On 26 January NAHB reported that existing home sales INCREASED in December: “Existing-Home Sales Spike As Bargains Glut Market: Sales Up a Surprising 6.5 Percent in December.

This was the only “good” economic news in weeks:

24 January 2009 WaPo: “Downturn Accelerates As It Circles The Globe: Economies Worse Off than Predicted Just Weeks Ago.” Record losses in jobs, defaulting banks, defaulting nation-states, riots in Eastern Europe, Autonomobile and retail closings, the four largest print media Enterprises in the US of A lost $18.3-billion in market value in just a year, the new federal administration scrambling for ways to expand bail-outs, consumer confidence at an all-time low, …

The 2001 Nobel prize winner in economics and former chairman of the Council of Economic Advisors Joseph Stiglitz suggested to CNNPolitics that the US of A follow Sweden’s lead: Agencies should take over failing banks – wiping out owner and bank investor interests – instead of just loaning them money or buying preferred stock.

The existing home sales news was apparently what kept the gambling venues (aka, Dow Jones, et. al.) from tanking during the first part of the last week in January because other news from the shelter sector not good:

On 24 January it was reported that Freddie Mac will ask for $35-billion more in taxpayer’s money and on 26 January that Fannie Mae will ask for $16-billion more. On 24 January FHA reported that the number of FHA-backed loans in default were rising.

There was some good news: The Newton Bank of Nigeria is offering loans to all comers over the Internet.

And almost as foolish, Bill Bolling who wants another term as Lt. Governor of Virginia has a “legislative agenda” that includes a $2,500 per person ($5,000 per couple) “tax credit” for Virginian’s buying homes with no location related criteria – such as qualifying for location efficient mortgages.

Perhaps most scary of all was the front page of WaPo’s Real Estate section on 24 January. The feature was a puff piece on green building (this story has already been cited in prior comments): “Seeking a Smaller Footprint: Builders Scale Back House Sizes as Buyers Commit to Energy Efficiency.”

Why is this scary? Check out the photographs of the featured buildings! If there were real standards for journalistic decency this would be stamped “PORNOGRAPHY!” It is well known that even those committed to energy efficiency will not walk forever. These dwellings are said to be “near Winchester.” But from the pictures it is clear they are not THAT near. Where are the Jobs and Services needed to achieve Balance?

Somewhat Better Size House, still in the Wrong Location.

But what puts the December rise in existing house sales in the deception category? The real estate industry is using the percentage drop in home value during the Depression when looking for the “bottom” of the market.

There are major differences in the unsustainable runup in house prices over the past 35 year, and especially the last 15 years with the Roaring 20s and the Depression Era drop of around a third in value. Here are some:

Far lower percentage of homes with mortgages

Far fewer homes

Far more dwellings with two or more generations in a unit.

This later point is critical. These occupants could work to help make ends meet. Multi-generational occupancy was especially prevalent in detached dwelling and detached dwellings were mainly in the Countryside. The occupants of detached dwellings were far more likely to be able to depend on the land for the needs of everyday life.

Then there is the fact that the housing bubble built up over the 20s was a far smaller bubble and it was not nearly as leveraged nor were the mortgages packaged, securitized and peddled around the globe. Home mortgages were a Community and a Regional activity.

If one wants to look for levels of property value declines they need to look not at nation-state wide percentages of owner occupied dwellings but at the bursting land speculation bubbles in Florida, California and elsewhere.

While NAHB reports that sales were up “a surprising” 6.5 percent in December, CNNMoney was reporting: “Flood of foreclosures: It’s Worse Than You Think.” “Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated that current statistics indicate.”

Of course most of these not yet listed dwellings are Wrong Size House in the Wrong Location – see “THE TRAGEDY OF TRICKLE DOWN.”

The bottom is not yet in sight. December sales numbers are Fools Gold.

And still new units are being built in the Wrong Locations, and the wrong dwelling type, even if somewhat closer in size and energy consumption.


