous community support, when families leave, they are given linens, kitchen implements and cleaning supplies to help them set up house. Continue reading
by James A. Bacon
The Richmond Redevelopment and Housing Authority (RRHA) has announced an agency-wide freeze on the enforcing rent payments through the end of the year. No public housing family will be removed from their home for debt owed to RRHA during that period.
“During this time,” the authority said, “RRHA will undertake an agency-wide evaluation of our public housing families’ rental accounts and give tenants that are in arrears the opportunity to come current. By utilizing a combination of repayment agreements, debt forgiveness, philanthropic contributions, and other eviction diversion methods, RHHA will endeavor to bring every RRHA family with a delinquent rental account as close to good standing as possible.”
The action comes in response to pressure from “tenant advocates,” reports the Richmond Times-Dispatch. Omari Al-Qadaffi, a housing organizer with the Legal Aid Justice Center, praised the move. “We’re very encouraged and we see it as a few steps in the right direction,” he said.
Now, nobody wants to see poor people needlessly evicted from their homes… Continue reading
by James A. Bacon
Virginia is a blue state now. Not only do Democrats occupy all statewide elected positions — two U.S. senators, governor, lieutenant governor, and attorney general — with yesterday’s election, they control both houses of the General Assembly.
Republicans got their booties kicked. And the butt-stomping is not likely to subside. The Dems will control the next redistricting, which will cement their dominance of the legislature. Auguring well for the blue team in the future, the fastest-growing region of the state, Northern Virginia, now is pure blue with bits of purple on the exurban fringe. By contrast, Republican strongholds in rural Virginia have shrinking or stagnant populations. Also favoring Democrats in the long run is the increasing percentage of racial/ethnic minorities in the state and the declining percentage of whites.
Republicans need to re-define who they are and what they stand for, or they will become a permanent minority. News reports say that dislike of Donald Trump drove Democratic voter turnout, but the Blue Tide is much broader and deeper than voter animus of one man. Take Trump out of the equation after the 2020 election, and Virginia Republicans still have a huge problem.
Can the Republicans re-calibrate? I certainly hope so, because I’m terrified of the Democratic Party agenda of $15 minimum wage, spiking the right-to-work law, a damn-the-torpedoes-full-speed-ahead rush to a 100% renewable electric grid, spending and taxing, taxing and spending, and injecting its grievance-and-victimhood agenda into the consideration of every issue. But Republican priorities on culture war issues — guns, abortion, transgenders — are not winning issues statewide. As long as Republicans remain captive to its rural/small-town base, I don’t see how it can reinvent itself.
What does a rejuvenated Republican Party look like? (Or, if the GOP is incapable of reinventing itself, what does a successor party look like?) Continue reading
Virginia school proficiency levels. Source: StatChat. Click to enlarge.
by James A. Bacon
In an essay posted earlier this week on the StatChat blog, Spencer Shanholtz with the Demographics Research Group at the University of Virginia explored the relationship between housing values and school quality. He documents the reality that children living in census tracts with low-value housing are more likely to attend low-performing schools. He finds this disturbing. “Children in lower-cost housing should be able to attend good schools,” he says.
I quite agree. Every child should be able to attend a good school. The pertinent question is whether it is necessary for a school to be located in an affluent neighborhood and have students from affluent families in order to accomplish that goal.
In this, first of two blog posts, Shanholz provides some useful data. It would unfair to critique his argument until he publishes the second post. For now, let’s take a look at the case he makes and raise some questions for him to answer in his follow-up post. Continue reading
by James A. Bacon
Not only can Virginians count on getting electric current when they flip on the light switch, the Old Dominion can boast of something else that Californians cannot: The number of homeless people in the state is declining. A lot. And we’re spending a tiny fraction of the money that Californians do to deal with the problem.
The number of homeless people in Virginia has tumbled 36% over the past decade, from 9,080 people in 2010 to 5,780 this year, according to figures provided by Pam Kestner, deputy director of housing at the state Department of Housing and Community Development in a presentation to the Virginia Housing Commission. (Virginia Mercury reported on the presentation here.)
The homelessness rate in Virginia runs about seven homeless people per 10,000 residents compared to 33 in California and 46 in New York. Progress has been especially evident in the Richmond area, where homelessness dropped from 1,158 people in 2007 to 497 this year. While the state of California spends roughly $1 billion a year on programs for the homeless (and local governments spend hundreds of millions more), Virginia and federal government together have budgeted $17.4 million for homeless services this year in the Old Dominion.
This is a remarkable untold story. Who knew that Virginia had been so successful in copying with homelessness? Continue reading
Virginia median owner-occupied house values by census district. Source: StatChat blog. Click to enlarge.
The StatChat blog has published a fascinating map showing the median value of owner-occupied housing across Virginia by census tract. The map appears as part of an essay on the relationship between housing affordability and school quality, which I may blog about later. But in the meantime, I thought the map was worth publishing on its own terms.
There are no huge surprises here — the highest median values occur in Virginia’s major metropolitan areas, most notably Northern Virginia, and values are lowest in depressed rural areas, particularly Southside and Southwest Virginia. (The blog post does not contain a color key indicating what values the colors represent, but you still get an idea of relative values.) Continue reading
Competitive intensity of the homebuilder industry in the Washington-Baltimore area, 2006. Yellow indicates where 6 or more firms account for 90% of construction, dark blue indicates only two firms.
by James A. Bacon
What is driving up housing prices in Virginia, especially Northern Virginia? In the simplest terms, the increase can be explained by a sustained imbalance in supply and demand. Between population growth and rising incomes, the demand for new dwellings is outpacing the supply of new dwellings built. Then the question becomes, what is restricting supply?
My commentary on this blog has emphasized the role of local zoning codes, comprehensive plans, and NIMBYism in restricting the density of development where demand is greatest, in and near the urban core of Virginia’s major metros. But Jacob Cosman and Luis Quintero with the Johns Hopking University business school point to a different, though related, phenomenon: The consolidation of the home building industry.
Intensity of competition in 2015. Source:Cosman and Quintero.
“Our empirical results indicate that a higher degree of concentration in local housing construction markets leads to less housing production, a decreased rush to build more units, and greater volatility in prices,” conclude the authors in their paper, “Fewer players, fewer homes: concentration and the new dynamics of housing supply.” Continue reading
Source: “Inclusionary Zoning and Housing Market Outcomes.”
by James A. Bacon
I have often advanced a common-sense proposition: If you want to create more affordable housing, increase the supply of housing. If the housing stock increases faster than demand, the price declines. A new study on “inclusive housing” policies in the Washington-Baltimore metropolitan area, which includes Northern Virginia, gives some support to that proposition, although it suggests that in highly regulated housing markets, the relationship between supply, demand and price is not straightforward.
Emily Hamilton, a research fellow at George Mason University’s Mercatus Center, has undertaken an in-depth study of inclusionary zoning in the Washington-Baltimore metro. Inclusionary zoning (IZ) is a policy in which local governments require or incentivize real estate developers to provide below-market-rate houses in new housing developments.
Economic theory (which has informed my thinking on this blog) predicts that IZ could be counter-productive. By increasing the cost of building new units, the policy diminishes the supply of new housing, which has the effect of pushing housing prices higher overall. But IZ programs vary widely in design and impacts vary, says Hamilton in her paper, “Inclusionary Zoning and Housing Market Outcomes.” Continue reading