Incentives out of Joint

The Metropolitan Washington area can accommodate another 200,000 households and reduce traffic congestion just by putting the new houses in mixed-use, transit-oriented development. That’s the startling conclusion of an exercise conducted by the Metropolitan Washington Council of Governments.

In his latest article for the Road to Ruin project, “Incentives out of Joint,” writer Bob Burke says there’s just one problem: There’s little financial incentive for local governments to cooperate. Given a revenue stream based largely upon property taxes and a state funding formula that reimburses affluent Northern Virginia localities as little as 20 percent for their education costs, local governments conclude that new households cost them more than they contribute in local tax dollars.

Until the tax structure and funding formulas change, it is unrealistic to expect local governments to support transit-friendly development that may relieve traffic congestion but brings in new families who pose a fiscal liability.

Share this article


(comments below)


(comments below)


11 responses to “Incentives out of Joint”

  1. E M Risse Avatar
    E M Risse

    Jim and Bob:

    This is nice work and I like the focus on “location” and the need to chage the tax structure but it lacks three ingredients:

    1. Quantification: How many acres at what density? What is the minimum threshold to achive a balance of J / H / S / R / A at the Alpha Community scale?

    2. Balanced Communites: If there is not a New Urban Region-wide strategy to create Balanced Communities, these mixed use developments could meet the “closer in” and “on a major transport corridor” criteria and still be in the wrong locations depending on station-area mix and system wide-balance of the transport system.

    More housing near Orange Line stations without jobs means even more crowed peak hour / peak direction trains.

    With the wrong mix and / or location these projects are just a little better than mixed use projects scattered across the Countryside. They are ofcourse much better than scattering individual uses across the Countryside.

    To reverse the intentives to create more Pod People and Pod Services there has to be a solution that benefits everyone except the land speculators.

    3. Fairshare allocation of all location variable costs: It is not just the municipal governments that have the wrong incentives, it is everyone in the private market.

    Keep up the good work…


  2. James Atticus Bowden Avatar
    James Atticus Bowden

    How far out does ‘metro’ Washington go – that could take the extra 200k without increases in congestion. Is it by county or by miles? How far?

  3. Jim Bacon Avatar
    Jim Bacon

    Jim, According to Bob’s reporting, “metro” Washington includes the following major jurisdictions: Prince William, Loudoun, Stafford, Fairfax, Arlington and the city of Alexandria. (I’m assuming that he didn’t bother to list all the smaller independent cities.)

  4. E M Risse Avatar
    E M Risse


    Great question! The COG study only covers the COG jurisdictions, in VA they are the ones listed by Jim Bacon above.

    But see “Where is Northern Virginia” our 12 August 2003 column for a review of the jurisdictions in the Virginia protion of the National Capital Subregion.

    For 30 years Fauquier County has been in what the Census Bureau calls the Metro Area but is not a member of COG or the Northern Virginia “Regional” Commission (nee NV Planning District Commission)

    More important those new project for 200,000 new citizens (sic) could be inside R=10 which is about as far out as the Beltway — that is only one half way “out” in Fairfax County.

    The numbers we use in “Five Critical Realities that Shape the Future” (a Backgrounder at are based on the “activity clusters” (nee Activity Centers) from COG early 21st Century study. This capacity analysis indicates the real holding capacity of those centers is far higher than 200,000 new citizens at minimum densities. (See our point 1. above)


  5. Toomanytaxes Avatar

    Bingo! It’s nice to see that others around the state are starting to get it. As many people from NoVA regularly argue, under the existing rules of the game (most especially, Virginia’s tax structure and spending patterns), adding people and density to NoVA makes its quality of life go down and real estate taxes go up!

    The unfair tax structure sends most of the public sector benefits from growth (read tax revenues) to Richmond for redistribution around the rest of the state. NoVA is the piggy bank and gets little in return — except for transportation funds because of the new Wilson Bridge and Springfield Mixing Bowl construction. For example, the staff of the Senate Finance Committee estimated that the net cost of the Mark Warner tax changes to Fairfax County for 2005 was almost $108 M (for 2006, the estimate is $117 M). Fairfax County Public Schools reported that, for fiscal 2006, it received less than $14 M in new state aid revenues. Great return on our investment for a tax increase that was supposed to go in large part to public schools — just not to Fairfax County Public Schools.

    Now toss in a county board of supervisors that fails to negotiate and collect adequate proffers. See my earlier discussions for the details.

    EMR – “More housing near Orange Line stations without jobs means even more crowed peak hour / peak direction trains.” This the one of the reasons that there was such strong citizen opposition to MetroWest at the Vienna Metro Station. No one trusts that the supervisors will force the builders to construct sufficient commercial (office) and retail within the development. In fact, the Fairfax County Board of Supervisors, despite stating that it needs to define such terms as “TOD” and “Mixed Use,” has not done that. Therefore, it’s open season to call anything TOD or Mixed Use.

  6. Ray Hyde Avatar
    Ray Hyde

    If the state would build the damn roads it’s supposed to build, if the state would give us the full money we’re due to build schools… I wouldn’t be putting the screws to them.”

