Category Archives: Transparency

Specific Updates: Lobbyists, Lottery, Tuition

Posted on August 8, 2018 by | Leave a comment

A few updates, clearing the decks before I disappear next week (I’m not quite as dedicated as Bacon, although I will take the laptop to Duck.)  My son who blogs on University of Virginia sports is going to give me some tips.  (StLouisHoo or something like that…)

Specifics on Who is Not Specific

The Virginia Public Access Project (VPAP) has once again demonstrated the power of a good chart (see above), this one tracking the number of 2018 disclosure forms filed by lobbyists which list bill numbers, and frankly it is a lower percentage than even I realized.   Absent any corrective action by the existing oversight committee or legislators, who are probably not motivated to require more disclosure, the number of disclosure forms listing bills by number will drop further.  No consequence, no change.

If the situation changed, you can see on VPAP the potential for a real tracking system where you could see which companies or associations weighed in on which bills.

Specifics on Who Plays the Lottery

Source: Virginia Lottery

A request for additional information on lottery spending or lottery frequency by income category, following my earlier report, drew a response from the Virginia Lottery that the information is not available.  Perhaps it is a question they do not want to ask or a survey crosstab they do not want to see.

My query did produce some additional data on who plays which games.  It was interesting that those with the lowest level of education, the 12 percent of respondents who didn’t finish high school, are least likely to play and of course least likely to have much discretionary income.  (They are underrepresented in the sample, however.)  People with a high school diploma but no college are the heaviest players of daily games and scratch games, which as noted earlier produce the most revenue.

Additional data was sent on the purchase of lottery tickets by automatic debits or charges, called a subscription in their terminology.  That approach to playing is most popular in the more economically healthy and urban regions of the commonwealth.

Source: Virginia Lottery

They did push back a bit on my assertion that the purchase of U.S. Treasury investments to cover deferred future payouts is another way the house wins, and correctly pointed out the state lottery doesn’t gain any benefit from that.  Yes, in that case I was using the term “the house” to mean government in general, including the federal government, which most certainly benefits from this steady market for these securities.

Specifics on Higher Education Inflation

You read it first on Bacon’s Rebellion a few weeks ago, but the large increase in the tuition and fees bills for this coming term at the state’s public colleges and community colleges is now fully detailed in the official release from the State Council of Higher Education.  The Richmond Times-Dispatch coverage is here.

Leave a comment

Posted in Education (higher ed), Open Government, Taxes, Transparency

Tagged

Somebody Must Think We’re Stupid

Commentary - Posted on August 7, 2018 by | 11 comments

David Poole and his team at VPAP have provided another illustration of how the reporting requirements placed on lobbyists at the state Capitol are intentionally vague and useless.  The chart above deals with the reports on lobbyist compensation.

This is usually the figure at the heart of the occasional stories about the amount spent by an individual company, or the gross amount spent on lobbying by all who file these forms.  But in practice almost nobody reports in full what they are paid, and they of course do things other than lobbying with their time.  So they pro-rate their fee and salary and report only a portion of it.

Who draws the line?  Who picks the formula for pro-rating the time? The lobbyist or the principal do so for themselves and are never asked to report their rationale.  That’s why comparisons are impossible – some report 5 percent and some 100.  Partly there is the natural reluctance everybody has to reveal their income, but there is also a reluctance to stand out as a big spender on charts like those produced by VPAP or in a news story.

A Peek Inside the Process

Years ago, one of the best lobbyists I ever worked with, a fine lawyer, instructed me that only the time I spent talking or writing to a legislative or executive branch official about a specific bill or vote was lobbying.  The time I spent researching the issue, drafting legislation or talking points, driving to the meeting, sitting in the anteroom – none of those hours, the bulk of the time, constituted lobbying.  The ten or fifteen minutes in the room, that was the only actual lobbying.

This all flows back to the very narrow definition of lobbying in Virginia law, which does not get into indirect lobbying or grassroots lobbying or lobbying preparation, all things that come up when companies are deciding what is and isn’t lobbying for federal tax compliance purposes.  This situation is too ridiculous to be accident or oversight, and extremely convenient for both the lobbyists and the lobbied.

Compensation is not that relevant.  What matters far more, the real glaring gap in the reports, are the details about what specific subject matters, bills, budget amendments, gubernatorial appointments or procurement decisions are being influenced.   The shameful gaps in the reports include loopholes that allow expensive dinners, gifts or entertainment to be given with no recipients named, or money to shuffle between various entities under the guise of some unregistered coalition.

