Category Archives: Housing

Density as an Answer

It seems that our leader, Jim Bacon, is on the cutting edge of new thinking about how to address the rising cost of housing.  (Of course, this is no surprise to BR readers.)  An article in yesterday’s New York Times describes how planners, economists, and environmentalists across the country have begun to advocate more density.

The target of the critics is detached, single-family residential zoning. “It is illegal on 75 percent of the residential land in many American cities to build anything other than a detached single-family home,” the authors contend. They created maps, included in the article, depicting the residential area within many cities (and some suburbs) that is zoned for detached, single-family residential units. (There are no Virginia localities shown.) There are real contrasts. In New York City and Washington, D.C., only 15 percent and 36 percent, respectively, of the residential land is zoned for detached, single-family homes, whereas in Minneapolis and Charlotte, N.C., the percentages are 70 and 84, respectively. Cities in the western part of the country have even higher percentages restricted to detached, single-family units.

Some areas are taking action. Minneapolis has recently ended detached, single-family zoning; Oregon is considering legislation that would allow options as dense as fourplexes in larger cities and duplexes in smaller cities; and Seattle has upzoned six percent of its single family-zoned land. As expected, there has been strong opposition from homeowners in these areas. In the California legislature, such opposition has stalled a bill that would affect local zoning statewide.

It is remarkable how much effect small changes could make. According to the authors’ analysis, “Over time, if just 5 percent of the largest single-family lots in Minneapolis — lots of at least 5,000 square feet — converted to triplexes, that would create about 6,200 new units of housing, according to UrbanFootprint [a software program]. If 10 percent of similar-sized lots in San Jose, Calif., added a second unit, the city would gain 15,000 new homes.”

It may be time for policymakers in Virginia to begin looking at such changes.  As for me, I am glad I bought my detached house with a yard, small as it is, thirty years ago.

As Arlington Housing Prices Soar, Supply Is Unresponsive

The worst fears of Amazon critics are coming true. Housing prices are becoming increasingly unaffordable — even before Amazon sets up shop at its HQ2 facility in Arlington and floods the region with 25,000 employees.

The average home price in Arlington County jumped 7% in the past year to $713,000, as investors poured into the market in anticipation of Amazon’s arrival, reports the Washington Post. Inventories are so sparse that some popular Zip codes in Arlington and Alexandria show no homes for sale at all.

Alexandria saw a comparable increase in average home prices, while Fairfax County saw a year-over-year gain of 6%. Said Terry Clower, director of George Mason University’s Center for Regional Analysis: “This is a market response to the Amazon HQ2 announcement, with investors competing with residents for a shrinking number of homes for sale.”

In a functioning real estate market, prices act as a signal for the allocation of capital. A surge in home prices would be matched by a surge in home building as developers and builders. But, as seen in the table above, based on Arlington County permit statistics, the supply of housing is increasing negligibly. In 2016 the county’s housing stock stood at 111,549 units. According to Arlington County permitting data, the increase in housing units (completions minus demolitions) was only 810 units in 2017 and a negligible 220 units in 2018 — roughly a 1% increase in the housing stock over two years. Continue reading

The Virtues of Incremental Development

Would you rather live here….

One more angle to think about when appraising Amazon’s HQ2 project in Arlington… A single developer, JBG Smith, will have a disproportionate impact on the evolution of the urban fabric in the National Landing district of Arlington and Alexandria. In theory, a single big developer can mobilize more resources, carry out better planning and execute a more uniform standard of design than could an uncoordinated army of small builders.

… or here?

Not so fast. Over on the Strong Towns blog, Daniel Herriges compares “Texas donut” approach typical of Dallas, Texas – a monumental ediface consuming an entire city block — with the incremental approach of traditional development in Charleston, S.C.

“Incremental development doesn’t mean slow, small, or cautious. Incremental means many hands,” Herriges writes. “The ‘increment of development’ is how big each project is, but says nothing about how many projects are taking place. Continue reading

The Crux of Arlington’s Affordable Housing Crisis: $350,000 Per Unit


Amazon will donate $3 million to support affordable housing in Arlington County, the company has announced. While government officials and charities welcomed the donation, reports the Washington Post, critics contend that the sum is sufficient to build only a handful of units.