Share this article


(comments below)


(comments below)


27 responses to “SHELTER FOOLS GOLD”

  1. Anonymous Avatar

    What is your point?

    That people will NOT make a logical choice between home cost and commuting costs?

    That people will willingly settle for less space for the same money, just to save 15 minutes of driving each day? The same fifteen minutes they would spend waiting for the bus or subway?

    Meanwhile the backlog of homes for sale has fallen from 12 months to nine months, and you are still whistling Dixie about the impending doom.

    All those houses, wherever they are will sell for some price, and that price will be a good deal for the buyers and the sellers.

    By defnition.
    (I knew you would love that.)


    “Far lower percentage of homes with mortgages”

    Good example of creative statistics and EMR’s version of false advertising.

    Yes, there was a time when mortgges were dear, when a greater percentage of homes had no mortgages. But there was a far lower percentage of people who could ever hope to own a home and far more renters.

    That made it easy for laqndlords to cash in on short term profits and tqx incentives for business, that did not exist for the regualr homeowner.

    But EMR paints this picture as if it was a good thing, only because there were fewer mortgages.



    Whatever the December sales numbers are, or were, those people have already committed for a pretty long term. EMR hates to see those numbers go up, because it might be an indication that his predictions of apocolypse are wrong once again.

    It doesn’t matter if the bottom is not in sight as long as we are reasonably close to it. Not everyone can expect to hit the exact bottom, so some will jump early and some late.

    It makes no difference as long as they get something they are happy with.

    Whether EMR is happy with it or not.


  2. Anonymous Avatar

    It must kill EMR to see so much emphasis on incentives being dedicated to housing.


  3. In my zip code – 22553 – we currently have less than 100 homes in foreclosure according to RealtyTrack.

    Now.. that's not a good statistic but how many are not in foreclosure?


    of that number – about 40% of them are commuter households – that commute every day to jobs in Stafford, Prince William, Fairfax, NoVa and points around.

    Now.. folks are not buying as much "stuff" as they used to.

    They're keeping their old TVs and cars…and last years winter coat, and holding off from putting up a deck or finishing off their basement ..and eating out a little less

    but what they are not doing is… selling their home and moving closer to work….

    I-95 still has a thundering herd of cars on it every AM and PM… maybe a few more carpools, vanpools and buses…but no where is Fundamental Transformation waiting like the Grim Reaper…

    … my own mind.. is looking more and more like EMR.

    just kidding guy…. 😉

  4. Anonymous Avatar

    I live in Winchester.

    Here is an article from our local paper regarding housing “renovation projects” in our “historic” downtown area.

    The area being discussed is perfect for such a project…..with one exception….JOBS!

    If you don’t believe me just look at the classified section of the paper mentioned above or go to one of the major job sites and tell me what you see.

    Now, my question is….does this fact (lack of jobs) make the project any less valuable or “sustainable”?

  5. well… here’s another settlement pattern issue that EMR probably does not have time to comment on….

    cutline: “Ratified Purple Line May Revive Suburbs”

    “The Montgomery County Council’s approval yesterday of a light-rail system linking Montgomery and Prince George’s counties is a milestone in the more than 20-year effort to move people more efficiently between the two suburbs and spur redevelopment of older neighborhoods, according to officials and transportation planners.”

    ” “It represents a case study for how suburban areas are going to remake themselves for the 21st century,” said Robert Puentes, a transportation specialist and senior fellow at the Brookings Institution. “It’s not just the old notion of moving people from point A to point B,” Puentes said, “but about remaking those places.”

    ” Purple Line would be the first major east-west transit link to directly connect spokes of the Metro system, a trip that now must be made by car or a series of slow buses. As jobs have moved from cities to fast-growing suburbs over the past 20 years, planners say, the Washington area has joined Los Angeles, Chicago and other areas seeking ways to better move commuters who need to get from their suburban homes to their suburban jobs — all as space to build roads has diminished.”


    this has dysfunctional access and mobility written all over it…

    what say you EMR?

    do you think this is yet another an example of wrong size homes in the wrong locations?

