The Backwards Notion That Driving Up Real Estate Prices Preserves Affordable Housing

The backers of the Columbia Pike Streetcar have many arguments in favor of the project.  They range from topsy-turvy (the idea that serving only one pair of destinations is a virtue, rather than a significant flaw in a transit system) to the mystical (the “magic” of streetcars “spurs” development).  But a recent claim, in particular, is so logically strained that is bears special mention.

That the CPRO – which gets a third of its funding via an appropriation from the pro-trolley County Board – would back the streetcar for Columbia Pike should not be much of a surprise.  But their recent list of reasons to support the trolley contained this remark about the relationship between the streetcar and affordable housing:

Supports our community’s goal to preserve affordable housing by having the proven potential to create enough real estate value to cross-subsidize committed affordable units.

This remark contains some tortured logic.  At its heart, the idea is that driving up the costs of housing along Columbia Pike corridor will promote affordable housing.  This doesn’t make any sense!  How can making housing more expensive make it more affordable?

The answer seems to be that by raising housing costs the County will earn more tax revenue that it can use to subsidize affordable housing for the poor.  This, too, is a confused notion.  First, the region has a problem with affordable housing close to job centers for the non-wealthy.  This isn’t just the people who work low-wage service jobs (although the problem is certainly worse for them), but it’s a problem for retail managers and secretaries and even many civil servants.  The rent is too damned high for both the poor and the middle class in this region.  (Great post from a Maryland blogger on the topic of housing costs for the young in the DC region here.)

But even if the County views the poor as the only people for which they want to worry about their housing costs (which they apparently do), much of the existing affordable housing stock is “market based” affordable housing – 6,300 units according to this report.  Market based affordable housing is public-policy speak for the idea that landlords set their rents at prices that are lower than other parts of the County (or region).  And if the goal of County policy is to drive up the cost (and thus the value) of real estate, those landlords are going to charge more in rent.  This is stunningly obvious and foreseeable yet wholly ignored by the Board and CPRO.

And think, for a moment, what this comment envisions: Arlington will become a place full of the region’s wealthy, without housing that meets the budgets of the non-wealthy.  In its place, will be a small handful of units that some (deserving) poor people will be able to get as part of ongoing government expenditures.  This is an Arlington of boomer-aged Lexus liberals with a smattering of poor people to alleviate their guilty consciences.  It is not the vibrant communities that line the Pike today.

To be clear, it is a good thing for the Board to encourage developers to include long-term affordable units in their real estate projects.  And the charitable groups working to build affordable housing for Arlington are praiseworthy.  However, the sum of these efforts is not sufficient  to even maintain the existing number of market based units if real estate prices along the Pike continue to climb to levels seen in the rest of the County.

The primary tool at the Board’s disposal to deal with affordable housing is not the choice of what transportation vehicles use Columbia Pike.  It’s even more density than they have already approved.  Unlike the massive new subsidies that Mr. Zimmerman and Mr. Tejada have been hounding the board for, increased density does not even show up in the County budget (at least not directly).

Affordable housing is a very difficult issue for Arlington.  Honest conversations are tough, partly because many local residents want their cute trolleys and oppose new apartment buildings built into their neighborhoods.  And too often affordable housing is seen solely as a concern for the poor, and not also that of the young and middle class.  But the notion that driving up real estate prices is the best means to promote affordable housing truly does not make any sense.

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2 Responses to The Backwards Notion That Driving Up Real Estate Prices Preserves Affordable Housing

  1. Chris Slatt says:

    Status Quo: Real estate values continue to slowly rise on the Pike. Apartment building owners either renovate their buildings and jack the rent up (like the Wellington) destroying affordable housing or knock them down and build Town Houses also destroying affordable housing. No additional affordable housing is built.

    Neighborhoods Plan: Grant additional density bonuses on the Pike in exchange for a portion of the units built being committed affordable housing. This shifts the economics in favor of redevelopment rather than renovation or conversion to townhouses. Two problems: 1) increased density means more people; if those people drive everywhere we’ll have some crazy congestion. 2) While it shifts the economics toward redevelopment, the math is still pretty close – if the Pike were a more in-demand place to live, someplace where market rents were higher then it’d make even more sense.

    Answer to problems 1 and 2: The Streetcar
    -The Arlington County Resident Study, a survey that was completed in 2009, found that while 36% of Pike residents use the current bus system at least once a week, 59% of respondents indicated they would use a proposed streetcar at least once a week.
    – In 2003 the City of Tacoma converted an existing bus line between the downtown Theater District and the Tacoma Dome station to Streetcar service. Ridership increased by 500%.
    – When Seattle temporarily substituted buses for the streetcars on its Waterfront line, ridership dropped to one-fifteenth of what it had been on the streetcars.
    – An Ed Tennyson study that attempted to determine what, if any effect mode had on ridership while holding constant all other factors – travel time, fare, frequency of service, population and density found that rail transit (like a streetcar) is likely to attract 34 to 43 percent more ridership than equivalent bus service.
    – When Memphis surveyed its transit riders it found that 83% of those who rode their streetcar system didn’t utilize any other form of public transit – it was the Streetcar or nothing at all.
    – Portland initially projected 2,800 daily riders when the city’s first line opened in 2001; today, the system is carrying over 10,000 riders per day.

  2. Pingback: Government Policies Designed to Raise Housing Prices Are Never Progressive | Pike Spotter

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