According to the Northern Virginia Affordable Housing Alliance, new housing in the Virginia suburbs costs about $350,000 per unit. In other words, Amazon’s gift is enough to build about 8.6 housing units. For purposes of comparison, the tech giant expects to employ 25,000 at its Arlington facility, and that doesn’t include jobs created by vendors, partners, spin-offs and support entities such as Virginia Tech’s new technology campus that locate near Amazon’s HQ2.

In other words, the donation is meaningless. The number we should focus on, however, is $350,000. If that’s what it costs to build “affordable” housing in Northern Virginia, then no wonder there is a housing panic. Continue reading

Want More Affordable Housing? Try Free Markets.

More apartments needed… Affordable housing complex approved in Brooklyn, N.Y.

Exclusionary regulation at the local level is the root cause of unaffordable housing, and a rollback of exclusionary regulation is the best long-term solution, argue Salim Furth and Emily Hamilton, research fellows at George Mason University’s Mercatus Center.

“Contemporary American land use law embodies the bad idea that private land ought to be publicly planned. In practice, these plans routinely exclude low-income families by indirect means, causing income-based segregation,” they write in an attachment to April 2, 2019, testimony to the U.S. House Committee on Financial Services.

Exclusion is widespread: most jurisdictions, through zoning ordinances, ban apartments and manufactured homes in all but a few locations. Single-family homes are usually allowed, but only in specified areas and often on lots larger than many buyers want. As a consequence, those states that give the most power to planners and the least authority to property owners have abysmal housing growth rates. When wages rise in those states, rents and home prices soar.

Continue reading

Housing’s Supply-Side Revolution

IndieDwell’s 960-square-foot house, made from three shipping containers, on display at the Richmond Convention Center. (Does not include peaked roof, which would not fit in the convention center.)

IndieDwell converts shipping containers into affordable housing. The Idaho-based business has taken an idea championed locally by entrepreneurs Sheila and Sidney Gunst (see “Thinking Outside the Container“) and turned it into a growing business enterprise.

The company now sells 640-square-foot dwellings, including the cost of delivery and installation, for $78,000. Add $11,500 to build a foundation (IndieDwell’s estimate), plus utility hookups if applicable, plus, say, $10,000 for a tiny lot, and it should be possible to create a new unit of affordable housing in Virginia for less than $100,000 — roughly half the price of what it costs public housing authorities in Virginia today.

IndieDwell was just one of the businesses presenting fresh perspectives on affordable housing at a Virginia Housing and Development Authority (VDHA) event yesterday organized to exploring new approaches to affordable housing. Other speakers addressed the phenomenal productivity gains in the manufactured housing industry and explored new concepts in modular housing. It was evident that a supply-side revolution in the housing industry is gathering momentum that holds out the potential to slash the construction cost of workforce and lower-income housing. Continue reading

Helping the Poor by… Replacing Lower-Income Housing with Mixed-Income Housing?

The Highland Grove mixed-income community. Photo credit: Richmond Free-Press

The premise behind public housing is that “market failure” fails to supply enough decent and affordable housing for poor people. Government must intervene in the housing marketplace not only with subsidies but as a real estate developer to fill the gap. What government succeeded in creating all too often — from Chicago’s infamous Pruitt Igoe towers to Richmond’s public housing courts — is concentrated poverty, crime and social dysfunction. Learning from past disasters, the public housing sector now sees the solution as diluting poverty by bundling low-income housing with middle-class housing under the rubric of “mixed-income” development.

Ironically, the consequence of implementing this philosophy in Richmond is less low-income housing and more middle-income housing.

The Richmond Redevelopment and Housing Authority has decided not to replace 22 of the 60 public housing units in Dove Court that were bulldozed in 2008 in order to make way for a a mixed-income community called Highland Grove. Reports the Richmond Free-Press: Continue reading

Bacon Bits: A Little Bit of This, a Little Bit of That

Safe hospitals. I’ve long maintained that the best thing you can do for your health is stay out of hospitals — 160,000 deaths occur annually across the country from avoidable medical errors monitored by the Leapfrog Hospital Safety Grade. Fortunately, Virginia hospitals are safer than most. The Old Dominion has the second highest percentage — 53% — of hospitals in the country of hospitals meriting Leapfrog’s A rating. In Maryland only 25% of hospital scored an A, and in Washington, D.C., there are no A-rated hospitals, reports the Richmond Times-Dispatch.

