Want More Affordable Housing? Build More Luxury Apartments.

Camden Fairfax Corner luxury apartments. Yes, building more housing like this is part of addressing the affordable housing crisis.

by James A. Bacon

Planners in the Washington metropolitan area are worried, as they well should be, that continued population growth coupled with housing shortages could turn the region into another unaffordable hellhole like San Francisco or Los Angeles where legions of homeless people are taking over the public spaces and making life miserable for everyone. The solution, says the Metropolitan Washington Council of Governments (COG), is to build more housing.

“You can’t afford to live in San Francisco — the workforce [there] is being displaced,” said COG Vice Chair Derrick Leon Davis, from Prince George County, Md. “We don’t want to be that region.”

Davis is absolutely right about that. Unfortunately, the solutions proffered by the regional planning organization aren’t practicable. COG says the region needs to add 320,000 housing units between 2020 and 2030, 75,000 more than previously forecast. Of those, reports theĀ Washington Post, at least three-quarters should be “affordable to low- and middle-income households.” That, in turn, likely requires increasing public subsidies such as rental vouchers and low-cost loans or redirecting funds from schools, transportation or other priorities.

In other words, COG planners have set a goal and then established preconditions that make fulfillment of that goal politically and fiscally impossible.

Not In My Back Yardism is as potent a political force in Washington-area local governments as it ever was, and NIMBYs have a wide array of procedural tools to block unpopular projects. If anything, the repertoire of tactics and strategems for shutting down unwanted development has expanded over the years. It’s difficult enough to win approval for high-quality development projects catering to higher-income households that pay more than their fair share of taxes. It’s almost impossible to win acceptance for projects aimed at lower-income families.

So, the first thing you do is drop the mandate to build housing that is affordable for “low- and middle-income” households. Take that requirement out of the equation and you get rid of the biggest objections to new housing: that the project will strain the local tax base, that the housing will be physically unattractive, that low-income residents will bring crime in their wake, that students from lower-income families might diminish the quality of local schools, and most important of all, that housing values will suffer.

You’ll never overcome objections that new development will add to traffic congestion, but that is one issue that the COG has addressed properly. New growth should be built as walkable urbanism with access to mass transit. While there may be no way to eliminate congestion, it is possible to design projects that generate fewer and shorter automobile trips per household. Moreover, traffic congestion is a problem that developers can remedy, at least in part, by handing over money for local road improvements. Developers of upscale projects can afford to pay the proffers and impact fees; builders of lower-income housing cannot.

If real estate developers build mostly up-scale housing, where will poor and middle-class families live? What if people can’t afford rents of $3,000 or $4,000 a month? The answer is trickle-down housing. As higher-income individuals move into new, upscale housing, they vacate the premises where they had lived before. Someone else moves into those dwellings, in turn vacating other housing units. At some point in the housing migration chain, someone will free up housing that lower-income households can afford. Admittedly, it will be the least desirable housing in terms of age, amenities and location. But as long as the growth in supply of new dwellings meets or exceeds the growth in demand, housing will be made available, and it will be more affordable than if housing construction had remained restricted.

The beauty of trickle-down housing policy — this is fundamental, so pay close attention — is that private actions take place outside the governmental arena where people can obstruct them. The only zoning approvals required are those for the new upscale housing projects. The migration of renters and homeowners from dwelling to dwelling requires no governmental approval. As long as fair housing laws are enforced, the migration chain cannot be hindered. Because the voluntary transactions of thousands of individuals take place outside the public eye, the process is largely invisible. And if it’s invisible, it won’t generate opposition.

Put another way, it’s easy for NIMBYs to block construction of a new low-income housing project. NIMBYs have no power to stop a poor family from moving into a dwelling that someone else has vacated.

To a carpenter, every problem looks like a nail and every solution looks like a hammer. To a metropolitan planner, every problem requires a government solution. But sometimes government is the problem. We need look no farther than the People’s Republic of San Francisco for proof. In an Opportunity Society, the solution to affordable housing is to let market mechanisms work. Let’s create an Opportunity Society in Virginia and the Washington metropolitan area.

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6 responses to “Want More Affordable Housing? Build More Luxury Apartments.

  1. If you had as many rich as you had for less wealthy – it might make some sort of sense but it’s not that way.

    WHERE has this “idea” actually worked by the way?

    I don’t buy the idea that people will oppose “affordable housing” no matter where it is proposed. There are many, many places now that used to be commercial in the era of Amazon and they are ripe for redevelopment and cities can and do give tax breaks and TIFs to redevelop and if it is done right – it can contain a mix of housing suitable for young singles and empty nesters and families.