Also, the full extent of grassroots or indirect efforts needs to be revealed.  More and more issues now spark television, direct mail, phone bank and other campaign style communications efforts, and every dime spent on those should be just as transparent as if they were being spent on a candidate.

One area where compensation should be reported in full is when the client is the government.  Beyond that, we need to focus on those other more important failings in the current non-disclosure disclosure regime, although this contribution by VPAP is useful in demonstrating that somebody out there thinks we’re stupid.

11 Comments

Posted in Commentary, General Assembly, Open Government, Transparency

Tagged

“All Matters” Makes Lobbyist Reports Worthless

Posted on July 9, 2018 by | 7 comments

“Matters Related” phrase used to avoid specifics is blessed by Virginia Ethics Council example.

“With as much specificity as possible.”

That is the instruction given to Virginia registered lobbyists about how they should list the various “executive and legislative actions and procurement transactions” they seek to influence on behalf of their principals.   The instruction to be as specific as possible is routinely ignored and never enforced.

Most of the hundreds of annual lobbyists disclosure forms filed on behalf of corporations, unions, associations, and government entities reveal nothing about which bills, resolutions, budget items or appointments they sought to influence.  Most simply report working on “all matters related to” or “matters of interest to” that company or association or entity.  One Chamber of Commerce lobbyist replied simply: “business issues.”

It is hard to blame the lobbyists for being vague.  In the illustration above, which is from the official example provided on a state website for those filling out the form, the stock phrase “all matters related to….” is shown to be acceptable.

July 1 was the annual deadline for lobbyist filings and if you know how to maneuver on the database you can find them here.  Set the date range for 2017-2018 and then enter a name for the lobbyist or their principal, which can be a client or an employer.  Look for the disclosure reports.  There are still some reports missing but most are up.  (The data will also eventually be picked up on the Virginia Public Access Project lobbyist listings.)

A Glimpse Inside the Process

There are many filings which do list specific bill numbers where the principal’s views were communicated and some even go so far as to list specific budget items by number.  But even in those cases it is not possible to determine if lobbyist expressed support, opposition or sought to amend the bill.  In some cases lobbyists suggested, requested or actually provided the text of a bill or amendment – an important specific detail never reported.

So many of the reports fail to list bill numbers or other details that there is no point in singling out anyone for doing so.  Some of the largest and busiest law firm lobby shops routinely use the “all matters” or “matters related” phrase or something similarly amorphous.

An earlier post described the way some lobbyists evade reporting the names of officials and their families on their entertainment expenses by splitting the cost between more than one client to stay below the $50 reporting trigger.

This failure to require actual details on which bills, appointments or budget decisions are being influenced – ignoring what appears to be a clear instruction – is another weak spot in Virginia’s oversight.  Absent that information the reports are worthless.

Other sections of the reports deal with spending on communication efforts, with advertising, social media and direct mail becoming increasingly common in legislative battles.  How much out-of-town lobbyists spent on hotels for themselves, or whether they rented a locker or subscribed to the bill tracking service, are details which are included.  They are also details which do not matter.

The required information on compensation is also meaningless because most lobbyists pro-rate the amount based on the narrow percentage of their time spent in direct contact with legislators or other officials.   Again, the reports are worthless.

How much information about what bills drew the attention and effort of the lobbyists could be the subject of debate.  The lobbyists’ natural inclination would be to share nothing.  Open government advocates would want to know everything.  Right now “nothing” is winning.

Many of these lobbyists are working for state agencies or for local governing boards, school boards or authorities.  They are spending taxpayer dollars seeking to influence tax and spending decisions or changes to their client’s authority – undisclosed government-to-government lobbying on our dime.

The private company or association lobbyists use private dollars, but are often fighting proposed regulations or seeking for the law to give them an advantage over customers or competitors.  Many of them are seeking tax changes or spending items in the budget that will provide a benefit to them or their stockholders.

One of the most important discussions during 2018 has been about filling an open seat on the State Corporation Commission, still unresolved.  The SCC is the crucial regulator for multiple businesses in Virginia.  You may look in vain for a lobbyist who discloses talking to legislators about any candidate for that job.  Does that mean no lobbyist has weighed in?  Unlikely.