Expanding hospital. Speaking of  hospitals, Carilion Roanoke Memorial Hospital has just announced a $300 million expansion that includes a new tower to care for emergency and heart patients, a new behavioral health hospital across the street, a parking garage and a pedestrian skyway to connect it all. The expansion is part of Carilion’s plan to invest $1 billion over the next seven years, according to the Roanoke Times. Roanoke Memorial scored a B in Leapfrog’s ranking, incidentally. Roanokers might legitimately inquire if some of that $300 million could be better spent on preventing avoidable medical errors.

Bye, bye, Jeff, baby. The Commonwealth Transportation Board unanimously voted yesterday to allow Arlington County to change the name of Route 1 from Jefferson Davis Highway to Richmond Highway, reports the Washington Post. The United Daughters of the Confederacy had spearheaded the naming of the highway after the president of the Confederate States of America, as a “direct and antagonistic response” to the establishment of Lincoln Highway across the northern states, said Arlington Board Chair Christian Dorsey. Continue reading

Giving Slumlords a Bad Name

Winter Whittaker. Photo credit: Virginia Mercury

I tend to be sympathetic to renters and landlords in their disputes with problem tenants, many of whom can be irresponsible and exasperating. Some renters are deadbeats. But then I run across a shocking case like the one documented by renter Winter Whittaker and published on the Virginia Mercury.

Whittaker, a Richmond resident, called her landlord, Dean Parsons, to ask him to fix a leaky roof. We don’t know the history behind the phone call, which may or may not leave out critical context. Clearly, Parsons, who claims to oversee a portfolio of 375 apartments and rental units, was agitated about something. Whatever the possible extenuating circumstances, it’s hard to imagine any excuse for the racist and profanity-laced tirade he unleashed.

Responding to Whittaker’s threat of a lawsuit, he said, “I don’t give a shit about you. … I don’t give a good goddamn. You’re just another dumb ass n—— I got to go to court with and I go to court every damn day with them. It ain’t no big damn deal to me.”

You don’t have to just take her word for it. The Virginia Mercury provides the recording. Continue reading

JBG Smith Raises $75 Million for Amazon-Related Affordable Housing

Al Jackson, JBG executive vice president of social impact investing

JBG Smith, the dominant developer in the National Landing area where Amazon will build its HQ2 offices, has raised $78 million in an affordable housing initiative. The company hopes to raise between $100 million and $150 million in all. The funds would be used to develop “workforce” housing, targeting households with incomes too high to qualify for government housing assistance but too small to afford the rent on average two-bedroom apartments, reports the Washington Business Journal.

The JBG Smith initiative does not directly address the concerns of community activists who worry that an influx of highly paid Amazon employees will drive up housing prices in the Arlington-Alexandria area, leading to gentrification and displacement of lower-income families. But the addition of “a few thousand” units of housing would absorb a significant percentage of households expected to be drawn to the area. Amazon has said it will hire 25,000 employees over several years. The project likely will attract thousands of employees from other companies and organizations in the Amazon innovation ecosystem as well as people performing retail, construction, and service jobs.

The big question is where that housing will be built. The article quotes Al Jackson, executive vice president for social impact investing at JBG, only as saying that the company will target neighborhoods that could experience “significant gentrification” over the next decade.

Bacon’s bottom line: Continue reading

Fresh Thinking from Richmond’s New Public Housing Chief

RDHA chief Damon Duncan. Photo credit: Style Weekly

The Richmond Redevelopment and Housing Authority has a new chief executive, Damon Duncan, who led a housing authority in the Chicago suburbs before taking on his new role in March. He has a tough job. The public housing stock has been deteriorating — units have outlived their useful life by 10 to 15 years at least, he says. And Richmond housing projects are beset by crime, much of it committed by outsiders. Between the maintenance backlogs and the high crime rates, public housing in Richmond is a scandal.

In a Style Weekly profile, Duncan comes across as energetic and willing to challenge the status quo. What impresses me most is that he’s talking about making changes that will surely ruffle feathers in the poverty-industrial complex. To receive subsidized housing, he says, residents will have to work or enroll in education or training programs. Writes Style: Continue reading

Bacon Bits: Boomtowns, Amazon, and Rent-a-Tribe

Pockets of prosperity. America’s big metropolitan regions may be sucking up most of the growth and prosperity of the current business cycle, but they’re not sucking up all of it. In crunching data measuring economic prosperity, population growth and rising incomes, GOBankingRates found numerous “cities” (not metros) that qualify as “boomtowns.” One region stood out as especially vigorous: the South. And Virginia nabbed two spots in the top 10, reports CNBC.