  6. E M Risse Avatar


    It will be years before the impact of the forces we noted in this post shake out in new human settlement patterns.

    The point of the post was that thinking the bottom is near and many of the dwellings now on the market are bargains is Fools Gold.

    Glad to hear you and your neighbors are safe and secure. Of course they could not sell if they wanted to.

    In addition, all the 12.5 Percenters together are only, well, about 12.5% of the population and they will be the last to give up.

    If you want a less cheery view than EMR’s see Jaime Correa’s book “Self-sufficient Urbanism: A vision of contraction for the non-distant future.”

    Anon 10:59:

    You are absolutely right. There must evolve a Balanced WITHIN the Clear Edge around the Core of Greater Winchester.

    Anything else will be uncivilized and unsustainable.

    But that does not provide any rationale for building new “energy efficient” Single Household Detached Dwellings in the middle of nowhere.

    Larry again:

    Why bother to ask such a silly question when you know the answer?

    The use of the word “suburb” by Montgomery County, WaPo and you indicate none of you know what you are talking about.

    The Purple Line, if the station-areas are correctly located and there is a Balance of uses in the station-areas, HAS THE POTENTIAL to create Alpha (Balanced) Communities out of the Beta Communities that have evolved over the past 200 years inside R=10 (and thus inside the Clear Edge around the Core of the National Capital Subregion.

    Oops, there I go again responding to a post using a Core Confusing Work. Sorry.

    To All, including those from whom I heard off line:

    Yes, it becomes more and more clear that the flamers have almost nothing left to do but intentionally miss the point and time is running out.


  7. Anonymous Avatar

    “Of course they could not sell if they wanted to. “

    Depends on what price they expect to get, doesn;t it?


  8. Anonymous Avatar

    Misuse of Kaldor-Hicks efficiency.

    I am an economist who from time to time tunes on Mr. Bacon and Dr. Risse because of an interest in human settlement patterns.

    Speaking of flamers, this seems like a good place a comment on gross (intentional?) misuse of Kaldor-Hicks by some who post on this site.

    Wikipedia has a simple description of the Kaldor-Hicks and Pareto efficiencies. These are concepts from the 1930s that are the basis for most “cost-benefit analysis.”

    This popularized process is frequently used and misused to justify policies, projects, programs and incentives (subsides).

    As noted in Wikipedia, a big problem with Kaldor-Hicks is that it takes into account absolute income but disregards distribution.

    That is what is now called “The Wealth Gap” and what Risse means when he discusses the profile of “The Ziggurat.”

    There is a much bigger problem with contemporary applications of Kaldor-Hicks. All measures of efficiencies are meaningless, or worse, without a full accounting for all costs, especially “externalities” which are the focus of Exonomics.

    A core principle of any rational path to a sustainable future requires full accounting for all costs.

    I am not yet completely conversant with the dynamics of human settlement pattern relationships but have been able to find no theoretical fault with Risse’s Five Laws. To do the proofs of the Laws one needs to have expertise and very good data from actual in land development and transportation projects, much of which is proprietary.

    I do, however, know enough about economics to point out that:

    For anyone who proudly proclaims a complete lack of respect for a fair allocation of location variable costs and demonstrates (intentional?) failure to understand the economic (as well as social and physical) impact of spacial distribution (what Risse terms Geographic Illiteracy) to yap about Kaldor-Hicks efficiency is misleading and deceitful.

  9. Anonymous Avatar

    This months National Geographic had an article written by a famous suthor about my home town, Vineyard Haven, on martha’s Vineyard, in Massachusetts.

    In the second paragraph she waxed poetic about how one of the things she (a newcomer) likes about it was the fact that the town has edges.

    Well yeah, and it’s only got 3800 people. And the edges on three sides are constituted by water. What she didn;t point out was that since I was there (and the population was 2000) the one remainig route out of town has sprung up with (the smaller, Vineyard version of) strip malls.