    We are seeing more and more “mixed” housing developments in Fredericksburg where a single development has luxury apts, “affordable” apts, townhouses and patio homes… a diverse mixture of housing to suit most budgets except at the low end.

    talking about nails and hammers… to a certain extent that’s what trickle down theory is… no?

  2. Fairfax County requires 12% workforce or affordable housing for significant rezoning application approvals and 20% workforce housing for Tysons cases. While traditionally, these units have been included in “mixed developments,” there is an effort to concentrate much of the remaining workforce requirements in a single building on Route 7. This has drawn opposition from the county staff and a number of citizens groups. No TIF financing in Tysons or in many other county locations.

  3. Yes, I think the way to generate a LOT of opposition is to try to concentrate all low-income housing in one project. We need to build mixed income projects where there are a variety of price points and options and they can include subsidized housing.

    Government should not encourage what amounts to “enclaves” for higher income folks and then let concentrate low income housing where they can overcome opposition (which is usually other low income neighborhoods).

    We FAIL when we do this. We create the very conditions for bad neighborhood schools that continue the cycle of poverty that ends up costing us all in increased subsidies. We want low-income kids to get 21st century educations so they can grow up – compete successfully for good jobs and be able to be fiscally responsible for themselves and their families.

    We are BREEDING through the way we do development – generational cycles of poverty -that cost us all – in increased taxes and increased dependence on govt subsidies.

    The “market” that Libertarian types blather on and on about – do not deal with these issues. The “market” caters to those who have money – that’s who it serves primarily and you can incentivize housing for the rich all you want but it won’t “trickle” down – that’s just cynical blather for chumps who want simple solutions.

    • I agree with you on most of this, LarrytheG. Planners know that neighborhoods that integrate diverse socioeconomic residents yield a ore desirable outcome–the lever tends to push up those who begin at the lower end. However, the discussion about tackling affordable housing issue in DC cannot really include solutions for housing for the poorest. Let’s use the other term, workforce housing. If the MSA around DC doesn’t expand the availability of workforce housing, the schools of McLean and Bethesda that are so attractive will eventually be unable to draw in enough teachers (or firefighters or nurses). How far is anyone willing to drive for a teaching job? Would you drive from Manassas to McLean every day? I wouldn’t. Bacon is right that the only aperture for government intervention is at development, not later, when market forces dictate where people live. But even developers with good plans which encompass workforce and high-end residential products get shot down by NIMBYs who imagine that their real estate values will be adversely affected. There is a big difference between allowing (or mandating) affordable housing to be blended into the mix and putting up Section 8 or public housing next to my McMansion. Let’s not even start on how far the McLean McMansion owner should expect housekeeping help to travel to clean.

    • Workforce housing is hardly low-income housing. Keep in mind that both land and construction costs are so high in Tysons that there is no general obligation to build affordable housing much less Section 8 housing.

  4. I suggest there are very distinct, and quite different problems here, and its important not to conflate the two, if only because it will make it harder to solve both problems.

    Insofar as places like Northern Virginia are concerned, and parts of DC, I believe that it is critical that affordable housing be built to insure that that All workers within the districts have easy access from home to place of employment to the fullest extent possible. We have achieved this many times in the past, and we can do it again, like for example Connecticut Ave. DC use to be (versus say its wildly dysfunctional sister street Wisconsin Ave. And like we did for Ballston / Rosslyn Corridor (versus say its wildly sister Tyson’s Corner). This require strong vision and execution by local authorities and private business and civil community leaders. Unfortunately, these latter groups appear today as dysfunctional as their communities, but again we have seen strong change whole communities radically for the better in a decade, and often those leader arise from unexpected places to bring great benefit, and whole new levels of wealth and quality of life. I sense that seeds (money, talents, and ripe opportunities are there inside the beltway in Northern Virginia right now. And what happens there over the next decade can become a template that ignites and serves as an example for revolution in many other locales, including for somewhat different reasons the north south Virginia’s I=81 Corridor (Inland Empire) Winchester and N., Virginia to Roanoke/Blacksburg, and also a cross east west Virginia Corridor from Hampton Roads to Roanoke / Blacksburg.

    The cumulative affects then are enormous. For example, this breaks the forty years and counting stranglehold of the I-95 disaster from DC to Richmond that is killing Virginia.

    Efforts to solve the unemployable poor housing problem should not be allowed to stand in the way of solving the first problem. And its solution then will go a long way to helping to solve second problem, building livable healthy housing for now unemployable poor that gives them a fair chance to escape their culture and seemingly hopeless plight.

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