Any competent lobbyist can sit down at the end of the session and list the bills or issues worked in the previous weeks, and some record the specific meetings or communications. (Not all are competent, but that’s another issue.)  They know what they did, and in most cases their employers or clients have received regular reports, with full specificity.  Requiring a list of bills and issues that were worked on the report would not be onerous.

7 Comments

Posted in Open Government, Transparency

Tagged

Behavior Has Changed But Within Limits

Posted on May 22, 2018 by | 18 comments

Gifts per legislator. Source: Virginia Public Access Project

There are plenty of complaints these days that the legislative process is unduly influenced by money, but when the spotlight shines or a major scandal erupts, behavior can change. For example, Virginia legislators simply do not want to report that they have received gifts or attended lobbyist dinners, on public records which are available to their voters, the media and potential opponents.

How few actually do show up on 2018 reports is well-illustrated in the graphic above recently posted on the Virginia Public Access Project (click here for interactive features). Readers of Bacon’s Rebellion are probably already following VPAP as well, but if not this is worth a look.

Except for one very popular event, the annual Agribusiness Council Dinner, 91 of Virginia’s 140 legislators would have reported no gifts or meals at all. In many rural districts the political cost of skipping the Ag Dinner and not being seen by constituents attending would also be high. Yet 64 legislators missed that one, too, and avoided having to explain that $69.48 repast.

Several legislative offices have signs out front expressing a policy against accepting any gifts, even innocuous gifts such as a ball point pen or a box of candy or a calendar. That is growing but is not universal. It is the aversion to reporting gifts or entertainment that is becoming more widespread.

That report makes one think the place has really changed since the Bob McDonnell case, right? Not so fast. First note the data covers the period of the regular General Assembly session, from January 1 to Sine Die in March, not the whole year. As you can see with the full 2017 data here the totals tend to grow through the year, especially with paid trips to summer conferences. But there is no dispute that the number and value of reported gifts and meals is shrinking. For example look at the same report for 2012.

Second, remember that gifts or entertainment expenses of $50 or less do not trigger a reporting requirement. Lobbyists or organizations are keeping a closer eye on the cost of items, but $50 can still pay for some very nice gifts or meals.

Does it at least mean the days of the big restaurant dinners are over? Oh my no – and here is how they do it. It can be tracked on VPAP as well but it takes research. The $50 reporting trigger is interpreted to mean $50 per person per lobbying principal (client) paying the bill. If two clients for the same firm split the tab the trigger is $100 per person, and if three – well, you get the drift.

To confirm this is still the practice I easily found an example, but will not provide the details because I did not reach out to the major lobbying firm involved. I noted that one client reported a dinner on January 25, 2017 with 12 persons and a bill of $149 – well below the cost that would require naming the legislators. But by clicking down its full client list I found four more clients reporting a dinner for 12 at $149 on the same date.

Assuming the firm didn’t host five different dinners that night, the real bill was $745 for 12 people, or $62 per person.  That’s hardly lavish, but the intent to disclose the names of attendees has apparently been thwarted. They could stay on the list of those with no reportable gifts for 2017.

As VPAP helpfully explains: “Disclosure forms do not require clients to state clearly the average cost per person. Calculating the average cost per person may not be as simple as dividing the total cost by the number of people attending. Because the forms and instructions are unclear, the amount listed can represent either the total cost of the event, the amount spent on only the officials who attended or the average cost per person.”

It is silly and arbitrary to assume that somebody who accepts a $51 dinner has been compromised while somebody who skips dessert or drinks and spends $40 has not. Frankly neither has been compromised in my book. The real purpose of these dinners is to get the undivided attention of the legislators for a while – admittedly an advantage for that lobbyist and an edge on the competition. That is reason enough they should be fully reported.

If the costs of a dinner can be shared among multiple clients then the costs of other forms of entertainment or gifts could also be divided, seeking to keep the cost below $50 per client per recipient and keeping the recipient(s) off reports. I have not scoured the records to see if that happens, but nobody should have to.  The General Assembly needs to end this particular game.

18 Comments

Posted in General Assembly, Money in politics, Transparency

Tagged

Not a Good Sign: Deadline Missed for Metro Safety Panel

Posted on January 5, 2018 by | 9 comments

Virginia, Maryland and Washington, D.C., will miss a February deadline for setting up an independent Metro safety oversight group. A realistic time frame for the panel’s launch is another six months, according to Virginia’s Transportation Secretary Aubrey Layne.