    Despite the fact that the Vineyard does have well defined town centers, much of the economic activity that supports those centers depends on assets OUTSIDE the clear edge.

    EMR has it wrong when he insists that balance depends on being inside the clear edge. Eventually he will redefine his meanings until only he is correct.


  10. Anonymous Avatar

    An economist that depends on Wikipedia?

    My understanding of Kaldor-Hicks is that it is simply and extension of Pareto efficiency. Pareto efficiency suggests that a policy is (a minimum) net benefit if no one is worse off and at least one person is better off.

    Kaldor-Hicks efficiency expands that idea such that a policy may be deemed a net positive provided that those who are better off as a result of the policy are able to indemnify those that are worse off, and still come out ahead.

    As far as I know it has nothing to do with the wealth gap, other than providing a means by which public policy can be tested to make sure it makes the wealth gap no worse.


    “All measures of efficiencies are meaningless, or worse, without a full accounting for all costs, especially “externalities” which are the focus of Exonomics.” [sic]

    That is correct. But it means ALL costs and ALL eternalities, both positive and negative, not just the ones that EMR or other special interest groups which to count. It is why, for example, you cannot count jobs created by renewables until you subtract out the conventional jobs lost.

    As far as I know I am the only “some” who mentions Kaldor-Hicks efficiency here. My name is Ray and you can speak to me directly, if you wish.

    To quote Wikipedia:

    “Using Kaldor-Hicks efficiency, an outcome is more efficient if those that are made better off could in theory compensate those that are made worse off, so that a Pareto improving outcome results. For example, a voluntary exchange that creates pollution would be a Kaldor-Hicks improvement if the buyers and sellers are still willing to carry out the transaction even if they have to fully compensate the victims of the pollution.

    The key difference is the question of compensation. Kaldor-Hicks does not require compensation actually be paid, merely that the possibility for compensation exists, and thus does not necessarily make each party better off (or neutral). Thus, under Kaldor-Hicks efficiency, a more efficient outcome can in fact leave some people worse off. Pareto efficiency requires making every party involved better off (or at least no worse off).”

    The point I have made repeatedly here is only that provided that a net benefit exists there is no reason NOT to provide compensation. When people are not willing to provide compensation to the losers, it is frequently because no net benefit exists to pay from.

    This is the problem with EMR’s argument: he wants some people to give up rights, property, and income for the social good, but he cannot demonstrate the social good by explaining how the losers might be compensated.


    You have chosen to pick a line from the Wikipedia article which I find confusing, and probably wrong. It says only

    “The most common criticism of the Kaldor-Hicks criterion is that it only takes into account the absolute level of income, but disregards its distribution.”

    Without further explanation. I don’t see it as a serious complaint. True enough, you could have some policy that makes some people a lot better off and make only the minimum compensation to the losers.

    That is less of a criticism of the method than it is of the practitioners.

    The article goes on to state that “taking one dollar from a poor person causes a greater loss in utility than taking a dollar from a rich one.” and uses this as a criticism of the Kaldor-Hicks efficiency criteria.

    In fact, the whole idea is to reduce the chance of anyone becoming worse off as a result of some policy. Therefore if a poor person is prevented from being worse off, then his marginal utility has already been accountted for. Kaldor-Hicks efficiency is designed to test whether a proposed policy is (or could be) a wealth transfer or a true net social benefit.

    To then turn around and criticize it because it does not provide a wealth transfer is just the sort of circular logic one would expect from EMR.


    To recap, my position is only that if the winners are unwillling to indemnify the losers, then it is simple evidence that the net social benefit claimed does not exist.

    It seems to me that EMR is entirely too willing to raide one group in favor of another, and then claim an improvement in the aggregate position. this is precisely because he does not consider ALL the costs and ALL the externalities.