    An average household in Prince William costs the county about $16,000 per year for services but pays only $3,300 in local taxes….

    Where does he think the state is going to get that money? It is going to have to come from someone who lives in a house?

    If you divide the PW budget by the number of houses, you come up with this kind of cost per house. But this argument is totally bogus because real estate taxes are only about a third of the county’s income. If homes actually paid what they cost under this formula, you could eliminate every other fee, tax, fine, and user payment in the county.

    This is just a dumb argument. It is another take on get somebody else to pay, and if you can’t, then get somebody else to absorb the costs.

    Under that scenario, the number of total vehicle miles traveled would actually drop by nine percent and transit trips would rise 12 percent.

    This is completely unrealistic. What is having 200,000 new TOD’s going to do to cause me or any existing resident to reduce driving by nine per cent? Nothing. Unless the traffic is so bad because of them that I have to drive less.

    In order to have total VMT drop by nine percent these people would have to drive negative miles. What this really means is that 200000 new TODs will drive nine percent less than they would otherwise. On average 200,000 vehicles drive 3 billion miles a year. Say this theory is right and we reduce that by nine percent, so it is only 2.8 billion miles. It is going to add 2.8 billion VMT to the areas that are already congested.

    Who cares if the new VMT drops by nine percent? That has got almost nothing to do with congestion. This study is an outright lie.

    Lets say that you consider the area inside the beltway and say it’s 150 square miles and 25% of that is streets and roads. Lets be really generous and say it there is 75 square miles of road surface. Now add 200,000 new cars, even if you reduce the VMT to zero for the new cars, it will still be more congested, just from parking that many cars.

    Even if 25% of TOD’s do without a car, you are still adding 150,000 more cars. People aren’t going to want to move to one of the most affluent areas in the country so they can do without a car. This idea is dumb.

    In last weeks article on trolleys on Columbia Pike, one advocate admitted that the whole reason was to get the couple in that $5,000,000 town house out of their two BMW’s. Now THAT is an incentive out of joint.

    And, say you use the land as far away as Loudoun to put these people, so instead of 75 sq miles of roadway you have 1500 sq miles of roadway. It is going to add 21,000 VMT to every mile of every road in the area.

    Anybody who thinks about this for two seconds can see that the study is self serving and outright wrong. And that is why you have so many people fighting new growth: they don’t believe the rosy picture painted by the planners.

  7. Anonymous Avatar

    A subsidy is an incentive that you don’t happen to approve of.

  8. Jim Bacon Avatar
    Jim Bacon

    Anoymous 4:33 — touche!

  9. James Atticus Bowden Avatar
    James Atticus Bowden

    Just because the flurry of facts and figures confuse me, I want to offer some historical and sci fi-based solutions.

    Designate a Lord of the Manor for every 5000 persons (is that an alpha community EMR?) in urban areas. These people must spend their entire lives within 5 miles (oops marry the size of realm with the density of the people so maybe it is 20,000 persons in a 2 mile by 2 mile realm…). If they want to leave the realm they must have permission from the Lord. Realms can have job producing ‘guild’ centers like defense consulting, medical, info systems, other federal consulting, etc.

    Put a chip in the palm of urban folks’ hands. If they go beyond their daily or hourly allowable limits the GPS function will know and make it glow red – for fines, etc.

    Ban cars within designated urban areas. Personal Cars must be kept in garages on the outside of the area. Inside its all mass trans, taxi, rickshaw, etc.

    (My favorite) Don’t allow any more Yankees to move into urban areas in Virginia. Legal foreign-to-the-USA immigrants to the U.S. are welcomed.

    Just trying to help.

  10. Ray Hyde Avatar
    Ray Hyde

    What do you do with halfbreed Yankees? My mother was as southern as Pecan pie.

    I figure I moved South and stayed because I didn’t have the right “blood” to survive in New England.

    I recall an obituary of a woman that died on Martha’s Vineyard. It reported that she had been a vistor on the island for 83 years.

    What does it take to become an honorary Virginian?

    JAB: I’ve been stuck on other projects, but I have not forgotten the database idea.

  11. James Atticus Bowden Avatar
    James Atticus Bowden

    Ray, I must admit my children are the result of a ‘mixed’ marriage. My wife, from West Virginia, had ancestors who served in the Union Army.

    Actually, I insist that we in real Virginia, south of the Occoquan, get the best Yankees. The most loyal, hard-working Republicans I had on my little city committee when I was chairman were Northern move ins – mostly retired military, devout Christian, who hated taxes.

    Virginian is a state of mind and choice as much as birth. Not kidding here. There is a culture here and a political culture and it is open to join. Especially in Tidewater there is a lot of respect for authority, trust in government to do what is right, desire to be left alone and governed the least as possible, joy in living, love of land and water, polite respect for other persons until they prove otherwise, strong ties to family and private faith.

    I’ve lived in NY and MA and snow in April is against my religion.

    If you believe, truly, that the Commonwealth is indeed “God’s Country” then you are a Virginian.

    Ray, I figured we would connect sooner or later to start sorting our data.

Leave a Reply