As a result, the Federal Transit Administration has withheld $15.8 million from the two states and the district, reports the Washington Post. The commission launch has been held up by the search for an executive director and six commissioners. Virginia and Maryland have announced their commissioner picks, but D.C. Council has not.

“It’s taken a lot longer than we anticipated with our partners getting together their personnel, but it is what it is,” Layne said. “It’s similar to [Metro]. It’s dealing with different regional issues and the politics of doing that.”

Bacon’s bottom line: If Virginia, Maryland, and D.C. can’t work effectively on an issue as innocuous as Metro rail safety — a goal everyone shares — how will they ever come to agreement over how to fund and operate the Metro itself? There is no consensus on how much to charge passengers. There is no consensus on how to revamp the Metro’s union contract. While there is agreement that the ailing commuter rail system needs billions of dollars to pay for maintenance backlogs, there is no consensus on who should pay. What a mess.

9 Comments

Posted in Transparency

Tagged ,

And That’s How You End Up with Donald Trump: Turnstile Jumping Edition

Posted on November 13, 2017 by | 4 comments

Turnstile jumper. (Image credit: Boston globe.)

The Metropolitan Washington Area Transit Authority (MWATA) has a big revenue problem. Not only is ridership declining, but it appears that an increasing number of riders aren’t paying their fares. To recapture riders, Metro is asking billions of dollars from member states and localities to patch up everything from rail lines to escalators. And to plug its revenue losses from fare jumpers, the authority is cracking down on fare evasion.

Metro Transit Police Chief Ronald A. Pavlik Jr. estimated that the agency loses up to $25 million a year in unpaid fares, reports the Washington Post. From January to June of this year, the number of fare-evasion citations issued more than doubled from the year before to about 6,000 tickets. About 65 percent of those tickets were issued to rail users; 8 percent of the tickets resulted in an arrest. Metro doesn’t collect any money from the fines, but it will benefit if tougher enforcement reduces turnstile jumping.

Many people applaud the crackdown on cheaters. WMATA desperately needs the money to maintain the rail service, which has been plagued with safety issues and delays. Metro General Manager Paul J. Wiedenfield has said that people feel a sense of injustice that some riders flout the rules and ride for free while others dig deep to pay their fares. “I think it’s right that everybody pay their fare.”

But not everyone agrees.

Washington City Council is considering legislation that would decriminalize fare evasion, eliminate jail time, and lower the maximum possible fine from $300 to $100. The move, says the Washington Post, “mirrors a trend in cities across the country based on a growing awareness among lawmakers of how issues such as legacy policing practices, unconscious bias and systemic racism, can unfairly target communities based on race or age — even in the seemingly mundane case of fare jumping.”

Some legislators are questioning whether fare evasion should be a crime at all, arguing that targeted enforcement campaigns are bound to ensnare poor and low-income people who don’t have the money to pay their fares — let alone fines.

“Absolutely there’s been a raised consciousness on this that did not exist 20 or 30 years ago,” said Nassim Moshiree, policy director at the American Civil Liberties Union of the District of Columbia. “Activism like the Movement for Black Lives has had a positive impact on raising awareness that policing — and the explicit and implicit bias in policing — means that certain communities are impacted in unfair ways. Even when it comes to something like fare evasion.”

Bacon’s bottom line: The MWATA board already keeps fares artificially low out of concern for the impact on low-income riders, with the difference to be made up by state and local governments. These low fares, incidentally, are a big reason why the system is desperate financial straits today. But apparently, that’s not enough. Now, invoking vague charges of systemic racism — no one has made the case that Metro is systemically racist, just that systemic racism exists — they want to end the crackdown on fare jumping.

It is thinking like this that puts the ACLU, Black Lives Matter, and allied movements in such ill repute. The mere fact that “systemic racism” exists somewhere in the country becomes grounds for engaging in what might be called “systemic reverse racism” in which one group, Metro fare jumpers who are predominantly African-American, get off easy while shifting the cost to taxpayers, a group dominated by whites. (Actually, MWATA does not track the racial identity of fare jumpers. I am simply following the lead of the ACLU’s Mr. Moshiree, whose statements would make no sense if he did not believe that fare jumpers were mainly African-American.)

This is identity politics run amok, and it is becoming all-pervasive in our society. And the most evil, insidious part of it is this: The more that blacks embrace identity politics, the more many whites will as well — particularly lower-income whites whose lives belie the notion that they benefit from “white privilege.” And that’s how you end up with Donald Trump.