  11. Anonymous Avatar

    “Kaldor-Hicks efficiency (named for Nicholas Kaldor and John Hicks) is a measure of economic efficiency that captures some of the intuitive appeal of Pareto efficiency, but has less stringent criteria and is hence applicable to more circumstances. Under Kaldor-Hicks efficiency, an outcome is considered more efficient if a Pareto optimal outcome can be reached by arranging some compensation from those that are made better off to those that are made worse off.”

    Kaldor-Hicks efficiency is more forgiving than strict Paerto efficiency which NONE of EMR suggestions would meet.

    “Using the “Kaldor criterion” an activity will contribute to Pareto optimality if the maximum amount the gainers are prepared to pay is greater than the minimum amount that the losers are prepared to accept.”

    Which is how you account for the utility function or wealth gap problem you mentioned. The losers have to be willing to accept the compensation offered, so it is really a free market exchange.


  12. Anonymous Avatar

    “Kaldor-Hicks tends to overestimate the net benefits of a policy whose distribution is uncertain.

    That is, when we think about whether a policy is a good idea we do a cost-benefit analysis. We add up all the costs to whomever they occur and all of the benefits to whomever they accrue. If the benefits are greater than the costs we declare the policy to be efficient.

    Perhaps, the policy is not equitable but it is efficient. The winners could compensate the losers and be better off.

    Now the problem is that the winners don’t compensate the losers. And, that’s not just a problem for the reason you think it is. We all admit that the distribution of the gains may be such that the winners don’t personally value their gains as much as the losers personally value their losses. However, without the ability to do interpersonal comparisons we are stuck.

    Yet, there is another problem. If the distribution of the gains is not certain then the individual agents will value them at less than their face value. Likewise if the distribution of the losses is not certain than the individual agents will value them at more than there face value.

    This means that even if the total benefits outweigh the total losses with certainty, uncertain distribution can lead to individual agents perfering not to make the trade.”

    And that is why the notion of certian proerty rights is so important: otherwise you cannot make a trade – even if it is to the agglomerated benefit of all.


  13. Anonymous Avatar

    “The magical mystery of fairness is that everyone knows what people are saying when they claim that something is (or isn’t) fair–and yet agreement on fairness itself often eludes us. The ultimatum game is the economist’s attempt to understand how fairness works.

    In the standard version of the game, two people are paired, and one of them is randomly selected to receive $10. That person is called the “proposer”, while the other volunteer is known as the “responder”. That’s because once he receives the $10, the proposer has the responsibility of offering some number of his dollars to the responder. The responder, as the name suggests, gets to decide whether to take that offer.

    Here’s the twist: if the responder rejects the offer, neither of them gets anything.

    In an experiment run by robots, where neither party has any sense of fairness to be offended, the natural result should be that the proposer offers a single dollar. After all, $1 is better than nothing, and if computers had noses, they wouldn’t cut them off to spite their face. People, on the other hand, do it all the time. If they don’t think the offer is enough, they won’t take it–they will cost themselves money just to punish the proposer. They don’t care what is optimal; they care about what is fair.”

    What would you say is “fair” in this game?

  14. Anonymous Avatar

    So, lets talk a little bit about fools gold and facts that anyone can look up,if they care to.

    Suppose you had invested in a collection of stocks in the construction industry over the last three months.

    Stocks with names like

    MASTEC INC 3.33%

    Then in the last three months your investment would have returned

    Not bad, for a downturn and a crisis, no?


  15. Anonymous Avatar

    Putting everyone together in a close-in environment will be incredibly expensive. Fairfax County has estimated that the costs (in today's dollars) of upgrading and expanding the waste water conveyance and treatment facilities alone would be $258 million. And that would be building to much less than the Task Force's fantasy dream.

    The Fire & Rescue Dept would need to move and expand the existing Tysons Corner station and then add two more fire stations by 2040. No price tags were provided.

    Let's toss in about #29 million more for a new library. Etc. Schools, roads, parks, police, water, storm water management.

    Where are the cross-over points between adding say 100,000 more people or 200,000 more people to Tysons Corner versus having them move near Larry or Ray?


  16. re: "Where are the cross-over points between adding say 100,000 more people or 200,000 more people to Tysons Corner versus having them move near Larry or Ray?"