Charlottesville ranked 6th among cities in the South with 2012 -to-2017 income growth of 17.9%, population growth of 11.9%, and GDP growth of 22.4%.

Richmond ranked 9th in the South with income growth of 15% over the same period, population growth of 7.6%, and GDP growth of 22.4%.

Can Amazon avoid a housing crunch? Amazon officials have told the Washington Post that the company will learn from its experience in Seattle how to avoid creating a housing crunch when its HQ2 expansion brings 25,000 jobs to a Washington region that already has full employment and high housing prices. Amazon contributed $80 million to public and private efforts to support affordable housing and prevent homelessness in Seattle, said Jay Carney, a senior vice president. But he added that it is primarily the government’s responsibility to ensure an adequate supply of affordable housing. Continue reading

More Money for Fairfax Affordable Housing — to What End?

Want more affordable housing in Fairfax County? Allow developers to build more of this.

The Fairfax Board of Supervisors is adding $5 million to its affordable housing budget next year, raising the total expenditure to $15 million. The Washington Post report of the budget action provides few details other than the fact that the money will fund an extra affordable-housing staff position and two positions for a new Office of Environmental and Energy Coordination.

The sum is a drop in the bucket for Virginia’s largest locality. Unless Fairfax is serious about increasing the supply of housing across the county — not just in Tysons, where residential growth will be choked by traffic congestion issues — the board action represents nothing more than virtue signalling. It’s a way of saying, “We care,” without really doing anything.

According to Zillow, the median home value listed in Fairfax County today is $619,000. An extra $5 million could subsidize the cost of 100 middling-cost houses — maybe 200 lower-priced houses — a year in a locality of 1.15 million people. Continue reading

It’s the Money, Stupid

A fascinating article in Sunday’s New York Times deals with one of the subjects that is a frequent topic on this blog—housing patterns. Using demographic data from the Census Bureau and home lending data published as part of the federal Home Mortgage Disclosure Act, the reporters “identified every census tract in the country that has grown notably more racially diverse since 2000.”

They found a consistent nationwide trend of increased diversity. Affluent whites are moving into central city areas that have been populated by blacks for many generations and middle-class non-whites are moving into suburbs long the domain of white families. The authors posit that the movement of whites into the central cities is a result of several factors. The major factor they cite is historical disinvestment by society in those areas, which has made them ripe for reinvestment. Another factor is old housing stock that was approaching the end of its life.

This increased diversity is altering the nature of the communities affected. The primary finding highlighted in the story is that the non-whites moving into the suburbs blend into, or integrate, their new communities relatively seamlessly. However, that is not true for whites moving into the central cities. The reason is not racial tension, but economics. While the non-whites moving into the suburbs have incomes similar to the families already living there, the average incomes of the whites moving into the central city neighborhoods are significantly higher than those who have lived there for many years. It turns out people feel more comfortable associating with those on their same income level. (This is not really a surprise.) Continue reading

Migration Chains and Trickle-Down Housing

Call it trickle-down housing. When developers build luxury housing for the wealthy because more expensive housing provides bigger profit margins, do the poor go homeless? No. When an affluent household moves into a luxurious new penthouse apartment, it creates a vacancy in its previous residence…. which a less well-to-do family moves into, creating yet another new vacancy. The idea, if not the label, has been around at least since the time of 1960s-era urbanist Edward Banfield, author of the sociology classic “Unheavenly City.”

The trickle-down description of housing markets always made sense to me because I saw up close how it operated. When my father was serving in the U.S. Navy in the early 1960s, he was stationed in Newport, R.I., the summering place of the Vanderbilts and other captains of finance and industry in the late-19th century. We lived next door to a former mansion that had been chopped up into multiple rental apartments. Some rich family had built the manse in the 1800s. After decades passed, it was no longer suitable enough or fashionable enough for rich people. The building was re-purposed as rental housing.

The reason people are going homeless is that not enough new housing, luxury or otherwise, is being built — not because luxury housing is too expensive for most people to afford. Continue reading