Martin Luther King had a dream that one day people would be judged by the content of their character, not the color of that skin. Tragically, that dream seems to be dying.

4 Comments

Posted in Race and race relations, Transparency

Woo Hoo! Stewart Promises Billions in Toll-Free Projects

Posted on May 24, 2017 by | 11 comments

Photo credit: Washington Post.

Claiming the populist niche in the contest for the Republican gubernatorial nomination, Corey Stewart has given away a semi-automatic rifle as part of a fund-raising effort, defended monuments of Confederate generals, and bashed Dominion Energy for its coal-ash disposal plans. Now he’s added to his rabble-rousing resume by promising voters to meet Virginia’s transportation needs without raising taxes or imposing new tolls.

“We obviously have transportation needs, and the way we’re going to fund those is by finding efficiencies within existing spending in Virginia. No new tolls; no new taxes. That’s what I’m pledging,” Stewart said yesterday in a Virginia Beach news conference.

Where would the money come from to pay for projects such as two more lanes for the Hampton Roads Bridge Tunnel, costing an estimated $3 billion? Reports the Virginian-Pilot:

Stewart said he would eliminate the need for new tolls by slashing $2.2 billion from the state budget, which is about $104 billion over two years, and redirecting it toward transportation.

Under Stewart’s plan, the $2.2 billion in redirected spending would come in his second year in office. He’s proposing that on the heels of another plan calling for cutting another $2.2 billion in spending in his first year so the state could reduce the income tax rate most people pay from 5.75 percent to 4.75 percent.

Stewart did not specify what would be cut from the budget under his proposals, but said “there are billions of dollars worth of savings out of the state’s annual $52 billion budget that can be found.”

Bacon’s bottom line: This is magical thinking, and it’s wrong in oh so many ways.

First, it is a fantasy to think that billions of dollars of “inefficiencies” can be squeezed out of the existing state budget by going through by line item by line item — the only way to achieve savings under the current paradigm of government. Medicaid, a federally mandated programs, continues to grow at the expense of other programs. (Virginia, by the way, already operates one of the leanest Medicaid programs in the country.) The state is under-funding its K-12 schools based on Standards of Quality, and it has chopped per-student support to higher education. Virginia has huge unmet needs for mental health and substance abuse. It has massive unfunded pension liabilities. The list could go on and on. Anyone who thinks they can cut the income tax rate at a revenue cost of $2.2 billion and then find another $2.2 billion laying around to be reallocated to transportation is deluded.

Second, Stewart is misguided in his no-new-tolls stance. But at least he has a rationale. Quoth the Pilot:

What makes this tolling plan so absolutely heinous is that taxpayers have already paid for these roads. It’s absolutely wrong. It’s absolutely wrong to tax citizens twice for the same road. You need a third crossing, we need a third crossing here in Hampton Roads, but that project is really a state project. It should not be borne upon the citizens of Hampton Roads to pay for a project that is really meant for the Port of Virginia, which is owned by the entire state.

I would agree, it is wrong to “tax” (or toll) citizens twice for the same road. But doubling the capacity of the Hampton Roads Bridge-Tunnel would not be tolling the “same road.” Most likely the new tunnel would be set up as HOT lanes, in which motorists would continue to use the original tunnel for free but would pay a premium to use the new tunnel as a way to bypass congestion. No one would be compelled to use the new tunnel; no one would be forced to pay the toll. But everyday motorists would benefit to the extent that the tolled road diverted some traffic from the untolled road.

I also would agree that it is reasonable to ask the Port of Virginia to help pay for transportation improvements that give tractor-trailers better access to inland markets. But the most logical way to collect money from port-related activity is for time-sensitive tractor-trailers to pay tolls to avoid congestion!

Corey Stewart reflects the id of the Virginia psyche in which everyone wants transportation improvements but they want someone else to pay for them. Stewart is promising to find “someone else” to pay. Thus, roads and highways effectively become free goods — free to the motorist, not the taxpayer. In other words, Stewart is a transportation socialist. The Bernie Sanders crowd might be OK with that. But I can’t imagine the gambit will take Stewart far with the Republican Party.

11 Comments

Posted in Politics, Transparency

Tagged

Virginia Ethics Council’s Searchable Database a Dud

Posted on March 7, 2017 by | 9 comments
So much for improved conflict-of-interest transparency. The Virginia ethics council's searchable database shoots blanks.

So much for improved conflict-of-interest transparency. The Virginia ethics council’s searchable database shoots blanks.