    What happens if they work in Tysons and live in Fredericksburg?

    That's the problem you face.

    If you ARE going to get the jobs – then you have two choices.

    1. – have those folks live close to where they work

    2. – have those folks commute – twice a day to the exurbs.

    either path has adverse impacts to Tysons – correct?

    I think the option that you don't have – is the "more places" option…

    Fairfax has been accused of going after jobs …and exporting the residential.

    With Tysons, they seem to be trying to reverse this – to try to build more (dense) residential to provide places to live – closer to the jobs.


    So.. it looks like no matter what Fairfax does with Tysons – that the two choices are either:

    1. – more density to accommodate (in part) more residential

    2. – less density but more (crowded) roads to accommodate commuters who will work in Tysons but live in the exurbs (where Larry & Ray live).

    What I'm asking for here is basic agreement on what I see as the issue – not how to resolve it.

    In other words, do we agree on what the problem itself is?

  17. Anonymous Avatar

    “I think the option that you don’t have – is the “more places” option…

    Fairfax has been accused of going after jobs …and exporting the residential.”

    But that is a result of the widely held and probably wrong opinion that residential doesn’t pay. As a result, Fairfax goes after the jobs, effectively exporting all the other costs.

    What you really have is an inequitable tax structure – people aren’t paying their full costs, and as a result of recruiting and tax breaks, neither are the businesses, really. They aren’t fully supporting the transportation it takes to bring them workers, for example.

    And you have the problem EMR points out, which is that the jurisdicional boundaries are wrong, leading to governmental rent seeking.

    What you left out is

    3) More job density in the suburbs and exurbs, leading to existing roads being better used where they are not now, and crowded roads being less used.

    A number of studies have been conducted to show why this can’t happen, but so far as I know thy have all been conducted by organizations that advocate it not happen.

    I think you have a false dichotomy, and the problem is not fully defined.

    For just one example we are going to need more space, just to implement all the new green initiatives, like reducing runoff. To properly retrofit Fairfax for just the new requirements in that area, might justify reducing density considerably.

    Reducing density may increase travel, but if it reduces congestion ou might still have less pollution. The trick is to rationalize ALL the competing factors, and so far we just don’t know how to do it well, although a few things seem obvious.

    The market works reasonably well: houses far out cost less than ones close in, and it is a trade of value for distance. But settlement patterns change glacially by comparison to markets, so we will alwys be out of sych and seeking more balance.

    maybe, we need to stop building things as if they were supposed to last for centuries. We could do a lot more with cheaper and more recyclable planning. Kind of the way the Japanese deign a manufacturing plant so that it can quickly be converted from one product to another.


  18. re: “residential does not pay”

    if you mean that it does pay – go talk to the exurban localities who have been crushed by NoVa commuters looking for “affordable” housing.

    I think they’d not agree with you that more residential is a “benefit” to them.

    re: transportation costs

    Businesses don’t pay for transportation.

    They incorporate whatever fees and costs that they are assessed into the cost of the product and services that they sell.

    If they don’t – they go broke.

    The question is – can businesses in Tysons make money selling products and services that have incorporated transportation costs in them?

    And the answer to that is – no.

    Not as long as there are competitors who can sell the same product for less because they do not have transportation fees put on them – where they are located.

    That’s called location – advantage – right?

    so… if a business can do better in a location than does not charge a transportation fee.. they’ll go there – right?

    Who should pay for the transportation?

    How about the folks that use it?

    If you want to work in NoVa/Fairfax/Tysons and drive a 100 mile round-trip commute everyday in order to make a higher salary and at the same time pay less for a house – then why should you not pay for the transportation part of the equation?

    Of course, then the commuter would have to do the calculation of higher salary, lower cost house but add in the cost of the commute – to figure out if it was still a benefit worthy of continuing the commute.

    I will posit that we are about to find this out – with the advent of HOT Lanes.