You can imagine my excitement to read this morning in the Richmond Times-Dispatch that the Virginia Conflict of Interest and Ethics Advisory Council has finally put lawmakers’ statements-of-economic-interest filings online. That information could prove invaluable to journalists and bloggers reporting on the inner workings of the General Assembly.

The statements detail what gifts lawmakers receive, what companies they own stock in, and who employs them and members of their immediate family. For years that information has been held in state offices, available only to those who physically inspected the records in downtown Richmond. Accessing the data online is a breakthrough in transparency. I, for one, looked forward to double-checking legislation for conflicts of interest without the tedious necessity of leaving the Bacon’s Rebellion Global Command Center.

Making a beeline for the Virginia ethics council website this morning, I entered the name of a particularly conflict-afflicted legislator, and eagerly awaited the results. Here’s a screen capture of what appeared on my screen:

Thanks for nothing.

If it’s any consolation, the searchable website for registered lobbyists does work. You can find the names, for instance, of all 16 of Dominion’s registered lobbyists, and all 16 of the Virginia Education Association’s. Of course, you can get the same data over at the Virginia Public Access Project website. Indeed, the VPAP website is better — it allows you to search the lobbyist records by issues lobbied, and it reports on the newest lobbyists registered. It even displays lobbyist photos!

Hopefully, the Virginia ethics council will get its website working soon. But it would serve the public interest even better by turning its data over to VPAP, Virginia’s one-stop-shopping for data on elections, campaign contributions, legislation, candidates and legislators, and lobbyists. Adding lawmakers’ statements of financial interest to the government-transparency portal would be awesome.

Update: OK, here’s what’s going on. The search feature provides a drop-down menu with two options: “June 2016” and “2017.” The June 2016 option is the default option. I used that default option when conducting my search. However, when I switched the option to “2017,” I was able to reach the most current filing. Not a complete dud, but confusing to say the least.

9 Comments

Posted in Transparency

Tagged

Fostering the TNC Revolution

Posted on March 6, 2017 by | 1 comment

Starship robot: Now legal in Virginia.

It’s always refreshing when Republicans and Democrats in the General Assembly play well together. We don’t hear about such instances very often — reporters are drawn to conflict — but I suspect they occur more frequently than we hear about.

An illuminating instance is how legislators from the two parties collaborated to create what Sen. Jennifer McClellan, D-Richmond, calls a “comprehensive legal framework” for Transportation Network Companies (or TNCs) popularized by Uber and Lyft.

Writing in Sunday’s Richmond Times-Dispatch, McClellan detailed several bills enacted in the 2017 session with bipartisan input. If signed by the governor, the legislation will accomplish the following:

  • Lower up-front fees. TNCs will have a new option for applying for certificates. Instead of paying the existing up-front fee of $100,000 upon application, businesses can pay a $20 surcharge per record when purchasing driver transcripts. This measure will make it easier for smaller, less capitalized companies.
  • Less red tape for drivers. A requirement will be removed for TNC drivers to register personal vehicles for use as a TNC partner vehicle. State Police can recognize another state’s annual motor vehicle safety inspection in lieu of Virginia’s.
  • Brokering rides. Third-party companies will be allowed to broker TNC rides. This measure responds to a request by Richmond-area startup, UZURV, which piggybacks on Uber and Lyft by allowing passengers to reserve rides with specific drivers.
  • Robot deliveries. London-based Starship Technologies wants to make deliveries in cooler-sized robots, which can travel up to four miles (round trip) and can navigate sidewalks, shared-use paths and crosswalk. These “Electronic Personal Delivery Devices” will become legal.
  • Less red tape for property carriers. Some requirements regarding property carriers and bulk property carriers will be eliminated.

The TNC revolution will prove a fertile field for innovation, and the more Virginia does to loosen regulatory restrictions (within the bounds of protecting public safety and creating a level playing field), the more innovation we will see. Companies like Starship will set up shop in Virginia before investing in states where their service is illegal. Entrepreneurs like UZURV will spring up to build on the Uber revolution. And Virginia consumers will benefit from options they never imagined having before.

Now, if the legislature can just figure out what to do with AirBnB…

1 Comment

Posted in General Assembly, Regulation, Science & Technology, Transparency

Three Land Use Trends to Watch

Posted on February 21, 2017 by | 7 comments

Construction booming in Tysons despite 17.5% office vacancy rate.

Three articles today may help us divine the future of residential and commercial development in Virginia:

Rebound of the exurbs? For many years, I was committed to the proposition that metropolitan development had reached a tipping point in which the forces favorable to urban re-development were stronger than the forces driving suburban sprawl. The exurbs — low-density tract development on the metropolitan fringe — seemed to be in full retreat as market preferences shifted toward walkable, mixed-use development in central cities and inner suburbs.

There still seems to be an unfulfilled demand for walkable urbanism, but I may have been to quick to write off the exurbs. Jonathan Fox, a principle at the Fox Group, argues in the Washington Post that median home prices in Washington’s inner suburbs flat-lined in 2016 while prices in outlying communities such as Marshall, Warrenton, Lorton and Middleburg have experienced double-digit increases in median home prices and strong gains in cost per square foot.

“As home prices and the cost of living continue to increase in Washington,” writes Fox by way of explanation, “there will be more demand for affordable housing which is often found in farther out regions of the counties.

My question for Fox: Is he focusing on real estate prices in the oases of small-town walkability in outlying communities — Warrenton, for instance, is highly walkable — or does his analysis include the surrounding tract development? If so, are walkable communities out-performing tract communities?

Tysons redevelopment is booming. But… The Tysons area may have a 17.5% office-vacancy rate, but re-development is going gangbusters. Traditional supply-and-demand logic does not seem to apply, says Gerald Gordon, president of the Fairfax County Economic Development Authority, as reported by Inside Nova.

Tysons tenants are engaged in a “flight to quality,” moving from older buildings to new ones with the latest amenities. “The new space is more expensive, but it sits right on top of a Metro station,” Gordon said.

But redevelopment away from the Metro stops may prove a challenge. “We’re going to have to work hard just to stay in place,” Gordon said. “When I first got here, office users were taking an average of 265 square feet per employee. Today, it’s anywhere between 80 and 140. So you have to bring in twice as many jobs to fill the same space.”

Moral: As employers figure out how to use less office space — more collaborative space, more mobile office technology, more “hoteling” — high commercial vacancy rates will continue to be an issue. There will be a lot of obsolete office space on the market.

Bifurcation of retail. Everyone knows that Amazon.com and other online retailers are gutting the traditional retail industry. But that doesn’t mean everything will be purchased online. People still like to shop as part of an entertainment or social experience. My wife’s cousin calls it “retail therapy.” A related phenomenon is what I call “girlfriend shopping” — shopping as a bonding experience. While Amazon.com makes shopping ridiculously easy, it’s not what you’d call an enjoyable experience.

Tom Goodwin, head of innovation for Zenith Media, argues in Bloomberg that physical retailers can create a competitive advantage that trumps price and convenience.

“Shopping is the world of adding experiences,” he writes. “It’s the interactive perfume lab in Selfridge’s, the selfie opportunities in Harvey Nichols, the Hardware club experiences in Harrod’s or the extravagant laboratories of Le Labo. Coffee shops seem to have learned this, it’s the unnecessarily long wait, the drama of the brew, the theatre of the leather bound menu in Intelligensia coffee.”

Market forces will push retailers in one of two directions — more frictionless, low-cost shopping online or more experience-rich shopping in the physical world.

Bacon’s bottom line: I don’t get the sense that local governments in Virginia have absorbed two important lessons. First, technology has rendered obsolete the space-intensive offices of yesteryear, and the demand for commercial space is shrinking. Old office parks will rapidly lose their market appeal. Counties will see their tax bases shrivel. Second, retail activity continues to move moving online, which is rendering shopping centers obsolete and redundant. Again, counties will see their tax bases shrivel.

The future belongs to those who can adapt. Office activity will shift to centers of walkable urbanism; access to mass transit is a major bonus (although, in an Uberized world, I’m not persuaded it is absolutely essential). Retail activity likely will do the same. When people want to enjoy shopping as an experience, they want to enjoy the experience outside the store as well. Strip shopping centers and aging malls don’t have much to offer.

Nobody knows where all this heading. (That includes your humble futurist and prognosticator). Things are changing too fast for planners and politicians to figure it out. How will self-driving cars alter the equation? How will Transportation-as-a-Service change the way think about where they live, work and play? There’s lots of speculation, but nobody knows. We won’t know until the market figures it out. The communities that prosper will be those that are the most flexible, adaptable and willing to experiment with new forms of transportation and land use.

7 Comments

Posted in Land use & development, Transparency

Tagged ,