    Each commuter – will then decide whether than Tyson’s Corner job is “worth” their exurban home and the commute that connects them.

  19. Anonymous Avatar

    All I’m telling you is that economists who have studied the issue have presented reasons why the usually stated complaint that residential does not pay is wrong.

    What the reasons boil down to is tha either the costs and benefits are not being fully accounted for, or as EMR woudl say the tax structure is wrong. Fix the tax structure so that residential DOES pay and you will have a lot less of that “new development” that gets blamed for costs.

    But, in order to do that, you have to raise your OWN taxes to a sustainable level, and not just the new guys, so an equitable adjustment can never happen.

    As for Business not paying for transportation, what Imean is that high concentrations of jobs cause a need for heroic transportation systems. Systems that can meet high peak demand twice a day.

    These systems are extraordinarily expensive and Business does not pay their share of supporting them.


    “Each commuter – will then decide whether than Tyson’s Corner job is “worth” their exurban home and the commute that connects them.”

    No, what has happened is that those that make the rules will decide to change the rules, in order to get what they would like to see. irrespective of whether what they want to see generates a true net social benefit.

    By changing the rules in such a way that they colllect money where none was collected before, they are claiming a new property right, where none existed before.

    This creats winners and losers in the system. If the new rules represent a better system, then the winners should be able to pay off the losers, and still come out ahead.

    That isn’t going to be what happens, and the HOT lane system will be a net loss to the communty.

    Everyone will be worse off, except a few.


  20. Anonymous Avatar

    VDOT and Fluor have discovered the way to create all those more places we’ve been talking about.

    In order to accommodate HOT lanes construction, one of Route 123’s lanes (in each direction) will be closed most of the time for up to 30 months. Route 123’s capacity will be only 67% of what it is today and that often cannot handle the traffic load.

    Then, let’s see what happens to Route 123, but most especially Route 7 once Washington Transit Partners (Bechtel) starts building rail down the middle of that roadway.

    Larry and Ray are going to get some new neighbors — both commercial and residential.

    But as Gerry Connolly likes to say, people come to Fairfax County for its quality of life.


  21. Anonymous Avatar


    Like the bumper sticker says:

    “Welcome to Northern Virginia, Expect Delays”

  22. re: “By changing the rules in such a way that they colllect money where none was collected before, they are claiming a new property right, where none existed before.”

    you mean like when service stations stop giving away free air and started charging for it?

    see… it was never “free” to start with. It always cost the owner to provide the compressor and hoses….

    the more accurate analogy would be to say that you now have to pay for something that you did not previously have to pay for – because there actually always was a cost – but it was being absorbed by others.

    In other words, Ray.. it was “reverse” property-rights – finally corrected .to be equitably neutral – as it should be.

    the guy that drives 100 miles round trip every day – never paid his true costs. He always depended on others to help defer the cost.

    Now.. he’ll have to pay his fair share…

    so.. yes.. he has to pay more… but he never paid enough to start with… and now he will.

  23. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    “Fix the tax structure so that residential DOES pay and you will have a lot less of that “new development” that gets blamed for costs.”

    That’s how big house, big lot came into existence down here. A bunch of little houses couldn’t pay the infrastructure costs. So they zoned for fewer expensive houses that were priced to pay an adequate tax. I’ve seen quotes that stated around 450k in house price was needed to generate enough taxes. Course, they never expected house prices to go down. Now they are crying for a tax increase. Told ya that was coming.

    Then there’s Barry’s stimulus. Saw an article that sez VA will get 1.5 billion. Seems kind of limp for the stimulus Tim was wanting.

  24. Here’s some interesting data:

    Total Revenue ($ Per Student) Virginia

    Spotsylvania – 9,418 –
    Local 4,632 State 4,380

    Fairfax 12,628 –
    Local 9.725 State 2,396

    Chesapeake 9,455 –
    Local 4,161, State 4,709

    Look at the Fairfax numbers.

    As we know, the State gives Fairfax less because of it’s formula that funnels money to the poorer counties.

    but also… Fairfax has chosen to spend about 3K more per student than the average.

    so.. Fairfax folks get a double whammy…

    Housing costs are higher and property taxes are also…

    Ray thinks the problem is caused by not charging enough taxes….


    how much is enough?

    how much is too much?

    Bonus question –

    do higher taxes for schools – contribute to higher levels of exurban commuting?

    extra credit question:

    does Fairfax/NoVa essentially trade better schools for worse traffic congestion (from commuters)?

  25. Anonymous Avatar

    “Ray thinks the problem is caused by not charging enough taxes….”

    Which problem are you talking about?

    If the argument is that “residential doesn’t pay” then it is probably because they aren’t taxing enough for the servies provided.

    If the argument is that we don’t have enough infrastructure, or the infrastructure is falling apart, then it is probably because we are not charging enough in taxes to cover maintenance and CAPEX sufficiently.

    If the argument is that “Fairfax has chosen to spend about 3K more per student than the average.” then I don’t see your point. Where does the money come from if the stae actually gives Fairfax LESS?

    “Housing costs are higher and property taxes are also…”

    Not proven. I think my tax RATE in Fauquier is pretty much the same as my tax RATE in Fairfax. I won’t argue that housing costs are not higher in Fairfax (for equivalent housing), but as Larry has often pointed out, you can CHOOSE lesser housing.

    So, is Fairfax able to spend that extra 3k because the get the money out of business tax revenues, which gives them an advantage over other counties? Or is it that they pay more money becuase they collect more cash revenue based on the higher value of homes?

    Or is it that they HAVE to spend $3k more in order to get an equivalent amount of education, just because EVERYTHING is more expensive in Fairfax?

    I stick by my previous claim: you cannot very well say that residential “doesn’t pay, without conceding this means it isn’t paying enough.

    As for the rest, don’t put words in my mouth I never said.


    Considering Fairfax salaries, is $3k that much of a burden?

    (I would think so, but that’s just me.)


    “do higher taxes for schools – contribute to higher levels of exurban commuting?”

    I think people are rational: they travel if it is worthwhile. So the question is really, do they think they can get an equivalent education for their children for less money + the cost(s) of commuting.

    We can artificially raise the cost of commuting (HOT lanes etc.) and (eventually) change behavior. What we cannot do is show unequivocally that this will result in a net social benefit. In other words it may cost us money, time, grief, pollution, etc etc. to achieve this (maybe dubious) goal.

    If there really is a net benefit, then those that want the benefit should be the ones to pay for it, and they should be ABLE to do it.

    The mere fact that the only way we seem to be able to pay for it is by charging tolls to people who don’t seem to want it suggests that the argument is wrong, somewhere. You should never have to raise money through negative incentives to make a good plan work.


    “does Fairfax/NoVa essentially trade better schools for worse traffic congestion (from commuters)?”

    False dichotomy. Traffic congestion from commuters is only about 15 to 20% of Fairfax congestion problems.

    I know you don;t believe that, but the numbers are readily available.


  26. Anonymous Avatar

    ” The National Association of Realtors (NAR) released its latest Housing Affordability Index (HAI) today, showing that housing affordability reached an all-time record high of 158.8 in December

    A HAI of 158.8 would mean that the typical household earning the median family income of $61,058 in December would have 158.8% of the qualifying income to purchase a median-priced existing single-family house ($174,700) with a 20% down payment, which would be the highest level of housing affordability since the NAR started reporting housing affordability in 1988. Since mid-2006, the HAI has risen by almost 60 points, from 100 to 158.8

    Stated differently, the annual qualifying income required to purchase a median-price house (with a 20% down payment) is only $38448, with monthly payments based on a 5.59%, 30-year fixed-rate mortgage “

    What say you, EMR, Still fools gold?


  27. Millionaire Maker Avatar
    Millionaire Maker

    Thanks for your post. There are many online business opportunities you can find for making money at home! It simply depends on what you want to do.

Leave a Reply